b) The economy prospers best when the people are healthy.

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1 ,, Department for Work & Pensions Ministerial Correspondence Caxton House Tothill Street LONDON SW1 H 9DA ministers@dwp.gsi.gov.uk Reverend Paul Nicolson Taxpayers Against Poverty 93 Campbell Road London N170BF Our ref: POS( 4 )4056/828 :3 March 2016 Dear David, Thank you for your letter of the 3 rd March 2016 answering mine of the 8 th December I am by no means satisfied with your answers. In principle no British parliament should pass laws which deprive people of the income needed to buy a healthy diet and keep warm even for one day let alone a one month, three month or a three year benefit sanction. Your laws are uneconomic because; a) they create mental and physical ill health of men, women and children costing billions in the NHS and schools which would be better spent preventing ill health with provisions of adequate minimum incomes and affordable housing b) The economy prospers best when the people are healthy. Dear Reverend Nicolson, Thank you for your letter of 8 December 2015 regarding welfare reforms. I am sorry for the long delay in replying. 1. The Chancellor announced a series of measures in the Budget on 8 July 2015 to reform welfare, and the four principles that have underpinned these reforms. First, the welfare system should support the elderly, vulnerable and disabled people; second, those who can work should be expected to look for work, and take work when it is offered; third, the working-age benefit system has to be more sustainable and fourth, the system should not support lifestyles or rents not available to the taxpayers who pay for that system. a) There is one governing principle which should underpin the policies of any civilized government. It is missing from the above four, but it was applied 1

2 by a national government during the war. It is that the government must ensure that men, women and children are able to buy a healthy diet and keep warm in work, unemployment or in retirement. b) I understand the political need for conditionality but am deeply opposed to the current random imposition of benefit sanctions by the jobcentres. c) The independent magistrate s courts are the right place for the imposition of severe penalties. No law should leave people without the income to buy food and keep warm for even a day let alone one month, three months or three years. d) Fines in the magistrate s courts are proportional to means leaving enough for food and other necessities; e) People are fed in prison. 2. Based on the above principles the Chancellor announced a number of protections for the most vulnerable in our society: exempting benefits for the additional costs of disability and Carer's Allowance from the Working-age Benefits freeze; maintaining the State Pension triple lock; exempting the most vulnerable disabled people from the Benefit Cap; and exempting the disabled/severely disabled child elements in Child Tax Credits (and their Universal Credit equivalent) from the Tax Credits/Universal Credit payment limits. These exemptions show that safeguarding the vulnerable is at the very heart of our reforms. 3. The Chancellor also announced a new National Living Wage at the Budget. This will be set at 7.20 an hour from next April, and will rise to 9 by This will benefit over 2 million workers and by 2020 a full-time worker will see their earnings rise by over 5,000 a year. 4. I can assure you that equality is at the heart of the Government's approach. It is fundamental to building a strong economy and a fair society. a) I am not clear what the government means when you say safeguarding the vulnerable is at the very heart of our reforms. So many of the reforms do exactly the opposite; none more so than the local housing allowance, the removal of the spare room supplement and the benefit cap. They all cut housing benefit for the poorest and most vulnerable tenants. They create rent arrears and evictions, which harm the education of children b) There is no published governmental research into the minimum incomes needed for healthy living to justify the statements that the vulnerable are protected by your policies in paragraphs 2, 3 and 4 of your letter. 2

3 c) What do you mean by equality? The highest incomes will never be equal to the lowest incomes. It is a civilized government s responsibility to ensure that the lowest incomes are enough for healthy living. A healthy workforce is essential to a strong economy. 5. You raise the Welfare Reform and Work Bill and the reduction in the benefit cap. The primary objective of the benefit cap is to tackle the culture of welfare dependency by setting a clear limit to what people can expect from the benefits system. It is important that the system is fair and that it is seen to be fair to the taxpayers who pay for it. Many working people have to cope with difficult circumstances, and have to live within their means. 6. This is about incentivising work and promoting fairness for working households, whilst continuing to support the most vulnerable. The benefit cap continues to provide a clear incentive to make sure that work is the best route out of poverty and helps reduce long term benefit dependency. 7. Evaluation of the current cap showed that households who were capped were 41 per cent more likely to enter work than comparable households not affected by the cap, and the greater the amount by which benefit receipt was reduced by the cap, the greater the proportion moving into employment. 8. Capping benefits is a key part of continuing the Government's commitment to full employment and the long-term economic plan to return fairness to the welfare system and deliver for hardworking people. It is continuing to help thousands of people who have been stuck on benefits to move into work. That is why we are reducing the benefit cap now to 23,000 in London and 20,000 elsewhere, to better align the levels with the circumstances of hard working families across the country: around 4 in 10 households in London earn less than 23,000, while 4 in 10 outside London earn less than 20,000. a) Whenever you speak of hard working people you discount all the effort being put in by the single mother or father of (say) a single child and twins as 'non-work'? b) Properly encouraged by government publicity, and supported affordable housing and child care, and in a stable community, a parent can prepare a child for a lifetime of healthy contribution to the common good. 9. There are a number of exemptions to the cap to protect the most vulnerable. The households which are exempt from the cap include Disability Living Allowance and Personal Independence Payment, as benefits which contribute towards the additional cost of disability. Those in receipt of the support component of Employment and Support Allowance are also exempt from the cap. 3

4 10. These provisions will allow the cap to be maintained at levels that better support the aims of our welfare reforms, balancing the key aims pf strengthening work incentives.and promoting fairness between those in work and those in receipt of out-of-work benefits. a) I understand your paragraphs 5-10 to be the implementation of the government s so called fourth principle the system should not support lifestyles or rents not available to the taxpayers who pay for that system. b) When a very large proportion of the population is paying rents that make them hungry them those tenants are supporting the lifestyles of the richest taxpayers who own several homes. The poorest people are supporting the life styles of the richest. The minimum progressive taxation necessary throughout the range of available incomes must provide benefits which will sustain a healthy workforce. c) You say that 41 per cent of households are more likely to enter work than comparable households not affected by the cap, and the greater the amount by which benefit receipt was reduced by the cap, the greater the proportion moving into employment. Please indicate whether that 41% would have entered work anyway and spell out in detail what happened to the incomes, health and well-being, after payment of rent and council tax, to the 59% who did not enter work. d) You will be aware the larger the family the bigger the cut in housing benefit imposed by the 500 cap. For example a single mother with five children will have a benefit income of rent of (say) 200 a week a total of 620 a week. Therefore her housing benefit is cut by 120 leaving that rent to be paid out the remaining 500 cap. In effect she is hit by a 240 cut in the income needed for food, fuel, clothes, transport and other necessities. e) That 120 cut has sometimes been covered by the Discretionary Housing Benefit (DHB) financed by central government and topped up by some local authorities, but it is limited and runs out leaving families in rent arrears and hungry. The payment of DHB is a post code lottery. f) An annual rise in rents can tip a family over the cap and create rent to be paid out of the income needed for food and other necessities. 11. Turning to your concerns about affordable homes, the Government is committed to delivering 400,000 affordable housing starts by 2020/21 and to supporting the most vulnerable in our society to have a decent place to live, as well as being committed to taking steps to increase homeownership. Since 2010, over 704,000 additional homes have been delivered in England, with over 277,000 affordable homes, and more council housing has been built 4

5 since 2010 than in the previous 13 years. 12. Nearly 270,000 people have been helped by the Government to buy a property since 2010, through schemes like Help to Buy and the reinvigorated 13. Right to Buy. We will deliver 200,000 Starter Homes exclusively for first-time buyers under 40 years old at a minimum of 20 per cent below open market value. 14. New planning reforms to deliver Starter Homes will be introduced through the Housing and Planning Bill and national planning policy changes. We announced as part of the outcome of the Spending Review in November 2015 a targeted funding package of 2.3 billion to support the building of up to 200,000 starter homes. We have already announced up to 36 million land facilitation funding this year to support the first wave of Starter Homes, and the Prime Minister announced on 4 January a further 1.2 billion would be made available to prepare more brownfield sites for Starter Homes. 15. We have taken action to increase supply and improve choice, quality and cost though our Housing Guarantees Scheme which will stimulate up to 10 billion of investment in affordable housing and the private rented sector, as well as a 1 billion Built to Rent Fund helping to fund up to1 0,000 new homes for private rent - it has funded delivery of over 4,000 homes to date. a) Sadly your housing policy will not produce affordable housing, because it is not underpinned by a credible definition of affordable housing. b) Housing is affordable when the income remaining after rent, income tax and council tax have been paid is enough to pay for a healthy diet, water, fuel clothes, transport and other necessities. c) 80% of median market rents is not a credible definition of affordable housing. It increases with the market taking an ever increasing proportion of the income needed for food, water, fuel, clothes, transport and other necessities. d) It will take many years to build enough properties in a market in short supply to make any impact on the level of rent or price of a home. e) Pumping money into demand side funding of the housing market in short supply counteracts the supply side funding, as does the national and international of speculation in UK property in such projects as but-to-let, unused land and empty properties. f) All UK land should be reserved for homes, work or the common good in such uses as hospitals and schools. 5

6 g) Meanwhile, for solely electoral reasons, the government supports the increasing value of homes people buy to the detriment of the people who rent their homes. Letting prices and rents drift uncontrollably upwards has spelt disaster in the very recent past. h) You say equality is at the heart of the Government's approach but your housing policy deliberately increases the inequality of incomes and wealth between home owners and home renters. It increases the inequality of incomes because a home becomes ever less affordable the higher the rents go, in a market in short supply, and the more the housing benefit is cut by the cap, the LHA and the bedroom tax. i) Immediate action by government is needed to protect the health and wellbeing of families, vulnerable and impoverished adults and the disabled from the assault on their incomes by ever increasing rents and prices in the chaotic UK housing market. j) Building more homes, though necessary, will not reduce rent quickly enough, if ever, to produce affordable rents that leave enough income to sustain a healthy life style for the poorest people in the UK. 16. Your letter also raises the benefits freeze. The benefits freeze is a vital part of the Government's welfare reforms, overall providing 3.5 billion of savings by which would otherwise need to be found elsewhere. It is therefore a necessary part of the Government's plan to reduce welfare spending by 12 billion by the end of this Parliament, and it would otherwise be unfair to future generations who are saddled with increased debt payments. a) 'Unfair to future generations? Parents and grandparents are acutely aware of the difficulties ahead of their children and grandchildren - and even greatgrandchildren. The protected 'elderly' have very often had it so good in their lives thanks to the beneficial policies of the Welfare state that they are horrified at the difficulties being put in the way of these later generations by the present government. b) The great unfairness is in the intergenerational consequences of squeezing the incomes remaining after rent, income and council tax have been paid with regressive local taxation, and its enforcement, to such an extent that buying a healthy diet and other necessities is put at risk. c) I am attaching a review by Dr Angela Donkin of the available research about the impact of low incomes on health, NOT HAVING ENOUGH INCOMES IMPACTS ON HEALTH. d) The expectation of life at 71 years in two wards in Tottenham is 17years 6

7 younger than the 88 years in Kensington and Chelsea; the same is true in other cities and towns throughout the UK. You make no mention of that profound inequality or how you intend to address it. 17. Benefits such as Jobseeker's Allowance have risen by 21 per cent, and the individual element of child tax credits has risen by 33 per cent, when earnings have only increased by 12 per cent since The freeze will help reverse this trend so that earnings grow faster than benefits; strengthen incentives to work; and deliver the savings necessary to bring the overall welfare bill down. I am showing below how the adult unemployment benefit was reduced in value up to April 2013 since when the freeze, the benefit cap, the bedroom tax and the council tax have driven it even further below the income needed for healthy survival Change Average value of UK home 156, ,000 61% ONS Average band D council tax (Eng) 976 1,444 48% DCLG Weekly Local Authority Social Rents* % DCLG Median basic weekly pay (full-time) % ASHE,ONS Minimum Wage % Parliament Single adults unemployment benefit % Parliament Cost of food % ONS Cost of domestic fuel % ONS Inflation (RPI) % ONS The council tax, always a regressive tax, has become more and more regressive as the value of domestic properties has increased. The chaotic UK housing market and the taxation of benefits by local authorities has made that persistent deterioration of equality ever worse since April Average Band D Council Tax As a proportion of Average house price % % % The source of my Statistics is the New Policy Institute. 18. We will also continue to offer protections for the most vulnerable. While we are supporting people to move closer to the labour market, we also recognise that this may not be possible for everyone. That is why we have made many 7

8 important exemptions to the freeze, including pensioner benefits, benefits relating to the additional cost of disability and care, and statutory payments. Sadly until you look below the surface at of your policies and statistics at what is happening to incomes and equality after rent, income and council tax have been paid you have no grounds to claim you are continuing to offer protections to the most vulnerable. 19. As you may be aware, this Department is leading the development of the forthcoming Life Chances Strategy which will set out this Government's new approach to tackling poverty and transforming the life chances of the most disadvantaged children and families. The Strategy will include a set of measures on the root causes of child poverty including children in workless households, children's educational attainment, family breakdown, problem debt, and drug and alcohol dependency. It will also be an opportunity to say more about how we can tackle deep rooted social problems to help transform children's lives so they can realise their full potential. 20. Let me reassure you that this Government is committed to working to eliminate child poverty and improving life chances for children. We are clear that low income measures do not drive the right action to tackle the root causes of child poverty, such as worklessness and educational failure, and simply deal with the symptoms. This Government wants to incentivise effective action. Our new approach, underpinned by the life chances measures of worklessness and educational attainment introduced in the Welfare Reform and Work Bill, will focus government action on the areas where the evidence tells us we can make the biggest difference to the lives of disadvantaged children - now and in the future. a) You have seriously underestimated the damage done to mental and physical health of men, women and children by the growing inadequacy of the adult unemployment benefit (now a due to stay that way throughout 2016/17) and the imposition of sanctions. b) It is not enough to say that there is not direct link between mental health problems and suicide on the one hand and poverty incomes, or their absence due to a sanction, on the other. It is also vital to look at the surrounding circumstances. c) In principle no British parliament should pass laws which deprive people of the income needed to buy food and keep warm even for one day let alone a one month, three month or three year sanction. 8

9 d) Why one person is resilient and can see the way through the misery of a three month sanction while another one is not is certainly difficult to discern. But misery it is when the absence of, or an inadequate, income makes it impossible to but food or pay off any outstanding rent or council, tax arrears or a fine. e) During a sanction. The local authorities and the magistrates computers continue to churn out notices to quit for rent arrears, summons to court for council tax arrears, plus court costs and a visit from bailiffs. f) Far from incentivizing effective action the sanction can be so debilitating that it diminishes the capability and chances of finding work. g) The government has been told repeatedly about the concern of the Royal College of Psychiatrists, the Government Office for Science, the Mental Health Foundation, the Faculty for Public Health and the BMA about the link between debt mental health problems, but you continue to great debt problems for vulnerable people, and the massively increased cost to the health service. h) You are also well aware that the risks of low birthweight are increased when a woman cannot afford a healthy diet before and during pregnancy. That deprivation increases the risk of permanent developmental brain disorder in their offspring. 21. Our approach is based on the evidence. We know that work is the best route out of poverty - around 75 per cent of poor children living in families where all parents move into full employment leave poverty altogether. That is why we are focused on improving work incentives and ensuring people have the skills and the opportunities to move into employment. Universal Credit, our investment in childcare and, in future, the National Living Wage will all play an important part in helping to make work pay. The expectation of life at 71 years in two wards in Tottenham is 17years younger than 88 years in Kensington and Chelsea; the same is true in other cities and towns throughout the UK. You make no mention of this inequality or how you intend to address it in your life chances policies Further, our published evidence review made it clear that educational attainment is the biggest single factor in ensuring that poor children do not end up as poor adults. That is why we are wholly committed to ensuring that every child, regardless of background, is extended the opportunities and education that allow them to fulfil their potential. In addition, the Department will continue to publish low-income statistics as part of the Households Below Average Income publication, so that anyone can see this data. 9

10 a) As I have already written until you look below the surface of your policies and statistics at what is happening to incomes and equality after rent, income and council tax have been paid you have no grounds to claim you are continuing to offer protections to the most vulnerable. b) I accept that educational attainment is the biggest factor in ensuring poor children do not end up and poor adults. c) You need to accept that low birthweight babies and hungry children cannot take advantage of the education offered and end up under educated and hungry adults. Yours sincerely, With good wishes, Lord Freud Minister of State for Welfare Reform from the Reverend Paul Nicolson Taxpayers Against Poverty No citizen without an affordable home and an adequate income in work or unemployment. 93 Campbell Road, Tottenham, London N17 0BF, , ,

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