Belfast Telegraph

Tuesday 21 October 2014

Getting blood from a stone while the fat cats roam free

Vigorous opposition: anti-cuts protesters drum up support while Alex Maskey and Sinn Fein decided against rejecting the Bill

De Valera never said that "Labour must wait". Not in so many words. But he might as well have. Similarly, Alex Maskey hasn't exactly declared that "welfare recipients must wait". But that's what his words mean.

De Valera believed that, in the early years of Irish independence, the labour movement should hold fire on class demands, lest it destabilise the nascent national democracy.

At Stormont on Tuesday, the Sinn Fein chairman of the social development committee explained that his party had decided not to torpedo the Tory benefit cuts "because we are not interested in causing a crisis in the Executive".

It was pointed out here last week that Sinn Fein had the capacity to blow the Welfare Reform Bill out of the water by putting down a petition of concern - the provision in the Belfast Agreement whereby 30, or more, MLAs can insist that a measure cannot pass unless it's endorsed by majorities of both nationalist and unionist members.

With 29 Assembly seats, Sinn Fein would have needed the signature of only one other nationalist to stop the hit. SDLPers would have queued up - if only to lay claim to a slice of the action.

Maskey is right that killing the Bill would have brought on a crisis. The DUP - although primly conceding that the measure is "not perfect" - is adamant that it must go through.

Minister Nelson McCausland told MLAs on Tuesday that any money saved for social security by rejecting the Bill would have to be made up through cuts elsewhere. He estimated the shortfall at upwards of £200m.

Deadlock over the issue would have had the potential to paralyse the Executive. So the interests of those who will bear the brunt of the measures had to be put aside.

No such crisis arises between Sinn Fein and the DUP from opting out of cross-channel practice in a different area - corporation tax.

The Treasury reckons that reducing the rate from a projected 2014 UK figure of 24% to parity with the Republic at 12.5% would require cuts of more than £360m.

So the cuts caused by changing corporation tax could go twice as deep as the cuts from rejection of welfare reform. But the Executive parties are at one in pressing for corporation tax to come down.

The theory is that low tax on business would boost the attractiveness of Northern Ireland to investors, eventually off-setting the loss of revenue.

As theories go, it's neat enough, although the evidence for it is flimsy. And the cuts would have to come before the benefits could accrue. Guaranteed pain for putative gain.

Many who are dismayed at the scope of the cuts believe, nonetheless, that, in the end, the measures can't be avoided; that given the limited powers of the Stormont institutions, it would be reckless to butt heads with the Treasury; that the best that can be done is to reject, or adjust, this or that detail.

In a briefing paper published last month, the independent advice network Advice NI set out a long list of minor additions and marginal changes which might ameliorate the effect of the Bill.

Here's one: "Consider delaying implementation of the under-occupancy penalty until suitable appropriate alternative accommodation is available for those affected."

This refers to proposed changes whereby people living in houses deemed too large for their needs would have their housing benefit cut to the tune of 14% for one unoccupied room to 25% for two rooms.

The suggestion, supported by housing campaigners and professionals, is that the measure should be postponed until such time as there are enough houses of the right size to cater for the needs of the families affected.

This is a mild measure of the sort many a self-respecting radical would be reluctant to touch. How much would it cost? Nobody really knows, because nobody has tried to find out. But hardly a lot. How does the current supply of available housing match up with housing need as calculated in the new occupancy rules? Again, no official figures appear to exist.

Shouldn't this minor piece of research be commissioned and completed before any move is made to put the provisions into practice?

Or consider the proposed strengthening of powers to root out fraud - loss of benefits in cases currently covered by a caution, increased deductions from earning, etc. The amounts involved are negligible. Contrary to the relentless propaganda from those who get their kicks from putting the boot into the poor, benefit fraud across the UK is running at around 0.5% of expenditure. It's a small fraction of the loss from tax-avoidance by the rich.

What's this measure doing in there? What's the argument against throwing it out?

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