ROOF Blog

Millions of pounds of taxpayers’ money will be used to overpay mortgages after the Chancellor extended the Government’s mortgage rescue scheme for another six months at a fixed rate of 6.08 per cent. More than 200,000 people on certain benefits are covered by the scheme, which was set up to help families to avoid repossession. Industry figures suggest that about a third of homeowners are on standard variable rate and 15 per cent are on tracker deals. The average interest rates on these mortgages are only 4.1 per cent and 3.65 per cent respectively, well below the rate paid by the scheme.

Labour’s strategy for tackling poverty has reached the end of the road and Britain risks a return to Victorian levels of inequality, according to a major two-year study by the Labour-affiliated Fabian Society and Webb Memorial Trust.

With 20 per cent of the population still stuck in poverty, the report calls for sweeping reform of the tax and welfare systems under which higher earners would finance more generous, universal benefits.

With all three main parties committed to cut spending to reduce the huge deficit in the public finances, the authors are worried that the battle against poverty will suffer.

They urge the parties to sign up to a new ‘poverty prevention strategy’ – not for the next Budget, but for the next 30 years.

Tim Horton, the Fabian Society’s research director, said: ‘We could be at a tipping point that sends Britain back towards Victorian levels of inequality and social segregation, and makes the solidarity which could challenge that social segregation ever more difficult to recover.’

A poll on the pressure of being a carer has found than three out of four of them have reached breaking point. The most common cause was with the bureaucracy of accessing NHS care and benefits, but the poll found that for many the burden of the carer role was so great that some people have had breakdowns and others attempted suicide.

Charities including Carers UK, Mencap and Alzheimers Society are among nine charities which have drawn up a carers poverty charter calling for better benefits for carers. The charities estimate that six million carers looks after family members or friends at home, but fewer than 500,000 carers actually get the allowance. They want an increase on the weekly carer’s allowance of £53.10, and greater support.

Research by the Prince’s Trust show that deprived young people are being hit by the recession worst, and more is to come. Claims for jobseeker’s allowance by 18- to-24-year-olds have risen by more than 80 per cent in the past year, totalling more than 450,000 young people. At the same time, youth charities are facing increasing demand for their services, and a drop in income as the recession hits the value of investments.

Research from uSwitch.com has found that the recession is hitting towns across the UK with growing unemployment, falling property prices, and rising council tax. Swindon in Wiltshire has been the hardest hit as unemployment soars 197 per cent while house prices fell 16 per cent and the number of people collecting jobseeker’s allowance rose from just under 2,000 to more than 5,700 in two years. Brent in west London was the most ‘recession-proof’ area, with a 12 per cent increase in earnings, and below-average increase in jobseeker’s allowance claims.

The strict working restrictions for Eastern Europeans will not be scrapped the government announced recently. The worker registration scheme ‘works for the British labour market and the country as a whole’ and allows for planning for local services, the government argued, while maintaining the restrictions means A8 nationals will not have full access to benefits until they have been working and paying tax for at least 12 consecutive months.

Working grandparents would be entitled to two weeks of ‘granny leave’ after the birth of a grandchild, and entitled to tax credits, if the charity Grandparents Plus have their way. It is calling for the government to give grandparents an entitlement of two weeks’ leave, to be taken at any point in the child’s first year, receive credits towards their national insurance contributions, and to extend the childcare tax credit to grandparents who provide childcare to help parents return to work. A spokesperson for Grandparents Plus said that 14 million grandparents provide £3.9 billion in childcare yearly.

Nearly £1 billion in tax credits is unclaimed from HM Revenue and Customs by families worried they would have to repay hundreds of pounds because of mistakes made by officials. The commons public accounts committee believes that one in three eligible people in parts of the country do not claim the credits. The committee blames the clawback of £770 on average from 1.3 million families in 2006. Since their introduction in 2003, £85 billion has been paid out in tax credits, but in the first four years of the scheme, HMRC overpaid £7.3 billion to some claimants and underpaid others by more than £2 billion.

Kitty Ussher the minister responsible for the reform of the housing benefit system yesterday ruled out making direct payment to social housing tenants. She said in a speech that the government had listened to the concerns over the impact the move may have on the sector’s ability to raise capital, and although there were advantages in direct payments, with the current economic climate now was not the right time to proceed.