George Osborne’s Budget today asks millions to pay more, so millionaires can pay less.
There are 14,000 people earning £1 million or more who will receive a tax cut of over £40,000 each year courtesy of George Osborne.
By contrast, a family with children earning just £20,000 loses £253 a year from this April. This is on top of the VAT rise which is costing a family an average of £450 per year.
And this Budget includes a £3 billion tax raid on pensioners over the next four years. The freeze in the personal allowance for pensioners will see 4.5 million pensioners who pay income tax losing an average of £75 per year next April. People who turn 65 next year will lose out by £314.
The government promised change, but things have got worse not better. Their policies have failed on jobs, growth and the deficit:
One million young people are unemployed. Our economy has stalled. The OBR is predicting just 0.8% growth in 2012 compared to 2.5% forecast in last year’s Budget. And the UK is growing at half the rate of the United States.
The government is set to borrow £150 billion more than planned because of slower growth and higher unemployment.
These are the wrong priorities. Even on the government’s bogus calculations the 50p top rate of tax has raised £1 billion in its first year. The Chancellor could have used the money to cut fuel duty, reverse cuts to tax credits, reduce cuts to police officers or help pay the down the deficit – but instead he chose to cut taxes for the richest 1% of earners. This is the wrong choice from a government that is totally out of touch.
When people on middle and low incomes are being squeezed by rising fuel prices, seeing their tax credits and child benefit cut, when one million young people are out of work and there’s a big deficit to clear, it is completely the wrong priority to cut taxes for people earning over £150,000.
The Chancellor claimed this was a “Budget which rewards work.” But at the same time as cutting taxes for the very richest, the government is pressing ahead with huge cuts to tax credits for working families next month which will leave thousands of families better off quitting work and living on benefits.
TAX CUT FOR MILLIONAIRES
HMRC’s review of the 50p top rate confirms that the government is cutting taxes for the richest earners next year by £3 billion – a tax giveaway to 300,000 existing taxpayers who gain on average £10,000. They have gambled that the result of this tax cut is to get £2.9 billion back from people currently avoiding tax.
But the OBR says that “the results of the evaluation are highly uncertain”. As the Institute for Fiscal Studies has said: “If the future of the 50p rate is to be determined on the basis of evidence ...then Budget 2012 will be too soon to form a robust judgement.”
George Osborne’s review of the 50p top rate of tax only covers the first year of the new tax, which we always said would raise much less as people could bring their income forward. The question is how much will it raise in the second and third year, but George Osborne didn’t want to wait and find out – he had already made up his mind.
No tax rate should ever be set in stone. Labour will set out our tax and spending commitments at the time of the election once we know how bad the state of the economy is after five years of George Osborne. But let’s be clear, if this was a Labour Budget this week or if there was an election tomorrow we would not be cutting the top rate of tax for people earning over £150,000.
TAX RAID ON PENSIONERS
George Osborne’s announcement means that the personal allowance for over 65s is being frozen in cash terms, so that the increases in the Personal Allowance for everyone else catches up until they are the same. There are 4.77 million over 65s at the moment paying income tax who will lose out in real terms.
FAILURE ON JOBS, GROWTH AND BORROWING
A year ago the Chancellor said his Budget would ‘put fuel into the tank of the British economy’. But since then our economy has stalled, unemployment has risen month by month and he’s borrowing £150 billion more than he planned.
This Budget should have put jobs and growth first, but it will do nothing to get our stalled economy moving or get people back to work. In fact the OBR says: “We have made no other material adjustments to the economy forecast as a result of Budget 2012policy announcements.”
Despite George Osborne’s claims, he is set to borrow £150 billion more than he planned in his spending review – because his failed economic policies have delivered slower growth and higher unemployment. Trying to raise taxes and cut spending too far and too fast has backfired.
Of course there have to be tough decisions on tax, spending and pay. But we won’t get the deficit down unless we have a plan for jobs and growth to get our economy moving again and get people off the dole and into work.
What we needed in this Budget was real help for families on middle and low incomes and a real plan for jobs, like Labour’s five point plan which includes a tax on bank bonuses to fund 100,000 jobs for young people and a tax break for small firms taking on extra workers.
We also called for a fair tax cut to help families and pensioners and jump-start the economy. A temporary VAT cut is the quickest and fairest way to do this, because it will help pensioners and those on lower incomes who won’t gain a penny from an increase in the income tax personal allowance.
INCOME TAX PERSONAL ALLOWANCE RISE
The increase in the personal allowance today is outweighed by the VAT rise, cuts to tax credits and higher petrol duty. A family with children earning just £20,000 loses £253 a year from this April. This is on top of the VAT rise which is costing a family an average of £450 per year.
And of course most pensioners and people on low incomes won’t be helped at all by this policy. The government is giving with one hand, but taking lots more away with the other hand.
STAMP DUTY
There are 300,000 people benefiting each and every year from the Chancellor’s top rate tax cut. But there are just 4,000 houses sold each year for more than £2 million. So 99% of those who gain from his tax cut for the richest will be totally unaffected by his rise in stamp duty, and get a massive windfall from this Chancellor.
TAX AVOIDANCE
Every Budget should clamp down on tax avoidance and close loopholes – that’s the Chancellor’s job. But why isn’t all the money raised being used to ease the squeeze on families on middle and low incomes, rather than giving a tax cut to the very richest?
BORROWING FIGURES
Whatever today’s figures show, George Osborne is already billions of pounds off track on his borrowing plans. He is set to borrow £150 billion more than planned because of the lower growth and higher unemployment his failed policies have delivered.
ANNUAL TAX STATEMENTS
This seems like a sensible idea, but it will be important to keep the costs of sending this out to every taxpayer down. And of course the statement will not show things like higher VAT and that the government is borrowing £150 billion more than they planned.
CHILD BENEFIT
The changes are a small step forward, but it does not change the fundamental unfairness of these changes. A one earner family on £55,000 would lose much of their child benefit, while a couple on as much as £99,000 could keep it all.
Wednesday 21 March 2012
WE NEED A BUDGET FOR JOBS AND GROWTH TODAY
The government’s economic policies have failed. What we need to see today is a Budget for jobs and growth and one which focuses every penny available on helping hard-pressed families on middle and low incomes.
At a time when people on middle and low incomes are being squeezed by rising fuel prices, seeing their tax credits and child benefit cut, when one million young people are out of work and there’s a big deficit to clear, it would be completely the wrong priority to cut taxes for people earning over £150,000. It would show just how out of touch this Conservative-led government is.
We need action on youth jobs and to stop a tax credits bombshell for working parents, not cutting taxes for the very richest.
However much the 50p top rate of tax raises the Chancellor could be using that money now to reverse cuts to tax credits, help small businesses or help pay the down the deficit – but instead he seems set to cut taxes for the richest 1% of earners. That would be the wrong choice.
A year ago the Chancellor said his Budget would ‘put fuel into the tank of the British economy’. But since then our economy has stalled, unemployment has risen month by month and he’s borrowing £158 billion more than he planned.
Of course there have to be tough decisions on tax, spending and pay. But we won’t get the deficit down unless we have a plan for jobs and growth to get our economy moving again and get people off the dole and into work.
Labour’s jobs plan includes a bank bonus tax to fund 100,000 jobs for young people, tax breaks for small firms taking on extra workers and fair tax cuts to jump-start the economy. A temporary VAT cut is the quickest and fairest way to do this, because it will help pensioners and those on lower incomes who won’t gain a penny from an increase in the income tax personal allowance.
Let’s see what the exact details are, but the likelihood is the increase in the personal allowance will be more than outweighed by the big VAT rise, cuts to tax credits and the child benefit freeze. And of course most pensioners and people on low incomes won’t be helped at all by this policy.
At the moment a family with children is set to lose £530 per year from the government’s changes next month. There’s no sign of this Budget doing much to change that. The government is giving with one hand, but taking lots more away with the other hand.
50p tax review
George Osborne’s review of the 50p top rate of tax is a bogus study. It should have been done by the independent Office for Budget Responsibility.
And the review only covers the first year of the new tax, which we always said would raise much less as people could bring their income forward. The question is how much will it raise in the second and third year, but George Osborne didn’t want to wait and find out – he had already made up his mind.
No tax rate should ever be set in stone. Labour will set out our tax and spending commitments at the time of the election once we know how bad the state of the economy is after five years of George Osborne. But let’s be clear, if this was a Labour Budget this week or if there was an election tomorrow we would not be cutting the top rate of tax for people earning over £150,000.
Stamp duty
We will look to support this, but it won’t work unless – as Labour has called for – there is a serious clampdown on stamp duty avoidance on expensive properties. The real question is whether the money raised is just going back to the very wealthiest by cutting the top rate of tax for people earning over £150,000.
Tax avoidance
Every Budget should clamp down on tax avoidance and close loopholes – that’s the Chancellor’s job. But why isn’t all the money raised being used to ease the squeeze on families on middle and low incomes, rather than giving a tax cut to the very richest?
Borrowing figures
Whatever today’s figures show, George Osborne is already billions of pounds off track on his borrowing plans. He is set to borrow over £100 billion more than planned because of the lower growth and higher unemployment his failed policies have delivered.
Child benefit
Let’s see what is announced today, but we have called on the Chancellor needs to address the fundamental unfairness of these changes where a one earner family on £43,000 would lose all their child benefit, while a couple on as much as £84,000 could keep it all.
Annual tax statements
This seems like a sensible idea, but it will be important to keep the costs of sending this out to every taxpayer down. And of course the statement will not show things like higher VAT and that the government is borrowing £158 billion more than they planned.
At a time when people on middle and low incomes are being squeezed by rising fuel prices, seeing their tax credits and child benefit cut, when one million young people are out of work and there’s a big deficit to clear, it would be completely the wrong priority to cut taxes for people earning over £150,000. It would show just how out of touch this Conservative-led government is.
We need action on youth jobs and to stop a tax credits bombshell for working parents, not cutting taxes for the very richest.
However much the 50p top rate of tax raises the Chancellor could be using that money now to reverse cuts to tax credits, help small businesses or help pay the down the deficit – but instead he seems set to cut taxes for the richest 1% of earners. That would be the wrong choice.
A year ago the Chancellor said his Budget would ‘put fuel into the tank of the British economy’. But since then our economy has stalled, unemployment has risen month by month and he’s borrowing £158 billion more than he planned.
Of course there have to be tough decisions on tax, spending and pay. But we won’t get the deficit down unless we have a plan for jobs and growth to get our economy moving again and get people off the dole and into work.
Labour’s jobs plan includes a bank bonus tax to fund 100,000 jobs for young people, tax breaks for small firms taking on extra workers and fair tax cuts to jump-start the economy. A temporary VAT cut is the quickest and fairest way to do this, because it will help pensioners and those on lower incomes who won’t gain a penny from an increase in the income tax personal allowance.
Let’s see what the exact details are, but the likelihood is the increase in the personal allowance will be more than outweighed by the big VAT rise, cuts to tax credits and the child benefit freeze. And of course most pensioners and people on low incomes won’t be helped at all by this policy.
At the moment a family with children is set to lose £530 per year from the government’s changes next month. There’s no sign of this Budget doing much to change that. The government is giving with one hand, but taking lots more away with the other hand.
50p tax review
George Osborne’s review of the 50p top rate of tax is a bogus study. It should have been done by the independent Office for Budget Responsibility.
And the review only covers the first year of the new tax, which we always said would raise much less as people could bring their income forward. The question is how much will it raise in the second and third year, but George Osborne didn’t want to wait and find out – he had already made up his mind.
No tax rate should ever be set in stone. Labour will set out our tax and spending commitments at the time of the election once we know how bad the state of the economy is after five years of George Osborne. But let’s be clear, if this was a Labour Budget this week or if there was an election tomorrow we would not be cutting the top rate of tax for people earning over £150,000.
Stamp duty
We will look to support this, but it won’t work unless – as Labour has called for – there is a serious clampdown on stamp duty avoidance on expensive properties. The real question is whether the money raised is just going back to the very wealthiest by cutting the top rate of tax for people earning over £150,000.
Tax avoidance
Every Budget should clamp down on tax avoidance and close loopholes – that’s the Chancellor’s job. But why isn’t all the money raised being used to ease the squeeze on families on middle and low incomes, rather than giving a tax cut to the very richest?
Borrowing figures
Whatever today’s figures show, George Osborne is already billions of pounds off track on his borrowing plans. He is set to borrow over £100 billion more than planned because of the lower growth and higher unemployment his failed policies have delivered.
Child benefit
Let’s see what is announced today, but we have called on the Chancellor needs to address the fundamental unfairness of these changes where a one earner family on £43,000 would lose all their child benefit, while a couple on as much as £84,000 could keep it all.
Annual tax statements
This seems like a sensible idea, but it will be important to keep the costs of sending this out to every taxpayer down. And of course the statement will not show things like higher VAT and that the government is borrowing £158 billion more than they planned.
Tuesday 20 March 2012
TWO THIRDS OF FAMILIES ABOUT TO LOSE TAX CREDITS ARE ALREADY LIVING IN POVERTY
Shocking new figures released on the eve of the budget by the shopworkers’ union Usdaw and the Child Poverty Action Group reveal that two thirds of the families about to lose all of their Working Tax Credit. This is because they cannot find enough hours of work are already living in poverty.
From 6 April, around 200,000 couples with children face losing £3,870 if they cannot increase the total number of hours they work from 16 to 24 hours. An analysis by Howard Reed of Landman Economics shows that around 140,000 of these families are already living below the poverty line. A further 35,000 families with around 80,000 children will fall below the poverty line if they are unable to find extra hours of work.
Usdaw and the Child Poverty Action Group (CPAG) are making another urgent call on the Chancellor George Osborne to use his Budget tomorrow to postpone the changes.
Both organisations have welcomed the news announced today that the Government has decided to exempt full-time carers and their partners from the requirement to work extra hours, but stressed that this new exemption would only affect a small minority of families.
Alison Garnham, Chief Executive of CPAG, called on the Government not to exacerbate the suffering of families already on the breadline:
"This is a precision-guided attack on the poorest working households. Two thirds of the households being hit by the cut are working families already below the poverty line. Slashing their household income by a further £3,870 will be devastating and will leave children in severe deprivation. With 470,000 children living in the families that will lose their tax credits if they cannot find extra hours of work, we should expect to see a surge in the extent and severity of UK child poverty. This is a terrible penalty to inflict on families who are working as many hours as they can find and trying to do their best for their children."
John Hannett, General Secretary of Usdaw, said that it was wrong to impose such a heavy financial cost on families unable to find more work due to the current high level of unemployment and squeeze on employers’ wage budgets.
“Thousands of Usdaw’s members are affected by the changes to tax credits. 78% have said it is impossible for them to find the additional hours of work they need. When this policy was proposed, back in 2010, the Government thought that unemployment would be falling in April 2012. Instead, unemployment is at its highest level for 17 years and a record 1.4 million people in part-time work are seeking more hours.”
“This change to tax credits means that 200,000 couples are seeking an average of around 6 hours a week of extra work, equivalent to over 50,000 jobs of 24 hours a week, to be delivered by next month, mainly in the retail and service sectors. With spending still low and those sectors still struggling, the extra work is just not available so George Osborne needs to delay this cut or thousands of families with children will suffer through no fault of their own.”
“In October 2013, the rule for minimum hours of work will be abolished when Universal Credit is introduced. This policy simply needs to be delayed for 18 months until Universal Credit comes in, and there is more work available.”
Case Studies - Couples Due to Lose Working Tax Credit on 6 April
Donna and Jim live in Guisborough in Cleveland. They have three children aged 10, 9 and 2. Jim works for 16 hours a week. Donna was made redundant before Christmas and can now only find work for 6 hours a week. In April they will lose £70 a week - 20% of their income. Donna says:
“We cannot cut back any more than we are doing and we face the uncertainty of whether or not we will be able to feed our children. We are a normal hard working family, we have three lovely kids who understand and appreciate all they are given but it is becoming increasingly hard to manage and if they reduce our money even further I am afraid for the future. My husband and I should not have to choose between us which one eats tonight.”
Emma from Abertillery works 23 hours a week but her employer says they cannot even give her 1 extra hour a week so she can keep her tax credits and her husband cannot find a job as unemployment is so high. Emma says:
“I’m totally with the incentive of rewarding the working and not just giving out money to anyone but why because of 1 hour a week employment should I lose all tax credits? It’s a really worry to me how I’m going to keep a roof over our heads.”
Heather from Gosport says: “We struggle to keep things going on an even level week to week as it is now. With the changes to tax credits I’m very worried! I’ve spoken to my boss regarding increasing my hours from 17 to 24 a week as I’m going to lose my working tax credit and I’ve been told that we are already overspent on our wages budget so it’s not likely I’ll be able to get more hours. My partner is looking for work but is struggling to find anything. Like many others, this is a worrying time for us and I’m very concerned with what’s going to happen.”
From 6 April, around 200,000 couples with children face losing £3,870 if they cannot increase the total number of hours they work from 16 to 24 hours. An analysis by Howard Reed of Landman Economics shows that around 140,000 of these families are already living below the poverty line. A further 35,000 families with around 80,000 children will fall below the poverty line if they are unable to find extra hours of work.
Usdaw and the Child Poverty Action Group (CPAG) are making another urgent call on the Chancellor George Osborne to use his Budget tomorrow to postpone the changes.
Both organisations have welcomed the news announced today that the Government has decided to exempt full-time carers and their partners from the requirement to work extra hours, but stressed that this new exemption would only affect a small minority of families.
Alison Garnham, Chief Executive of CPAG, called on the Government not to exacerbate the suffering of families already on the breadline:
"This is a precision-guided attack on the poorest working households. Two thirds of the households being hit by the cut are working families already below the poverty line. Slashing their household income by a further £3,870 will be devastating and will leave children in severe deprivation. With 470,000 children living in the families that will lose their tax credits if they cannot find extra hours of work, we should expect to see a surge in the extent and severity of UK child poverty. This is a terrible penalty to inflict on families who are working as many hours as they can find and trying to do their best for their children."
John Hannett, General Secretary of Usdaw, said that it was wrong to impose such a heavy financial cost on families unable to find more work due to the current high level of unemployment and squeeze on employers’ wage budgets.
“Thousands of Usdaw’s members are affected by the changes to tax credits. 78% have said it is impossible for them to find the additional hours of work they need. When this policy was proposed, back in 2010, the Government thought that unemployment would be falling in April 2012. Instead, unemployment is at its highest level for 17 years and a record 1.4 million people in part-time work are seeking more hours.”
“This change to tax credits means that 200,000 couples are seeking an average of around 6 hours a week of extra work, equivalent to over 50,000 jobs of 24 hours a week, to be delivered by next month, mainly in the retail and service sectors. With spending still low and those sectors still struggling, the extra work is just not available so George Osborne needs to delay this cut or thousands of families with children will suffer through no fault of their own.”
“In October 2013, the rule for minimum hours of work will be abolished when Universal Credit is introduced. This policy simply needs to be delayed for 18 months until Universal Credit comes in, and there is more work available.”
Case Studies - Couples Due to Lose Working Tax Credit on 6 April
Donna and Jim live in Guisborough in Cleveland. They have three children aged 10, 9 and 2. Jim works for 16 hours a week. Donna was made redundant before Christmas and can now only find work for 6 hours a week. In April they will lose £70 a week - 20% of their income. Donna says:
“We cannot cut back any more than we are doing and we face the uncertainty of whether or not we will be able to feed our children. We are a normal hard working family, we have three lovely kids who understand and appreciate all they are given but it is becoming increasingly hard to manage and if they reduce our money even further I am afraid for the future. My husband and I should not have to choose between us which one eats tonight.”
Emma from Abertillery works 23 hours a week but her employer says they cannot even give her 1 extra hour a week so she can keep her tax credits and her husband cannot find a job as unemployment is so high. Emma says:
“I’m totally with the incentive of rewarding the working and not just giving out money to anyone but why because of 1 hour a week employment should I lose all tax credits? It’s a really worry to me how I’m going to keep a roof over our heads.”
Heather from Gosport says: “We struggle to keep things going on an even level week to week as it is now. With the changes to tax credits I’m very worried! I’ve spoken to my boss regarding increasing my hours from 17 to 24 a week as I’m going to lose my working tax credit and I’ve been told that we are already overspent on our wages budget so it’s not likely I’ll be able to get more hours. My partner is looking for work but is struggling to find anything. Like many others, this is a worrying time for us and I’m very concerned with what’s going to happen.”
Thursday 15 March 2012
GOVT MUST STOP FAILING OUR RAILWAYS
The UK rail industry has gone through some turbulent times in recent years. The publication of the McNulty report in May 2011 saw recommendations aimed at economising the industry and saving vast sums of money which have previously been spent subsidising the railways. The industry has been fragmented for a number of years which was a lasting legacy of the botched privatisation carried out in the dying days of the last Tory government.
This privatisation resulted in huge bills being footed by fare payers and tax payers. However, I do not believe the McNulty report addressed these pressing issues or delivered sensible cost-saving options. At a time when families were, and still are, feeling the economic pinch the report recommended a 30% increase in rail fares over three years. This problem has become worse over time and has effectively priced passengers out of rail travel.
There is no doubt that changes must be made to our rail system, to reduce passenger fares, secure jobs and alleviate the burden on the taxpayer, but we need government to demonstrate they value the rail industry before it can be reformed; something they have singularly failed to do.
The industry suffered a massive body blow last year when Bombardier, the last remaining UK train manufacturer, lost out on the lucrative Thameslink contract. The loss of the 1,200 carriage contract meant that the Derby’s plant’s future was in jeopardy. Its future beyond 2014 is still uncertain.
I wrote on numerous occasions to the Secretary of State and Minister responsible for the procurement of the contract to no avail. They blankly refused to reopen the tendering process. The Transport Minister, Theresa Villiers, acknowledged “that there would be disappointment in Derby”. She was not wrong. But we continued to fight and marched through the streets of the city with over 10,000 people in support of Bombardier workers.
But, still, the government refused accept the way in which they set out the tendering process was disadvantageous to Bombardier and they failed to take into account the socio-economic impact the tender of the contract would have. The loss of Thameslink had a devastating social and economic impact in Derby with 1,400 skilled workers being thrown out of work and into the dole queue.
After receiving the hardest knock in its history, Bombardier have dusted themselves off and applied for the Crossrail contract. Just days ago the shortlist was revealed. Bombardier again find themselves pitched against old German rivals Siemens; also on the shortlist are Japan’s Hitachi and CAF of Spain. The Secretary of State for Transport, Justine Greening, announced to MP’s last week that the government have adopted a new “responsible procurement” policy. She claims the new policy will mean bidders have to outline how they will provide apprenticeships and opportunities for small and medium-sized businesses.
The decision made last week by the government to include new procurement rules relating to jobs and training is a welcome move and has justified Labour’s position that the Thameslink procurement could have been restarted all along. A similar clause in the Thameslink procurement may have resulted in the outcome being very different. Although the government has made some amendments to the procurement rules, concerns still remain about the financing arrangements.
I sincerely hope that the government is serious about a change in the procurement process and this is not just a parlour trick using smoke and mirrors. The McNulty report argued for change in the rail system by undermining the role of railway workers who keep the system working. That is not an effective or an acceptable way to deliver change.
At a time of record unemployment it is essential that massive public procurement projects are used to inject jobs and growth into our economy, we need to make the government understand this. This Tory led government failed us on McNulty, failed us on Thameslink, but let’s hope it doesn’t fail us on Crossrail.
This privatisation resulted in huge bills being footed by fare payers and tax payers. However, I do not believe the McNulty report addressed these pressing issues or delivered sensible cost-saving options. At a time when families were, and still are, feeling the economic pinch the report recommended a 30% increase in rail fares over three years. This problem has become worse over time and has effectively priced passengers out of rail travel.
There is no doubt that changes must be made to our rail system, to reduce passenger fares, secure jobs and alleviate the burden on the taxpayer, but we need government to demonstrate they value the rail industry before it can be reformed; something they have singularly failed to do.
The industry suffered a massive body blow last year when Bombardier, the last remaining UK train manufacturer, lost out on the lucrative Thameslink contract. The loss of the 1,200 carriage contract meant that the Derby’s plant’s future was in jeopardy. Its future beyond 2014 is still uncertain.
I wrote on numerous occasions to the Secretary of State and Minister responsible for the procurement of the contract to no avail. They blankly refused to reopen the tendering process. The Transport Minister, Theresa Villiers, acknowledged “that there would be disappointment in Derby”. She was not wrong. But we continued to fight and marched through the streets of the city with over 10,000 people in support of Bombardier workers.
But, still, the government refused accept the way in which they set out the tendering process was disadvantageous to Bombardier and they failed to take into account the socio-economic impact the tender of the contract would have. The loss of Thameslink had a devastating social and economic impact in Derby with 1,400 skilled workers being thrown out of work and into the dole queue.
After receiving the hardest knock in its history, Bombardier have dusted themselves off and applied for the Crossrail contract. Just days ago the shortlist was revealed. Bombardier again find themselves pitched against old German rivals Siemens; also on the shortlist are Japan’s Hitachi and CAF of Spain. The Secretary of State for Transport, Justine Greening, announced to MP’s last week that the government have adopted a new “responsible procurement” policy. She claims the new policy will mean bidders have to outline how they will provide apprenticeships and opportunities for small and medium-sized businesses.
The decision made last week by the government to include new procurement rules relating to jobs and training is a welcome move and has justified Labour’s position that the Thameslink procurement could have been restarted all along. A similar clause in the Thameslink procurement may have resulted in the outcome being very different. Although the government has made some amendments to the procurement rules, concerns still remain about the financing arrangements.
I sincerely hope that the government is serious about a change in the procurement process and this is not just a parlour trick using smoke and mirrors. The McNulty report argued for change in the rail system by undermining the role of railway workers who keep the system working. That is not an effective or an acceptable way to deliver change.
At a time of record unemployment it is essential that massive public procurement projects are used to inject jobs and growth into our economy, we need to make the government understand this. This Tory led government failed us on McNulty, failed us on Thameslink, but let’s hope it doesn’t fail us on Crossrail.
Tuesday 13 March 2012
THIS IS ONE CUT THE CHANCELLOR SHOULD MAKE
As we approach the Budget, the Chancellor needs to be reminded of some of the key arguments for reducing VAT on all housing repair, maintenance and improvement work. Last year, Labour argued that it should be cut from 20% to 5% for very good reasons.
According to independent research by Experian, a reduction to 5% on the labour element of all housing repair, maintenance and improvement work would have the following results:
• Provide a total economic stimulus in the region of £1.7 billion in 2012 alone, rising to £7.6 billion by the end of this Parliament.
• Create 26,650 jobs in the construction sector, as well as an extra 34,400 new jobs in the wider economy in 2012. A cut to 5% would create over 74,000 jobs in the UK by 2015.
• Create an extra 3,625 construction jobs in Scotland, 1,461 in Wales and 572 in Northern Ireland by 2015.
• Potentially release an extra £374 million a year to improve the UK’s social housing stock, which required a total expenditure of £7.9 billion in 2010.
• Potentially release enough funds to renovate or bring back into use approximately 80,655 social homes by 2015.
• Stimulate additional spending of around £515 million on energy efficiency measures by 2015.
Although VAT receipts would be lower, there are a number of factors which will reduce the overall impact of the cut on the Treasury’s finances. These are:
• The shift from DIY to professionals
• The shift from the information economy
• The financial benefits of job creation
According to the Experian research, therefore, the effect of such a cut would be a net revenue loss to the Government in 2012 of between £161m and £864m.
Additional benefits would include:
• Helping households in need of essential repair work, energy efficiency improvements or extra space for additional family members.
• Significantly reducing the competitive advantage of the informal economy over legitimate traders.
Please take the opportunity to remind Treasury ministers of these arguments in the run up to the Budget and in the debate following the Chancellor’s statement on 21st March. The increase in the standard rate of VAT in January 2011 has been described as the ‘final nail in the coffin’ by the small and medium sized building firms that are members of the Federation of Master Builders.
Indeed, official figures show that compulsory insolvencies in the construction industry began to rise again in 2011 following a decrease of over 30% in 2010. In addition, the latest ONS construction figures show that all repair and maintenance work fell by 11% between December 2011 and January 2012. Repair and maintenance output was 0.6% lower in January 2012 than in it was in January 2011.
Sadly, if his incompetent handling of the economy since he took office is anything to go by, the chances of him doing the right thing on VAT are remote. However, I live in hope!
According to independent research by Experian, a reduction to 5% on the labour element of all housing repair, maintenance and improvement work would have the following results:
• Provide a total economic stimulus in the region of £1.7 billion in 2012 alone, rising to £7.6 billion by the end of this Parliament.
• Create 26,650 jobs in the construction sector, as well as an extra 34,400 new jobs in the wider economy in 2012. A cut to 5% would create over 74,000 jobs in the UK by 2015.
• Create an extra 3,625 construction jobs in Scotland, 1,461 in Wales and 572 in Northern Ireland by 2015.
• Potentially release an extra £374 million a year to improve the UK’s social housing stock, which required a total expenditure of £7.9 billion in 2010.
• Potentially release enough funds to renovate or bring back into use approximately 80,655 social homes by 2015.
• Stimulate additional spending of around £515 million on energy efficiency measures by 2015.
Although VAT receipts would be lower, there are a number of factors which will reduce the overall impact of the cut on the Treasury’s finances. These are:
• The shift from DIY to professionals
• The shift from the information economy
• The financial benefits of job creation
According to the Experian research, therefore, the effect of such a cut would be a net revenue loss to the Government in 2012 of between £161m and £864m.
Additional benefits would include:
• Helping households in need of essential repair work, energy efficiency improvements or extra space for additional family members.
• Significantly reducing the competitive advantage of the informal economy over legitimate traders.
Please take the opportunity to remind Treasury ministers of these arguments in the run up to the Budget and in the debate following the Chancellor’s statement on 21st March. The increase in the standard rate of VAT in January 2011 has been described as the ‘final nail in the coffin’ by the small and medium sized building firms that are members of the Federation of Master Builders.
Indeed, official figures show that compulsory insolvencies in the construction industry began to rise again in 2011 following a decrease of over 30% in 2010. In addition, the latest ONS construction figures show that all repair and maintenance work fell by 11% between December 2011 and January 2012. Repair and maintenance output was 0.6% lower in January 2012 than in it was in January 2011.
Sadly, if his incompetent handling of the economy since he took office is anything to go by, the chances of him doing the right thing on VAT are remote. However, I live in hope!
Friday 9 March 2012
UNPATRIOTIC TORIES & LIB DEMS OBLITERATING WW2 GENERATION’S LEGACY TO THE NATION
I have been in Derby’s city centre recently collecting signatures for a petition calling on the Government to drop its health reforms. It is clear from the public’s reaction that local people are angry and anxious about what the Conservatives and Liberal Democrats are doing to our NHS.
At a time when the Government is making huge cuts in the NHS totalling £20bn, it is unforgivable to spend £2 billion on this reckless re-organisation. Little wonder that doctors, nurses and other healthcare professionals are united in their condemnation of the Government’s plans. The bodies who have spoken out against the Bill include the Royal College of Nurses, Royal College of GPs, Royal College of Anaesthetists, Royal College of Midwives, Royal College of Ophthalmologists, Royal College of Paediatrics & Child Health, Royal College of Pathologists, Faculty of Public Health and the British Medical Association.
We have already seen how Government cuts are damaging healthcare in our city. Since the General Election, the number of people waiting longer than 18 weeks for NHS treatment in Derby has rocketed by a colossal 502%. I remember the dismal days under the last Conservative Government when people were often waiting for years to obtain vital NHS treatment. Many patients needlessly died before they could receive the lifesaving operation for which they were waiting.
But these reforms are set to make the situation far worse than anything we witnessed in the 1980s and 1990s. The intentions of the Health & Social Care Bill were exposed last year in a speech by Mark Britnell, a former Government adviser, at a conference of private sector executives. His remarks were widely reported when he said the reforms would show "no mercy" to the NHS and offered the private sector a "big opportunity" to make profits.
He wasn’t exaggerating either. The Bill turns the NHS into a full-blown commercial market, putting competition before patient care and allowing private companies to cherry-pick quick profits. NHS hospitals in England will also be able to use 49% of their beds and theatre time to prioritise private patients forcing everybody else to wait longer.
This Government’s zeal for undermining our cherished public sector institutions is distinctly unpatriotic and contrary to the decent British values for which my parents’ generation fought in WW2. And nothing symbolises those British values better than the NHS that was established by the first post-war Labour Government in 1948. Maybe that is why the tide of opposition to this Bill is so enormous.
Aneurin Bevan, the founding father of the National Health Service said, “The NHS will exist as long as there are folk left with the faith to fight for it.” I’ve got the faith and I intend to continue fighting for our beloved NHS. That is why I will be in East Street again tomorrow morning collecting more signatures for the ‘Drop the Bill’ petition, which people can sign between 11am – 3pm.
At a time when the Government is making huge cuts in the NHS totalling £20bn, it is unforgivable to spend £2 billion on this reckless re-organisation. Little wonder that doctors, nurses and other healthcare professionals are united in their condemnation of the Government’s plans. The bodies who have spoken out against the Bill include the Royal College of Nurses, Royal College of GPs, Royal College of Anaesthetists, Royal College of Midwives, Royal College of Ophthalmologists, Royal College of Paediatrics & Child Health, Royal College of Pathologists, Faculty of Public Health and the British Medical Association.
We have already seen how Government cuts are damaging healthcare in our city. Since the General Election, the number of people waiting longer than 18 weeks for NHS treatment in Derby has rocketed by a colossal 502%. I remember the dismal days under the last Conservative Government when people were often waiting for years to obtain vital NHS treatment. Many patients needlessly died before they could receive the lifesaving operation for which they were waiting.
But these reforms are set to make the situation far worse than anything we witnessed in the 1980s and 1990s. The intentions of the Health & Social Care Bill were exposed last year in a speech by Mark Britnell, a former Government adviser, at a conference of private sector executives. His remarks were widely reported when he said the reforms would show "no mercy" to the NHS and offered the private sector a "big opportunity" to make profits.
He wasn’t exaggerating either. The Bill turns the NHS into a full-blown commercial market, putting competition before patient care and allowing private companies to cherry-pick quick profits. NHS hospitals in England will also be able to use 49% of their beds and theatre time to prioritise private patients forcing everybody else to wait longer.
This Government’s zeal for undermining our cherished public sector institutions is distinctly unpatriotic and contrary to the decent British values for which my parents’ generation fought in WW2. And nothing symbolises those British values better than the NHS that was established by the first post-war Labour Government in 1948. Maybe that is why the tide of opposition to this Bill is so enormous.
Aneurin Bevan, the founding father of the National Health Service said, “The NHS will exist as long as there are folk left with the faith to fight for it.” I’ve got the faith and I intend to continue fighting for our beloved NHS. That is why I will be in East Street again tomorrow morning collecting more signatures for the ‘Drop the Bill’ petition, which people can sign between 11am – 3pm.
Friday 2 March 2012
PROSPECTS FOR CONSTRUCTION INDUSTRY GETTING WORSE
The prospects for construction output weakened still further as the latest new orders figures from the Office of National Statistics for the final quarter of 2011 showed a fall of more than 15% compared with the same quarter one year earlier.
These ONS figures for new construction orders give the clearest picture of the decline in the construction since the Tory-Lib Dem coalition was formed. The fall in orders of 14% in 2011 will lead to a further reduction in construction output during the next 18 months.
The Economics Director at the Construction Products Association, Noble Francis, said: “It is clear that the government’s cuts are having an adverse impact on the industry.”
He added: “Our latest forecasts for construction anticipate a 5.2% fall in the industry overall in 2012, with public sector construction falling 14%. It is clear that if the Chancellor wants construction to be at the heart of the economic recovery then the Budget will need additional measures to help the sector and economy.
“Government needs to do its utmost to shift current spending into capital spending, which government anticipates will fall by 30%.”
The problem is this Government is indulging in so much smoke and mirrors that the smoke is getting in their eyes and when that’s cleared, ministers are then being dazzled by the mirrors!
Further evidence for this was contained in the Autumn Statement, which provided a £5 billion stimulus for infrastructure, but 85% of that won’t be available until 2013/14. If George Osborne is genuinely interested in stimulating growth and creating jobs he should bring forward this infrastructure funding immediately.
These ONS figures for new construction orders give the clearest picture of the decline in the construction since the Tory-Lib Dem coalition was formed. The fall in orders of 14% in 2011 will lead to a further reduction in construction output during the next 18 months.
The Economics Director at the Construction Products Association, Noble Francis, said: “It is clear that the government’s cuts are having an adverse impact on the industry.”
He added: “Our latest forecasts for construction anticipate a 5.2% fall in the industry overall in 2012, with public sector construction falling 14%. It is clear that if the Chancellor wants construction to be at the heart of the economic recovery then the Budget will need additional measures to help the sector and economy.
“Government needs to do its utmost to shift current spending into capital spending, which government anticipates will fall by 30%.”
The problem is this Government is indulging in so much smoke and mirrors that the smoke is getting in their eyes and when that’s cleared, ministers are then being dazzled by the mirrors!
Further evidence for this was contained in the Autumn Statement, which provided a £5 billion stimulus for infrastructure, but 85% of that won’t be available until 2013/14. If George Osborne is genuinely interested in stimulating growth and creating jobs he should bring forward this infrastructure funding immediately.
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