The DWP has become Britain’s biggest debt collector.

Gordon Brown in The Guardian

Prime Minister Sunak talks about the need for “compassion” from the government this winter. But how far do social security benefits have to fall before our welfare system descends into a form of cruelty?

Take a couple with three children whose universal credit payment is, in theory, £46.11 a day. However, when their payment lands they have just £35, because around a quarter of their benefit has been deducted to pay back the loan they had to take out on joining universal credit to cover the five weeks they were denied benefit. And an extra 5% has been deducted as back payment to their utility company. According to Department of Work and Pensions (DWP) rules, money can be deducted for repayment of advance or emergency loans, and even on behalf of third parties for rent, utilities and service charge payments.

With gas and electricity likely to cost, at a minimum, £7 on cold days like today, and with a council tax contribution to be paid on top, they find that they have just £25. 80 a day left over, or £5.16 per person, to pay for food and all other essentials. Even if the Scottish child poverty payment comes their way, clothes, travel, toiletries and home furnishings remain out of reach. Parents like them are just about the best accountants I could ever meet , but you can’t budget with nothing to budget with. And that’s why so many have had to tell their children they can’t afford presents this Christmas. No wonder they need the weekly bag of food they get from the local food bank. But they also need a toiletries and hygiene bank, a clothes bank, a bedding bank, a home furnishings bank, and a baby bank.

The DWP has now become the country’s biggest debt collector, seizing money that should never have had to be paid back, from people who cannot afford to pay anyway. In fact, the majority of families on universal credit do not receive the full benefit that the DWP advertises. More than 20% is deducted at source from each benefit payment made to a million households, leaving them surviving on scraps and charity as they run out of cash in the days before their next payment. In total, 2 million children are in families suffering deductions.

Gordon Brown with workers at the Big Hoose multi-bank project, Fife, 8 November 2022. Photograph: Murdo MacLeod/The Guardian

When the money runs out, and the food bank tokens are gone, parents become desperate and ashamed that their children cannot be fed, and fall victim to loan sharks hiding in the back alleys who exploit hardship and compound it, and prey on pain and inflame it.

The case for each community having its own multi-bank – its reservoir of supplies for those without – is more urgent this winter than at any time I have known. Since the Trussell Trust’s brilliant expansion of UK food banks, creative local and national charities have pioneered community banks of all kinds offering free clothes, furnishings, bedding, electrical goods and, in the case of the national charity In Kind Direct, toiletries.

In Fife, Amazon, PepsiCo, Scotmid Fishers and other companies helped to set up a multi-bank. It’s a simple idea that could be replicated nationwide: they meet unmet needs by using unused goods. The companies have the goods people need, and the charities know the people who need them. With a coordinating charity, a warehouse to amass donations and a proper referral system, multi-banks can ensure their goods alleviate poverty.

But the charities know themselves that they can never do enough. With the state privatisations of gas, water, electricity and telecoms, the government gave up on responsibility for essential national assets. But now, with what is in effect the privatisation of welfare, our government is giving up on its responsibility to those in greatest need – passing the buck to charities, which cannot cope. Just as breadwinners cannot afford bread, food banks are running out of food.

Charities, too,are at the mercy of exceptionally high demand and the changing circumstances of donors whose help can be withdrawn as suddenly as it has been given. And so while voluntary organisations – and not the welfare state – are currently our last line of defence, the gap they have to bridge is too big for them to ever be the country’s safety net.

According to Prof Donald Hirsch and the team researching minimum income standards at Loughborough University, benefit levels for those out of work now fall 50% short of what most of us would think is a minimum living income, with their real value falling faster in 2022 than at any time for 50 years since up-ratings were introduced. And still 800,000 of the poorest children in England go without free school meals.

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I’m so cold I live in my bed – like the grandparents in Charlie and the Chocolate Factory
Marin

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When it comes to helping with heating, the maximum that any family will receive, no matter its size, is £24 a week emergency help to cover what the government accepts is the £50 a week typical cost of heating a home. From April, the extra payments will be even less – just £16 to cover nearly the typical £60 a week they now expect gas and electricity to cost. And then, as Jeremy Hunt says, help with heating will become a thing of the past.

One hundred years ago, Winston Churchill was moved to talk of the unacceptable contrast between the accumulated excesses of unjustified privilege and “the gaping sorrows of the left-out millions”. Our long term priority must be to persuade a highly unequal country of the need for a decent minimum income for all, but our immediate demand must be for the government to suspend for the duration of this energy crisis the deductions that will soon cause destitution.

Ministers have been forced to change tack before. In April 2021 the government reduced the cap on the proportion of income deducted from 30% to 25%. During the first phase of Covid, ministers temporarily halted all deductions. In April, they discouraged utility firms from demanding them, but deductions as high as 30% of income are still commonplace.

There is no huge cost to the government in suspending deductions, for it will get its money back later. But this could be a lifesaver for millions now suffering under a regime that seems vindictive beyond austerity. Let this be a Christmas of compassion, instead of cruelty.

The Way to Find High Quality Women

 

Pakistan's weird Supreme Court

 

A Strong Labour movement Raises everyone’s Living Standards

Owen Jones in The Guardian

Respect for tradition, we are told, underpins the Conservative party. But there’s one tradition for which it has unwavering contempt – strike action: a part of our culture and heritage it has ferociously and instinctively demonised as an antisocial attack on the general public. Tories are known to extol the virtues of rugged individualism, but it seems the collective suddenly matters when industrial action is declared. Then, it seems, society – which in previous Tory eras was doubted to even exist – becomes a totem to be protected from sinister forces, from a malign and externalised striking rabble.

Strikes bring inconvenience. Of course they do. They disrupt our normal life, our plans, our expectations. But the concentrated attempt to stigmatise the very notion of the strike is something that must be resisted. The strike – and the threat of striking – should be celebrated precisely because it underpins many rights and freedoms we now take for granted. Union struggles in the 19th century played a pivotal role in shortening the working day, and in the 20th century, in creating the weekend. In the postwar heyday of union power, they drove up incomes. Strikes are a profound social good.

Yet how little this argument is heard. Anti-union sentiment is profoundly embedded in our political culture. When the Tory chairman, Nadhim Zahawi, suggested on national television that the upcoming nurses’ strike would aid Vladimir Putin by worsening inflation in the west, it was yet another crude illustration of this very British phenomenon, echoing Margaret Thatcher’s denunciation of striking miners as the “enemy within” in the 1980s. This hostility has a long pedigree and, historically at least, the Tories have been known to be candid about their real intentions.

RMT picket at Slough railway station, 8 October 2022. Photograph: Maureen McLean/Rex/Shutterstock

As the 20th century dawned, the Tories defended a legal ruling making unions financially liable for profits lost to strikes, leading the Conservative prime minister Stanley Baldwin to later confess: “The Conservatives can’t talk of class war. They started it.” In 1926, they introduced a raft of anti-union laws in the aftermath of the general strike, including the banning of solidarity industrial action.

But while unions were hobbled in the 1930s, a spirit of collectivism nurtured by wartime sacrifice helped their rebirth. The three-decade social democratic consensus established by Clement Attlee’s Labour government led the Trades Union Congress in 1968 to boast that it had grown from a “small debating assembly” into a body that shared “in the making of government policies, taking part in administering major social services and meeting on equal terms with the spokesmen of the nation’s employers”. This was the era in which Britain enjoyed its highest ever sustained period of economic growth, which – thanks in part to strong unions – was more equitably distributed, boosting the pay of ordinary workers.

When the oil shock of the 1970s sent prices surging, unions mobilised in an effort to match wages with the cost of living. The grand climax – the winter of discontent – was successfully spun by Thatcher to label unions as national bogeyman for a generation. Her successors took up that framing as well. When Tony Blair became prime minister in 1997, he promised that his government would “leave British law the most restrictive on trade unions in the western world”. And David Cameron assailed Ed Miliband as “taking his script from the trade unions”, and turned the screw further, with even more restrictive laws.

But today this anti-union approach jars with political reality. One poll has suggested that nearly six in 10 voters back the nurses’ strike, and another found that more people backed the rail strike than opposed it. After an unprecedented fall in living standards, the default position of millions whose pay packets are shrivelling in real terms has become “well, fair play to them, at least someone is taking a stand”.

While earlier generations of Tories may have used the language of class warfare openly, their modern cohort is savvier. They seek to isolate striking workers from the wider public, portraying them as somehow separate from society at large. Rishi Sunak denounces strikers as a threat to “hardworking families”, as if nurses, paramedics or transport workers are excluded from that category. But this attempt to separate striking workers from society at large collides with the reality people see every day. The withdrawal of strikers’ labour is so noticeable precisely because of how central they are to our way of life. Rather than a middle-finger salute at the general public, it is one part of society crying for help from another.

 

Despite all the talk of monstrous disruption, for most the real inconvenience is struggling to pay bills and feed their children, rather than the irritation of a postponed train journey. Real wages are projected to be lower in 2026 than they were in 2008.

Indeed, a fundamental reason for wages being so low and conditions so poor in the UK is because of the dilution of union power. According to one study, the “changes in bargaining power” suffered by unions explains half of the decline in the share of the economy going to wages over four decades in several rich countries, including Britain. Rather than union action inconveniencing everybody else, the decline of unions has dragged down the wages of non-unionised workers, too, according to a US study. A strong labour movement, in other words, brings up everyone’s living standards.

A strike, then, isn’t antisocial behaviour, on a collision course with the interests of the wider public. By neutering the threat of strike action with authoritarian laws, the Tories have succeeded only in weakening a mechanism with a proven record in raising the living standards of all workers. Despite the mythology, no one goes on strike on a whim. A worker forfeiting a day’s pay isn’t just a sacrifice for the sake of their own interests, it’s a gamble and a sacrifice. Indeed, one of the government’s fears is that a victory for nurses or railway workerswould embolden the pay claims of other workers – an anxiety that is well founded.

Union membership should be honoured not just as a democratic right, but as a cornerstone of collective prosperity. Even many union sympathisers have retreated from such an argument, instead blaming bosses and government for any regretful breakdown in industrial relations. But to strike isn’t a sin, or antisocial or an act of mendacity: it’s a key to a society less beset by injustice than our own.

Actual data on Revdis, Subsidies and Deficits of the Modi Government

 

75 Years of Pakistan

 

Gujaratification of India

 From The Economist

Agashiye, a popular restaurant in Ahmedabad, serves only one thing: Gujarati thali. But the dish contains multitudes: curries, pulses, veggies and sweets, along with flatbreads, rice, salad, pickles, poppadums and more. Its fans say the thali strikes the perfect balance. But that depends how it is consumed. Presented with a plate featuring greens next to fried delights and thick, sweet cream, few diners choose to gorge on cabbage.

So it is with Gujarat’s strangely uneven development record. Ruled by Narendra Modi’s Hindu-nationalist Bharatiya Janata Party (bjp) since 1998, India’s westernmost state is a great success story overall. It is the sixth-richest state and accounts for 30% of exports. Its economy grew at an average annual rate of 11% between 2011 and 2021, the fastest in the country.

It is this record that Mr Modi, after 13 years running Gujarat, stressed when he sought India’s top job in 2014. Just as the thali contains a balance of fibre, protein and carbohydrates, his “Gujarat model” was said to be a perfect mix of good education, jobs, higher incomes and a “better life”. After a decade of welfarism, state meddling and graft under the Congress party, many Indians were hungry for it.

Critics of Mr Modi pointed to communal riots on his watch in 2002 that left over 1,000 Gujaratis dead, most of them Muslims. They also noted that the state was pro-business long before he showed up. And that Gujarat’s social indicators, which track changes in the lives of the poor, were far from perfect—indeed much worse than its economic ones. That seemed like a bad lookout for a country with more than twice as many very poor people as any other. Sure enough, eight years and two crushing election victories later, the hopes and fears for Mr Modi’s economic stewardship have largely been realised. He and his party have taken the Gujarat model India-wide.

In the state of 62m people, where the bjp won its seventh straight election this week, social indicators still trail economic ones. On a development index that accounts for life expectancy, education and income, Gujarat ranks 21st out of 36 states and territories. It is in the bottom half of states for underage marriage, child stunting, infant mortality, and school and college enrolment. Last year its gdp per head matched Tamil Nadu’s, but its share of people living in poverty, at 14%, was nearly four times bigger (see chart 1).

This reflects the Hindu nationalists’ priorities. Gujarat’s social spending is the lowest of all Indian states. It also directs a smaller share of its total expenditure to rural development and a larger portion to cities than the state average. Many of its rural districts lack basics such as secondary schools as a result. Meanwhile, its cities are thriving, as they like to illustrate with shiny new building projects. When the national government solicited proposals for urban-renewal plans in the early 2000s, most cities in Gujarat wanted funds for flyovers, says Himani Baxi of Pandit Deendayal Energy University in Gandhinagar, the state capital. Just one city proposed building an unglamorous but necessary sewage-treatment plant.

After a number of false starts, India’s economy is also booming. On December 6th the World Bank upgraded its forecast for growth this year from 6.5% to 6.9%. If that is not as fast as Gujarat tends to grow, it is faster than any other big economy. Mr Modi’s highly publicised new mantra is “Together, for everyone’s growth, with everyone’s trust”. And ambitious infrastructure projects such as highways and digitisation are, as in Gujarat, a prominent part of his plan. Most large cities now have metro lines; over 10,000km of highways are being added each year, twice the rate the previous Congress-led government managed. The infrastructure push is helping households, too. Many more now have access to bank accounts and clean fuel. Internet penetration is rising rapidly.

bjp rule has been much less successful at improving Indians’ poor health and woeful education. Child-mortality rates are falling, but patchily. More than a third of children under five are stunted, a higher rate than in Bangladesh and Sri Lanka. In 2018 around half of all rural children in fifth grade could not read to second-grade levels. And after two years of school closures during the pandemic, the situation is unlikely to have improved.

These failures, again, reflect the bjp’s choices. It has been more generous to India’s poor than its government in Gujarat; the percentage of spending given to welfare schemes such as food and cooking-fuel subsidies is in line with the long-term average. Yet the Modi government is devoting a much smaller portion of India’s bumper tax revenues to social spending, including health care and education, than its predecessor (see chart 2). In 2018-19 government spending on health represented 3.2% of gdp, down from 3.9% the year before it came to power. Spending on education, at 3.1%, is far below its target of 6%.

The poorest bits of the country are missing out most, largely because India’s growth is so unequally distributed. According to official figures, unemployment in Gujarat is 2.9%; in Uttar Pradesh (up), a poor northern state of 240m people, it is 7.1%. Yet the bjp has suffered little or no blowback in such places. This year it became the first party to win a second consecutive majority in up since 1985. Why?

A lot of the answer is its Hindu chauvinism. In Gujarat, up and elsewhere, the bjp has successfully presented itself as a defender of high-caste Hindus, while mollifying the populous lower castes with hate speech against Muslims and just enough welfare. Yet it also seems that Indians like its spending priorities far more than would once have been imagined.

The long-abysmal state of public services—and proliferation of private alternatives—have downgraded Indians’ expectations of them. Less than a third rely on public health care. In an international survey in 2016, just 46% of Indians agreed that “the primary responsibility for providing school education rested with government”, the lowest of any country polled. Meanwhile, the bjp’s infrastructure projects, and relentless efforts to put Mr Modi’s imprimatur on them, have made the projects and prime minister alike powerful symbols of national progress.

As anyone who has tackled a thali knows, to eat is to choose. And so it is to govern. Not every element of the Hindu-nationalist development policy is good for Indians. But it is fuelling their growth and keeping them coming back for more. Mr Modi’s approval rating, at around 77%, may be the highest of any major world leader. His prospects of winning a third parliamentary majority in 2024 appear exceptionally strong.