Conflating all social security spending as "welfare" is not transparent. Photo: Getty
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Osborne's personal tax summaries are not transparent: they don't break down welfare spending

Why the Chancellor's personal tax summaries are the wrong type of transparency.

At CPAG, we slept on yesterday’s news of George Osborne’s personal tax summaries. This morning, we awoke to find we’re still pretty annoyed. This blog is an attempt to figure out why, exactly.

Now, we’re not against transparency in politics. Indeed, like most people, we’re also partial to motherhood and apple pie. Yet, scratch the surface, and it’s clear that the government have chosen very carefully what information they’re using, and how they’re presenting it. And selective transparency isn’t really transparency at all.

How that information is presented has been critiqued in a number of places. At the top of the government-produced mock-ups of the summaries sits a monolithic block, "welfare" – a term that, unlike social security or social protection, has no commonly-accepted meaning. Others have raised serious concerns about how spending is allocated to that block, and thus the total calculated. Putting that aside, however, it is hard to see this outside the prism of mooted further cuts to "welfare". Why else conflate spending as diverse as unemployment benefit, in-work tax credits, disability living allowance, and pension credit? With the public already confused as to what proportion of the "welfare" bill goes on these conceptually very different things, is transparency served best by dispelling those misconceptions, or by playing into them?

In reality, our social security system is doing a wide range of things at the same time. Support for pensioners is by far the biggest slice of the pie (state pensions, but also pensioner benefits like pension credit), with the continuing falls in pensioner poverty one of the great public policy success stories of our day; housing benefit comes in next – with the proportion of in-work claims increasing rapidly. Other major spends include disability benefits, child benefit and tax credits, in-work tax credits, and a small slither (around 3 per cent) on jobseeker’s allowance. As a society, we’re spending money to support people with extra costs (of disability, or of having children), those with reduced capacity to earn (disabled people, pensioners, parents), topping up low wages, and subsidising high housing costs. By all means, let’s have a debate about the relative priorities of these functions. But rather than shedding light, these summaries are casting shadows.

The personal summaries are selective, too, looking only at direct personal taxation. Direct tax accounts for less than half of all government revenue, with the long-term reduction in that proportion accelerated by increases in both the personal tax allowance and VAT in this Parliament. This matters because increasing numbers of people are earning too little to pay much if any direct tax. In reality, though, those on low incomes pay a higher proportion of their income in tax than those on high incomes, but do so mostly through indirect taxes. That, in turn, matters because statements focusing just on direct taxes promote a false picture of relative contributions to the Exchequer.

Increasing understanding of how public money is spent is a laudable aim, and we would welcome informed public debate on what our social security is for, and how it can be directed most effectively towards those ends. A well-functioning, well-resourced social security system is an essential pillar in achieving a poverty-free society. Part of transparency around the costs of social security has to include the £29bn annual cost of child poverty alone. Sadly, the selectiveness and partiality of the new personal tax summaries are such that they risk having, if anything, the opposite effect. Not so much transparent, then, as transparently political.

Moussa Haddad is senior policy and research officer at the Child Poverty Action Group

Photo: Getty
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Jeremy Corbyn urged to intervene in Momentum's feud

Pressure is growing on the Labour leader to attend to the troubled organisation's splits. 

Jeremy Corbyn is being urged to intervene to help settle the breach in Momentum, as the troubled organisation’s internal divisions again spilt into the open after a fractious meeting of the organisation’s national committee left Jon Lansman, the organisation’s founder, contemplating exercising his “nuclear option” and shutting down the group completely.

Proposals to give decision-making power to the whole of Momentum’s membership were narrowly defeated, with the organisation resting on a delegate system. The public argument advanced by Lansman’s allies, who backed the one member, one vote system, was that the e-ballot would give greater control to members as opposed to bogging the organisation down in hidebound procedures.

But privately, insiders admitted the plan was a gambit to see off Lansman’s internal critics, including the Alliance of Workers’ Liberty, a Troskyite grouping, who are small but well-organised, giving them an advantage over the rest of the membership.

In a blog, Laura Murray, the newly-elected women’s representative, said publicly what allies of Lansman have been saying privately for some time: that the plan of the AWL and its allies is to take over Momentum with a view to setting it up as a rival party to Labour.

Lansman’s critics, however, say that he is treating Momentum as his personal fiefdom and is stifling the internal democracy of Momentum. The division, which first flared into life following the row over Jackie Walker’s remarks at Labour party conference, has taken on an additional dimension due to the growing frustration of some at what they see as the leadership’s right turn on immigration, free movement and taxation. Clive Lewis’ remark that free movement “has not worked” and John McDonnell’s support for the 40p rate cut are particular causes for alarm.

However, Jeremy Corbyn’s popularity remains largely undimmed, and the Labour leader is coming under pressure to intervene in the row. Lansman has also met with Andrew Murray, who as well as being the father of Laura Murray is Unite general secretary’s Len McCluskey’s chief of staff and a key link into the Labour leader and McCluskey himself.   One trade union official said “I think it’s time for Jeremy and John to intervene to straighten out the situation, so we can get on with the job of holding the government to account”.

Should Corbyn refrain from wading in, Lansman still retains the ability to shut down Momentum, taking its valuable maillist with him, and starting again from scratch. However, the so-called “nuclear option” would mean crippling the left in its internal battles with the Corbynsceptics ahead of crucial clashes about conference delegates and parliamentary selections. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.