The divide widens
From Deputy Geoff Southern.
La Rochelle, Bellozanne Road, St Helier.
SO, the Treasury Minister, Senator Le Sueur, took some time in front of the Institute of Directors to assure his audience that ‘there is no conflict between economic prosperity and social justice’. How true, one would imagine that improved prosperity would positively contribute to better social justice. But as you point out in your editorial comment of 10 April, the ‘trickle-down’ effect from the haves to the have-nots is not a conspicuously effective mechanism for delivering social justice. The minister must now demonstrate how social wellbeing can be delivered.
Unfortunately he has not made a good start by removing £90 million from company tax and placing £60 million of that burden on the shoulders of resident working people using the regressive GST as the principal mechanism. Nor did he help by refusing exemptions on basic needs which impact more on the budgets of low earners. Remember that although 3% sounds relatively small, the GST bill for the average pensioner couple will be over £600 a year.
In order to ensure that the working population of the Island take their medicine he has unveiled his so-called anti-inflation strategy, otherwise known as a wage restraint policy. Prices will rise from May this year by 3%, or 5% after business has passed on the administration costs, from GST and this will come on top of global inflation running at 4% plus. In 2009, the minister will offer around 3%, based on his new RPI(Y) measure, to the teachers, nurses, manual workers and others employed by the States. The private sector will be encouraged to follow suit. We shall all be poorer.
Jersey, the third richest economy in the world, currently spends less than 75% of the EU average on social protection. By internationally recognised standards, 45% of single pensioners and 64% of single parents and their children live in relative poverty. 8,000 out of a workforce of 53,000 are claiming Income Support. In comparison with the Isle of Man, for example, while their average wage is £26,000 ours is 23% higher at £32,000; our minimum wage, however is the same as theirs, at £5.80. This is not a good starting point for the delivery of social justice.
Income Support is supposed to protect those in greatest need. Your opinion column says ‘it has the makings of a step in the right direction’. If only that were the case. ‘Helping people to help themselves is the best strategy’ says the minister.
But if you wish to help yourself by returning to work, or working more hours, then under Income Support, for every extra £1 you earn you will lose 94 pence from your benefit. Helping yourself by earning 6p an hour hardly sounds like a step in the right direction. Helping yourself by working hard and saving for your retirement is also penalised under Income Support. Do not save too hard, because single pensioners will have Income Support severely reduced for any savings over £12,000.
Income Support was ‘sold’ to States members on the basis that it would redistribute benefits to the most needy.
Early evidence suggests that this is not true. Transition payments protect most for now, but come October, many of those on low incomes, below £200 per week, will see the money in their pocket cut by a few pounds because they no longer have free consultation with their GP under HIE. Free access to GP services has been eliminated. No one knows where the costs of a home visit, or God forbid, a night visit will come from. Many of those claiming for a disability (Attendance Allowance or Adult Disablement Allowance) will be particularly hard hit by Income Support, with families losing between £40 and £100 per week.
Now that the final safety net of parish welfare has also been removed, those who need urgent additional help also find themselves without support. The special payments fund has already routinely refused urgent assistance with dental costs, high winter heating bills and parish rates which used to be covered in some cases.
Despite all the assurances that the delivery of social justice is high on the agenda of the Council of Ministers, neither the Chief Minister, nor his Treasury Minister and certainly not the Minister for Social Security, has delivered anything but platitudes and humbug, while the social and economic divide grows wider and deeper as we watch.
Published 11/4/2008
