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Lesson 10 - Learning Intentions (After this lesson pupils should be able to):

Lesson 10 - Learning Intentions (After this lesson pupils should be able to): Describe the ways by which recent Governments have tried to reduce wealth inequalities/poverty for those able to work . Programmes include: Jobcentreplus New Deal National Minimum Wage Working Tax Credit

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Lesson 10 - Learning Intentions (After this lesson pupils should be able to):

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  1. Lesson 10 - Learning Intentions • (After this lesson pupils should be able to): • Describe the ways by which recent Governments have tried to reduce wealth inequalities/poverty for those able to work . Programmes include: • Jobcentreplus • New Deal • National Minimum Wage • Working Tax Credit • Child Tax Credit • Jobseekers Allowance

  2. Reducing Wealth Inequalities / Poverty One priority of the last Labour and current Con./Lib Dem. Government has been toreduce inequality/poverty by extending employment opportunities for those able to work i.e. ‘people to work their way out of poverty’. Described as Labour’s ‘Third Way,’ where Labour retains its traditional support for the deserving poor, welfare policy has seen a cutting of support to the ‘undeserving poor’ e.g. working age adults. For example, there has been a crackdown on those claiming benefits illegally and Incapacity Benefit has been replaced by Employment Support Allowance which has tougher eligibility rules. With Jobseekers Allowance, the main benefit for those out of work (paid for up to 6 months but only to those ‘actively seeking work’; 1.47m claimants 2010) eligibility rules were tightened under Labour with 100,000 single parents moved to JSA 2008 to increase pressure to undertake work.

  3. Policies / Programmes To Reduce Wealth Inequalities • • Jobcentre Plus - Provides a wide range of services to help people find employment and claim the correct benefits. • New Deal - Introduced to get unemployed people back in to employment or training. Personal advisers support each client in their search for work. Seven different schemes available covering a wide range of training courses and employment types. • National Minimum Wage (MW) - Introduced in 1999, the MW aimed to encourage people to take up employment as rates of pay would be better for many low paying jobs. Note: Most years since 1999 MW has risen above inflation (meaning greater spending power for the poorest paid in real terms). MW extended to 16-17 year olds in 2006. Adult MW to be extended to 21 year olds in 2010.

  4. Policies / Programmes To Reduce Wealth Inequalities • Working Tax Credit(WTC) - Introduced to ‘make work pay’ through a reduction in tax, WTC aims to ensure that those moving from unemployment to work are better off financially i.e. WTC seeks to end the ‘poverty trap’ which is a disincentive for some people to take up employment. • Child Tax Credit (CTC) - The CTC is either a reduction in tax for family’s with children to encourage parents to take up employment or a cash payment to unemployed people with children Gordon Brown and more recently Alistair Darling, have targeted target tax credits towards the poorest paid workers with families to encourage more people from these groups to seek employment. In 2010, the value of Child Tax Credits will rose a further £20.

  5. Success of Policies to Reduce Wealth Inequalities/Poverty • The Government would argue that until the current recession started (2008): • Employment figures had been the highest ever (to 30m) • For 15 years, unemployment rates had been very low • There had been falls in child and pensioner poverty levels • BUT • The wages of the top earners have risen faster than those at the bottom or near MW (UK’s Gini co-efficient has risen) • Until Budget 2010 (new top rate of 50% on incomes over £150k), only real attempt to make taxation system progressive • Complicated benefits system mean many poor groups miss out on benefits

  6. Conservative/Liberal Democrat Welfare Update (2010) The Chancellor of the Exchequer George Osborne says he is introducing the greatest reform to the Welfare State in a generation, with £7bn in welfare cuts. It includes reforms to Jobseekers Allowance, Housing Benefit and Childcare Benefits. "No family that doesn’t work will receive more in benefits than the average family that goes out to work” said Mr Osborne. "Taken together, all these welfare, measures I have outlined will save the country £7 billion a year,” he added.

  7. Conservative/Liberal Democrat Welfare Update (2010) • A further £7bn in welfare savings planned on top of the £11bn already announced. • A new 12-month time limit on the Employment and Support Allowance could see an estimated 200,000 claimants moved on to Jobseekers Allowance and see their support reduced. • Proposed 10% cut in Council Tax Benefit Budget. • Under-35s only able to claim Housing Benefit for a room rather than a whole property. • Maximum savings award in Pension Credit to be frozen for four years. • Increased working hours threshold for Working Tax Credits for couples with children. • New total benefits cap per family.

  8. Questions • 1. Describe the way in which three of the following Government policies/programmes aim to reduce inequality / poverty: • • Jobcentre Plus • New Deal • National Minimum Wage • Working Tax Credit • Child Tax Credit • 2. What approach have the Conservative/Liberal Democrat Government adopted towards welfare state spending? • Homework essay: To what extent have recent UK Government policies been successful in reducing inequality and poverty amongst those able to work? • Reading: ‘Modern UK Social Issues’ pages 30 and 31 and 34 and 35.

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