The shame of Austerity Britain

Mostlyh, you are also talking about building more homes.

mostlyharmless Sun 03-Jun-18 20:55:39
"allyg your figures for housing benefit over a random twenty years don’t take inflation into account so are meaningless."

The only figures in my post are the ones you quoted in yours Mostly. Not posted any others.

As for the poorer generations:

“One of the author's of the study, Andrew Hood, said: "Since the Second World War, successive cohorts have enjoyed higher incomes and living standards than their parents.
"Yet the incomes and wealth of those born in the 1960s and 1970s look no higher than the cohorts who came before them.
"As a result, younger cohorts are likely to have to rely on inheritances to be better off in retirement than their predecessors.”
www.bbc.co.uk/news/uk-25411181

The economics of austerity specifically caused since 2008 yes, I have read a lot about it outside of Gransnet.

Aaah I see what you’ve done. You’ve taken those housing benefit figures totally out of context. I was saying that over that twenty years while housing benefit went up the amount of money going into building social housing has dropped to virtually nothing in the last few years.
I find it difficult to follow your argument.

Mh This is your post in it's entirety:
"mostlyharmless Sun 03-Jun-18 17:22:04
You can’t help thinking that £26 billion housing benefit dwarfs the amount invested in social housing each year endre.
Surely building more social housing with some of that housing benefit would be a better use. Social housing means secure long term tenancies with fairer rents, which must be good for tenants and their families.
I know it’s out of fashion to build big council estates (quite rightly) but small social housing developments could be fitted in.
Housing benefit is being absorbed into the Universal Credit system. This could cause problems for tenants who find it hard to budget or who have debts. Under the old system, housing benefit could be paid directly to the landlord if the tenants was struggling to keep up with rent payments.

The National Housing Federation report highlights how money spent on housing benefit rose from £16.6bn in the mid-1990s to £25.1bn in 2015-16.
www.bbc.co.uk/news/education-41309316
It added that since 2011, no government money has been made available to build homes in England for low paid people to rent"

Mh This was my response to part of your post:
"Mostlyharmless:The National Housing Federation report highlights how money spent on housing benefit rose from £16.6bn in the mid-1990s to £25.1bn in 2015-16."

"Mh, there will be multiple reasons for this increase, one of which will be that there are more single adults living alone, rather than couples. I will research the causes of this increase, not tonight though."

This does not seem out of context to me. I am merely looking to the reasons for such an increase in housing benefits as per the figures you quoted.

"mostlyharmless Sun 03-Jun-18 20:55:39
allyg your figures for housing benefit over a random twenty years don’t take inflation into account so are meaningless."

Back to your figures Mh. If when you thought these figures were mine, they were "meaningless" without taking "inflation into account" can you make them meaningful by taking inflation into account for us?

It is an interesting issue about the many reasons housing benefit has gone up during this period, although it’s not the point that I was making. My point was why not put money into building social housing rather than subsidise rent through housing benefits.
Perhaps I didn’t make this point clearly enough.
Austerity policies, such as NO investment since 2010 in building social housing as such, (some money for “affordable” housing which is different), are costing the government money to the tune of £26 billion a year in housing benefit.

I appreciate the move to pay housing benefit directly to claimants can be seen as treating people with respect. My main worry is its a recipe for increasing homelessness. The cuts to benefits are leaving many families worse off. If its a question of feeding the family and hoping to find a magic money tree with which to pay the rent at a later date, it isn't difficult to know what will happen.

Some benefit claimants will be long term unemployed. No disrespect to anybody but the low skilled work available in the past is rare these days. This adds to social isolation and the problems that go with it. Paying the rent direct without support may be beyond some, whether because of substance, mental health or learning issues.

Austerity is not a political decision it is an economic one. It's like one of us living high on the hog on our credit cards, then borrowing to consolidate and still using the credit cards.....it's then either Bankruptcy or some serious austerity measure to save us from economic disaster.

Your analogy is completely false, Allyg. National economies are not like household or personal economies. This is just a myth promulgated by one set of economic theorists which has gained traction because it's an analogy which resonates with most people and has proved useful to our governments when they wish to shrink the state in favour of private enterprise. Though, as mostlyharmless is pointing out, it doesn't really seem to work as cutting spending in one area, housing provision, has just increased spending on welfare, housing benefits.

Households and individuals have a finite amount of money. They cannot spend more than they have unless they are prepared to take on debt which they very likely cannot afford to repay (or even service in many cases). Governments which control their own sovereign currency are not confined to a finite amount of money. They were in the old days of currency being pegged to the gold standard but that was abolished in the early 1970s. They are not confined to a finite amount now. Nor are they actually obliged to borrow from anyone to finance their spending (though they still do to a certain extent by issuing government bonds). The past decade has seen quite extensive use of Quantitative Easing (QE) whereby some £340+ billion has been created by the Bank of England, initially to cushion the economy against the international banking crisis of 2007/8 and latterly to prop up the pound when it fell sharply after the Brexit vote. The objective of QE was to put money into the economy to keep it 'working'. Unfortunately it went mostly into the 'wrong' economy. Instead of going into the 'real', everyday economy (the one that you and I and most people exist in) through investment in infrastructure and new businesses (creating jobs and purchases which keep money moving around the economy and eventually returning to the treasury through taxation) much of it ended up in the financial markets, inflating bond and equity prices and making a lot of already wealthy people even wealthier.

We know that 'trickle down' doesn't really work. Wealthy people tend, on the whole, to put their money to work in the financial markets to make more money and then aim to pay as little tax on it as possible by squirrelling it away in tax havens. They may spend a bit more on high end goods and services but not enough to make a difference for most workers or businesses.

I know that the argument against putting more money into the economy is the danger of inflation but some causes of inflation, such as increased cost of oil and raw materials, are beyond the control of any government as they are sold in the global market. There comes a point where restricting the money available in the 'real' market puts the cost of goods and services dependent on global market prices beyond the reach of 'ordinary' people and the businesses supplying these to the domestic market suffer loss of income which leads to cutting jobs and lessening the tax take from people's earnings and taxes on profits. Which makes no sense whatsoever.

So maizie how do you think should the economy should be kickstarted?
Or perhaps it doesn’t matter where you start?

You are absolutely correct maizie but somehow this message never gets through. The "maxed out credit card" nonsense seems to have stuck.

This was another thing that annoyed me about New Labour, before the 2010 election, they never seemed to challenge the narrative put forward by the Conservatives.

I like John McDonnell's idea of a National Investment Bank that would lend money to small and medium sized businesses and to small and medium sized builders.

It's always puzzled me, too ilovecheese. If it hadn't been for the prompt injection of QE into the economy the international banking crisis could have seen the UK go under (I emphasise the 'international' bit for the benefit of those who persist in thinking that the banking crisis was all Gordon Brown's fault). Why Labour never defended their record, and the fact that the economy was growing again pre 2010, is a complete mystery.

What really did annoy me, though, was them being 'relaxed' about the filthy rich. But, they had bought into the 'maxed out credit card' myth, too. (And it is so well embedded in the popular consciousness that I don't think they dared suggest that there was any other way to run the economy. The rightwing press would have torn them to shreds.) They really believed that if they didn't scratch rich backs they would pack up and leave the UK.

Of course, the EU Anti-Tax Avoidance Directive comes into force on 1st April 2019. That couldn't have had anything to do with May's haste to set a 'leaving date' of 31st March 2019, could it?

What really did annoy me, though, was them being 'relaxed' about the filthy rich.
I've never really understood why GB sold off half of our gold reserves at a then rock-bottom price either, which drove the price down even further.

Gold reserves have very little bearing on the nation's economy, Jalima. We are no longer on the 'gold standard' where our currency was valued against the amount of gold we held. As far as I can see, gold reserves are only relevant to the financial markets.

Perhaps you can explain how they affect the 'real' economy. This is a genuine request.

To be fair though, whoever it was who said they were relaxed about the filthy rich (Alistair Darling? Peter Mandellson?) did add
"as long as they pay their taxes"

I don't know... it only mitigates it slightly for me, ilovecheese. They could still be using tax havens and tax avoidance schemes. I'd rather see a level playing field for the filthy rich

Surely maizie you’re not suggesting that people like the charming Jacob Rees-Mogg, entrepreneur James Dyson and generous Tory donor Crispin Odey have ulterior motives for being determined to get us out of the EU before the new tax avoidance directive comes in?
What was that date again? March 2019 did you say?

Lemongrove
I did mean 20K.
You have to live in the big cities to earn 100-200K. The same jobs in the sticks pay much less.
Many families are struggling on 10-20k . That is the wealth gap. We have to get rid of zero hour contracts. They suit students but families cannot survive on them.

This sounds Dickensian.
The Joseph Rowntree Foundation report on U.K. Destitution (June 2018)

It is unacceptable that in our society approximately 1,550,000 people, 365,000 of them children, were destitute in UK at some point over the course of 2017.

This means that they could not afford to buy the bare essentials that we all need to eat, stay warm and dry, and keep clean.

The report concludes that destitution is usually caused by low pay or low welfare benefits, sanctions on benefit claimants and having to pay off large debts.

This is how JRF defined Destitution:
People who have lacked two or more of six essentials over the past month, because they cannot afford them:
• Shelter (have slept rough for one or more nights),
• Food (have had fewer than two meals a day for two or more days),
• Heating their home (have been unable to do this for five or more days),
• Lighting their home (have been unable to do this for five or more days),
• Clothing and footwear (appropriate for weather) and
• Basic toiletries (soap, shampoo, toothpaste, toothbrush), or
• Had an income that was so low, and no savings, so that they would be likely to lack these essentials in the immediate future

"mostlyharmless Thu 07-Jun-18 19:03:54
This sounds Dickensian.
The Joseph Rowntree Foundation report on U.K. Destitution (June 2018)"

Have you got a link Mh?

Jalimal. Half the gold reserve was sold at rock bottom price, at seventeen auctions. The cost was 7 billion to us the tax payer. Gross error by the Labour Government when Brown was the Chancellor. The money raised was poor and was spent buying other currencies.

As I understand it the gold reserve of any country can be used as collateral and since the price of gold (unless something goes wrong such as Brown announcing his sale and the price dropped like a stone naturally) the gold reserves are pretty much aligned and stable and have a book value, just as they would in a company. Don't have details but you can find lots of information about that time.
Gold reserves are important. Just take a look at the US.

allyg
Full report:
www.jrf.org.uk/file/51368/download?token=eILZejT6&filetype=full-report
Summary:
www.jrf.org.uk/file/51369/download?token=VO799W5l&filetype=summary

Yes, I remember the anger at the time from selling off our gold reserves so cheaply.

"MaizieD Mon 04-Jun-18 10:35:44
Austerity is not a political decision it is an economic one. It's like one of us living high on the hog on our credit cards, then borrowing to consolidate and still using the credit cards.....it's then either Bankruptcy or some serious austerity measure to save us from economic disaster."

Austerity is an economic decision, not a political one. The maxed out credit card might be "old hat", nevertheless if a Country has austerity thrust upon it with EU rules connected to the failure of the Euro, which affects 28 Countries, all at the same time when a world recession hit in 2008. If the 27 had their own currency, they each could take action as we did to defend their currency as best suits them and quickly. The UK had additionally to assist the Eurozone to bail out the Euro. All in the sinking boat, not a good idea. All the EU countries were hit with austerity measure including us.

Did someone once say it's the economy s----d. Not something I would say and not nice but I agree with the sentiment.
Thank goodness we have a benefit's system, NHS, GP's free prescriptions for low income, disabled, or elderly people on benefits.

In Greece they had no medicines, not even paracetamol, let alone complex drugs like heart, cancer and other life essential treatments. Food shortages, empty shelves, multiple business went to the wall. Banks not opening, no ATM all to stop a further run on the Banks who had no money. The Eu is now reaping the results of imposing austerity with Greece, Italy, Hungary and Slovakia and even Germany have a coalition government. Economic austerity affects society, it is not political.

Thanks for the link Mh.
JRF reports are always sad reading and very informative.

This one had one small light at the end of the tunnel the destitution figures since 2015 had dropped by 25%.
We should not be complacent though, for those classified as destitute including on third of those migrants (some born in the UK) the figures are still unacceptable. But a reduction means something is improving or being done right, we should encourage the continuation of this.