Labour Manifesto 2010 and the housing benefit cap
On Page 20 of Labour's 2010 Manifesto it looks at welfare reform.More people with disabilities and health conditions will be helped to move into work from Incapacity Benefit and Employment Support Allowance, as we extend the use of our tough-but-fair work capability test. This will help to reduce the benefit bill by £1.5 billion over the next four years. We will reassess the Incapacity Benefit claims of 1.5 million people by 2014, as we move those able to work back into jobs.Our goal is to make responsibility the cornerstone of our welfare state. Housing
Benefit will be reformed to ensure that we do not subsidise people to live in the private sector on rents that other ordinary working families could not afford. And we will continue to crack down on those who try to cheat the benefit system.
on page 19Our job guarantees will put an end to long-term unemployment and a life on benefits. No one fit for work should be abandoned to a life on benefit, so all those who can work will be required to do so. At the same time, we believe that people should be able to earn enough to live and be better off than on welfare.
on page 45This will be paid for as savings accrue from housing benefit through our reforms.
What are they saying now on Housing Benefit?here
Chris Bryant is quoted as saying:There is dark talk of how the poor will be driven from affluent areas. Labour's Chris Bryant has suggested they will be "sociologically cleansed out of London" while the mayor, Boris Johnson, warned he would resist "any kind of Kosovo-style social cleansing" in the capital.
So on the cap we have Labour campaigning against a policy which is clearly in their 2010 manifesto. It is also clear that many of the other Coalition welfare changes are not dissimilar to those proposed by Labour. With only a 10% cut in HB after one year that even looks less than Labour's "required to work".
Christopher Booker on public family law
I think there is getting to be a bit of momentum behind the campaign to sort out English child protection.
The link is to a story in the Sunday Telegraph.The only people in a position to reform this system fundamentally are those who set it up in the first place under the 1989 Children Act – the politicians. But they have, with one or two shining exceptions – notably John Hemming – walked away from the Frankenstein's monster that Parliament created. It is now up to them to support Mr Hemming and all those horribly maltreated families who are campaigning for one of the most outrageous scandals in Britain today to be brought to an end.
I mentioned one of the UK's secret prisoners today in the House of Commons. These prisoners are different to those imprisoned through the courts where the Family Court bans the name of the prisoner being revealed.
These are people whose legal capacity to decide where they live is removed from them by the Court of Protection.
The Mental Capacity Act 2005 specifies in detail the circumstances in which someone can be jailed ostensibly to protect them. In these situations the system decides that someone does not have either the capacity to decide where they live or indeed to instruct a solicitor to argue about the issue.
There are two problems with how the system currently works.
The first is the wider one of accountability. Someone is locked up with no right to instruct a solicitor to contest the jailing and the media are banned from talking about it.
Obviously my comments in the House of Commons can be reported, but without that it cannot be talked about on threat of imprisonment.
The second is that the system has its usual unreliable expert system of determining whether people have capacity.
To me the idea that someone can be jailed purely on the basis that a social worker employed by the local council thinks they don't have the capacity to decide where they live is very wrong.
On top of all of this it seems very clear that the Mental Capacity Act is not being followed and furthermore
a) I am not being allowed to talk to the secret prisoner ... and
b) Other parties are being threatened in an attempt to prevent them talking to me.
All very very wrong.
Gilt Yields over the century
John O Shea
has now started a bidding war on gilt yield graphs. I think, however, that looking at 1900-2009 is sufficient.
The figures here are annual averages, but they show clearly how it is possible to have problems with the interest rate on government debt.
The peaks were indeed during the Labour Government of 1974-9.
Labour, although they were in theory talking about cuts of just over 40bn do now seem to be arguing against all the cuts.
Incidentally given that "there is no money left" the funds for Royal Mail do have to be raised on the equity markets. Labour have left no choice on this. Labour were aiming to do a similar thing.
There are a number of key priorities
1. Protecting the Post Office Network
2. Maintaining the Universal Service Obligation.
These are our objectives.
The chart below is the current 10 year gilt yield chart from bloomberg. It looks back at what happened with gilt yields. As we went into the recesssion and there was an attempt to drive down interest rates the gilt yields followed. Then they popped up a bit and averaged around 4% going into the general election although there was a peak with a bit of extra uncertainty. Then they went down to the 3% level where they have remained.
We as a country are "in hock" to the markets because we borrow money from them. The only way to be less "in hock" is to borrow less.
The government's policies are in many ways traditional keynsian as there is not an attempt to remove the deficit overnight.
The Coalition Government's cuts are about of the same order of magnitude in fact as those initially proposed by Labour. They get rid of the deficit faster because of lower interest rates (1% on 1 tn is 10bn). Labour now appear to be arguing against any substantial cuts. That would clearly hit a sovereign debt crisis.
I still take the view that the urgent effort was needed to stop interest rates going up and the public finances spiraling out of control.
In retrospect we will be able to compare and constrast the different approaches between countries. I do not think, however, that there is any example of a a country which is spending its way out of cuts.
Dutch Orchestra Protest
The link is to a story about a Dutch Orchestra protesting about funding cuts.
The protest of performing in a commuter railway station is at least more musical than average. However, what we are seeing across the developed world is the consequences of the recession. Initially it was a private sector recession and has turned into a public sector recession - inevitably.
John O Shea complained
about me using the crocodile on a plane analogy. Much that the previous (Labour) government were responsible both for overspending (believing their own publicity) and a failure of regulation, the recession was also caused by high oil prices and the lack of liquidity in the housing market. These things were hard to predict (in the same way as a crocodile on a plane), but they cause a big problem.
Labour are in the "spend your way out of the problem" camp. That is exactly the policy adopted by Greece before their debt crisis.
Remember that interest is affected both by the amount of debt and the interest rate on the debt.
All developed countries are having to cut public spending. Hence the protests in France, Holland and Greece. However, protesting cannot do anything about reality.
It is worthwhile people suggesting alternate routes. I attended the PCS fringe meeting in Liverpool to discuss what options there were and to be fair to them they were not as uncompromising as the public statements.
However, the risk of inaction at this stage is far greater than the risk of action.
In a sense doing nothing is not a "high risk" strategy as there is certainty that the UK would face a sovereign debt crisis.
Labour's current position is to offer up no cuts at all. That is a certainty of disaster (and with it greater cuts).
The Communication Workers Union
I find it odd that on one hand the Communication Workers Union are setting out publicly to defeat me personally at the next General Election and then in the next minute they want to meet me.
There is always a question of priorities. I am happy to meet constituents at my advice bureau (which does not have appointments). However, I find it a bit odd that my political opponents would expect me to find time to meet them. It is all a question of priorities.
It is not possible to do everything that people ask you to do. Hence you need to prioritise. My priority is serving my constituents.
You couldn't make it up
on 22nd October it says:
The Work Foundation, which bills itself as "the leading independent authority on work and its future", announced today that it had been acquired by Lancaster University. The move came after a winding up petition, citing a £26.9m pension deficit, was filed at the high court yesterday.
The university claims the purchase minimises losses to creditors, including pension fund members, and safeguards 43 jobs, including that of the foundation's executive vice-chair, Will Hutton. Hutton is a former editor of the Observer, a member of the Scott Trust, which owns the Guardian, and an adviser to the government on public sector pay.
Two days later also in the Guardian here
Will Hutton says:
The gamble did not have to be taken. The scale of spending cuts were not "unavoidable". The country was not and is not on the brink of bankruptcy. The stock of national debt built up over the decades lies in the middle of the international average as a share of GDP. Indeed, the national debt has been proportionally higher for 200 of the last 250 years. Britain certainly needed to get the flow of new public debt under control, but it had choices over the timing and how it split the adjustment between tax increases and spending cuts.
Solvency is not about the amount of debt, but the rate at which debt is either increasing or reducing. It is about the ability to pay debt back. Although the total amount of debt at any one time is obviously relevant - what is more relevant is the rate of increase of debt.
The danger missed by people such as Will Hutton is that as deficits are maintained not only the amount of interest goes up because the debt goes up, but also the interest rate on the debt increases making the amount of interest increase even further that then increases the forecast deficit exacerbating the problem.
Taxation and the Graduate Contribution
When I graduated (in 1981) I faced basic tax rates of 30% and a higher rate of 60%. People who graduate with the graduate contribution in place will face a tax rate of 20+9=29% and 40+9=49%. That is a lower marginal rate of taxation than I faced on graduation in 1981.
I think this is important because the case is often made that those people who benefited from tertiary education in the 1970s have been changing how the system works.
I made this point on the politics show today.
Do people care about Elected Mayors
The link is to the story about Tower Hamlets.The turnout was 25.6%.
I am not quite sure of exactly why people want elected mayors. There is a claim that it creates "accountable" local government. I don't see this myself.
There is also an argument that it encourages higher turnouts. Well the evidence from Tower Hamlets does not substantiate that.
Twinkle and Beauty
There has been a bit more interest in Twinkle and his missing sister. Here is a photograph of them both.
In terms of various questions about the kitten(s)
a) They were named by my daughter (age 4) - they are her cats.
b) They are due to be chipped, but are not yet.
c) They are now about 6 months old.
I would like to thank those who have replicated the photos of Beauty for their support of the attempts to find Beauty. That even includes Andy Howell who has set up a twitter account and a facebook page even if it is a bit tongue in cheek.
For those who don't know Andy Howell used to be Deputy Leader of the Birmingham Labour Party.
However, the Labour Party in Birmingham have been quite helpful within the context of trying to find Beauty.
If anyone has seen this kitten please contact me at the House of Commons. There is a reward for its return.
(note that people are welcome to republish this picture of Beauty on the basis that they are aiming to get her returned.)
Labour's cuts would be more
One reason why the Coalition's cuts are less than Labour proposed is that the Coalition is really committed to reducing the deficit quickly. That means simply that people will lend money to the UK at a lower interest rate. That means less interest and hence the cuts don't need to be as much.
Remember that Labour's lax approach to public spending means that they have to cut more.
Student Finance - the Options
Regardless of reports in the press, I have not yet made up my mind as to which way to vote. I cannot practically do this until the government has produced any proposals. However, in terms of the debate some things are clear:
Ideally tertiary education should be funded directly from general
taxation. That is not an option so there are various options.
1. Up front fees.
2. A graduate tax (an open ended tax)
3. Up front fees with an option of the government providing a loan
4. A scheme which shares the burden between graduates on the basis of
their earnings (not their parents' wealth), but which is not an open ended
"pure" graduate tax.
What would you pick?
I think the fourth option is the fairest (or most socially just) because it shares the cost of tertiary education between graduates on the basis of the income of the graduates.
This does, however, require the option of an up front payment without penalty being removed. It also requires more work on the calculation of the net present value of the graduate's contributions. I have done some initial work and although some graduates would pay nothing, Quite a few would have a net present value of something like 5K. However, there are questions as to what happens as people go up the income scale.
The graduate tax itself causes financial problems as it does not provide the cash today, but a gradual increase and we (the UK) need the cash today.
What option 4 does is package together students for financing purposes where some make greater contributions and some make lesser contributions.
Student Fees and the NUS Pledge
There is rightly a debate about the signing of the NUS pledge by Lib Dem MPs, including myself, and what happens now about the Browne Report and any subsequent proposals.
The pledge said:“I pledge to vote against any increase in fees in the next parliament and to pressure the government to introduce a fairer alternative”
It is clear from that pledge that the objective is to have "a fairer alternative". The question, therefore, is whether the government's proposals are, indeed, a fairer alternative.
The test is whether they have moved from being effectively a tuition loan to what is a capped progressive graduate tax (or graduate contribution).
I am still not sure that they are progressive enough and have raised this with the government, but in defence of the proposals:
a) Up front fees are scrapped for part time students - this is important.
b) 30% of graduates pay less under the Browne proposals than under Labour's proposals.
The proposals are far more progressive than Labour's. If the option of a penalty free up front payment or advance is taken away then they become a taxation system rather than a fees system particularly given that different people pay different amounts depending upon their income.
However, more work needs to be done.
Jobs for long term unemployed and people with disabilities
The link is to Hansard where I have made progress with the idea of requirign those people contracting to supply services to the government to take on some long term unemployed and some people with disabilities.
John Hemming (Birmingham, Yardley, Liberal Democrat)
I congratulate the Secretary of State on the proposals for the universal credit, which will make it worth being in work. As well as trying to fit people to jobs, will he consider trying to fit jobs to people by using the Government's contracting power to require that there be some jobs for the long-term unemployed and some jobs for people with disabilities?
Iain Duncan Smith (Secretary of State, Work and Pensions; Chingford and Woodford Green, Conservative)
We will certainly ensure that we look at that suggestion.
Today's Sunday Mirror
The link is to the story in today's mirror about the attempt to get justice by approaching international courts.Hundreds of heartbroken parents who claim social services "stole" their children have launched a legal bid to win them back.
The 500 mums and dads say it is impossible to get justice in the UK and have turned to an international court.
Families argue they are the victims of social workers who are over-zealous after cases such as Victoria Climbié and Baby Peter and a process in family courts which is excessively secretive.
There are a number of procedural problems in the Family Division. The secrecy makes it difficult for people to know what is going on. The biggest problem relates to the way expert evidence is handled. The fact that parents have to live with the Local Authority's preferred experts and have no right to a second opinion makes the judgments of the courts unreliable.
The Court of Appeal will not correct this obvious error simply because they don't think it is an error.
Panorama on children in care
is to Panorama's story on children in care in Coventry where they looked at the situation for children in Coventry by following them for 6 months.
Much that at times children do need to be taken into care, at other times they are kept from their families for no good reason.
The young Connor in the programme who has already had a disrupted (aka failed) adoption is a good example of a child who has many symptoms of reactive attachment disorder. This results in his behaviour being from time to time particularly difficult and would be likely to cause a subsequent adoption to fail. However, the authorities are set on getting him adopted again - this is probably the worst thing they could do to him and he would be best to remain with his current foster family.
The thing to note about this is that it is likely that the RAD has arisen subsequent to him being removed into care.
The older Connor is basically angry with the state for keeping him away from his mother and young half sister. He has been through over 10 placements. There appears no good reason as to why he cannot live with his mother. He is counting the days until he can escape from Care.
Then you have Shannon who appears to be part of a cycle of mothers and daughters brought up in care who learn patterns of behaviour which then results in them going to jail from time to time.
A fourth child, Hezron, seems to be doing well from the system and sees his mother as often as he wants (more like the Danish system).
At around 16 minutes into the programme Connor explains his understanding of the care system. Section 20 (voluntary care), Section 31 (Care orders) and adoption.
He says; "[Section 20] is better than being under Section 31. ... [referring to S31]That's one of the worst ones you can get. The worst one you can get is when you get adopted."
What this does is demonstrate the perspective of some of the children which is that they are being effectively punished by the state rather than protected.
Jonathan Wallace on Ed Balls
Jonathan Wallace does a good analysis of Ed Balls' assertions about the historical financial paths taken in the UK (in the 1930s and also in 1945). That is on the link.