POSTCODE LOTTERY
The Bill will break up the NHS and create an unfair postcode lottery. With no national standards, there will be widespread variation in the treatments available on the NHS. In some areas, people may have to go private to get services available for free elsewhere.
LONGER WAITING TIMES
The Bill risks rises in waiting times and a two-tier NHS. It scraps the cap on hospitals treating private patients at the same time as watering down guarantees on NHS waiting times. This means local hospitals will be free to treat more private patients and make NHS patients wait longer.
PRIVATISATION
The Bill turns the NHS into a full-blown commercial market, putting competition before patient care. It allows private companies to cherry-pick quick profits, potentially forcing local hospitals to go bust. Hospitals could even be fined for working together.
DAMAGED DOCTOR-PATIENT RELATIONSHIP
The Bill undermines the bond of trust between doctors and patients. It creates conflicts of interest where financial incentives could interfere with medical decisions. GPs could even get a bonus for rationing your care.
WASTE
This Bill is wasting money and creating bureaucracy. It is unforgivable to spend £2 billion on a reckless re-organisation when the NHS needs every penny it can get for patient care. Nearly £1 billion is being wasted on pay-offs for managers, only for many of them to be re-employed as consultants.
Friday 24 February 2012
Monday 20 February 2012
LIES, DAMNED LIES & TORY PROMISES ON THE NHS
Before the election, David Cameron and the Conservatives made promise after promise on the NHS as part of an attempt to detoxify the Conservative brand and ensure that they could be trusted to run the health service.
But in Government, David Cameron and the Conservatives are breaking promise after promise on the NHS, with the biggest top-down reorganisation in NHS history, cuts to the frontline – including thousands of nurses being cut – more bureaucracy and more long waits.
BROKEN PROMISE 1: No more top-down NHS reorganisations
BROKEN PROMISE 2: Stopping hospital closures
BROKEN PROMISE 3: Keeping waiting times down
BROKEN PROMISE 4: Cutting NHS bureaucracy
BROKEN PROMISE 5: 3,000 more midwives
BROKEN PROMISE 6: No NHS cuts
BROKEN PROMISE 1: No more top-down NHS reorganisations
Promise made: Before the election the Conservatives repeatedly promised no more top down reorganisations of the NHS. This was reiterated in the Coalition Agreement.
“So I make this commitment to the NHS and all who work in it.
“No more pointless reorganisations.”
David Cameron, Conference speech 4 October 2006
“The NHS needs no more pointless organisational upheaval. It needs no more top-down reorganisations.” Andrew Andrew Lansley, press release, 11 July 2007
"But first I want to tell you what we're not going to do.
"There will be no more of those pointless re-organisations that aim for change but instead bring chaos."
David Cameron, speech to the Royal College of Nursing, 11 May 2009
"We will stop the top-down reorganisations of the NHS that have got in the way of patient care."
Coalition Agreement, 20 May 2010, p. 24
Promise broken: The Government is embarking on the biggest top-down reorganisation in NHS history, in the teeth of opposition from health professionals, experts, patients and the public. The Health and Social Care Bill is three times longer than the Bill that set up the NHS in the first place.
BROKEN PROMISE 2: Stopping hospital closures
Promise made: David Cameron made hospital closures a key battleground for the election, promising a ‘bare knuckle fight’ with Gordon Brown:
David Cameron has promised a "bare knuckle fight" with Prime Minister Gordon Brown as he launched a campaign to safeguard district hospitals.
BBC News, 21 August 2007
Mr Cameron said the downgrading of services at district hospitals would be a key battleground at the next general election.
"I can promise what I've called a bare-knuckle fight with the government over the future of district general hospitals.
"We believe in them, we want to save them and we want them enhanced, and we will fight the government all the way."
BBC News, 21 August 2007
The Conservative Manifesto promised to stop the closure of local A&E and maternity services.
“We will stop the forced closure of A&E and maternity wards, so that people have better access to local services, and give mothers a real choice over where to have their baby, with NHS funding following their decisions.”
Conservative Party Manifesto 2010, p. 47
David Cameron visited Chase Farm hospital in Enfield in 2007 and posed for photos promising to stop cuts and closures there.
David Cameron with David Burrowes MP campaigning to stop cuts and closures at Chase Farm Hospital, 4 October 2007,
Promise broken: In September 2011, Andrew Lansley approved the downgrade and closure of services at Chase Farm Hospital that David Cameron had visited and personally pledged to protect.
“Chase Farm hospital in Enfield, north London, is to lose its A&E and maternity units after the health secretary – who had previously supported campaigners' efforts to retain them – accepted recommendations from the Independent Reconfiguration Panel (IRP), which advises ministers on reshaping hospital services.
“Lansley's decision ends uncertainty surrounding the hospital's future stretching back to 2007, when the-then Labour government first asked the IRP for advice about what services it should offer.
“But Cameron indicated his support for Chase Farm in October that year when, as leader of the opposition, he visited the hospital and said: "What I would say to Gordon Brown is if you call an election on 1 November we'll stop the closure of services at this hospital on 2 November."
“The hospital's A&E unit will now be downgraded to a 12-hours-a-day urgent care centre and its maternity unit replaced by a midwife-led birth unit. They will change as part of a shakeup that will see A&E and childbirth services centralised at Barnet and North Middlesex hospitals.”
Guardian, 12 September 2011
According to the Health Service Journal, the following schemes have been approved since the election, including the downgrading of the Newark Hospital A&E, and downgrading of Rochdale Infirmary A&E:
“Permanent closures and downgrading of services agreed since May:
“Newark Hospital, Nottinghamshire, A&E services to be downgraded, with emergency medical admissons no longer taken from April 2011.
“Queen Elizabeth II Hospital, Welwyn Garden City. A&E service to be downgraded and consultant led maternity unit closed. Casualty unit likely to be staffed by GPs and nurses. No date set for changes. A review will decide whether a midwife-led unit, for "low-risk" cases, will be set up.
“Sandwell General Hospital in Birmingham will lose consultant-led maternity services in 2011. A midwife led unit due to open in Sandwell by the end of that year.
“Maidstone Hospital in Kent will lose consultant-led maternity services in the summer of 2011. Plans were drawn up under Labour, Coalition Government agreed it could go ahead in July.
Sunday Telegraph, 9 October 2010
BROKEN PROMISE 3: Keeping waiting times down
Promise made: David Cameron promised in June that NHS waiting times would be kept down.
“Waiting times really matter.
“If your mum or dad needs an operation, you want it done quickly and effectively.
“I refuse to go back to the days when people had to wait for hours on end to be seen in A&E, or months and months to have surgery done.
“So let me be absolutely clear: we won’t.”
David Cameron, speech on the future of the NHS, 7 June 2011
Promise broken: The NHS is losing control of waiting times. The number of patients who waited more than 18 weeks for their operation is up 13 per cent year on year in the latest figures, and hundreds more patients have had to wait over a year (source: Department of Health Referral to Treatment Time Statistics,).
Major A&E units have missed the four-hour waiting time target for the last seven weeks in a row (Source: Department of Health Weekly A&E and Ambulance Activity,
David Flory, Deputy NHS Chief Executive wrote to senior NHS managers this month warning that 47 Commissioners and 30 Trusts have missed the standard that 90% of admitted patients should be treated within 18 weeks.
“However, in November 2011, 47 commissioners and 30 acute trusts failed to meet the 90 per cent admitted standard. Performance in some treatment functions also needs to improve – most notably in Trauma and orthopaedics where the largest numbers of patients continue to wait longer than 18 weeks.”
Department of Health, Gateway reference: 17134, 2 February 2012, p. 2
He said that “It is unacceptable for performance to fall below the expected standards”.
“Waiting times are a key part of patients’ perceptions of the NHS and their care and can impact on patient outcomes. It is unacceptable for performance to fall below the expected standards. The contractual operational standards should be achieved in each specialty by every organisation and this will be monitored monthly.”
Department of Health, Gateway reference: 17134, 2 February 2012, p. 2
He said that “too many patients are still being reported to be waiting a long time” especially those waiting longer than a year for treatment.
“However, published referral to treatment incomplete pathway data shows that too many patients are still being reported to be waiting a long time, in particular, those waiting over 52 weeks before starting their treatment.”
Department of Health, Gateway reference: 17134, 2 February 2012, p. 2
BROKEN PROMISE 4: Cutting NHS bureaucracy
Promise made: The Conservatives promised that they would cut bureaucracy in the NHS.
“We will decentralise power, so that patients have a real choice. We will make doctors and nurses accountable to patients, not to endless layers of bureaucracy and management.”
Conservative manifesto 2010, p. 45
David Cameron continues to claim that he is cutting NHS bureaucracy.
“What we’re doing is cutting the bureaucracy in the NHS.”
David Cameron, Prime Ministers Questions, 8 February 2012
Promise broken: The Health and Social Care Bill introduces new layers of bureaucracy into the NHS. According to the Royal College of GPs, the reorganisation moves the NHS from having 163 statutory organisations to 521.
"The bureaucracy with the new Bill, post-pause, means that we have gone—we have calculated this—from 163 statutory organisations to a proposed 521, not counting the commissioning support organisations. Clearly, we have massively increased the bureaucracy, if one calls it that, within the new, post-pause NHS. With respect to the national commissioning board and whatever, the current, post-pause Bill seems to be very incoherent. No matter what one felt about the pre-pause Bill, it was coherent. This is not. It is neither liberating nor controlling. It neither allows for GPs to be innovative, nor does it give them tight restraints."
Dr Clare Gerada, Royal College of GPs, evidence to Health and Social Care Bill Committee, 28 June 2011
The NHS Confederation says that the Government’s proposed new NHS structure is “more complex” and “could potentially lead to paralysis in the system.
“We remain concerned that the proposed, more complex structure could potentially lead to paralysis in the system. It needs to be clearer how the various bodies in the system will be expected to work effectively together, which organisations will lead on certain crucial issues such as improving the quality of care, and how potential disputes will be resolved.”
NHS Confederation, Health and Social Care Bill House of Lords – Report Stage Briefing February 2012, p. 2
BROKEN PROMISE 5: 3,000 more midwives
Promise made: In January, David Cameron told the Sun newspaper, “we will increase the number of midwives by 3,000”.
"Second, we are going to make our midwives' lives a lot easier. They are crucial to making a mum's experience of birth as good as it can possibly be, but today they are overworked and demoralised. So we will increase the number of midwives by 3000''
David Cameron, The Sun, 21 January 2010
Promise broken: In November 2010 Cathy Warwick, General Secretary of the Royal College of Midwives, said, "We've now had a meeting with Andrew Lansley the Secretary of State for Health and they are clearly not prepared to fulfil that commitment." A Conservative Party spokesman confirmed that the pledge would not be met.
“Cathy Warwick, general secretary of the RCM, said the service is at ‘cracking point’ but the government had reneged on its promise to create more midwifery posts.
“She told BBC Radio 4's Today programme: ‘Before the election both David Cameron and Nick Clegg pledged more midwives. As recently as January David Cameron had an article in the The Sun where he talked about the importance of midwives to mothers and said that if he was in power he would give us 3,000 more midwives.’
“She explained: ‘We've now had a meeting with Andrew Lansley the Secretary of State for Health and they are clearly not prepared to fulfil that commitment.’
Daily Telegraph, 17 November 2010
“However, a Conservative party spokesman said there would be no increase in the number of posts due to a recent levelling off of the birth rate.
“He said: ‘There must of course be enough midwives to meet the demands arising from the number of births. The commitment to 3000 midwives made in Opposition was dependent on the birthrate increasing as it has done in the recent past. It was not in the coalition agreement because predictions now suggest the birthrate will be stable over the next few years.’"
Daily Telegraph, 17 November 2010
BROKEN PROMISE 6: No NHS cuts
Promise made: David Cameron promised “I’ll cut the deficit, not the NHS”.
Promise broken: Official figures show that 3,500 nurses have been cut since the election, and thousands more are set to be cut in this Parliament.
The number of full-time equivalent (FTE) qualified nurses (excluding midwives, health visitors and school nurses) has fallen from 281,431 in May 2010 to 277,915 in October 2011 (latest figures), a fall of 3,516 (source: NHS Information Centre, Monthly NHS Hospital and Community Health Service Workforce Statistics in England - October 2011).
Recent research by the Royal College of Nursing suggests that many more nursing posts may already have been earmarked for cuts (Frontline First: November 2011 update, Royal College of Nursing). The RCN analysis identified 5,000 nursing posts at risk, comprising both qualified nurses and healthcare assistants. We are assuming that half (2,500) of these 5,000 posts are qualified nurses.
Labour is calling for the Government to drop the Health and Social Care Bill now, and use £750 million of the £1.78 billion this would save to save 6,000 nurses.
But in Government, David Cameron and the Conservatives are breaking promise after promise on the NHS, with the biggest top-down reorganisation in NHS history, cuts to the frontline – including thousands of nurses being cut – more bureaucracy and more long waits.
BROKEN PROMISE 1: No more top-down NHS reorganisations
BROKEN PROMISE 2: Stopping hospital closures
BROKEN PROMISE 3: Keeping waiting times down
BROKEN PROMISE 4: Cutting NHS bureaucracy
BROKEN PROMISE 5: 3,000 more midwives
BROKEN PROMISE 6: No NHS cuts
BROKEN PROMISE 1: No more top-down NHS reorganisations
Promise made: Before the election the Conservatives repeatedly promised no more top down reorganisations of the NHS. This was reiterated in the Coalition Agreement.
“So I make this commitment to the NHS and all who work in it.
“No more pointless reorganisations.”
David Cameron, Conference speech 4 October 2006
“The NHS needs no more pointless organisational upheaval. It needs no more top-down reorganisations.” Andrew Andrew Lansley, press release, 11 July 2007
"But first I want to tell you what we're not going to do.
"There will be no more of those pointless re-organisations that aim for change but instead bring chaos."
David Cameron, speech to the Royal College of Nursing, 11 May 2009
"We will stop the top-down reorganisations of the NHS that have got in the way of patient care."
Coalition Agreement, 20 May 2010, p. 24
Promise broken: The Government is embarking on the biggest top-down reorganisation in NHS history, in the teeth of opposition from health professionals, experts, patients and the public. The Health and Social Care Bill is three times longer than the Bill that set up the NHS in the first place.
BROKEN PROMISE 2: Stopping hospital closures
Promise made: David Cameron made hospital closures a key battleground for the election, promising a ‘bare knuckle fight’ with Gordon Brown:
David Cameron has promised a "bare knuckle fight" with Prime Minister Gordon Brown as he launched a campaign to safeguard district hospitals.
BBC News, 21 August 2007
Mr Cameron said the downgrading of services at district hospitals would be a key battleground at the next general election.
"I can promise what I've called a bare-knuckle fight with the government over the future of district general hospitals.
"We believe in them, we want to save them and we want them enhanced, and we will fight the government all the way."
BBC News, 21 August 2007
The Conservative Manifesto promised to stop the closure of local A&E and maternity services.
“We will stop the forced closure of A&E and maternity wards, so that people have better access to local services, and give mothers a real choice over where to have their baby, with NHS funding following their decisions.”
Conservative Party Manifesto 2010, p. 47
David Cameron visited Chase Farm hospital in Enfield in 2007 and posed for photos promising to stop cuts and closures there.
David Cameron with David Burrowes MP campaigning to stop cuts and closures at Chase Farm Hospital, 4 October 2007,
Promise broken: In September 2011, Andrew Lansley approved the downgrade and closure of services at Chase Farm Hospital that David Cameron had visited and personally pledged to protect.
“Chase Farm hospital in Enfield, north London, is to lose its A&E and maternity units after the health secretary – who had previously supported campaigners' efforts to retain them – accepted recommendations from the Independent Reconfiguration Panel (IRP), which advises ministers on reshaping hospital services.
“Lansley's decision ends uncertainty surrounding the hospital's future stretching back to 2007, when the-then Labour government first asked the IRP for advice about what services it should offer.
“But Cameron indicated his support for Chase Farm in October that year when, as leader of the opposition, he visited the hospital and said: "What I would say to Gordon Brown is if you call an election on 1 November we'll stop the closure of services at this hospital on 2 November."
“The hospital's A&E unit will now be downgraded to a 12-hours-a-day urgent care centre and its maternity unit replaced by a midwife-led birth unit. They will change as part of a shakeup that will see A&E and childbirth services centralised at Barnet and North Middlesex hospitals.”
Guardian, 12 September 2011
According to the Health Service Journal, the following schemes have been approved since the election, including the downgrading of the Newark Hospital A&E, and downgrading of Rochdale Infirmary A&E:
“Permanent closures and downgrading of services agreed since May:
“Newark Hospital, Nottinghamshire, A&E services to be downgraded, with emergency medical admissons no longer taken from April 2011.
“Queen Elizabeth II Hospital, Welwyn Garden City. A&E service to be downgraded and consultant led maternity unit closed. Casualty unit likely to be staffed by GPs and nurses. No date set for changes. A review will decide whether a midwife-led unit, for "low-risk" cases, will be set up.
“Sandwell General Hospital in Birmingham will lose consultant-led maternity services in 2011. A midwife led unit due to open in Sandwell by the end of that year.
“Maidstone Hospital in Kent will lose consultant-led maternity services in the summer of 2011. Plans were drawn up under Labour, Coalition Government agreed it could go ahead in July.
Sunday Telegraph, 9 October 2010
BROKEN PROMISE 3: Keeping waiting times down
Promise made: David Cameron promised in June that NHS waiting times would be kept down.
“Waiting times really matter.
“If your mum or dad needs an operation, you want it done quickly and effectively.
“I refuse to go back to the days when people had to wait for hours on end to be seen in A&E, or months and months to have surgery done.
“So let me be absolutely clear: we won’t.”
David Cameron, speech on the future of the NHS, 7 June 2011
Promise broken: The NHS is losing control of waiting times. The number of patients who waited more than 18 weeks for their operation is up 13 per cent year on year in the latest figures, and hundreds more patients have had to wait over a year (source: Department of Health Referral to Treatment Time Statistics,).
Major A&E units have missed the four-hour waiting time target for the last seven weeks in a row (Source: Department of Health Weekly A&E and Ambulance Activity,
David Flory, Deputy NHS Chief Executive wrote to senior NHS managers this month warning that 47 Commissioners and 30 Trusts have missed the standard that 90% of admitted patients should be treated within 18 weeks.
“However, in November 2011, 47 commissioners and 30 acute trusts failed to meet the 90 per cent admitted standard. Performance in some treatment functions also needs to improve – most notably in Trauma and orthopaedics where the largest numbers of patients continue to wait longer than 18 weeks.”
Department of Health, Gateway reference: 17134, 2 February 2012, p. 2
He said that “It is unacceptable for performance to fall below the expected standards”.
“Waiting times are a key part of patients’ perceptions of the NHS and their care and can impact on patient outcomes. It is unacceptable for performance to fall below the expected standards. The contractual operational standards should be achieved in each specialty by every organisation and this will be monitored monthly.”
Department of Health, Gateway reference: 17134, 2 February 2012, p. 2
He said that “too many patients are still being reported to be waiting a long time” especially those waiting longer than a year for treatment.
“However, published referral to treatment incomplete pathway data shows that too many patients are still being reported to be waiting a long time, in particular, those waiting over 52 weeks before starting their treatment.”
Department of Health, Gateway reference: 17134, 2 February 2012, p. 2
BROKEN PROMISE 4: Cutting NHS bureaucracy
Promise made: The Conservatives promised that they would cut bureaucracy in the NHS.
“We will decentralise power, so that patients have a real choice. We will make doctors and nurses accountable to patients, not to endless layers of bureaucracy and management.”
Conservative manifesto 2010, p. 45
David Cameron continues to claim that he is cutting NHS bureaucracy.
“What we’re doing is cutting the bureaucracy in the NHS.”
David Cameron, Prime Ministers Questions, 8 February 2012
Promise broken: The Health and Social Care Bill introduces new layers of bureaucracy into the NHS. According to the Royal College of GPs, the reorganisation moves the NHS from having 163 statutory organisations to 521.
"The bureaucracy with the new Bill, post-pause, means that we have gone—we have calculated this—from 163 statutory organisations to a proposed 521, not counting the commissioning support organisations. Clearly, we have massively increased the bureaucracy, if one calls it that, within the new, post-pause NHS. With respect to the national commissioning board and whatever, the current, post-pause Bill seems to be very incoherent. No matter what one felt about the pre-pause Bill, it was coherent. This is not. It is neither liberating nor controlling. It neither allows for GPs to be innovative, nor does it give them tight restraints."
Dr Clare Gerada, Royal College of GPs, evidence to Health and Social Care Bill Committee, 28 June 2011
The NHS Confederation says that the Government’s proposed new NHS structure is “more complex” and “could potentially lead to paralysis in the system.
“We remain concerned that the proposed, more complex structure could potentially lead to paralysis in the system. It needs to be clearer how the various bodies in the system will be expected to work effectively together, which organisations will lead on certain crucial issues such as improving the quality of care, and how potential disputes will be resolved.”
NHS Confederation, Health and Social Care Bill House of Lords – Report Stage Briefing February 2012, p. 2
BROKEN PROMISE 5: 3,000 more midwives
Promise made: In January, David Cameron told the Sun newspaper, “we will increase the number of midwives by 3,000”.
"Second, we are going to make our midwives' lives a lot easier. They are crucial to making a mum's experience of birth as good as it can possibly be, but today they are overworked and demoralised. So we will increase the number of midwives by 3000''
David Cameron, The Sun, 21 January 2010
Promise broken: In November 2010 Cathy Warwick, General Secretary of the Royal College of Midwives, said, "We've now had a meeting with Andrew Lansley the Secretary of State for Health and they are clearly not prepared to fulfil that commitment." A Conservative Party spokesman confirmed that the pledge would not be met.
“Cathy Warwick, general secretary of the RCM, said the service is at ‘cracking point’ but the government had reneged on its promise to create more midwifery posts.
“She told BBC Radio 4's Today programme: ‘Before the election both David Cameron and Nick Clegg pledged more midwives. As recently as January David Cameron had an article in the The Sun where he talked about the importance of midwives to mothers and said that if he was in power he would give us 3,000 more midwives.’
“She explained: ‘We've now had a meeting with Andrew Lansley the Secretary of State for Health and they are clearly not prepared to fulfil that commitment.’
Daily Telegraph, 17 November 2010
“However, a Conservative party spokesman said there would be no increase in the number of posts due to a recent levelling off of the birth rate.
“He said: ‘There must of course be enough midwives to meet the demands arising from the number of births. The commitment to 3000 midwives made in Opposition was dependent on the birthrate increasing as it has done in the recent past. It was not in the coalition agreement because predictions now suggest the birthrate will be stable over the next few years.’"
Daily Telegraph, 17 November 2010
BROKEN PROMISE 6: No NHS cuts
Promise made: David Cameron promised “I’ll cut the deficit, not the NHS”.
Promise broken: Official figures show that 3,500 nurses have been cut since the election, and thousands more are set to be cut in this Parliament.
The number of full-time equivalent (FTE) qualified nurses (excluding midwives, health visitors and school nurses) has fallen from 281,431 in May 2010 to 277,915 in October 2011 (latest figures), a fall of 3,516 (source: NHS Information Centre, Monthly NHS Hospital and Community Health Service Workforce Statistics in England - October 2011).
Recent research by the Royal College of Nursing suggests that many more nursing posts may already have been earmarked for cuts (Frontline First: November 2011 update, Royal College of Nursing). The RCN analysis identified 5,000 nursing posts at risk, comprising both qualified nurses and healthcare assistants. We are assuming that half (2,500) of these 5,000 posts are qualified nurses.
Labour is calling for the Government to drop the Health and Social Care Bill now, and use £750 million of the £1.78 billion this would save to save 6,000 nurses.
CONSTRUCTION INDUSTRY CALLING FOR QE TO INCREASE HOUSING SUPPLY
George Osborne is coming under pressure from the construction industry to use his Budget statement next month to introduce a range of practical policies to drive growth.
The Construction Products Association has written to the Chancellor calling for measures that will speed the country’s economic recovery without impinging on his stated medium term deficit target.
The punitive cuts programme will see a 26 per cent reduction in public sector capital investment between 2010/11 and 2013/14. This is despite last year’s Government announcement that additional capital spending in housing, education and infrastructure would be made available. To give the UK economy any chance of recovery within a reasonable timescale, it is essential that this Government focuses on sustainable investment for growth.
Next month’s Budget provides the Chancellor with the opportunity to stimulate the economy and deliver growth. Capital investment would not only generate economic activity and employment, it would also increase long term productivity by improving the nation’s infrastructure.
The Construction Products Association’s Chief Executive, Michael Ankers, said: “Key to delivering the infrastructure that the country needs is the attraction of additional private finance to compensate for the shortfall in public capital investment.” Mr Ankers also suggested that additional quantitative easing could be used to “raise levels of housing supply.”
The Bank of England could use QE to purchase bonds in housing construction companies and housing associations through its asset purchase scheme to provide desperately needed homes. This would increase housing provision and reduce the gap between housing supply and housing need, which is currently spiralling out of control.
The budget should also do more to ensure the Green Deal succeeds. The Construction Products Association is calling for a reduction in VAT to 5 per cent for Green Deal work (and also equivalent energy efficiency work done outside the Green Deal) is necessary to incentivise consumers to take out these measures and to make the Golden Rule more achievable. As things currently stand, energy usage is charged at 5 per cent VAT whilst the products and solutions that will help reduce energy usage are charged at 20 per cent VAT.
There is plenty of evidence of the importance of construction to the growth agenda, the big question is, will George Osborne make the right call. Failure to do so will consign millions of Britons to even greater hardship, which is unnecessary and preventable.
The Construction Products Association has written to the Chancellor calling for measures that will speed the country’s economic recovery without impinging on his stated medium term deficit target.
The punitive cuts programme will see a 26 per cent reduction in public sector capital investment between 2010/11 and 2013/14. This is despite last year’s Government announcement that additional capital spending in housing, education and infrastructure would be made available. To give the UK economy any chance of recovery within a reasonable timescale, it is essential that this Government focuses on sustainable investment for growth.
Next month’s Budget provides the Chancellor with the opportunity to stimulate the economy and deliver growth. Capital investment would not only generate economic activity and employment, it would also increase long term productivity by improving the nation’s infrastructure.
The Construction Products Association’s Chief Executive, Michael Ankers, said: “Key to delivering the infrastructure that the country needs is the attraction of additional private finance to compensate for the shortfall in public capital investment.” Mr Ankers also suggested that additional quantitative easing could be used to “raise levels of housing supply.”
The Bank of England could use QE to purchase bonds in housing construction companies and housing associations through its asset purchase scheme to provide desperately needed homes. This would increase housing provision and reduce the gap between housing supply and housing need, which is currently spiralling out of control.
The budget should also do more to ensure the Green Deal succeeds. The Construction Products Association is calling for a reduction in VAT to 5 per cent for Green Deal work (and also equivalent energy efficiency work done outside the Green Deal) is necessary to incentivise consumers to take out these measures and to make the Golden Rule more achievable. As things currently stand, energy usage is charged at 5 per cent VAT whilst the products and solutions that will help reduce energy usage are charged at 20 per cent VAT.
There is plenty of evidence of the importance of construction to the growth agenda, the big question is, will George Osborne make the right call. Failure to do so will consign millions of Britons to even greater hardship, which is unnecessary and preventable.
Tuesday 14 February 2012
CONSTRUCTION INDUSTRY BRACED FOR WORSENING 2012
The latest Construction Trade Survey published today shows that the final quarter of 2011 was very poor for the vast majority of the construction industry, especially SMEs, which continues to be constrained by a lack of finance and sharply falling public sector funding.
This latest survey is yet more evidence that George Osborne’s stewardship of our economy is proving utterly disastrous. Yesterday’s decision by Moody's, the ratings agency, to put the UK on a negative outlook means Britain’s AAA rating could be downgraded by the end of this year.
Yet the Chancellor is in complete denial about the state of the economy and the failure of his policies. Moody’s decision is a significant warning to George Osborne that his deficit reduction strategy isn’t working. He should abandon his ideological fascination for a laissez-faire small state and focus on jobs and growth starting with a boost for the construction sector.
The Economics Director at the Construction Products Association, Noble Francis, was blunt about the impact of the Government’s counterproductive austerity measures. He said: “Cuts to public sector capital budgets had a tangible impact on activity across the construction supply chain, exacerbated by economic uncertainty and a lack of lending.
“As a consequence 2011 Q4 was very challenging for the industry. However, of even greater concern, previously positive workloads in sectors such as commercial and private housing have now become negative. Furthermore, prospects for the industry in 2012 are poor with sharply deteriorating order books and enquiries.
“The only bright spots appear in exports and infrastructure. Yet this is unlikely to be sufficient to offset all the other sectors in which workloads are declining. As a consequence, instead of being a driver of growth in the UK, construction is likely to hinder economic recovery this year unless the Chancellor takes steps in next month’s Budget to stimulate the industry and the economy as a whole.”
Julia Evans, Chief Executive of the National Federation of Builders, was even more scathing. She said: “With energy and material costs up, confidence down and lending conditions set to deteriorate further through 2012, it is hard to see how much of the industry will survive if these conditions are sustained. Marquee projects such as the Olympic Stadium will always give the impression of a vibrant industry but the vast majority of firms will only be able to survive for so long with cutthroat competition for work, unreasonable credit rates and late payment before they join the 2,700 construction firms that went into administration in 2011.’
Only the UK Construction Group found anything positive to say. Its Director, Stephen Ratcliffe, said: “Business conditions remain challenging but there are also still opportunities for the industry. UKCG is working with government to help ensure the pipeline of public sector projects announced at the time of the autumn statement is translated into reality and that we help deliver the best possible value to a cash strapped public sector to ensure some continuity of work.”
Key survey findings include:
• 37% of large and medium sized building contractors, on balance, reported that output in 2011 Q4 was lower than during the same quarter one year earlier.
• The civil engineering workload balance was positive (at +5%) for the first time since 2008 Q1.
• Manufacturers of light side products benefitted from growth in export sales with 37% of firms, on balance, reporting year-on-year sales growth in Q4.
• Enquiries levels to SME contractors were widely reported to be below average, by -30% on balance.
• Nearly half of specialist contractors surveyed reported a quarter-on-quarter reduction in orders in Q4.
• Materials cost inflation and rising energy prices were the main drivers of strong overall cost inflation in the last three months of 2011.
This latest survey is yet more evidence that George Osborne’s stewardship of our economy is proving utterly disastrous. Yesterday’s decision by Moody's, the ratings agency, to put the UK on a negative outlook means Britain’s AAA rating could be downgraded by the end of this year.
Yet the Chancellor is in complete denial about the state of the economy and the failure of his policies. Moody’s decision is a significant warning to George Osborne that his deficit reduction strategy isn’t working. He should abandon his ideological fascination for a laissez-faire small state and focus on jobs and growth starting with a boost for the construction sector.
The Economics Director at the Construction Products Association, Noble Francis, was blunt about the impact of the Government’s counterproductive austerity measures. He said: “Cuts to public sector capital budgets had a tangible impact on activity across the construction supply chain, exacerbated by economic uncertainty and a lack of lending.
“As a consequence 2011 Q4 was very challenging for the industry. However, of even greater concern, previously positive workloads in sectors such as commercial and private housing have now become negative. Furthermore, prospects for the industry in 2012 are poor with sharply deteriorating order books and enquiries.
“The only bright spots appear in exports and infrastructure. Yet this is unlikely to be sufficient to offset all the other sectors in which workloads are declining. As a consequence, instead of being a driver of growth in the UK, construction is likely to hinder economic recovery this year unless the Chancellor takes steps in next month’s Budget to stimulate the industry and the economy as a whole.”
Julia Evans, Chief Executive of the National Federation of Builders, was even more scathing. She said: “With energy and material costs up, confidence down and lending conditions set to deteriorate further through 2012, it is hard to see how much of the industry will survive if these conditions are sustained. Marquee projects such as the Olympic Stadium will always give the impression of a vibrant industry but the vast majority of firms will only be able to survive for so long with cutthroat competition for work, unreasonable credit rates and late payment before they join the 2,700 construction firms that went into administration in 2011.’
Only the UK Construction Group found anything positive to say. Its Director, Stephen Ratcliffe, said: “Business conditions remain challenging but there are also still opportunities for the industry. UKCG is working with government to help ensure the pipeline of public sector projects announced at the time of the autumn statement is translated into reality and that we help deliver the best possible value to a cash strapped public sector to ensure some continuity of work.”
Key survey findings include:
• 37% of large and medium sized building contractors, on balance, reported that output in 2011 Q4 was lower than during the same quarter one year earlier.
• The civil engineering workload balance was positive (at +5%) for the first time since 2008 Q1.
• Manufacturers of light side products benefitted from growth in export sales with 37% of firms, on balance, reporting year-on-year sales growth in Q4.
• Enquiries levels to SME contractors were widely reported to be below average, by -30% on balance.
• Nearly half of specialist contractors surveyed reported a quarter-on-quarter reduction in orders in Q4.
• Materials cost inflation and rising energy prices were the main drivers of strong overall cost inflation in the last three months of 2011.
Monday 13 February 2012
‘TAX CREDITS BOMBSHELL’ AS 1,000 COUPLES IN DERBY COULD LOSE £4,000 A YEAR
CHANGES to tax credit rules, being introduced by the Government in April, will result in over 1,000 Derby couples with children losing around £4,000 a year.
The move is being introduced as part of the Government’s austerity measures and will affect couples who are working part-time. Couples will need to increase the number of hours they work from a minimum of 16 to 24 hours per week or they will lose all their working tax credit of £3,870 per year.
The HMRC’s website explaining the changes says:
At the moment, if you're responsible for at least one child and working at least 16 hours a week, you can get Working Tax Credit.
From 6 April 2012, the rules for couples with at least one child are changing. In most cases, to qualify for Working Tax Credit your joint working hours will need to be at least 24 a week.
This will mean:
• if you both work your joint weekly hours must be at least 24, with one of you working at least 16 hours a week
• if only one of you works, that person must be working at least 24 hours a week
• If neither of these apply, your Working Tax Credit will stop from 6 April 2012.
Government figures revealed in parliamentary answers to Labour’s shadow Treasury minister Cathy Jamieson MP show 212,000 households across the country could lose out.
A recent survey by the Chartered Institute for Personnel and Development found that one in five organisations have cut back on the number of hours that people work as a result of the economic downturn, with just 6 per cent increasing them.
This tax credits bombshell is now just a few weeks away. It is a deeply unfair change from a Government that is increasingly out of touch with parents feeling the squeeze and struggling to juggle work and family life.
Raising taxes and cutting spending too far and too fast has seen unemployment rise and the economy going into reverse resulting in many employers cutting people’s hours. And it tells you everything you need to know about the warped priorities of the Tory-Lib Dem Coalition.
The move is being introduced as part of the Government’s austerity measures and will affect couples who are working part-time. Couples will need to increase the number of hours they work from a minimum of 16 to 24 hours per week or they will lose all their working tax credit of £3,870 per year.
The HMRC’s website explaining the changes says:
At the moment, if you're responsible for at least one child and working at least 16 hours a week, you can get Working Tax Credit.
From 6 April 2012, the rules for couples with at least one child are changing. In most cases, to qualify for Working Tax Credit your joint working hours will need to be at least 24 a week.
This will mean:
• if you both work your joint weekly hours must be at least 24, with one of you working at least 16 hours a week
• if only one of you works, that person must be working at least 24 hours a week
• If neither of these apply, your Working Tax Credit will stop from 6 April 2012.
Government figures revealed in parliamentary answers to Labour’s shadow Treasury minister Cathy Jamieson MP show 212,000 households across the country could lose out.
A recent survey by the Chartered Institute for Personnel and Development found that one in five organisations have cut back on the number of hours that people work as a result of the economic downturn, with just 6 per cent increasing them.
This tax credits bombshell is now just a few weeks away. It is a deeply unfair change from a Government that is increasingly out of touch with parents feeling the squeeze and struggling to juggle work and family life.
Raising taxes and cutting spending too far and too fast has seen unemployment rise and the economy going into reverse resulting in many employers cutting people’s hours. And it tells you everything you need to know about the warped priorities of the Tory-Lib Dem Coalition.
ED MILLIBAND'S LETTER TO MEMBERS OF THE HOUSE OF LORDS
Ed Miliband has written to every member of the House of Lords about the Health and Social Care Bill. This is the text of his letter.
Dear Member of the House of Lords
I am taking the unusual step of writing to you and all your fellow peers to share my very great fear for the future of the NHS. I know you are aware that the decisions you have to make over the next few weeks on the Health and Social Care Bill are of huge significance to the NHS and to the country. I can think of few times where the House of Lords has had a role of greater importance.
As it stands, I believe this Bill would undermine the quality and ethos of our NHS – especially Part 3, which seeks to import the model of the privatised utilities into healthcare. I fear it will lead to a fragmented service, pitting doctor against doctor and hospital against hospital, undermining the culture of co-operation and collaboration that has made our NHS so great. The reorganisation proposed by the Bill as it stands would also cost a vast amount of money – money that would be better spent protecting the frontline, such as the thousands of nursing posts set to be lost in this Parliament. It is also a matter of great concern that this Bill and its underlying intentions were hidden from the public before the general election.
I know the Labour team in the Lords, led by Glenys Thornton and Phil Hunt, are already working with many of you on this issue. On behalf of my Party, I want to extend this offer to peers of all parties and of none: we will work with you to stop this Bill damaging the NHS.
Recent weeks and months have shown just how widely the concerns about this Bill are shared – not just among patients and the public, but also among doctors, nurses and other NHS staff. The Government would have us believe that those who oppose this Bill are ‘vested interests’. I think that is deeply insulting to people who have devoted their lives to working in the NHS and care about its future.
I want you to know that Labour has made an offer to put party differences aside and work with the Government on reform objectives we all share, such as greater clinical involvement in commissioning and the funding of social care. But ultimately, the NHS is too important to stand back and let this Bill damage it. I hope we can all work together to protect the future of our National Health Service.
Yours sincerely
Rt Hon Ed Miliband MP
Dear Member of the House of Lords
I am taking the unusual step of writing to you and all your fellow peers to share my very great fear for the future of the NHS. I know you are aware that the decisions you have to make over the next few weeks on the Health and Social Care Bill are of huge significance to the NHS and to the country. I can think of few times where the House of Lords has had a role of greater importance.
As it stands, I believe this Bill would undermine the quality and ethos of our NHS – especially Part 3, which seeks to import the model of the privatised utilities into healthcare. I fear it will lead to a fragmented service, pitting doctor against doctor and hospital against hospital, undermining the culture of co-operation and collaboration that has made our NHS so great. The reorganisation proposed by the Bill as it stands would also cost a vast amount of money – money that would be better spent protecting the frontline, such as the thousands of nursing posts set to be lost in this Parliament. It is also a matter of great concern that this Bill and its underlying intentions were hidden from the public before the general election.
I know the Labour team in the Lords, led by Glenys Thornton and Phil Hunt, are already working with many of you on this issue. On behalf of my Party, I want to extend this offer to peers of all parties and of none: we will work with you to stop this Bill damaging the NHS.
Recent weeks and months have shown just how widely the concerns about this Bill are shared – not just among patients and the public, but also among doctors, nurses and other NHS staff. The Government would have us believe that those who oppose this Bill are ‘vested interests’. I think that is deeply insulting to people who have devoted their lives to working in the NHS and care about its future.
I want you to know that Labour has made an offer to put party differences aside and work with the Government on reform objectives we all share, such as greater clinical involvement in commissioning and the funding of social care. But ultimately, the NHS is too important to stand back and let this Bill damage it. I hope we can all work together to protect the future of our National Health Service.
Yours sincerely
Rt Hon Ed Miliband MP
Friday 10 February 2012
ED MILIBAND SPEECH TO THE SHEFFIELD POLITICAL ECONOMY RESEARCH INSTITUTE
9 February 2012
It is a pleasure to give this inaugural lecture and open SPERI, the new Sheffield Political Economy Research Institute.
The Institute recalls the project of eighteenth and nineteenth century thinking, the era of David Hume, of Adam Smith, of Jeremy Bentham and John Stuart Mill.
A way of thinking which sought to understand politics and economics, the role of state and market in an integrated way.
And, as I’ll argue, a tradition which is in desperate need of rediscovery today.
There has never been a better time to open a centre which thinks about the challenges posed to our economy and our politics by the financial crisis.
As a society, we must respond to the deep lessons of the crisis and find new answers, including by learning from historical and international experience, and this institute will form an important part of that.
It is particularly important that this centre is opening in Sheffield, with its story of manufacturing strength and the example you are setting at the Advanced Manufacturing Research Centre with business and research going hand in hand.
I want to start tonight with a story.
Early on in my leadership I did an interview on the Today Programme with John Humphrys.
For the sake of clarity, this is not to be confused with the interview where he appeared to call me ugly.
That was a different interview.
And, relatively speaking, a walk in the park.
This one was about a year ago soon after I had written an article about the ‘squeezed middle.’
He thought it was a weakness that the term seemed to refer to a broad majority of the population, so we had a bit of an argument.
To be honest, I don’t think my team thought the interview was a total triumph.
But surprise surprise, a year later the ‘squeezed middle’ entered the Oxford English Dictionary as the word of the year for 2011.
Which is pretty good when you consider it was up against ‘the Arab Spring’ and ‘bunga bunga.’
The reason I tell this anecdote is because it speaks to the condition of Britain, the project of this institute, and the purpose of the Labour party
My argument is that to command consent and to be sustained, the political economy of the country must deliver for the working people in this country.
Tonight, I want to make the case that failure to do that has since the war led to radical transitions in the political economy of our country.
The 1945 welfare state settlement was built in response to the failures of the 1930s.
The 1979 market settlement was a response to the failures of the 1970s.
What you might call the 1997 settlement was a response to the failures of part of that settlement when it came to the public realm.
And now in the period after the financial crisis, we face such a challenge once again.
The failures that led up to the financial crisis of 2007 and with which we are still living today demand a new settlement.
The kind of capitalism we have seen for the last thirty-odd years has simply stopped delivering for the vast majority of working people in this country - the famous squeezed middle.
But the lesson from previous transitions is that this alone is not enough to usher in a new settlement.
The three conditions for change are:
First, the breakdown of consent for the previous settlement.
Second, the ideas which can form the basis of a new settlement.
And third, the political coalition to make it happen.
So I’m clear that the only way we are going to make the change the squeezed middle need is by being honest about the failures, and ambitious about the solutions.
That, after all, is what the Labour Party was founded to do.
Labour’s mission has always been to represent the interests, fulfill the aspirations, and embody the values of working people.
When John Humphrys asked me what I meant by the squeezed middle, I should have said this:
The squeezed middle are working people.
People bound together, now as in the past, by a set of values.
The value of working hard.
Whether it is in a factory, a mine, on a shopfloor, or a barracks.
Whether it is on the railways, at a supermarket checkout, or at a call centre.
The value of making an effort, of taking responsibility for yourself and your community.
A hope that work should earn you the chance to give your kids a better start in life than you had.
And the simple belief that you should not have to battle vested interests which use their power to rig the system, that everyone deserves a fair shot.
To be honest, I’m not sure John Humphrys would have let me get to the end of all that.
But in many ways, the story of British politics since the war has been the story of the changing aspirations and interests of working people, and of how the main political parties competed to show they understood and could deliver on them.
Let me start with the 1945 settlement.
Why did it happen? Because of the catastrophic failures of the previous decade to meet the basic human needs of millions.
Because of the growing sense that the evils of unemployment, poverty and want were not acts of nature but the result of political decisions.
Because of an intellectual revolution based on the economic ideas of John Maynard Keynes, the social reform of William Beveridge and the understanding of society of TH Marshall.
And because of the political demands of millions of servicemen and women who had returned to Britain, full of the optimism that the energy and planning which won the war could now be applied to winning the peace.
They included my Dad who spent part of the war in the British Navy.
The parting words of his commanding officer were ‘Goodbye Miliband. Remember: Don’t Vote Labour’
But he did.
And so did millions of others.
It’s easy to forget now, but the 1945 settlement represented a complete revolution in the understanding of what a government can and should take responsibility for.
The aspirations of working people were for a basic level of provision – a decent home and secure job - and Clement Attlee’s Labour government set about responding to these hopes.
Hundreds of thousands of new council houses were purpose built for families, with new schools going up alongside them.
The new role for government meant full employment and comprehensive social insurance.
And the crowning achievement was the creation of the NHS.
The day after the NHS came into operation, many working people went to the doctor or the dentist for the first time in their lives.
One receptionist working on that day remembered the queues stretching out of the surgery doors, down the street, and disappearing into the high street.
Whether in housing, schools, welfare, health, jobs or the cost of living, working people would no longer be left to cope alone.
The model of political economy of the period, based on the state providing a basic platform of services and assuring full employment and low inflation, formed a new consensus between the parties.
A consensus that lasted for more than two decades.
Both parties knew how central the aspirations of working people were to election victory.
Although the idea of what that meant was more familiar to some than others.
In the 1959 election, Harold Macmillan reportedly said to an aide:
“During this campaign, I have heard a great deal of talk about the ‘middle classes.’ Can you find out who they are and what they want, and we will see if we can give it to them.”
But of course, by the late seventies, the confident spirit of 1945 seemed to have run its course.
The magical combination of full employment, stable prices, rising living standards and social mobility was no longer available.
What good were wage rises of 15, 20 or 30 percent if prices were going up faster?
The system was unable to meet the aspirations of working people.
And the inability of government to reconcile competing aspirations, including those of trade unions, convinced people that a break was needed.
The new right had an explanation for what was going wrong, inspired by people like Friedrich Hayek and Milton Friedman.
Whereas the 1945 settlement had meant that the government provided a minimum platform of provision for all, Mrs Thatcher promised something very different.
The new bargain was that if the government got out of the way, the market would deliver prosperity and opportunity.
After financial deregulation, it was easier to get credit.
You could buy your council house from the council.
And you could even buy shares in newly-privatised companies like British Airways, British Telecom, and British Gas.
The Labour Party certainly seemed, for a time at least, at sea with these new aspirations.
It took us too long to stop opposing council house sales.
When Madonna sung about being a material girl or Rodney and Del Boy came up with another scheme to get rich quick, they were inhabiting a world that seemed alien to Labour.
But by the early nineties, working people began to ask new questions.
At this moment, people were not questioning the economic fundamentals of the settlement, in particular the dominance of financial services in our economy, and the idea that greater overall prosperity would benefit all.
But they were asking other profound questions.
Why should kids be taught in prefabs, in classes which are so big?
Why did you have to wait so long to get an operation?
It is hard to remember now, but many people were asking whether the NHS could survive at all.
People were also asking, with more women going to work, how could our economy provide quality time to spend with the family?
The ideological impulses of the time were captured in the so-called Third Way, seeking to reconcile economic efficiency and social justice.
And New Labour was the political project that spoke to this change.
And big change was produced.
Change I am proud of.
We rebuilt the NHS in ways that few would have believed possible.
We embarked on the biggest school building programme in generations.
We offered maternity and paternity leave to make it easier to spend more time with the family.
We introduced the minimum wage and tax credits, so that going to work each day brought in more money each month.
And we also undertook more redistribution than any government, including 1945.
But the new settlement was incomplete.
After the banks crashed, and the boom years turned into the toughest times for working people in a generation, a whole set of challenges were exposed.
The first is that working people are being squeezed between stagnant incomes and rising costs.
For thirty-odd years, the bargain had been clear:
Let the economy grow, and everyone, including the low paid, would get richer.
And it worked for a time, partly because of greater productivity, and partly because of changes like more and more women coming into the workplace.
But working peoples’ rise in incomes and living standards over those years was also supported by particular factors – the rise of credit, cheap imports from Asia and tax credits.
But by 2007, it was clear that these factors were not enough to sustain rising living standards for working families.
The basic promise of the 1979 era, that those at the middle would benefit as well as those at the top, began to unravel.
For the five years before the last recession, the economy grew by 11%, but the wages of everyone earning less than average incomes stayed the same.
And on current forecasts, the average worker will be earning the same in three years’ time as they were ten years ago.
The rising tide has not lifted all boats.
The result is an unprecedented squeeze to incomes.
And at the same time, costs are rising, partly as a result of vested interests that are worsening the squeeze.
Fares are going up on some train routes by 20 per cent in the next two years.
Energy bills seem to go higher and higher.
Each year, more families have to choose between paying the rent and heating their home.
Nearly one in five households here in Sheffield are fuel poor.
And if things carry on as they are, in three years the average household in the country will be too.
For too many families the only way they felt able to sustain their living standards was through greater personal debt.
The second unprecedented aspect of the squeeze is that working people have shouldered more risk and are less secure today than they have been for a generation.
Wages aren’t linked to inflation, people, including those in the middle, have no certainty that their job will still be there tomorrow.
And at the same time most people who earn less than the average wage have no pension.
Nearly half say they can’t afford to save £10 a month.
Then there are those who are already out of work in the current economic climate.
More people woke up this morning to another day without a job to go to than at any time since 1994.
For every vacancy in the country, there are six jobseekers.
For every vacancy in Sheffield, there are nearly ten.
The third big challenge is intergenerational.
The basic promise of Britain, the idea that we could be optimistic about our country’s future and expect our children to lead better lives than we did, is being betrayed.
As people in this audience know, young people are leaving home with debts which their parents never faced, because of the cost of tuition fees.
It is harder to get onto the housing ladder.
The average age of someone trying to buy a home for the first time without help from their parents is 37 and is pushing upwards.
And we see threats to the environment that young people will inherit.
And at the same time, many working people are squeezed when it comes to paying for care for their elderly relatives.
Most aren’t earning enough to be able to pay for private care, but aren’t earning so little that they qualify for free or subsidised care.
And if they cut back on work to look after them, it will hurt their own incomes.
They are squeezed by the system too.
So in contrast to a decade ago when there was optimism about uninterrupted prosperity, today the squeezed middle knows the system is not working for them.
The fundamental idea that if you work hard you will get on is being undermined.
At the same time, there appear to be rewards for failure at the top, with top executives’ salaries going up even as their companies’ share prices go down.
The reality is that by the time of the last election, no party answered the new challenges of the squeezed middle.
No party offered them sufficient hope.
No party understood that the very settlement that was supposed to help the middle, was in fact the cause of the squeeze to their living standards.
We lost. And no party won.
Perhaps my party didn’t see what was required because after thirteen years in power, we just couldn’t face up to the challenges to some of the assumptions of the era.
And the Tories certainly did not see what was required.
Those who just wanted to conserve the status quo had a blind spot when it came to seeing the need for a radical break with the past.
They just clung to a faith in free markets.
And that leaves us where we are today.
Consent for the old system has broken down.
Anyone looking around at society today can see that our previous model of capitalism is not working.
When you look at the Occupy Protests, we all know that many people who would not go and camp outside St Pauls, share the anger of those who do.
Anger at rewards for failure in the banks and the squeeze on the 99%.
But as I have argued, anger at the old system’s flaws is not enough to produce change.
It needs the ideas and the political movement to transform discontent with the old settlement into consent for a new one.
As far as the ideas are concerned, I hope and expect SPERI will make its contribution.
I can think of no more urgent project for our country.
Stage by stage, we are taking on this project in Opposition.
Identifying the issue itself, and beginning to set out solutions.
This is the subject of our ongoing policy review, but let me today give some brief pointers to Labour’s agenda.
We know the limits of the previous settlement: just getting the government out of the way won’t work.
We know the economic climate will be far tougher: there will be less money to spend.
And we know that in any case, if Labour wins the next election, it will not be good enough to simply rely on spending money to patch up the failures of the economy we inherit.
A more fundamental change is needed.
From the ashes of the kind of irresponsible capitalism which led to the crash, we need to build a new kind of capitalism, a responsible capitalism.
A capitalism based on long-term productive behaviour with a fairer distribution of rewards based on a new set of principles:
Long-termism not short-termism.
A fairer sharing of rewards not growing inequality.
An understanding that successful firms are those that invest in their people rather than neglecting them
And that the environment is not an enemy of economic progress but essential for it.
In short, an economy that better works in the interests of working people.
So what does this mean in practice?
First, Britain needs a new era of long-term wealth creation.
Both to pay its way in the world and to create fairness in tough times.
We need to use the power of government in new ways.
To set new rules that promote the long-term and fair wealth creation we need.
To share a vision with British industry of how we pay our way in an ever more competitive world with an active industrial policy.
That’s why we are looking at plans for a British Investment Bank so small businesses can invest and grow.
That’s why we will need new leadership from industry, undertaking their responsibilities to bring on the next generation.
As a first step, we say no major government contract should be awarded unless companies offer apprenticeships.
We must tackle the historic British problem of short termism in our corporate life.
And it is why we have to end the situation where we have rewards for failure at the top, harming both the company and its workforce.
That’s why Labour has suggested a number of reforms, including an employee on every remuneration committee.
We need real change.
If you will excuse me a bit of politics, the current Government is never going to provide it.
George Osborne says that action to tackle big bonuses is ‘anti-business’.
It is not.
It is pro-business to demand responsibility at the top and an end to the something-for-nothing culture which has damaged our economy in the financial crisis at every level, wrecked businesses and left everyone else squeezed.
By defending an unreformed bonus culture, this Government confuses the interests of the economy as a whole with the interests of an irresponsible few.
We need banks to be lending to small business rather than handing out big bonuses.
Some argue that it is no business of the public what bonuses banks pay.
I fundamentally disagree.
Because even banks which are not publicly owned, implicitly benefit from a taxpayer guarantee, to the tune of billions of pounds.
That is why we need change in the bonus culture across all our banks.
And we need responsibility from top to bottom across our society.
Across the economy we need executives to recognise that exceptional rewards should only be for exceptional performance.
Tackling excessive executive pay and bonuses is not an end in itself but a necessary first step towards a bigger change in our economy in which people get fair rewards for their contribution at every level of society.
Secondly, standing up for the squeezed middle today also means challenging the powerful vested interests which are squeezing working people in this country for every penny they can.
It means standing up to the banks, the train operating companies, and the electricity firms with simple measures to cap fare increases, lower electricity prices, and guaranteeing the cheapest power for the most vulnerable.
We have a Government which doesn’t even notice when the market isn’t working for working people.
In fact they are making the squeeze worse, with an economic policy that has seen growth flatline and tax credits withdrawn.
Third, standing up for the squeezed middle also means always making sure there is a fair tax system and a fair benefits system.
That means everyone paying what they are supposed to, including those at the very top.
It means cutting the 50p tax rate is the wrong priority
And it is why, for example, I have spoken out about offshore tax havens.
And on welfare, I believe in a welfare state based on contribution as well as need.
We need a better welfare state when it comes to issues like childcare and social care.
But we cannot deliver it, unless we continue to reform the welfare state so it delivers high employment and demands responsibility from all.
These are just the start of the changes we need for a new settlement.
Let me say this in conclusion.
The challenge for politics in times like this is to decide whether it is going to leave these problems to stagnate as it did in the thirties, or have the courage to address them head on.
We can hear the creaking of the foundations of the previous settlement.
The families seeing their wages squeezed for a decade know things have to change.
The small business looking for finance know things have to change.
The young person looking for work know things need to change.
All of us looking at the way thing are, know things have to change.
Sometimes people look at this and feel a sense of pessimism and question whether there is anything that can be done.
But the lesson of history is different.
Nobody would have believed in the 1930s that things would change.
From the Left, change did happen.
In the 1970s, people believed Britain would not change.
And from the Right, change did happen.
And again in 1997 we saw change to address the concerns of working people.
So in our recent history, new settlements have come forward in the face of profound scepticism about the ability of politics to deliver change.
I am in politics because I believe in its power to change working people’s lives for the better.
As a society, it is our task now to turn all our energy and resourcefulness towards a reformed, responsible capitalism,
It is our task to build a new model of political economy, one which delivers prosperity and fairness for the working people of Britain once again.
I look forward to working with this institute to make it happen.
It is a pleasure to give this inaugural lecture and open SPERI, the new Sheffield Political Economy Research Institute.
The Institute recalls the project of eighteenth and nineteenth century thinking, the era of David Hume, of Adam Smith, of Jeremy Bentham and John Stuart Mill.
A way of thinking which sought to understand politics and economics, the role of state and market in an integrated way.
And, as I’ll argue, a tradition which is in desperate need of rediscovery today.
There has never been a better time to open a centre which thinks about the challenges posed to our economy and our politics by the financial crisis.
As a society, we must respond to the deep lessons of the crisis and find new answers, including by learning from historical and international experience, and this institute will form an important part of that.
It is particularly important that this centre is opening in Sheffield, with its story of manufacturing strength and the example you are setting at the Advanced Manufacturing Research Centre with business and research going hand in hand.
I want to start tonight with a story.
Early on in my leadership I did an interview on the Today Programme with John Humphrys.
For the sake of clarity, this is not to be confused with the interview where he appeared to call me ugly.
That was a different interview.
And, relatively speaking, a walk in the park.
This one was about a year ago soon after I had written an article about the ‘squeezed middle.’
He thought it was a weakness that the term seemed to refer to a broad majority of the population, so we had a bit of an argument.
To be honest, I don’t think my team thought the interview was a total triumph.
But surprise surprise, a year later the ‘squeezed middle’ entered the Oxford English Dictionary as the word of the year for 2011.
Which is pretty good when you consider it was up against ‘the Arab Spring’ and ‘bunga bunga.’
The reason I tell this anecdote is because it speaks to the condition of Britain, the project of this institute, and the purpose of the Labour party
My argument is that to command consent and to be sustained, the political economy of the country must deliver for the working people in this country.
Tonight, I want to make the case that failure to do that has since the war led to radical transitions in the political economy of our country.
The 1945 welfare state settlement was built in response to the failures of the 1930s.
The 1979 market settlement was a response to the failures of the 1970s.
What you might call the 1997 settlement was a response to the failures of part of that settlement when it came to the public realm.
And now in the period after the financial crisis, we face such a challenge once again.
The failures that led up to the financial crisis of 2007 and with which we are still living today demand a new settlement.
The kind of capitalism we have seen for the last thirty-odd years has simply stopped delivering for the vast majority of working people in this country - the famous squeezed middle.
But the lesson from previous transitions is that this alone is not enough to usher in a new settlement.
The three conditions for change are:
First, the breakdown of consent for the previous settlement.
Second, the ideas which can form the basis of a new settlement.
And third, the political coalition to make it happen.
So I’m clear that the only way we are going to make the change the squeezed middle need is by being honest about the failures, and ambitious about the solutions.
That, after all, is what the Labour Party was founded to do.
Labour’s mission has always been to represent the interests, fulfill the aspirations, and embody the values of working people.
When John Humphrys asked me what I meant by the squeezed middle, I should have said this:
The squeezed middle are working people.
People bound together, now as in the past, by a set of values.
The value of working hard.
Whether it is in a factory, a mine, on a shopfloor, or a barracks.
Whether it is on the railways, at a supermarket checkout, or at a call centre.
The value of making an effort, of taking responsibility for yourself and your community.
A hope that work should earn you the chance to give your kids a better start in life than you had.
And the simple belief that you should not have to battle vested interests which use their power to rig the system, that everyone deserves a fair shot.
To be honest, I’m not sure John Humphrys would have let me get to the end of all that.
But in many ways, the story of British politics since the war has been the story of the changing aspirations and interests of working people, and of how the main political parties competed to show they understood and could deliver on them.
Let me start with the 1945 settlement.
Why did it happen? Because of the catastrophic failures of the previous decade to meet the basic human needs of millions.
Because of the growing sense that the evils of unemployment, poverty and want were not acts of nature but the result of political decisions.
Because of an intellectual revolution based on the economic ideas of John Maynard Keynes, the social reform of William Beveridge and the understanding of society of TH Marshall.
And because of the political demands of millions of servicemen and women who had returned to Britain, full of the optimism that the energy and planning which won the war could now be applied to winning the peace.
They included my Dad who spent part of the war in the British Navy.
The parting words of his commanding officer were ‘Goodbye Miliband. Remember: Don’t Vote Labour’
But he did.
And so did millions of others.
It’s easy to forget now, but the 1945 settlement represented a complete revolution in the understanding of what a government can and should take responsibility for.
The aspirations of working people were for a basic level of provision – a decent home and secure job - and Clement Attlee’s Labour government set about responding to these hopes.
Hundreds of thousands of new council houses were purpose built for families, with new schools going up alongside them.
The new role for government meant full employment and comprehensive social insurance.
And the crowning achievement was the creation of the NHS.
The day after the NHS came into operation, many working people went to the doctor or the dentist for the first time in their lives.
One receptionist working on that day remembered the queues stretching out of the surgery doors, down the street, and disappearing into the high street.
Whether in housing, schools, welfare, health, jobs or the cost of living, working people would no longer be left to cope alone.
The model of political economy of the period, based on the state providing a basic platform of services and assuring full employment and low inflation, formed a new consensus between the parties.
A consensus that lasted for more than two decades.
Both parties knew how central the aspirations of working people were to election victory.
Although the idea of what that meant was more familiar to some than others.
In the 1959 election, Harold Macmillan reportedly said to an aide:
“During this campaign, I have heard a great deal of talk about the ‘middle classes.’ Can you find out who they are and what they want, and we will see if we can give it to them.”
But of course, by the late seventies, the confident spirit of 1945 seemed to have run its course.
The magical combination of full employment, stable prices, rising living standards and social mobility was no longer available.
What good were wage rises of 15, 20 or 30 percent if prices were going up faster?
The system was unable to meet the aspirations of working people.
And the inability of government to reconcile competing aspirations, including those of trade unions, convinced people that a break was needed.
The new right had an explanation for what was going wrong, inspired by people like Friedrich Hayek and Milton Friedman.
Whereas the 1945 settlement had meant that the government provided a minimum platform of provision for all, Mrs Thatcher promised something very different.
The new bargain was that if the government got out of the way, the market would deliver prosperity and opportunity.
After financial deregulation, it was easier to get credit.
You could buy your council house from the council.
And you could even buy shares in newly-privatised companies like British Airways, British Telecom, and British Gas.
The Labour Party certainly seemed, for a time at least, at sea with these new aspirations.
It took us too long to stop opposing council house sales.
When Madonna sung about being a material girl or Rodney and Del Boy came up with another scheme to get rich quick, they were inhabiting a world that seemed alien to Labour.
But by the early nineties, working people began to ask new questions.
At this moment, people were not questioning the economic fundamentals of the settlement, in particular the dominance of financial services in our economy, and the idea that greater overall prosperity would benefit all.
But they were asking other profound questions.
Why should kids be taught in prefabs, in classes which are so big?
Why did you have to wait so long to get an operation?
It is hard to remember now, but many people were asking whether the NHS could survive at all.
People were also asking, with more women going to work, how could our economy provide quality time to spend with the family?
The ideological impulses of the time were captured in the so-called Third Way, seeking to reconcile economic efficiency and social justice.
And New Labour was the political project that spoke to this change.
And big change was produced.
Change I am proud of.
We rebuilt the NHS in ways that few would have believed possible.
We embarked on the biggest school building programme in generations.
We offered maternity and paternity leave to make it easier to spend more time with the family.
We introduced the minimum wage and tax credits, so that going to work each day brought in more money each month.
And we also undertook more redistribution than any government, including 1945.
But the new settlement was incomplete.
After the banks crashed, and the boom years turned into the toughest times for working people in a generation, a whole set of challenges were exposed.
The first is that working people are being squeezed between stagnant incomes and rising costs.
For thirty-odd years, the bargain had been clear:
Let the economy grow, and everyone, including the low paid, would get richer.
And it worked for a time, partly because of greater productivity, and partly because of changes like more and more women coming into the workplace.
But working peoples’ rise in incomes and living standards over those years was also supported by particular factors – the rise of credit, cheap imports from Asia and tax credits.
But by 2007, it was clear that these factors were not enough to sustain rising living standards for working families.
The basic promise of the 1979 era, that those at the middle would benefit as well as those at the top, began to unravel.
For the five years before the last recession, the economy grew by 11%, but the wages of everyone earning less than average incomes stayed the same.
And on current forecasts, the average worker will be earning the same in three years’ time as they were ten years ago.
The rising tide has not lifted all boats.
The result is an unprecedented squeeze to incomes.
And at the same time, costs are rising, partly as a result of vested interests that are worsening the squeeze.
Fares are going up on some train routes by 20 per cent in the next two years.
Energy bills seem to go higher and higher.
Each year, more families have to choose between paying the rent and heating their home.
Nearly one in five households here in Sheffield are fuel poor.
And if things carry on as they are, in three years the average household in the country will be too.
For too many families the only way they felt able to sustain their living standards was through greater personal debt.
The second unprecedented aspect of the squeeze is that working people have shouldered more risk and are less secure today than they have been for a generation.
Wages aren’t linked to inflation, people, including those in the middle, have no certainty that their job will still be there tomorrow.
And at the same time most people who earn less than the average wage have no pension.
Nearly half say they can’t afford to save £10 a month.
Then there are those who are already out of work in the current economic climate.
More people woke up this morning to another day without a job to go to than at any time since 1994.
For every vacancy in the country, there are six jobseekers.
For every vacancy in Sheffield, there are nearly ten.
The third big challenge is intergenerational.
The basic promise of Britain, the idea that we could be optimistic about our country’s future and expect our children to lead better lives than we did, is being betrayed.
As people in this audience know, young people are leaving home with debts which their parents never faced, because of the cost of tuition fees.
It is harder to get onto the housing ladder.
The average age of someone trying to buy a home for the first time without help from their parents is 37 and is pushing upwards.
And we see threats to the environment that young people will inherit.
And at the same time, many working people are squeezed when it comes to paying for care for their elderly relatives.
Most aren’t earning enough to be able to pay for private care, but aren’t earning so little that they qualify for free or subsidised care.
And if they cut back on work to look after them, it will hurt their own incomes.
They are squeezed by the system too.
So in contrast to a decade ago when there was optimism about uninterrupted prosperity, today the squeezed middle knows the system is not working for them.
The fundamental idea that if you work hard you will get on is being undermined.
At the same time, there appear to be rewards for failure at the top, with top executives’ salaries going up even as their companies’ share prices go down.
The reality is that by the time of the last election, no party answered the new challenges of the squeezed middle.
No party offered them sufficient hope.
No party understood that the very settlement that was supposed to help the middle, was in fact the cause of the squeeze to their living standards.
We lost. And no party won.
Perhaps my party didn’t see what was required because after thirteen years in power, we just couldn’t face up to the challenges to some of the assumptions of the era.
And the Tories certainly did not see what was required.
Those who just wanted to conserve the status quo had a blind spot when it came to seeing the need for a radical break with the past.
They just clung to a faith in free markets.
And that leaves us where we are today.
Consent for the old system has broken down.
Anyone looking around at society today can see that our previous model of capitalism is not working.
When you look at the Occupy Protests, we all know that many people who would not go and camp outside St Pauls, share the anger of those who do.
Anger at rewards for failure in the banks and the squeeze on the 99%.
But as I have argued, anger at the old system’s flaws is not enough to produce change.
It needs the ideas and the political movement to transform discontent with the old settlement into consent for a new one.
As far as the ideas are concerned, I hope and expect SPERI will make its contribution.
I can think of no more urgent project for our country.
Stage by stage, we are taking on this project in Opposition.
Identifying the issue itself, and beginning to set out solutions.
This is the subject of our ongoing policy review, but let me today give some brief pointers to Labour’s agenda.
We know the limits of the previous settlement: just getting the government out of the way won’t work.
We know the economic climate will be far tougher: there will be less money to spend.
And we know that in any case, if Labour wins the next election, it will not be good enough to simply rely on spending money to patch up the failures of the economy we inherit.
A more fundamental change is needed.
From the ashes of the kind of irresponsible capitalism which led to the crash, we need to build a new kind of capitalism, a responsible capitalism.
A capitalism based on long-term productive behaviour with a fairer distribution of rewards based on a new set of principles:
Long-termism not short-termism.
A fairer sharing of rewards not growing inequality.
An understanding that successful firms are those that invest in their people rather than neglecting them
And that the environment is not an enemy of economic progress but essential for it.
In short, an economy that better works in the interests of working people.
So what does this mean in practice?
First, Britain needs a new era of long-term wealth creation.
Both to pay its way in the world and to create fairness in tough times.
We need to use the power of government in new ways.
To set new rules that promote the long-term and fair wealth creation we need.
To share a vision with British industry of how we pay our way in an ever more competitive world with an active industrial policy.
That’s why we are looking at plans for a British Investment Bank so small businesses can invest and grow.
That’s why we will need new leadership from industry, undertaking their responsibilities to bring on the next generation.
As a first step, we say no major government contract should be awarded unless companies offer apprenticeships.
We must tackle the historic British problem of short termism in our corporate life.
And it is why we have to end the situation where we have rewards for failure at the top, harming both the company and its workforce.
That’s why Labour has suggested a number of reforms, including an employee on every remuneration committee.
We need real change.
If you will excuse me a bit of politics, the current Government is never going to provide it.
George Osborne says that action to tackle big bonuses is ‘anti-business’.
It is not.
It is pro-business to demand responsibility at the top and an end to the something-for-nothing culture which has damaged our economy in the financial crisis at every level, wrecked businesses and left everyone else squeezed.
By defending an unreformed bonus culture, this Government confuses the interests of the economy as a whole with the interests of an irresponsible few.
We need banks to be lending to small business rather than handing out big bonuses.
Some argue that it is no business of the public what bonuses banks pay.
I fundamentally disagree.
Because even banks which are not publicly owned, implicitly benefit from a taxpayer guarantee, to the tune of billions of pounds.
That is why we need change in the bonus culture across all our banks.
And we need responsibility from top to bottom across our society.
Across the economy we need executives to recognise that exceptional rewards should only be for exceptional performance.
Tackling excessive executive pay and bonuses is not an end in itself but a necessary first step towards a bigger change in our economy in which people get fair rewards for their contribution at every level of society.
Secondly, standing up for the squeezed middle today also means challenging the powerful vested interests which are squeezing working people in this country for every penny they can.
It means standing up to the banks, the train operating companies, and the electricity firms with simple measures to cap fare increases, lower electricity prices, and guaranteeing the cheapest power for the most vulnerable.
We have a Government which doesn’t even notice when the market isn’t working for working people.
In fact they are making the squeeze worse, with an economic policy that has seen growth flatline and tax credits withdrawn.
Third, standing up for the squeezed middle also means always making sure there is a fair tax system and a fair benefits system.
That means everyone paying what they are supposed to, including those at the very top.
It means cutting the 50p tax rate is the wrong priority
And it is why, for example, I have spoken out about offshore tax havens.
And on welfare, I believe in a welfare state based on contribution as well as need.
We need a better welfare state when it comes to issues like childcare and social care.
But we cannot deliver it, unless we continue to reform the welfare state so it delivers high employment and demands responsibility from all.
These are just the start of the changes we need for a new settlement.
Let me say this in conclusion.
The challenge for politics in times like this is to decide whether it is going to leave these problems to stagnate as it did in the thirties, or have the courage to address them head on.
We can hear the creaking of the foundations of the previous settlement.
The families seeing their wages squeezed for a decade know things have to change.
The small business looking for finance know things have to change.
The young person looking for work know things need to change.
All of us looking at the way thing are, know things have to change.
Sometimes people look at this and feel a sense of pessimism and question whether there is anything that can be done.
But the lesson of history is different.
Nobody would have believed in the 1930s that things would change.
From the Left, change did happen.
In the 1970s, people believed Britain would not change.
And from the Right, change did happen.
And again in 1997 we saw change to address the concerns of working people.
So in our recent history, new settlements have come forward in the face of profound scepticism about the ability of politics to deliver change.
I am in politics because I believe in its power to change working people’s lives for the better.
As a society, it is our task now to turn all our energy and resourcefulness towards a reformed, responsible capitalism,
It is our task to build a new model of political economy, one which delivers prosperity and fairness for the working people of Britain once again.
I look forward to working with this institute to make it happen.
Saturday 4 February 2012
WE’RE RETURNING TO A 19TH CENTURY POOR LAW
LABOUR Peer, Jeremy Beecham, told me that when he was a young council candidate in Newcastle, the first leaflet he distributed before the 1967 council elections was about rate rebates.
This was a new initiative at that time which had been introduced by the then Labour Government. Fast forward forty five years and we are about to see massive changes in the system, now called council tax benefit.
The Tory-Lib Dem Government is introducing a 10% cut in council tax benefits, which for will leave many people considerably worse off.
Around half the people who receive council tax benefit are pensioners, who, in fairness, will be protected, but the effect will be to double the size of the cut for everyone else. Moreover it will be for councils to decide who gets what out of a capped allocation, instead of drawing down from a national scheme.
So people’s entitlement to what has been a national welfare benefit will now vary according to where they live. Decisions on who should qualify for benefit and how much they should receive will be decided by around three hundred and fifty councils. We sometimes hear about the “post-code lottery” in the NHS. The term will now apply to council tax benefit too.
The Government makes the ludicrous claim that putting councils “in charge of providing support for council tax in England will help more people back into work”. However, ministers have not produced a shred of evidence. After all council tax benefit is paid to people in work, and many other recipients are either incapable of working or unable to find a job. This is hardly surprising as unemployment is soaring.
And while the Government claims it will save up to £480m it proposes to do nothing about the much larger sum, £1.8bn, of council tax benefit which goes unclaimed. Much of this unclaimed entitlement should be paid to pensioners.
Nor is this the only change. Crisis grants and loans hitherto administered as part of the social security system will also be devolved to local councils. Furthermore, there will be no guarantee that the funding will be distributed fairly to areas most in need.
We are, in effect, returning to a 19th Century Poor Law system. Crucial decisions affecting individuals and families on low incomes who are working or unemployed will be made locally and paid out of stretched council budgets.
The very concept of National Insurance is being undermined. The Welfare Reform Bill will have a severe impact on vulnerable families especially those living in the private rented sector.
This year is the bi-centenary of the birth of Charles Dickens. He was all too familiar with, and did much to expose, the harshness and injustices of a fragmented local, and often charity-based system of welfare. By contrast the national system of entitlement related to need, that the welfare state has provided for decades, was introduced when Labour won the first election after WW2.
I wonder what Charles Dickens would have made of Cameron, Osborne and Pickles; perhaps they would be today’s Gradgrind, Wackford Squeers and Mr Bumble?
This was a new initiative at that time which had been introduced by the then Labour Government. Fast forward forty five years and we are about to see massive changes in the system, now called council tax benefit.
The Tory-Lib Dem Government is introducing a 10% cut in council tax benefits, which for will leave many people considerably worse off.
Around half the people who receive council tax benefit are pensioners, who, in fairness, will be protected, but the effect will be to double the size of the cut for everyone else. Moreover it will be for councils to decide who gets what out of a capped allocation, instead of drawing down from a national scheme.
So people’s entitlement to what has been a national welfare benefit will now vary according to where they live. Decisions on who should qualify for benefit and how much they should receive will be decided by around three hundred and fifty councils. We sometimes hear about the “post-code lottery” in the NHS. The term will now apply to council tax benefit too.
The Government makes the ludicrous claim that putting councils “in charge of providing support for council tax in England will help more people back into work”. However, ministers have not produced a shred of evidence. After all council tax benefit is paid to people in work, and many other recipients are either incapable of working or unable to find a job. This is hardly surprising as unemployment is soaring.
And while the Government claims it will save up to £480m it proposes to do nothing about the much larger sum, £1.8bn, of council tax benefit which goes unclaimed. Much of this unclaimed entitlement should be paid to pensioners.
Nor is this the only change. Crisis grants and loans hitherto administered as part of the social security system will also be devolved to local councils. Furthermore, there will be no guarantee that the funding will be distributed fairly to areas most in need.
We are, in effect, returning to a 19th Century Poor Law system. Crucial decisions affecting individuals and families on low incomes who are working or unemployed will be made locally and paid out of stretched council budgets.
The very concept of National Insurance is being undermined. The Welfare Reform Bill will have a severe impact on vulnerable families especially those living in the private rented sector.
This year is the bi-centenary of the birth of Charles Dickens. He was all too familiar with, and did much to expose, the harshness and injustices of a fragmented local, and often charity-based system of welfare. By contrast the national system of entitlement related to need, that the welfare state has provided for decades, was introduced when Labour won the first election after WW2.
I wonder what Charles Dickens would have made of Cameron, Osborne and Pickles; perhaps they would be today’s Gradgrind, Wackford Squeers and Mr Bumble?
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