Financial Education in Schools - with predatory companies and pusillanimous regulators, we must educate the children

Martin Lewis, of moneysavingexpert.com fame, started an e-petition to the British government: “Make financial education a compulsory part of the school curriculum”. To see the petition, now closed, click >>HERE<<. The petition successfully exceeded the 100,000 needed to be considered for debate in Parliament. The higher the number of signatures, the harder it will be for MPs with their ignominious record of failing to legislate against rip-offs to consider and reject debating this in parliament.

We share an objective with Martin Lewis. The objective: to build financial capability among Britons, and make them less ripped-off. This is a struggle on many fronts, but none more fundamentally important and potentially effective than education in schools. Astute young people protect themselves, their friends and relatives, and later their own children - creating a virtuous circle.

The rippers-off come from all sectors – energy, telecoms, retail – but they are lead by the example set by the financial services industry. They rip off because it is profitable and they rarely suffer any significant sanction. The most effective sanction could be applied by educating the customers to see and understand how they are being ripped off  - customers turning away and rejecting the deals because they can spot the rip-off in the first place.

Imagine, a school syllabus that includes the various rip-offs of the past. Homework analysing the impact of a rip-off - parents by helping their children at home will themselves learn. A class project to "design your own rip-off", to help the student understand the mentality of the corporate executives who create and promote these things. Examinations and assessments, and more...

The banks and insurers spend great fortunes on building trust with us Britons. They are already going into schools to build trust with the children, explaining why it’s a good idea to save, to borrow, and to insure. But unsurprisingly they fail to drum into the little darlings how to spot and avoid the rip-offs.

After all, every successful rip-off stands on a foundation of truth:

• Saving is a good idea:  
• Though excessive fund charges can swipe upto 50% of your investment, leaving you in poverty in spite of a lifetime’s saving. And if you are not eternally vigilant, your savings accounts with tempting "bait" rates are sure to drop to a measly 0.1%.
• Borrowing is a good idea:
• Except when you are tempted into taking on excessive debt by continual hikes in your credit card limit. Or by low teaser rates, that then jump up after a few months to strangle your finances.
• Insuring is a good idea:
• Unless you are sold insurance that it is impossible for you to claim on.

Building trust is their first step. “My word is my bond”, the banker’s lofty statement as he looks you straight in the eye, appealing for your trust. “Trust me and take me at my word. If I say it is a great product, then you can assume it is, so just sign here”. Make no mistake - Financial Services and other industries will look you straight in the eye, and then poke a sharp stick into it to try and pinch your eyeball.

An ancient and wise saying:

“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”

This could be paraphrased for Financial Education:

“Expose a suspicious activity, such as Payment Protection Insurance, and you may rescue a man from yesterday’s scam. Teach the man to understand and to be suspicious, and you rescue him from a lifetime of scams”.

Suspicion is an ugly word. In the consumer protection legislation the consumer has a responsibility to be "reasonably circumspect", a sweeter smelling term for suspicion. But it is suspicion that will be one of the most effective ways of building financial capability in the population. Which is why the responsibility for financial education in schools should absolutely not be in the hands of the financial community – not the industry, not the regulators.

• The industry is hardly going to put much effort into teaching people to treat them like the bunch of dodgy geezers they are.
• The regulators are hardly going to spend much time highlighting their inability to ensure good practice by the dodgy bunch they regulate.

The regulators have sometimes publicly regretted the failure of those they regulate to learn from past mis-selling. Hector Sants, chief executive of the FSA, said in a speech in June 2011:

I would like to take the opportunity to make some personal remarks on the challenges the FCA faces.

''The biggest disappointment of my time at the FSA has been the failure of firms, in particular their senior management, to learn the lessons of past mis-selling. Sadly the recent history of the British retail financial services industry is proof of the adage that those who fail to understand the mistakes of the past are condemned to repeat them.''

These words were spoken not by me but by Howard Davies, the first chairman of the FSA at the annual public meeting in 2003. These words are as true now as they were then. Eight years on, there is little or no evidence that any significant change has occurred in the attitude of the financial services industry towards its customers."

Hector Sants, CEO of the FSA, 28th June 2011

Chairmen of the FSA lamenting the incorrigibly bad behaviour of the banks and insurers were joined in their frustration by the Governor of the Bank of England, Mervyn King, who commented in March 2011

"if it’s possible to make money out of gullible or unsuspecting customers, particularly institutional customers, [the banks think] that is perfectly acceptable”.

If the Financial Services are determined not to reform, if the regulators are frustrated in their attempts to regulate, then the only thing separating Britons from the next rip-off is education and suspicion.

The new Financial Conduct Authority (FCA) will soon replace the FSA. It states that the third of its six Regulatory Principles is:

“the general principle that consumers should take responsibility for their decisions”.

Two well known facts suggest that this ‘general principal’ opens up a gaping loophole for the FCA and the industry it regulates to avoid their responsibility to their customers:

• A large segment of the population lack the numeracy, the literacy, or the attention span, to comprehend what is being sold to them.

• The industry has a specific strategy to offer products that are complex and that change surreptitiously.

In addition, the main consumer protection legislation, the “Consumer Protection from Unfair Trading Regulations”, explicitly allows traders to rip off the “less than average” half of the population.

It is these regulatory principals that have allowed the Financial Services to get away with behaviour that embarrasses even them. The UK banks lost a succession of court decisions over their excessive penalty charges on unauthorised overdrafts, but finally won at the Supreme Court. The highest court found in favour of the banks on the basis that the penalty charges were given in their customer contract small-print, and so the Office of Fair Trading had no right to investigate them:

"This appeal involved a relatively narrow issue. The Supreme Court had to decide not whether the banks’ charges for unauthorised overdrafts were fair but whether the OFT could launch an investigation into whether they were fair."
British Supreme Court judgement in November 2009 on rip-off bank charges, in which the OFT having won its case through the High Court, ultimately lost in the Supreme Court.

Therefore it was up to the customers to take responsibility for spotting, comprehending, and calculating the charges in the small-print.

Two chairmen of the FSA, Davies and Sants, have stated that the industry has failed to learn from its past mis-selling. The Governor of the Bank of England points out that the banks believe it is acceptable to take advantage of the unwary. The FCA states that the customer must take responsibility for what they buy. The authorities are resigned, perhaps with regret and exasperation, to the predatory companies having a free hand, and put the responsibility on the prey (that’s us) to look after ourselves.

The combination of predatory companies and of regulators and legislation  puts the responsibility for not being ripped off on their prey! Sounds like an opportunity for more mis-selling. An opportunity the Financial Services, through their associations, their consortia and their patronage, hungrily nurture and protect.

Anti Rip-off programmes already exist, like the BBC’s Watchdog. However, like newspapers, these highlight the latest rip-offs for one episode and then move on.

In contrast, there are mountains of marketing materials, legions of salesmen, and hundreds of millions of pounds of budget devoted by the Financial Services and other industries to ripping us off. Materials that are broadcast and mailed by them obsessively, day in, day out.

For customers to become capable of taking responsibility for their decisions, as the FCA requires them to, they need education. The most effective way to teach them is by entertaining them. Short, focussed, memorable, succinct – not unlike the myriad adverts paid for by the dodgy banks, energy companies, airlines, mobile phone sellers. It's not only the best way for them to be taught, but provides them with material they themselves can teach others with.

Ripped-Off Britons aims to highlight scams pulled off by the pillars of British industry who operate within the letter of the law. Scams by the most respected and rewarded in the land that cause far wider and deeper harm than the activities of all the criminal fraudsters and conmen in the land put together.

No organisation can do this by themselves. Our media are our cartoons in The Guardian and this blog. We invite guest contributions and suggestions - see our invitation by clicking HERE.

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Our invitation to guest bloggers:

Some of the most valuable insights on the Ripped-Off Britons blog have been sourced from insiders and professional observers of our subjects. A few of these insiders and observers have themselves made valuable written contributions to the blog:


Richard Murphy, loved and loathed as one of Britain's most effective campaigners against tax abuses by powerful companies, individuals, and the government, gives us his checklist for 'good capitalism'.


Stefan Stern, visiting professor at the Cass Business School, asks why Truth in public life has gone even more out of fashion.


Deborah Hargreaves, Chair of the High Pay Commission, wrote on the de-linkage of executive pay from performance and how this is resulting in gaping and growing inequality. In a later article, she explains why this is not just morally dubious, but is also against the national interest.


Alexandra Woodsworth, of Campaign for Better Transport, described how Britons are among the most ripped-off in Europe when it comes to rail fares. She tells that the government will be raising the cap of fare rises from 1% to 3% above RPI, and how this will price people off the trains - a cynical ploy to reduce overcrowding? Sophie Allain, also from Campaign for Better Transport, wrote on the fact that Britons can pay three and a half times more than the fare for an equivalent journey in Europe.


"Honestly Banking", a banker writing undercover on his own blog, wrote a piece exposing the churning tactic used by fund managers to drive up their fees at your cost. He tells how new financial legislation has actually removed the requirement for funds to report their portfolio turnover!




If you have a good story you would like to tell on our blog, particularly if you are an insider, please contact us at guestblog@rippedoffbritons.com


One way to try and stay out of trouble is to write your piece as "factual fiction",  or "faction". Write as an imagined employee of the Ripped-Off Britons group of companies:


ROB Bank - perhaps you have an insight on the orders and incentives and threats from HQ on selling?


ROB Insurance - for example, do you know the rate at which claims are incurred and paid? And therefore can you identify an insurance product that is sold that few people successfully make claims on - e.g. Payment Protection Insurance, Indentity Fraud Insurance.


ROB Supermarket - do you know why a top supermarket prices some loose fruit & veg per kilo and bagged fruit & veg per pound? Could it be to confuse? Surely not.


ROB Telecom -
ROB Gas & Electricity -
ROB you name it...


These are just examples of topics you may want to write about. Organisations in Britain have vast armies of people, and pour treasure chests of money into campaigns to rip us Britons off. So we know there are many many other topics to be written about.


Articles need to be evidence based. Your comments should be backed up by graphs, data, quotations etc. from recognised researchers and commentators.

Please contact us with an outline of your proposed article - email us at guestblog@rippedoffbritons.com


If, like "honestly banking", you wish to remain anonymous then we'll accommodate you. Or if, like the High Pay Commission and Campaign for Better Transport, you want links to your own sites and blogs then that will be an honour for us too.

Read More

Our invitation to guest bloggers:

Some of the most valuable insights on the Ripped-Off Britons blog have been sourced from insiders and professional observers of our subjects. A few of these insiders and observers have themselves made valuable written contributions to the blog:


Richard Murphy, loved and loathed as one of Britain's most effective campaigners against tax abuses by powerful companies, individuals, and the government, gives us his checklist for 'good capitalism'.


Stefan Stern, visiting professor at the Cass Business School, asks why Truth in public life has gone even more out of fashion.


Deborah Hargreaves, Chair of the High Pay Commission, wrote on the de-linkage of executive pay from performance and how this is resulting in gaping and growing inequality. In a later article, she explains why this is not just morally dubious, but is also against the national interest.


Alexandra Woodsworth, of Campaign for Better Transport, described how Britons are among the most ripped-off in Europe when it comes to rail fares. She tells that the government will be raising the cap of fare rises from 1% to 3% above RPI, and how this will price people off the trains - a cynical ploy to reduce overcrowding? Sophie Allain, also from Campaign for Better Transport, wrote on the fact that Britons can pay three and a half times more than the fare for an equivalent journey in Europe.


"Honestly Banking", a banker writing undercover on his own blog, wrote a piece exposing the churning tactic used by fund managers to drive up their fees at your cost. He tells how new financial legislation has actually removed the requirement for funds to report their portfolio turnover!




If you have a good story you would like to tell on our blog, particularly if you are an insider, please contact us at guestblog@rippedoffbritons.com


One way to try and stay out of trouble is to write your piece as "factual fiction",  or "faction". Write as an imagined employee of the Ripped-Off Britons group of companies:


ROB Bank - perhaps you have an insight on the orders and incentives and threats from HQ on selling?


ROB Insurance - for example, do you know the rate at which claims are incurred and paid? And therefore can you identify an insurance product that is sold that few people successfully make claims on - e.g. Payment Protection Insurance, Indentity Fraud Insurance.


ROB Supermarket - do you know why a top supermarket prices some loose fruit & veg per kilo and bagged fruit & veg per pound? Could it be to confuse? Surely not.


ROB Telecom -
ROB Gas & Electricity -
ROB you name it...


These are just examples of topics you may want to write about. Organisations in Britain have vast armies of people, and pour treasure chests of money into campaigns to rip us Britons off. So we know there are many many other topics to be written about.


Please contact us with an outline of your proposed article - email us at guestblog@rippedoffbritons.com


If, like "honestly banking", you wish to remain anonymous then we'll accommodate you. Or if, like the High Pay Commission and Campaign for Better Transport, you want links to your own sites and blogs then that will be an honour for us too.

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The Occupy protesters at St Paul's...

Chris and KJ have pretty strong opinions on certain people

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Supermarket price promises really are a lottery!

Chris and his wife try and find the best bargains while shopping in a supermarket

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“Consumer Protection from Unfair Trading Regulations” - the law that legalises ripping-off in Britain

The right to rip-off Britons is enshrined in British law, most explicitly by the ironically named “Consumer Protection from Unfair Trading Regulations”. It is not our contention that the rip-offs we write about in this blog are illegal – just that they are rip-offs. But that is the problem: as you will read in the rest of this blog, the rip-offs are not in breach of the Consumer Protection from Unfair Trading Regulations so long as they rip-off no more than half their target market.


The preamble in this legislation tells us that the law will protect the “average consumer” (and of course all those smarter or better informed than average). It helpfully goes on to qualify this “average consumer” as being “reasonably well informed, reasonably observant and circumspect”.


It further states that:

“In determining the effect of a commercial practice on the average consumer where the practice is directed to a particular group of consumers, a reference to the average consumer shall be read as referring to the average member of that group.”

...going on to say:

“(a) where a clearly identifiable group of consumers is particularly vulnerable to the practice or the underlying product because of their mental or physical infirmity, age or credulity in a way which the trader could reasonably be expected to foresee,

and

(b) where the practice is likely to materially distort the economic behaviour only of that group,

a reference to the average consumer shall be read as referring to the average member of that group”

Thus, in words comprehensible to the average trader, the legislation makes clear that the trader is permitted to rip off the "below average" half of the population. If the trader, be he a high-street banker or a purveyor of sweeties, is selling specifically to a mentally infirm or credulous group then he is permitted to rip off the more infirm and credulous half of the group.

The act goes on to stipulate explicitly what a trader may and may not do:

• A commercial practice is unfair if…..it materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product. 

• A commercial practice is a misleading action if…. it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise. 

• A commercial practice is a misleading omission if, in its factual context…. it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise. 

• A commercial practice is aggressive if….it significantly impairs or is likely significantly to impair the average consumer’s freedom of choice or conduct in relation to the product concerned through the use of harassment, coercion or undue influence

The act continues that a trader is guilty of an offence if:

• (a) he knowingly or recklessly engages in a commercial practice which contravenes the requirements of professional diligence under regulation 3(3)(a);

and

• (b) the practice materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product under regulation 3(3)(b).

Never underestimate the power of an “and”. Einstein, in one of his quips about the world we live in, thought compound interest was the most powerful force in the universe. I think it is “and”, and/or perhaps “or”. Two little words that make almost anything possible. In this case the “and” tells us that the trader is legally allowed to use any tactic he wants, be it unfair, misleading, aggressive, reckless, unprofessional so long as the “average consumer” won’t be tricked by them. Anyone “less than average” is fair game to be recklessly coerced, misled, and handled unfairly. On them it’s open season 12 months a year!


To understand the implications of the legislation:

If we lined our population up in order of each one’s ability to do hard sums and understand tricksy small-print in a ‘terms and conditions’ contract putting the smartest in Edinburgh with the line heading south to London, the average guy would be the one in the middle, in the city of Leeds.

The laughably called “consumer protection” legislation leaves unprotected the half of the population lined up south of Leeds in this map:

So, how easy is it to trick an “average consumer”?

Well, the UK government did a revealing study in 2003, “The Skills for Life survey”. The purpose of the survey was to understand the literacy and numeracy skills in the UK population. To achieve this, the survey classified people according to their level of academic ability.

For our overseas readers, and some of our fellow ripped-off Britons who haven’t had to have anything to do with school for a while, here is a bit of base information you will need to understand the graphs below:

National           Approximate School

Standard          Level Equivalent

Entry 1             Key stage 1 (ability expected of a student age 5-7)

Entry 2             Key stage 2 (ability expected of a student age 7-9)

Entry 3             Key stage 2 (ability expected of a student age 9-11)

Level 1             GCSE D-G (ability expected of a student age 11-14)

Level 2             GCSE A*-C (ability expected of a student age 14-16)

GCSE = General Certificate of School Education, usually taken by 15-16 year olds in the UK. Students can achieve pass grades from A* at the top down to G, or else fail the test.

The Skills for Life survey looked into the literacy and numeracy levels of the UK population and found the following:

In real numbers

Literacy:            16% at Entry Level 3 and below   =          5.2 million adults

                        Reading age of 11 years and below.

Numeracy:        46% at Entry Level 3 and below =            15 million adults

                        Numeracy age of 11 years and below.

Across Britain, those who fall into the “less than average” group, unprotected by the “Consumer Protection” legislation, include millions of people who have the mathematical and reading ability of a junior school child. Banks, energy companies, insurers, mobile phone companies, and all the other lawful businesses in Britain have a free hand with these Britons.

You may think that this bottom 50% probably don’t have enough money to make them worth ripping-off.  You would be wrong. Confusing money with wealth is a mistake the blue-chips don’t make. They understand that while the bottom 50% of the population have negligible wealth, they do 30% of the nation’s spending (figures from the Office of National Statistics).

30% of all the spending in Britain is a lot of money. And the courts look very sympathetically on organisations that go hunting this “less than average” customer base – as the banks found when they defeated the Office of Fair Trading in their case against excessive bank charges. Throwing out the OFT’s case, their lordships stated:

“Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplied in exchange, on the other, in so far as these terms are in plain intelligible language.”

So long as the contract gives the terms and conditions somewhere, in language that is “plain and intelligible” to the “average” customer then it doesn’t matter how great or grotesque the rip-off is. In law it cannot be said to be “unfair”, and is therefore “fair”.

And that’s the law in Ripped-Off Britain. 

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Opting out of pensions … at the double

KJ and his pal have a drink while they discuss pensions and debt. But who's paying?

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Liebrary: Energy companies' profit margin is reasonable? See the accounting trick

Another addition to our Liebrary: In October 2011 OFGEM reported that energy companies' profit margins had leaped from an average £15 to £125 per dual-fuel customer per year. They claim that this equates to a 9% margin.

The industry claims that this margin is a reasonable return on their costs. The reality is that over 50% of what they charge is down to the commodity cost of the fuel plus the VAT.

This 50% for commodity and tax is just a pass-through cost. The retailer buys it from the wholesaler, and delivers it unchanged to your house.

It is no more legitimate for an energy retailer to fiddle down its profit margin calculation in this way than it would be for the post-office to include the value of the contents of the packages it delivers in its turnover.

Therefore the real margin based on the cost of delivery is actually double 9%,  coming in at a gouging 18%.


Graph from OFGEM Supply Market Report of June2011.

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Energy bills: taking the nation's temperature

The gang debate David Cameron's call for action from the big six energy suppliers

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Liebrary: Wholesale energy price graphs reveal the dismal fibs behind latest retail price rises

Another addition to our Liebrary: How is it that our leaders, including the well coiffed Cameron and the buff Huhne, are so poorly briefed about wholesale energy prices? 

So poorly briefed that Cameron and Huhne went to a high profile showdown to 'get tough' with the Big Six energy companies and come away mesmerised by the idea that retail prices are driven up by wholesale prices? Coming away preaching that the solution is for us all to wrap up warmly and search the internet for a lower tariff:

"We should be switching if we're not on the cheapest tariff and taking the opportunity ahead of this winter to really make sure that we're insulating so that we can save money."

Graphs from Consumer Focus, the soon to be axed "statutory consumer champion for England, Wales, Scotland and (for postal consumers) Northern Ireland", show the truth.

Wholesale prices have indeed risen in recent months. But that follows an even bigger fall in the months before that. Which all left wholesale prices well below their 2008 peak.  

On the other hand, the average retail price rose with the peak in 2008,  failed to fall as wholesale prices plummeted throughout 2009, and now starts rising even above the 2008 peak.

Electricity Prices - Wholesale vs Retail (graph from Consumer Focus)

Gas prices - Wholesale vs Retail (graph from Consumer Focus)

See the full Consumer Focus article - click here

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Paying the price of the Banking Crisis - are we really all in it together?

David Cameron, prime minister of the UK, when speechifying about the cuts claims that we are “all in this together”. We must all, he insists, make sacrifices to pull the British economy out of the crash. A mantra repeated by leaders around the world to explain the all the sackings and the cuts. And to defend the additional money being poured into the banks even today as the Euro crisis rumbles on. All done, we are told, to save us all who are, it is stated, in it together.

Of course the assertion that 'we are all in this together' is a lie. The way we keep the economic balloon afloat is to chuck some people out of the basket. In the words of the Governor of the Bank of England, Mervyn King:

"The price of this financial crisis is being borne by people who absolutely did not cause it…..Now is the period when the cost is being paid, I'm surprised that the degree of public anger has not been greater than it has."

Mervyn King, Governor of the Bank of England, in evidence to the UK Parliament’s Treasury Select Committee, March 2011.

The people thrown out of the basket are absolutely not the ones who caused the current economic crisis. 

We are absolutely not all in this together. According to latest ONS figures for October 2011 the current crisis with 2.57 million Britons out of work leaves 29.1 million employed. Tragedy for the unemployed, some of whom may never re-enter work. But a great opportunity for those who still have a salary to draw, as dropping demand brings out a slew of bargains in shops and holiday destinations. A great opportunity to get a wider flat-screen tv, renew the sofa, and take a bargain-break to Marrakech for a new rug. And with more people unable to pay their mortgages, perhaps a chance to pick up a bargain home!

The Independent Commission on Banking published its final report last month, and then closed itself down. The report has various interesting elements, to which we shall return in a future blog. But these two graphs we need to look at now.

The first shows how the banks leveraged themselves – i.e. borrowed lots of money – to fund their irrational exuberance leading to the worldwide economic crash. Banks made money and paid bonuses by doing deals. The quality of the deal was irrelevant – all that mattered was the banks’ fees and the resulting bonuses. Be it an over-stretched “sub prime” home-buyer or a fiscally incompetent government doing the borrowing. To do the deals the banks needed money which they borrowed often from each other, generating further fees for themselves. The deal made the commission that paid the bankers’ bonuses.

The second graph shows public sector debt with and without “Interventions”. “Interventions” being the money pumped into the banks to make sure that when all the rotten deals imploded the banks could pay their debts using taxpayers’ money. To bail out the banks, Britain’s national debt nearly quadrupled.  

The banks who did cause the financial crisis are already reaping profits and bonuses, as is shown in this Bank of England graph from their 2010 Financial Stability Report. The graph shows that banks will be back to their pre-crash levels of profits this year even as the rest of us pay the price of what they caused.

So who is paying the price? The National Association of Welfare Rights Advisers, details the impact on the poorest. Some of the highlights include:

Cuts already enacted:

Employment and Support Allowance (ESA):      Affects around 1.5 million people across UK with a disproportionate effect in deprived areas with a high incidence of long term limiting illness.

CUT of up to £2,500 million per annum (30%) by 2014

ALL working age benefits: Those receiving any benefit will see its value decrease over time, lessening their ability to pay for essentials.Increases will be set by the Consumer Price Index (which produces consistently lower increases) instead of the Retail Price Index or the Rossi index.

CUT of £5,840 MILLION per annum by 2014/15

Child Benefit: Frozen for three years. Affecting ALL families and children, poorest most.

CUT of £985 million per annum

Tax Credits: Affects low income working families in particular. Taper on income for tax credits moves from 39% to 41%.

CUT of £765 million per annum by 2014/15

Tax Credits: Affects those moving back into work. Fall from £25,000 to £10,000 in “disregarded increases in income during the current tax year”

CUT of £140 million rising to £450 million

Working Tax Credit (WTC): The amount of tax credits to working families reduces in real terms. Basic & 30 hour elements in WTC frozen for 3 years.

CUT of £625 million by 2014/15

Working Tax Credit: This cut will increase childcare costs for low-paid parents. Childcare element of WTC reduced from 80% to 70% of actual childcare costs up to a capped maximum.

CUT of £385 million pa by 2014/15

Housing Benefit: Only 1/3 (instead of ½) of available private rented housing locally will be affordable to HB claimants. Local Housing Allowance Rates will be set at the 30th percentile of local private rent prices, not the 50th.

CUT of £425 million

Educational Maintenance Allowance: Abolished in England. A loss of up to £30 a week for young people on low incomes staying on at school or college.

Future cuts already in the calendar:

Housing Benefit: LHA Single room rent restriction for single people (not lone parents) under 25 extended to people aged under 35.

CUT of £215 million pa by 2014/15

Tax Credits: Tax credits will not increase to help you if your income drops unless the drop is more than £2,500.

CUT of £585 million by 2014/15

Contributory Employment and Support Allowance (ESA): Limited to 1 year for people in the “work-related activity” group.

CUT of £2,010 million by 2014/15

The well oiled hypocrisy of our leading citizens - the politicians who call for the 'dunkirk spirit' as they slash other people's jobs and benefits – is matched by the bag-carriers of the high-paid. They warn that their well remunerated masters would start slacking unless the top rate of tax is cut back from 50%. Warning that their slacking would put the brakes on the recovery with the direct result that no new jobs would be created to employ the unemployed. 

No Dunkirk spirit for them – they aren’t all in it together with the rest of us. They are just in it for themselves.

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