LibLink: Christine Jardine Death at Westminster shames world’s fifth largest economy

In her Scotsman column this week, Christine Jardine has what she calls a “proper pointy-fingered rant” about homelessness:

“I won’t use the word I’m thinking, it’s what you might term unparliamentary language. Let’s just leave it at I am disappointed. Yes, there are often social, medical or family issues responsible for people sleeping rough, and most people who are homeless are not on the street. I also agree that we need to tackle those issues in very different and specific ways. Building more houses will not help those who need social care, perhaps because they got into a spiral of drug or alcohol addiction and were treated like criminals rather than being looked after.

By the same token, more social care will not help those for whom decent housing is simply not available because a previous government decided to sell off the council housing stock almost four decades ago, and they have never been replaced. And then there are the issues surrounding benefits and the now infamously inept system of Universal Credit. All of that adds up to a horrifying tally of despair. In Scotland 43,000 people, including children, became homeless in 2017. That’s more than the joint capacity of Easter Road and Tynecastle stadiums, and equates to one household every 18 minutes losing the roof over their heads.

At the same time, Shelter calculates that there are more than 39,000 homes lying empty in Scotland. Surely someone in government can do the maths? Take the empty properties and turn them into homes. I’m proud of the fact that at the last Scottish elections my party, the Scottish Liberal Democrats, proposed doing exactly that: invest in turning those empty houses, many of which are now derelict, and provide accommodation. Failure by governments at both Holyrood and Westminster to do that is nothing short of a dereliction of duty.”

You can read the whole thing here.

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32 Comments

  • Christine Jardine,

    Wouldn’t it be a ‘sensible” start be to participate in budget discussions to try and influence decisions on spending?

  • Can you fix the headline please? When I first saw it, it looked like CJ had died at Westminster! A bit of punctuation needed.

  • Housing policy, building regulations and land use are devolved matters.
    Rough sleeping and families being accommodated in temporary accommodation do require different solutions. Housing first is a strategy that requires rough sleepers be settled in permanent accommodation as pre-requisite to and part and parcel of treating addiction and mental health problems. It is a labour intensive strategy that has been successfully deployed in countries like Finland.
    Councils are currently able to assess higher rates of council tax on unoccupied homes as part of strategies for bring empty homes back into use.
    Local housing allowance can be paid straight to landlords where tenants:
    – have rent arrears of eight weeks or more
    – are already getting deductions from their income support, employment and support allowance or jobseeker’s allowance to pay for rent arrears
    – council helped with getting private rented accommodation.
    The council can also pay LHA straight landlords if it believes they are:
    likely to have problems managing their financial affairs because of a learning disability or a drug or alcohol problem or are unlikely to pay the rent and are aware that tenants have consistently failed to pay rent in the past, without good reason.

    More use needs to be made of these provisions currently available to councils.

    The Scottish Land Commission published its report this month https://landcommission.gov.scot/wp-content/uploads/2018/12/Land-Value-Tax-Policy-Options-for-Scotland-Final-Report-23-7-18.pdf. It’s Chief executive commented:

    Chief Executive of Scottish Land Commission said,
    “This report provides a good evidence base for us to engage widely on the potential role land value taxation could play in making more of Scotland’s land. The research suggests land value tax could contribute to addressing key land reform objectives, including bringing vacant and derelict sites into use, reinvesting rising land values to public benefit and moving to a more diverse and productive pattern of land ownership.”

    I hope our Scottish MPs and MSPs will take up the challenge.

  • David Evershed 28th Dec '18 - 3:37pm

    I read that the homeless person who died at the Westminster tube station was an EU immogrant, as are a high proportion of of those sleeping on the streets.

    The Office of National Statistics recently estimated the number of rough sleepers in England to be 4,134 of whom 16% are EU nationals, 4% other overseas nationals and 8% of unknown nationality. See

    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/682001/Rough_Sleeping_Autumn_2017_Statistical_Release_-_revised.pdf

  • David Raw,

    LVT is directed at addressing the issue of land for new housing construction and bringing back empty properties into use to alleviate the growth in the use of temporary accommodation.

    Housing first is a strategy that has been successfully employed to tackle rough sleeping. Shelter Scotland writes https://scotland.shelter.org.uk/professional_resources/practice_solutions/practitioner_articles/housing_first/4

    “…The evaluations of the original ‘Pathways’ Housing First project in New York suggests that this approach can deliver towards outcomes in the following key areas:
    An effective response to homelessness – for people with complex needs, people who were not engaged with any service and who had previously been unable to access or sustain a tenancy are now housed, and have access to support
    Homeless prevention – The Pathways Housing First programme sustained an 80% housing retention rate over two years
    Effective use of resources – Many reports conclude that Housing First is a highly cost-effective approach, which offsets costs via a reduction in clients’ use of expensive emergency services. An evaluation of the Denver Housing First Collaboration in the United States, for example, calculated that total emergency-related costs (such as use of shelters and hospital emergency rooms) declined by 73% per client, in the 24 months of participation, as compared with the previous 24 months.”

    Again this is something Libdems could and should be championing. There is a good International evidence base to show it works. and relieves pressures of other stretched services like hospital A&E departments.

  • The solution is simply our society raising its importance so that it is as unthinkable as having no clothes to wear to not have a roof over your head that you can call home.

  • Suzanne Fletcher 29th Dec '18 - 11:38am

    ” only” 7% of those destitute, but this is part of the problem, and this is what was on the LD4SOS website in November.
    Rough sleeping – its causes and effects, is at last being looked into more. 7% of all street homeless people is caused by those who have been given leave to remain, so are new refugees. One of LS4SOS Council wrote this letter to the Observer after reading one of their articles.
    Note that it is Lib Dem Policy, in our information sheet on “When the final decision is made” that we say at least 60 days should be given to vacate a property. The letter is here :
    As you rightly say in your “comment is free” https://www.theguardian.com/commentisfree/2018/nov/25/observer-view-rough-sleepers-homelessness rough sleeping is an urgent, and potentially deadly, issue for those who have to do it.
    Of those thousands who are destitute, there is another category though; People who have had a positive decision on their asylum claim, being given the right to remain in the UK! It is good news for them, but they suddenly, after what can be many years of waiting, have to vacate the property they have been living in, in less than 28 days. It gives very little time for them to find somewhere they can afford, at the same time as trying to sort out work and benefits. Rough sleeping can be the option, and of course that does not help their quest for work.
    Increasing the time to vacate a property to at least 60 days, and longer for those who are vulnerable, would make a big difference, and be a better start to those wanting to make a positive contribution to life in the UK.

  • Peter Martin 29th Dec '18 - 12:58pm

    @ Steve Trevethan and Joe Bourke,

    This isn’t an argument for excusing anyone not paying their taxes, but at the same time we do need to understand that tightening up on tax avoidance probably won’t yield any extra revenue.

    For example: suppose I have a problem with my car and I pay a friend of mine ‘cash in hand’ £300 to fix it. If I hadn’t had that bill I would have gone out to buy a new TV and the Govt would have receive 20% VAT, the shop workers would have paid income taxes on their wages etc.

    But guess what? My friend needs a new TV too. So, after I have paid him, he goes off to the same shop and buys the same TV I would have done and the Govt isn’t ‘out of pocket’ at all.

    Or is it? I haven’t paid any VAT on my car bill. My friend hasn’t paid any income tax on his wages!

  • @Peter Martin

    “tightening up on tax avoidance probably won’t yield any extra revenue.”

    Good news! We can go into the next election proposing to raise spending 3 times to 100% of the economy and no-one having to pay any tax. Because by the logic of your argument no-one paying any tax raises the same amount as everyone paying tax!

    I guess the argument falls down somewhere!

    I do appreciate your argument that the cost of the tax gap is less than actually stated because people go and spend the money that they have avoided in tax in the economy which subsequently gets taxed. And it is worth pointing out that it is not necessarily the people who directly pay the tax who actually pay it. Higher taxes may mean higher labour costs which in turn mean higher prices for the consumer etc.

    It is worth also pointing out that VAT is paid on each stage in the supply chain on the “value added” hence um.. the name. So as your friend is VAT registered he can claim back the VAT on the parts he needs for the job and doesn’t reciprocate on paying the VAT he should.

    In an alternative scenario – you pay the VAT by either taking the money out of your savings or working more. In either case there is an economic benefit by the economic activity which then circulates around the economy – £60 goes to the Government (say net £30 if the parts are half the cost). Obviously also the Government then circulates the money around the economy in wages to public sector employees etc.

    I believe there is a way that legitimately your friend can avoid paying income tax and VAT on his value added by you and him bartering the time. You agree to say babysit for him for so many hours and he mends your car. But I am not an accountant so no-one should take my advice as correct! And obviously avoidance is legal – no-one is obliged to pay more tax than they have to – evasion is not.

  • David Raw 28th Dec ’18 – 4:10pm

    @ David Evershed ” I read that the homeless person who died at the Westminster tube station was an EU immogrant, as are a high proportion of of those sleeping on the streets.” And your point is, Mr Evershed ?

    I think the relevance – I don’t know the specific facts of the case – is if you are not “ordinarily resident” etc. in this country then you are not entitled to housing benefit and out of work benefits. In general I believe that this means that you have to have been here three months AND making your life here.

    Whether this is right or wrong. And while as an ideal I favour virtually complete unfettered freedom of movement, I think it probably is right, this case does rather put a lie to the claim perpetuated by some that you can just arrive here from another EU country and walk into having benefits and housing.

    Out of interest do you need to have a permanent address to claim UC? You need a bank account but you can open a credit union account that UC can be paid into without a permanent address – see for example – https://www.eastsussexcu.org.uk/universalcredit

  • Peter Martin 29th Dec '18 - 3:03pm

    @ Michael1

    “…….by the logic of your argument no-one paying any tax raises the same amount as everyone paying tax!”

    Actually it doesn’t but that’s not the real point.

    “I guess the argument falls down somewhere!!”

    Yes it does. But it needs a little lateral thinking, and an understanding of just what taxes are for, and how they work, to see where!

    What my friend and I were doing, I agree, in this totally made up example 🙂 was more tax evasion that tax avoidance. I’m not sure if it would make a difference, in law, if I’d actually bought his TV for him, and then bartered it for his labour, but as it’s purely an hypothetical scenario it doesn’t really matter !

  • @Michael 1. You need to have a bank, building society or credit union account to receive UC. It is virtually impossible to do this without a permanent address because it is part of the ID required to open such an account.

    Apart from the theoretical aspects of this, the closure of nearly 3,000 bank branches in the last three years exacerbates the access and travelling costs for UC claimants.

  • @David Raw

    Thanks for the reply and the information and to Joseph Bourke for the further information (and a slight correction on Post Office Card Accounts although the citizens advice website states you can’t get money out of cash machines – the post office websites says you can take money out of “Post Office branded” ATMs).

    Certainly East Sussex Credit Union state: “Not everybody has a bank account and opening one can be problamatic especially for someone who doesn’t have a permanent address, proof of ID or a good credit score. For anyone struggling to open a bank account, we can help them to open a credit union account and sign up to the Engage Pre-Paid Visa card account in order for their benefits to be paid to them.”

    I am a little confused as to how they do that without someone without a permanent address as they say in their infographic that they do require proof of address as ID.

    However the Government website does state that: “in exceptional circumstances they can use their local jobcentre.” and a letter from the DWP acts as address ID.

    In full it states: “If the claimant does not have a permanent address, there are options available to them. They can use a care of address, like the address of a family member or trusted friend, if they are staying at a hostel they can use the hostel address as their address or in exceptional circumstances they can use their local jobcentre.”

    https://www.gov.uk/government/publications/universal-credit-and-homeless-people/universal-credit-and-homeless-people-guide-for-supporting-organisations

  • @Peter Martin

    Thanks for the reply. I do appreciate the points that you were making.

    On battering, I was on wrong on consulting the great oracle Google, the government website states that battered goods and services have essentially to be treated as cash for VAT purposes. https://www.gov.uk/guidance/vat-part-exchanges-barters-and-set-offs

    Obviously your (hypothetical) friend is VAT registered and therefore I assume running a business as a garage mechanic. Assuming that he is a friend and not a tradesman you had just met I think it would be difficult for anyone to prove that you were not two friends doing each other a good turn. Someone doesn’t have to charge for things if they don’t want to. Obviously it needs the bonds of a good friendship for one side not to renege on another side without a contract (at which point it would presumably be seen as a business transaction). They valued the friendship so fixed your car for free. You stepped in to do some babysitting when they wanted to go out. Or indeed you felt they were such a good friend that you decided to give them as a present that TV you were suddenly and inexplicably attracted to in the post-Christmas sales forgetting that you had a perfectly good set of your own!!!

    But as I proved I am not an accountant so consult your friendly tax lawyer etc. and probably pay more than the VAT 🙂 !

  • The tax gap is calculated based on modified GDP estimates of taxable transactions. If their is a commercial transaction that has the badges of trade whether settled by way of exchange of goods and services (barter) or via money as the medium of exchange it generally will fall within the scope of taxation.

    GDP counts only transactions that are measured in terms of money value. Unpaid voluntary work, carers taking care of family members, mothers rearing children are productive economic activity and socially beneficial but do not get counted in GDP.
    Organised charitable activity does get counted in GDP but is mostly non-commercial and outside the scope of taxation.

    Rough sleepers need accommodation and extensive social services support to overcome the obstacles and set-backs they face. The resources required are either vacant residential properties or land for building on, labour and capital provided via the responsible local authorities. Local authorities need either central government funding from a treasury budget or the ability to collect taxes directly themselves to acquire the necessary resources.

  • Peter Martin 30th Dec '18 - 11:38am

    @ Michael1,

    I’m not sure if you’ve figured why dodging tax payments does affect the economy even though, and as I showed in my original post, of 29th Dec ’18 – 12:58pm, they don’t necessarily affect the Govt’s tax take but it does! It is a real problem.

    As I have often said, the British and US Governments don’t tax because they “need the money”. This doesn’t apply to euro using countries, local and regional Govts etc. They tax because they do indeed need the money.

    They tax us to stop us spending it all on what we might prefer to spend it on. The Govt wants us to forego some of our personal consumption. Money is simply a tax voucher. So just like Tescos put their collected vouchers in the shredder because they no longer have any relevance so does the Govt with its collected ‘tax revenue’. This way the Government creates fiscal space to do its own spending without creating inflation.

    Anyone dodging their taxes, whether you want to call that tax avoidance or evasion, isn’t foregoing anything. That’s the problem!

    PS I don’t want to give you the idea that my example was totally fictional, but it was a long time ago when I did do some small scale ‘wheeler dealing’ to make ends meet! Everything is above board and legit now!

    But I know what goes on. If I want anyone do some decorating for me, or whatever, I know the choices I’ll be given!

  • @Peter Martin

    Thanks for your reply. Firstly I am sure that I don’t understand anything!
    But… here goes!

    I think there are a number of scenarios.

    1. Starting from the assumption that there is no Government. I along with my neighbours decide to club together to fund a police officer by all putting in a percentage of our income. I renege on giving over my percentage. We are now theoretically short of the money we need to fund a police officer. But I go and spend my money I would have put in with Bill, my neighbour who also runs a pub. Now Bill is an upstanding citizen and he contributes his percentage. It looks as if everything is OK because he can pay over his money over as his income is increased by my money. There are though several problems. Firstly he is only paying a percentage over. So if I earn a £1,000 and have to pay over 10% – £100, Bill has only to pay over 10% of that £100 .But Bill also has to pay for the costs of the beer, the pub up-keep and so on which is calculated as costs for the purpose of his income. But I appreciate that this is slightly less of a problem for a large Government because that money keeps on being spent in the economy but there is leakage out of the economy, personal allowances, zero vat rated goods etc. etc.

    2. We now have a money issuing government. Now governments can create their own money which has no intrinsic worth. The paper in the notes is not worth much and the electronic zeros in a computer nothing. Also I can’t go along to the Government anymore with my £5 to a get a fiver’s “worth” of gold. Now there is a debate about borrowing and it may well be the best strategy especially in a recession. But in general no-one proposes that all or indeed the majority of a Government’s spending or indeed anything other than a small percentage to be funded this way. Wikipedia notes: “Economists regard seigniorage as a form of inflation tax, redistributing real resources to the currency issuer. Issuing new currency, rather than collecting taxes paid out of the existing money stock, is then considered in effect a tax that falls on those who hold the existing currency. Inflation of the money supply in the long run may cause—and, all other things being equal, will cause—a general rise in prices due to the reduced purchasing power of the currency.”

  • Inflation tax is so named as one of the effects of inflation is that it functions as a giant tax increase. It tends to unfairly target the poor because they spend nearly all their income on goods and services, the costs of which go up greatly during an inflation. Where wages and benefits do not increase by at least the same level as inflation the poor will get poorer. By contrast, because the rich have the opportunity to save a lot of their incomes rather than spending everything they take in, proportionately they’re less affected by inflation tax. By investing their savings in assets (like property) whose prices go up during inflation, the rich can insulate themselves from a great deal of the harm caused by inflation.
    As with all economic relationships the value of money is determined by supply and demand. The supply of money is under government control and is adjusted by spending, taxes, interest rates, debt issuance and open market operations. The demand for money derives from its usefulness as a medium of exchange. The object of government policy is to increase the supply of money at a rate in excess of the demand for money that will enable it to meet is target rate of 2% for CPI inflation. With a 2% inflation rate the real value of outstanding debt will reduce in value every year – a benefit for borrowers (including the largest borrower- the state) and a loss of value for lenders.

  • Peter Martin 30th Dec '18 - 3:49pm

    @ Michael,

    I’m not sure I fully understand part 1 of your argument.

    First of all I would say we should all pay our taxes. I was aware of the paradox of a person not paying their taxes but the Government not being any worse off, according to conventional thinking, before I actually had a answer. But if you muse on these things for a while you can generally figure out the answer. Another way of looking at the problem is to consider that the Government creates money when it spends it into the economy and destroy it when it taxes. It can never get back more than it has created in the first place. So deficits and debt are quite normal for currency issuing governments.

    All Government money will end up coming back as revenue – eventually. Where else can it go? I suppose someone could burn banknotes! If I save the money in a piggy bank that will slow down the process. So spenders, even ones who don’t pay any tax, don’t interfere with the process of money flowing back to the Government. Savers do. Our big savers at the moment are our overseas trading partners who sell us more than they buy from us and save the surplus ££ they earn.

    “But in general no-one proposes that all or indeed the majority of a Government’s spending or indeed anything other than a small percentage to be funded this way”

    No its usually just a few % of GDP. But it is just a few % that seems to cause us a lot of problems. The kind of problems that we read about all the time on LDV are caused by excessive worrying about the ‘deficit’. We are told we can’t fund local councils like we used to, can’t run the health service, can’t do anything about the homeless, because we have to live ‘within our means’. Well yes we do, but our means aren’t defined by the number of ££ the government destroys in its digital shredder. They are defined by the number of builders we have to build the houses, the number of teachers we have to staff the schools etc.

    Seignorage is the difference between the value of money and the cost to produce it. It’s not a particularly useful concept for a fiat currency because the cost to produce it is virtually zero. So in that sense its all seignorage.

  • Party policy on homelessness was last updated in 2016 and set-out in policy paper F9 https://www.libdems.org.uk/conference-autumn-16-f9-end-to-homelessness. It calls for:
    – An end to the Government’s policy of forcing local authorities to sell their higher value council homes.
    – Increased funding for local authorities from central government to meet their homelessness duties and a strengthening of these duties to allow earlier intervention in homelessness prevention, including extending the definition of someone threatened with homelessness from a 28 day period to 56 days.
    – A requirement for local authorities to provide emergency accommodation for all people who become homeless and have nowhere safe to stay, whether single or a family, for 28 days – this will provide a window of time for support teams to work with the applicant and move them into alternative accommodation as well as act as a signpost to services including mental and physical health services.
    – Adequately resourced mental health services to support those leaving care and those who become homeless.
    – A review of the priority need system and the method for assessing the intentionality of homelessness.
    – Involving people in designing their own solutions where possible by jointly developing a Personal Housing Plan which addresses underlying as well as immediate issues, as has been introduced in Wales.
    – An end to the Government’s policy of removing the entitlement to housing benefit for 18-21 year olds, currently set to be enacted in April 2017.
    – A repeal of the Vagrancy Act which makes sleeping rough a criminal offence.
    – A ban on the use of public space protection orders that target rough sleepers and an end to the use of so-called ‘homeless spikes’.
    – All local councils to have at least one provider of the Housing First model of provision for long term entrenched homeless people.
    – The Government to work closely with organisations to deliver better services for homeless people and those under threat of homelessness.
    – Long-term support for the supported housing sector, including maintaining funding rates at least in line with inflation.

    There will be a fringe meeting on Homelessness and Universal credit at the spring conference in York next March.

  • Steve Trevethan,

    I think it is important to have an evidence-based foundation for economic policy and particularly important to be able to distinguish between decisions based on economic rationale and political. Economics is all about how people and societies deal with scarcity. People have limited time and there is a finite supply of natural resources. This forces people to make trade-offs How these choices are made by groups of people is the basis of economics.
    With limited resources there needs to be a method for allocation beyond brute force. This is where politics comes in to resolve conflicts. encourage compromise, accommodate different interests and determine who exercises power and makes the law.
    Economics has developed significantly in the post-war period and a synthesis developed based on the original classical economics developed for the Industrial age and the Keynesian economics practiced in the decades following WW2. This synthesis was led by economists like Paul Samuelson of MIT and forms the basis of current day economics teaching in academia.
    Since the financial crisis if 2007-08 there has been a renewed interest in economics generally and how such recessions can be avoided. Two leading UK economists Simon-Wren Lewis and Jonathan Portes have undertaken extensive research and developed a basis for fiscal rules . The Labour party has adopted the rules as the basis of their fiscal policy approach.

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