LibLink: Danny Alexander – The coalition has helped, not hurt the poor

Danny Alexander by Paul WalterDanny Alexander, Lib Dem chief secretary to the Treasury, has an article in today’s Observer rejecting the paper’s front page lead last week headlined ‘Revealed: how coalition has helped rich by hitting poor’.

I absolutely reject this assertion. Nick Clegg and I led the Liberal Democrats into coalition not just to rescue the British economy from the aftermath of the 2008 crash, but to do so fairly.

He details, with examples, various of the Coalition’s policies which aren’t picked up in the analysis reported by the Observer and sets out ways the Government (thanks to the Lib Dems) is ensuring the burden of economic retrenchment is fairly shared:

We’re ensuring the better-off do their bit. The top 1% of taxpayers now pay more than 28% of income tax revenue, more than at any point under the previous government.

In every single budget we have raised revenues from the wealthiest. In 2010, we increased higher-rate capital gains tax. In 2012, we raised stamp duty on high-value homes and introduced a limit on income-tax reliefs that can be claimed on pensions. And in 2013 we took measures against offshore tax evasion.

Before 2010, the richest 20% in society contributed around three-and-a half times as much in tax as they received from public spending. Now it is around four times as much. Independent analysis also shows that the tax and benefit reforms we have implemented since the fiscal consolidation began have hit the richest hardest.

Those on low and medium incomes, by contrast, have benefited. Our flagship Liberal Democrat policy has increased the tax-free personal allowance from £6,475 in 2010 to £10,000 now, with a further rise scheduled in April next year to £10,500. That’s a saving of £805 for a typical basic-rate taxpayer – and more take-home money for more than 25 million working people. More than 3.2 million low-income individuals will be taken out of tax altogether by the end of this parliament.

Danny concludes:

It was inevitable that living standards would suffer after a crash as severe as that of 2008. But regaining that lost ground can only be done on the back of a growing economy underpinned by sound public finances and strong business investment. Encouragingly, the most recent monthly ONS figures showed wage growth outstripping inflation. The recovery we are beginning to see is only happening because the Liberal Democrats are in government. It is our values and our policies that have placed a sense of fairness at the heart of the recovery plan.

You can read Danny Alexander’s piece in full here.

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  • Another example of a politician divorced from reality. Say this at the Food Banks where people have been forced to go because of draconian sanctions or those hit badly by the bedroom tax and /or ATOS. Is he not aware of the unemployed? He does not mention the rise in VAT which hit poorer households. Giving the rich a tax cut was fair?

  • Shame Danny didn’t also mention narrowing the gender pay gap in his article. You can check the figures for your local area on NOMIS. In my area Labour left the gender pay gap at 24% but under the Coalition government this has now narrowed to 15%. Still more to do but substantial progress in just four years.

  • Tell it to the ‘bedroom blockers’.

  • Danny you are forgetting that under your government students will now have very large debts , which will be with them for many years. The majority of new jobs created are zero hour or part-time and payday loans and foodbanks have thrived. Also the bedroom tax and savage medical assessments on the sick don’t exactly make the low income families feel better off. Not long to go now Danny, you and many of your fellow LibDems will soon lose their seats. Then I – as a ex LibDem voter – will cheer along with the many others who feel let down by this dreadful leadership, of which you are part .

  • TechnicalEphemera 23rd Nov '14 - 10:13am

    I make no comment other than this.

    On the one hand we have a rigorous reviewed academic analysis that shows the coalition have systematically transferred money from the poor to the better off.

    On the other Danny Alexander “Believes” this to be untrue.

    It has all gone a bit IDS hasn’t it.

  • Interesting article in the Gyardian today

    You were saying about low income families Mr Alexander?

  • @ Technical Ephemera

    “On the one hand we have a rigorous reviewed academic analysis that shows the coalition have systematically transferred money from the poor to the better off.”

    It shows no such thing. It shows maximum 1-2% of difference, despite taking a totally distorted reference point i.e. after Labour’s last-month-of-power 50p tax rate, plus, as the review makes clear, it is totally dependent on your assumptions about take up of benefits.

    How predictable that the usual suspects should be the first to rush out and post here with negative views about what the Lib Dems have achieved in power.

  • Danny, the public at large don’t believe you. You may have done a lot, but they wanted and needed you to do more. You allowed George to have his headline tax cuts at the top rate, and totally failed to realise that the headline is what mattered. Your political naivety is shocking. What does it take to make you realise this?

  • @ Anne

    The evidence is that the increase is due to wage levels and prices, neither of which are set by government, are they?

    You will notice the report says: “Incomes for the poorest have not been increasing in line with inflation and many, whether in low-paid work or on welfare, are not yet seeing the benefits of economic recovery.”

    What is the government supposed to do about this that won’t increase the deficit even more and lead to even more debt in future?

    The Lib Dems have cut taxes for lower paid workers to make it easier to earn a living, while supporting the economic recovery with a wide range of measures like increased training and apprenticeships, setting up an industrial policy, regional, green and infrastructure investment, reformed banking system etc. The only way we are going to get higher living standards is by having more people in higher paid, better skilled jobs working for successful companies.

    Or alternatively we could just have more borrowing, more spending and more people dependent on benefits, like under Labour. It sounds like a lot of people here would like the second option.

  • Today’s Indy has the following:

    Low incomes have driven more people to resort to foodbanks this year, despite reports of an improving economy.

    The Trussell Trust, which operates more than 400 foodbanks across the UK, said almost half a million people were given three day’s food between April and September – a 38 per cent rise.

    No idea how Danny squares his ‘belief’ with the facts as reported by umpteen other sources which disagree with him.

    The report by economists at the London School of Economics and the Institute for Social and Economic Research at the University of Essex finds that:
    ■ Sweeping changes to benefits and income tax have had the effect of switching income from the poorer half of households to most of the richer half, with the poorest 5% in the country in terms of income losing nearly 3% of what they would have earned if Britain’s tax and welfare system of May 2010 had been retained.
    ■ With the exception of the top 5%, who lost 1% of their potential income, it is the better-off half of the country that has gained financially from the changes, with an increase of between 1.2% and 2% in their disposable income.
    The report also claims that the transfer of funds from the poorest half of the country to the more affluent did not contribute to deficit reduction.
    The report, to be published on Monday, claims that the cumulative impact of tax and welfare changes, from in-work benefits to council tax support, to the cut in the top rate of income tax and an increase in tax-free personal allowances, has been regressive across the income spectrum.
    Its authors, Paola De Agostini and Professor Holly Sutherland at the university of Essex, and Professor John Hills at the LSE, write: “Whether we have all been ‘in it together’, making equivalent sacrifices through the period of austerity, is a central question in understanding the record of the coalition government … It is clear that the changes did not lead to uniform changes in people’s incomes. The reforms had the effect of making an income transfer from the poorer half of households (and some of the very richest) to most of the richer half, with no net effect on the public finances.”

  • @ David Evans

    “Danny, the public at large don’t believe you.”

    Well the public at large are often, when it comes to the Lib Dems, sadly misinformed. What was he supposed to do? Tell them they are right in all their false assumptions?

  • @ Matt

    Based on the starting point after Labour’s 50p tax rate increase, which they undertook as a “temporary measure” and which CUT tax revenues. If you take March 2010 rather than May 2010, it does not support their analysis.

    Plus the fact that under the Tories alone, which was the only alternative government in 2010, the situation would have been far, far worse for the less well off.

    This study offers no more objective proof than any other. Where are the links to the study so we can see the assumptions behind it?

  • As others in this thread have noticed Danny Alexander paints a very different picture from the report commissioned by 
    The Church of England, Oxfam, The CPAG and The Trussell Trust Food Bank people.

    Who should we believe?

    ”  More than half of people driven by acute poverty to apply for emergency food aid are there because of delays, sudden cuts or sanctions imposed on welfare payments, according to new research

    The Trussell Trust’s findings are a direct challenge to the coalition government’s insistence that the meteoric rise in the numbers of food bank users is unconnected to the cuts to the social security system, and is only linked to the growth in provision.

    The charity, which runs the country’s largest network of food banks, analysed more than 900 different users at a range of facilities across the country, as well as conducting 40 more in-depth interviews and 178 different caseloads from people accessing one of their advice services.”

    Up to two-thirds of those analysed by the study, which was commissioned by the charity along with the Church of England, Oxfam and the Child Poverty Action Group, said they were waiting for their benefits which had been delayed, because they had been sanctioned by jobcentres or because they had been suddenly hit by the so-called bedroom tax.”

  • @ John Tilley

    “As others in this thread have noticed Danny Alexander paints a very different picture from the report commissioned by
    The Church of England, Oxfam, The CPAG and The Trussell Trust Food Bank people.
    Who should we believe?”

    Maybe we can believe both at the same time. Danny Alexander doesn’t say there isn’t poverty. He says the Lib Dems have done a lot to help try to combat it.

    Sanctions are in many cases being applied unfairly. We should be looking to stop that, you’re right. But what about when they are fairly applied? If people dont’ search for work, should they not be sanctioned?

    As for the “Bedroom tax”, again we made a major mistake, which we’re moving to correct, of applying it where alternative accommodation wasn’t available. But should people be paid to live in accommodation that is too large for them when there are families who have greater need?

    There have been big own goals by the Lib Dems, which we should be ashamed of, but there have been some big positive actions of which we should be proud.

    Without the Lib Dems, poverty in the UK would be far, far worse than it is now.

  • Only a couple of days ago LDV carried a detailed report, with shocking details of real life case studies of poverty.
    It seems to confirm what the Trussell Trust, CofE, CPAG and Oxfam are saying.
    Did Danny Alexander read it?

    This thread did not attract many comments but I would strongly recommend people check it out.

    As I said at the time —
    JohnTilley 21st Nov ’14 – 7:54am
    The case studies in this report are a clear reminder of people in very real, desperate need.
    The studies reveal that minimal expenditure (a few hundred pounds) can save much greater public expenditure down the line and prevent a great deal of human misery.

    I recommend people read the case studies in the report.   There are repeated examples of people who through no fault of their own have had no income for weeks whilst awaiting decisions by DWP or other authorities.  
    I feel particularly for the man who did not have enough money to travel to hospital for his cancer treatment and form wheelchair bound, double incontinent woman who had been dependent on her elderly father for care hit a crisis when her father’s dementia got so bad that it meant that neither of them were being cared for.  
    Are we really saying that such people should be left to get on with it by themselves, without help?

    Link to report —

  • Both the report, and Danny’s spin on it, can be true. The increase in the proportion of tax revenues taken by the top 50% merely reflects the even greater proportion of earnings taken by the top 50%.

    Taken to its extreme, if the bottom 50% of earners were reduced to total penuary, subsisting on food stamps and change begged from passers-by, the proportion of tax paid by the most wealthy 50% would increase to approaching 100%. And presumably Mr Alexander would welcome that as further success in ‘the rich doing their bit’.

  • RC 23rd Nov ’14 – 11:06am

    You are in danger of painting yourself into a corner by attempting to defend the indefensible.
    Both the reports which I have made reference to in my last two comments indicate that the increase in poverty is as a direct result of this government’s actions.

    Just have a look at the reports and the desperate position that people are in as a direct result of the actions of the government and in particular the DWP.

    It is most certainly not just about the Bedroom Tax (and by the way the private members bill has failed to get through the parliamentary bureaucratic procedure so we are not at the moment trying to do something about it as you suggest).

  • Paul In Wokingham 23rd Nov '14 - 11:17am

    As often there is a really interesting article in this week’s New Scientist saying something that gives you pause for thought. In this case, it’s in the editorial titled “Get over it” which talks about some research into the “gay gene”, for which there is now very strong evidence.

    The article talks about “tolerance” (whatever that is) and says something that many politicians intuitively know: there is a growing understanding that simply presenting people with evidence that contradicts their world views does not change their minds: rather than assimilate the information, they just intensify their efforts to reject it.”

    The “world view” in this case has been created by 4 years of apparent Lib Dem acquiescence to a Tory agenda. Blame the ministers. Blame the media. Blame whoever. But as David Evans observes, it’s going to take more than a few numbers on an excel spreadsheet to change perception at this late stage.

  • Helen Tedcastle 23rd Nov '14 - 11:19am

    John Tilley is right. Danny Alexander cannot hide from the facts. The truth is the Lib Dems are part of a government at a time when the use of foodbanks is soaring.

    This is not some conspiracy on the part of those struggling to make ends meet. These are the real lives of the working poor and those who find themselves falling on hard times. A sad indictment of attitudes and approaches to welfare and human well-being by this government of hard-line Tory ideologues and centrist Lib Dems (in leadership positions):

    Key facts – 83% of foodbanks report ‘sanctioning’ is causing rising numbers to turn to them
    – 913,138 people received three days’ emergency food from Trussell Trust foodbanks in 2013-14 compared to 346,992 in 2012-13

  • “Are we really saying that such people should be left to get on with it by themselves, without help?”

    No, and we should be saying that welfare administration needs radical improvement to make sure people receive the benefits they are entitled to *when they need them*.

    To say that there are gross injustices in our benefits system in terms of speed and efficiency of administration does not detract from the fact that the Lib Dems have been largely successful in maintaining the overall basic levels of social security available for those in need.

    Things could, indeed should, be far better, but without the Lib Dems in power, as I said before, things would have been much, much worse.

  • @ Helen Tedcastle

    So are you saying that sanctioning shouldn’t ever be allowed to happen?

  • ” there is a growing understanding that simply presenting people with evidence that contradicts their world views does not change their minds: rather than assimilate the information, they just intensify their efforts to reject it””

    Precisely so, on both sides of the argument here.

    Those who start out with the basic premise that the Coalition is bad will be determined to reject any evidence otherwise and believe only the evidence that supports their world view.

    So what you say cuts both ways. Look at John Tilley’s conviction that Nick Clegg is the only reason why the Lib Dems aren’t rocketing in the polls and set to enter government with a majority of MPs next May.

  • Eddie Sammon 23rd Nov '14 - 11:28am

    I’ve read Danny’s article twice (once sped read, once properly). It is good that Danny is writing what he believes in and the content of the article is good and tackles some misconceptions about the government. From my own experience I have not got the impression that the government is full of neo-liberalism, despite what some journalists say.

    However, I think defending the coalition so strongly is toxic. It feeds narratives that some senior Lib Dems would like the coalition to become permanent and I do not believe this to be true.

    I’m not even really talking about other people’s opinions of the coalition. Cutting the 50p rate at the same time as cutting benefits was pure toxic and the government in partnership with the Bank of England has in my opinion re-inflated the asset bubble and even if it doesn’t burst I believe this misallocation of capital has acted as a drag on growth.

    Best regards

  • I despair at seeing a Lib Dem using Tory arguments on tax. Talking about the proportion of income tax paid by the wealthiest….

    The bigger point is that over a generation we have seen a growth in inequality not seen since the wars. We had a public deficit of about £160bn per annum. Labour must take their share of responsibility for this. But what has been the coalition’s response to this scenario? Basically to indulge the better off and certainly not ask much of the rich. I’d also point out that raising the basic tax threshold is a tax cut for EVERYONE, not just the poor.

  • @Anne

    “He does not mention the rise in VAT which hit poorer households.”

    No it doesn’t VAT on the lower-rated items such as gas and electric hits the poor. But then the government has not raised this.

    VAT at the standard rate hit poor adults when they buy new shoes and new clothes, which is a pretty rare thing to do when you re really poor. It disproportionately hits medium to high earners.

  • Eddie Sammon ‘I believe defending the coalition so strongly is toxic’

    Indeed, this has been the Lib Dem strategy failing from the start. Defending to the hilt a Tory dominated government. That just helps to endorse Cameron. Instead they should have said it was the best option availablea and if the likes of IDS, Gove or Osborne thought they could ride roughshod over the Lib Dems, we’d be walking away. But it’s always been clear that Clegg et al were going to have their 5 years of ministerial cars.

  • mmmm whom do I trust more

    A coalition Government that is extending the scope of Tpims and secret courts, Spending Hundreds of Thousands of Pounds relocating someone on a relocation order and spending Hundreds of Thousands of Pounds on Surveillance.
    Whilst at the same time subjecting a woman and child to the bedroom tax because she has had a panic room installed in her house due to threats of murder and rape, saving a few hundred pounds.

    Or do I trust the LSE, Trussell Trust, CofE, CPAG and Oxfam, all of whom have the welfare of the poorest people in societies and exposing the truth about the level of poverty and hardship that has increased.
    Bit of a no brainer really

  • RC 23rd Nov ’14 – 11:26am

    RC, by all means attack what I say but don’t try and divert the discussion by nventing something that I have NOT said.

    This thread is no about Clegg’s failures and I have not mentioned his name in this thread. What I have done is make reference to two very serious reports on poverty and need which have arisen directly fro, this government’s actions.

    Please address the subject under discussion.

    In addition to the LSE report which hit the media a week ago, we now also have the London Councils report and the Trussell Trust Report.
    That Trussell Trust Report was commissioned by the CofE, the CPAG and Oxfam.

    Your loyalty to a beleaguered Danny Alexander is of course admirable.

    Are you saying that the Church of England, Oxfam, The Child Poverty Action Group, 900 food bank users and the London School of Economics along with every London Council (irrespective of party in power ) are all wrong and only Danny Alexander and a few uber-loyalist Lib Dems are right?

    I don’t think you are.
    Maybe this is just another example of the ever-widening gap between the Political Classes and people in the real world.

  • Helen Tedcastle 23rd Nov '14 - 12:08pm

    ‘ So are you saying that sanctioning shouldn’t ever be allowed to happen?’

    I’m pointing to this:
    – 83% of foodbanks report ‘sanctioning’ is causing rising numbers to turn to them

    – 913,138 people received three days’ emergency food from Trussell Trust food-banks in 2013-14 compared to 346,992 in 2012-13

    and this:

    To quote: ‘ Citizens Advice Scotland (CAS) has called for urgent changes to jobseeker’s allowance and employment support allowance systems. It said that cuts in payments had left an increasing number without money for food, heating or other essentials.’

    The system isn’t fit for purpose.

  • @RC – Sadly what Danny and apparently you do not seem to realise is that in politics it is not just what you do, it really is the way that you do it. Or at least it is if you don’t want liberal democracy to implode.

  • David Howell 23rd Nov '14 - 12:33pm

    To RC:

    You say that the LibDems are doing the right thing for the country; so how come your poll ratings are in free-fall?
    You just returned your lowest ever share of a vote and lost your fifteenth deposit!
    Clearly the electorate don’t believe the spin of your argument .

    Is that all just the public mis- interpreting things like the reneging on a cast iron promise to students not to raise their fees, going along with the Bedroom Tax, supporting the original Nasty Party in all their moves to transfer wealth from the poorest in society to the wealthiest.

    At what point will the scales fall from your eyes, I wonder?

  • Tsar Nicolas 23rd Nov '14 - 12:36pm

    I notice that RC fixates on the debt, as if there was only one kind of debt that matters. The debt has not gone down, and other forms of debt, such as student loan debt, have been foisted on families.

    I have previously posted about getting rid of student debt by making the Bank of England purchase bonds in the student loans company at 0% for a hundred yeas. This is what the Bank of England has been doing with respect to the commercial banks for a number of years – it’s called Quantitaive Easing. there is no useful return to the economy except for asset price bubbles reflecting the investment practices of the commercial banks.

    A back to work programme could be financed in the same way – the inherent credit creation powers of the BoE could be utilized to fiance all sorts of public projects. The last thing we should be using the BoE’s powers of credit creation for is propping up the commercial banks, but it turns out that this is the only thing we have done.

  • Nigel Cheeseman 23rd Nov '14 - 12:57pm

    There are several assumptions made by various people in this thread which are inaccurate. On VAT, there is a popular belief that an increase hits the poor, ie it is a regressive tax. That is not true, in fact the poorest pay very little VAT. The bulk of their expenditure goes on things like food (no VAT ) , fuel (5%, unchanged) and rent (no VAT). Other things that the poorest spend money on include bus fares (no VAT), children’s clothes (no VAT) and items from charity shops (no VAT). Not to mention contraband tobacco. In fact it is those on middle incomes who are hit by increases in VAT. New clothes, cars, petrol and diesel, alcoholic drinks, cigarettes, consumer goods, home improvements, TV subscriptions, entertainment etc. The wealthy spend proportionally less on VAT, as investments, school fees and housing do not qualify.
    On food banks, it seems to me that the biggest reason for need in this case is having benefits stopped or cut punitively. This is the fault of the DWP and its mismanagement. Ultimately, of course, that does come down to ministerial responsibility. My feeling is that incompetence is the main problem here, rather than deliberate policy. (As with the removal of the spare room subsidy, a good idea completely screwed up by incompetent civil servants. )

  • Philip Rolle 23rd Nov '14 - 1:02pm

    You cannot implicitly justify measures like restricting ESA or imposing a housing benefit cut by in effect arguing that they are offset in some way by tax increases on the well-off. A better comparison would be with benefits paid to the middle classes. We still pay huge amounts in benefits to those who do not have any real need for the money and it is here that the Coalition have not been brave enough to grasp the nettle.

  • Nigel Cheeseman 23rd Nov ’14 – 12:57pm

    Nigel Cheeseman, if you read the case studies in the London Councils report you will see that this is nothing whatsoever to do with what you describes as “incompetent civil servants”
    You will see that it is everything to do with ministerial decisions.
    The case studies show that in fact public servants are doing an excellent job in some cases using a few hundred pounds to stave off much higher public expenditure further down the line. These local council staff are doing their best to help people in desperate circumstances. They are being highly competent and effective.

    If you read these reports and take in the facts you will see that your attempt to shift the blame away from the government ministers’ decisions is entirely without foundation.

    People are being sanctioned by DWP as a direct result of government policy, it is not because of the staff misunderstanding those decisions. Please read the reports.

  • @Nigel Cheeseman
    ” That is not true, in fact the poorest pay very little VAT.”
    “Not to mention contraband tobacco.”

    That is disgraceful, how dare you make those sort of assumptions.
    Not all the people from the poorest sections of Society buy “contraband tobacco” talk about sterotyping.
    And people accuse Labour of being out of touch.

  • Tony Greaves 23rd Nov '14 - 2:29pm

    Well I’ve just read the Observer from front to end (missing out the fashion pages) and I did not see this article.

    Raising the tax threshold has done nothing for the poorest, and will do even less in future – since more and more people at the bottom do not pay income tax. It is really a tax cuts for middle earners.

    But the general thrust of the claims are just not true. The best that can be said is that Mr Alexander is poorly briefed.


  • Tony Greaves 23rd Nov '14 - 2:31pm

    As for food banks, Nigel Cheeseman, the sanctions regime is nothing to do with incompetence – it’s all about the very competently imposed targets forced on DWP staff, and carried out by them at the pain of losing their own jobs.


  • The reason the percentage take off the wealthy is larger is because the poor are even more poor than before the reason is the wealthy enjoy being rich and have little intention of giving pay rises lower down

    This country is becoming like a SciFi film where the well to do have everything and the poor scrub around in the dirt keeping the rich well supplied with goodies

  • @ Tony Greaves

    It would be simple making tax cuts help lower down

    A increase the starting rate for NIS
    B lower the rate for 0.40p rate by half the increase so £500 better low pay drop start rate 40p by £250
    C by far most important impose living wage now not in 5/10 years time

    It may also help as an aside stop thinking the poor are also stupid that is not specific for you Tony but politicians in general every party, many older folk did learn their sums we don’t all need an abacus

  • Nigel Cheeseman 23rd Nov '14 - 3:17pm

    Thank you, Tony, for your input. Although my family rely substantially on benefits, they are administered by HMRC rather than DWP, so my views on incompetence are based on third party evidence. Nevertheless, in our case there is a perpetual cycle, as our circumstances change , of being informed that we have been overpaid and then having to pay the overpayment back through deductions. We are lucky in being able to budget. Others are not so fortunate and I am aware that changes in circumstance can result in benefits being temporarily withdrawn. Having no money at all while your case is being assessed is one of the major reasons for referral to food banks. Is near starvation really deliberate policy from Ian Duncan Smith?
    Matt, I worked until recently in the pub trade. Virtually everybody I know is on a low income. Apart from as a distress purchase all the smokers used tobacco imported by smugglers, either from Belgium or France or, latterly, via shops selling illegally imported cigarettes from eastern Europe. Most of the nonsense which is spouted in the media about the poor is by people who aren’t poor, in order to make political points. Much of the hardship is a result of claimants not understanding the process and/or not claiming for things which they are entitled to.

  • @Tony Dawson
    I was replying to your comment on VAT and the poor.

  • These figures are not surprising, and are being repeated across the Western world. In America it has been estimated that if workers had received the benefit of productivity gains over the last 30′ years the minimum wage would now be $25 per hour. The reality is almost all productivity gains have been acquired by the 1%. Some one on average earnings in the mid 1970s was almost 4 times better off than some one on average wages today,I’m real terms. A worker on minimum wage as far back as 1968 was 2 times better off than the minimum wage worker today in real terms.

    The problem is Neo Liberalism. It is not working for greater and greater amounts of the population. It is working for the rich. Boy is it working for them. And they fund the political system . All the major parties have now signed up to the neo liberal agenda. Republican, Democrat, Tory, New Labour and LIb Dem. What is interesting is we see the rise of far right wing parties. UKIP, Tea Party, Le Penn, Golden dawn. They all have their regional differences, but the thrust is the same. The blame likes with the weak, the immigrant, the other, the lazy the unemployed.

    A lot of these parties claim to be grass root bottom up jobs. But most of them are being funded by the rich, who are hedging their bets. They know the current system is not working for the majority,and things are only going to get worse over the next 25-50 years. No major politician will admit this. “Vote for me and it will get worse” is not a winning slogan. But the elites know that sooner or later there will be push back, a reaction. And when it comes they are creating right wing parties who will take advantage and make sure it is not neo liberalism that gets the blame. Instead it will be all about the immigrants and the poor. UKIPs Nigel for all his blame game won’t be turning his fire on either the 1% or Neo liberalism. He yet the poor are increasingly falling for it.

    Thatcherism gave an illusion of things improving. But for many in the 80s prices were still at post war consensus levels. (Try getting on the housing ladder today at neo liberal prices. Home ownership is now falling) Education costs are rising. Student debt recently went over $1 billion for the first time in the US. The increase in technology is speeding up. And will wipe away many many workers jobs. If you don’t believe me listen to Bill Gates. He is already waring about the huge surplus amounts of labour. What is the answer? I have no idea, but a hurricane is coming and it is not going to be pretty.

  • TechnicalEphemera 23rd Nov '14 - 5:08pm


    The report absolutely does show a systematic transfer of wealth from the poorest to the better off. You might not like it but it reflects reality.

    That was in fact my point, Danny saying he believes something else has no credibility because belief doesn’t (or shouldn’t) trump fact.

    I made no comment on what the Lib Dems may or may not have achieved in government.

  • Bill le Breton 23rd Nov '14 - 7:31pm

    What Danny Alexander should have used his article to say, “The Tories’ £7bn tax cuts plan is a ‘total fantasy”
    Well done Mr Cable.

  • That’s why I believe Mr Cable is the right man to lead the party.

    I think under the stewardship of Cable he would be able to steer back the party to it’s more traditional roots as a left of center party. I could vote Liberal Democrats again under the leadership of Vince.
    Ok he made a goof at the beginning of this parliament when he was caught up in a sting by the undercover reporters regarding the Murdoch take over bid, but, I can overlook that, everyone is entitled to goof once.

    He is respected for his economics, He is sincere and believable and he is not afraid to stick the boot in to the establishment.
    Some people may think he is to long in the tooth, not me, I think he is extremely wise, charismatic and he is enthusiastic.
    Bring on Vince

  • RC People involved with JSA cannot NOT look for work under the current conditions. Neither can they legitimately turn down inappropriate types of work. If you believe they should be sanctioned, you are, IMO, being illiberal. Sanctions are therefore, under current conditions, unnecessary.

  • Here is the reason that the party is and will be punished so badly.

    Danny Alexander is a Tory supporting Tories. He will lose his seat next year and he will lose badly. In fact every LD in Scotland (apart from the Orkney/Shetland seat will lose their seats.

    I honestly have a great deal of sympathy for the activists. I have had my share of hidden letter boxes, ambushing dogs etc.
    However the LD’s enabled – they did not mitigate the Tory cuts agenda. The leadership of the LD’s betrayed their party members but much, much worse than that was the suffering delivered on those in greatest need.

    No amount of spin will change public opinion on that fact.

  • Ed Shepherd 24th Nov '14 - 8:10am

    “The bulk of their expenditure goes on things like food (no VAT )”

    VAT is charged on many foodstuffs. Poor people will need to buy clothes, shoes, food, household goods and services that attract VAT.

  • Eddie Sammon 24th Nov '14 - 8:51am

    Thanks Frank. I agree there have been plenty of other instances where Lib Dems have become “the government” and this is problematic.

  • @ Tony Dawson
    VAT rises do hit the poor. For example there is 20% on all cleaning items including toilet paper along with toothpaste, soap, house cleaning items, washing powders that are a large part of the household budget. So yes the poor are hugely affected.

  • The problem for left or left of centre parties is that although there are poor people ,and always will be, they are not the majority of the population as they were many years ago but as Paul in Wokingham points out evidence does not make people change their minds, they simply try every means to reject or ignore it. Another example of this is that organisations like the BBC seem to think that most people travel by train or bus when in reality most use their cars except when commuting in London and the South East . When we read that for example 65% are said to want the railways renationalised or some such, the vast majority rarely if ever use trains so they would not know whether the service was good or not.

    The reality is that the majority who are not poor want to hang on to their money and their relatively comfortable life style and resent having to pay taxes for the upkeep of poorer people. Of course this is reprehensible but political parties have to do what the majority of their supporters want them to do or they will lose support to UKIP or whatever is the latest reincarnation of the right .
    I am not sure what the standard of living in Danny Alexander’s constituency is but I suspect it is rather higher than in parts of, for example, Glasgow where the overwhelming majority of those who bothered to turn out voted Labour and seem likely to switch to the SNP next time because the Labour Party was allied with the Conservatives during the referendum debate – I kid you not – thus possibly depriving the Labour Party of a majority in the 2015 election, the SNP having very cleverly said they would support a Labour Government though of course only if it does what they want so England will again be governed by the Scots as it was from1997 until2010. Ah the realities of politics …….

  • @ Julian Gibb
    “However the LD’s enabled – they did not mitigate the Tory cuts agenda.”

    Entirely untrue. Under the Tories there would have been far worse cuts (e.g. they wanted to remove benefits from all under 25s) and outright reductions in rates of benefits paid.

    The fact that the Lib Dems have made some entirely unforced errors (failure to implement the removal of the spare room subsidy fairly, failure to improve the administration of benefits) is being used by lots of people here to obscure the fact that we still have a substantial welfare safety net in place, albeit with still too many holes in it.

    Without the Lib Dems in power it would have been destroyed entirely.

  • nvelope2003. “The reality is that the majority who are not poor want to hang on to their money and their relatively comfortable life style and resent having to pay taxes for the upkeep of poorer people. ”

    How about the poorer people who have to pay taxes for the upkeep of the elites? Parliament is full of so called libertarian right wing politicians earning thousands in salaries , and hundred thousand pound expense accounts., and Gold plated pension schemes. All paid for by the tax payers. Or how about the city of a London and the huge billions of bail outs for the bankers? And the printing of money ‘quantitive easing ‘ to prop up asset prices of the rich? Or how about all the wealthy land owners and farmers like the Duke of Westminster and Prince Charles who recieve huge tax paid for hand outs to run the faming interests. Have you seen the the changes and hand outs the chancellor has given grouse shoot estates in the last few budgets?

    Or what about the huge military industrial complex that pays out huge contracts to companies to make arms and fight wars for the benefit of oil companies? Or how about subsidies that have been poured into Oxbridge over the centuries to educate the kids from the most priveledged backgrounds? I could go on and on. But the idea that the poor live off the state and the wealthy do not is one of the biggest lies propigated in this country. The wealthy may be far fewer in number but they take much larger amounts out individually. And as for the middle classes , look at all those tax paid for jobs in teaching, medicine, police, law. The majority who are not poor are a wash with tax payers money, and invisible subsides . For years they were given tax subsidy on their mortgages to buy their homes.

    In my experience the upper middle classes are usually the first in line when there is a govt hand out on offer.

  • matt (Bristol) 24th Nov '14 - 1:35pm

    Hmm. I respect Danny Alexander, but this confirms my strong desire that he do not lead the party in the near future. If he is genuinely interested in doing so, and does not believe the party was refounded on a new basis in 2010 with the coalition agreement as its ocnsitution, it is not in his interests to speak in this way.

    He continually alienates those who believe the coalition was (at best) a necessary compromise that has risked the party’s reputation in the interests of making possible a stable government at a time of crisis, not a shining vision of a better future.

    I’m not saying the coalition has done nothing good, but that I can’t believe that we would seeminlgy commit ourselves to never clearly say that government over the last 5 years could have been better without the Tories having the whip hand, and in particular it could have been significantly better for those at the bottom of the heap.

  • Matthew Huntbach 24th Nov '14 - 2:34pm

    Tony Greaves

    Well I’ve just read the Observer from front to end (missing out the fashion pages) and I did not see this article.

    It was the previous week.

    Raising the tax threshold has done nothing for the poorest, and will do even less in future – since more and more people at the bottom do not pay income tax. It is really a tax cuts for middle earners.

    Yes. I can see the case for being satisfied with this as a compromise, something which came out of arguing with the Tories who really wanted an even more regressive tax cut, but settled on this one instead. But the constant promotion of this as being just about the core Liberal Democrat policy and so some huge triumph for our party, and meeting our manifesto promise, no. The manifesto promise which involved this very clearly linked it to tax rises elsewhere, we did not go into the election just promising this tax cut in isolation as now suggested by those promoting the party nationally. It now looks like they want to make this the centre point of our 2015 general election campaign, well, if that’s so it just furthers my resolve to stay “on strike” as an activist when the election happens. I just could not deliver literature making this boast, it would sicken me to do so.

    If cutting the deficit is the key priority for government, and we argue that we have had to support some horrible things because of that, and it is true, we have, then trumpeting this tax allowance increase just undermines that argument. It argues against ourselves, it makes it look as if the deficit was just an excuse for spending cuts we secretly wanted to do anyway. It makes us look shifty and untrustworthy, it supports those critics who say our party has either made a big right-wing shift, or was secretly much more right-wing than it let on when it was campaigning for people’s votes.

    This Sunday’s Observer led on Vince Cable’s criticism of the Tories for proposing more tax cuts and stating that they just could not be afforded without a huge and damaging impact on other things. But this line is so undermined when the Liberal Democrats are also boasting about being a tax-cutting party.

  • Matthew Huntbach 24th Nov '14 - 2:45pm


    The reality is that the majority who are not poor want to hang on to their money and their relatively comfortable life style and resent having to pay taxes for the upkeep of poorer people.

    This line, commonly made, greatly over-emphasises the extent to which taxation pays “for the upkeep of poorer people”. In fact wealthier people tend to get more out of the state than poorer people, this is for various reasons, but one is they tend to have a longer lifespan, so more time to receive pension and NHS health care.

    If people don’t want an NHS, well, let them say so, but mostly there doesn’t seem to be a big call for its abolition. If people want it, it has to be paid for. If they didn’t have it, they wouldn’t actually “hang on to their money” because they’d have to spend more on private health care.

    Quite a big chunk of the money that supposedly DOES go to the upkeep of poorer people actually goes straight into the pockets of their private landlords. That was an inevitable consequence of the “right to buy”, anyone who voted Tory in the 1980s in effect voted for it. Also, subsidies for poor people are in effect subsidies for low wages, so allowing employers to keep more money, or to be charitable, reduce costs to those they sell their products and services to.

  • Nigel Jones 24th Nov '14 - 3:28pm

    It is wrong of Danny to say we have helped the poor. What we have done is prevent them being even worse had we not been in government. We inherited an unfair society and a time of huge financial difficulty is not the easiest of times to correct that. The welfare bill was too high, but that was partly due to some retired people getting too much and party due to too much going through the less well-off into the pockets of landlords.
    Nick and Danny’s two big mistakes have been to boast about our achievements in this respect without pointing out to people that we as a party are thoroughly still dissatisfied with what is happening to those at the bottom AND to agree the bedroom tax. This has hugely damaged our image and they both remain part of that image.
    Last week in the Independent Andreas Whittam-Smith rightly said that the poorest in our society no longer have any party that is speaking their voice. I joined the Liberals assuming this was one of the key reasons for the party’s existence. I fought the last election as a Parliamentary candidate with this as one of my key campaigning points and I know that is a main reason why many people voted for me. Sadly, we will only recover if we have a change in message from the top down and loose those who project an image not in line with our party’s preamble to our constitution.

  • Tony Dawson 24th Nov '14 - 3:32pm

    @Tony Greaves:

    “The best that can be said is that Mr Alexander is poorly briefed.”

    and the worst that can be said is that he is in a world of his own.

    People on benefits are a big chunk of the poorest. Paying a fraction of their Council Tax is a significant hole in their monthly budget. (Goodness knows what it costs local authorities to collect this). They re not being ‘elped’ compared with their better-off neighbours.

    As one who deals daily with people who are being sanctioned or being delayed ESA etc due to ATOS and co,, there is indeed an issue regarding the competence of many who make the decisions day to day. There is, however, an issue of overall competence regarding the framework and the apparent indifference of the centre to whether the system is actually allowing the claimants to get enough cash to feed and heat themselves. I could say the same about those operating Child Benefit and Tax Credits, a department for which Danny Alexander has direct departmental responsibility since it is still (stupidly) part of HMRC rather than DWP.

  • Nigel Cheeseman 23rd Nov ’14 – 3:17pm
    “…….Is  near starvation really deliberate policy from Ian Duncan Smith?”

    The answer to your question -“Yes, this really is Iain Duncan Smith’s deliberate policy.”

    It was discussed in public only last year.   See —

    The threat of starvation, forcing people to live on no income whatsoever, is his deliberate policy for DWP.

    The Mirror reports that Mr Duncan Smith has an income of £1,581 a week (after tax).

    You may recall him saying he could easily live on £53 a week.

  • Simon McGrath 24th Nov '14 - 5:16pm

    Nothing in the Mirror article suggest that the Coalition’s policy is to starve people. It also quotes the fictitous claims that the market trader David Bennett is living of £53 a week

  • nvelope2003 24th Nov '14 - 8:44pm

    Re the above comments. I think you rather missed the point. I was simply stating that many though not all resented having to pay taxes to help the poor, not that I agreed with them as I made clear but as Paul in Wokingham said, simply presenting people with evidence that contradicts their world views does not change their minds……. oh never mind….
    To be fair to the taxpayers though, if you have a really huge income and your father was a highly paid lawyer and former Assistant Secretary General of the UN and you were married to a High Court judge you can afford to be more sympathetic to poorer people than if you are struggling to pay the mortgage and the other bills. I am just trying to point out that things are not as simple as so many seem to think and trying to see other people’s point of view if that is still allowed.

  • nvelope2003 24th Nov '14 - 9:00pm

    Sally: Yes of course you are absolutely right and I detest all that sort of thing but I do not think any Government anywhere in history, including the Communist ones, managed to change these things because the governing elite are totally ruthless in their pursuit of wealth and power and nothing will be allowed to stand in their way. The criminal classes like Stalin etc would even pretend to join any revolution if that meant they could acquire orhang on to power. Of course they killed off their enemies like the Tsar and the aristocrats in the same way that the Tudors, Plantagenets etc killed off their rivals but that was just to steal their wealth and power for themselves. How many Russian peasants got the land that they were promised ? Many of them were deliberately starved to death, something even the Tsar and the nobility did not do, at least not deliberately.

  • Rennard’s Rochester Verdict. Wonder what Clegg thinks?

  • Tony Dawson 25th Nov '14 - 9:05am


    “VAT rises do hit the poor. For example there is 20% on all cleaning items including toilet paper along with toothpaste, soap, house cleaning items, washing powders that are a large part of the household budget.”

    I am intrigued. How much money, Anne, do you think that a person living long-term on benefits spends on cleaning items and toilet paper each week? And how much do you think that the difference between 15 per cent and 20 per cent of that total spend is?

    I ask you because (albeit some time ago) I have lived on basic benefits alone. Have you?

    There is a case to be considered for removing higher rate VAT from such items. But do not use them to inflate an argument.

  • Actually Tony Dawson In my case I spend a fortune on toilet paper. On top of mental health I suffer from Ulcerated Colitis, On a good day I go to the loo between 7-10 times. On bad day well it does not bare thinking about.

    As you can imagine, someone going to the toilet this amount of times, can not use the cheap toilet paper as that amount of cleaning causes sores, so I have to use the more expensive brands.

    It is not unusual in my house to go through a whole roll of toilet paper a day.
    £4.50 for 9 rolls of toilet = £3.50 a week just on toilet paper, that’s without the cost of the water to flush the toilet and products to clean the toilet

    When you are on a limited income as it is, these expenses rips into your finances.

    Probably far to much info, but hey you asked the question lol

  • Simon McGrath 24th Nov ’14 – 5:16pm
    You seem to be confused. You may not have read this thread all the way through.
    In my earlier comments I made specific reference to the reports from The Trussell Trust and and from London Councils.
    In addition the thread covers the reports from the LSE and also Citizens Advice Scotland.

    You may thnk that all this evidenced can be ignored on the basis of a Daily Telegraph character assassination written to defend one of the most right wing and incompetent ministers in the government (Iain Duncan Smith). If that is our considered opinion it probably says more about your view of the world than I ever could.

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