Tag Archives: austerity

The Coalition’s Record on Adult Social Care: Policy, Spending and Outcomes 2010-2015

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Approaching 1.3 million older people and younger disabled and mentally ill adults
use social care services in England, and 3.2 million are cared for informally, by their
families and friends. How did the Coalition respond to long-term pressures that are
putting care services and carers under growing stress?

– The Government legislated to make more people with modest wealth eligible for publicly funded
support, by raising the capital threshold used as a means test from £23,250 to £118,000 (from
2016) and introducing a lifetime cap on care costs. However, this cannot be expected to have much
impact on continued under-funding for social care as a whole.
– Public spending on social care has failed to keep pace since the mid-2000s with demand for
services from growing numbers of older people. Spending cuts imposed by the Coalition intensified
the pressure on social services from 2010 onwards.
– Overall spending is projected to have fallen by 13.4 per cent over the Government’s five years in
office. Already by 2013/14, 17.4 per cent less was being spent on services for older people. By
contrast, the number of people aged 65 and over increased by 10.1 per cent over the same
period, including an 8.6 per cent increase in the population aged 85 or over.
– The number of people receiving publicly-commissioned adult social care services fell by one quarter
between 2009/10 and 2013/14 from 1.7 million to below 1.3 million. Care at home and other
community-based services were hit especially hard, resulting in an average 8 per cent reduction in
the number of users each year.
– The number of people with learning disabilities using community-based services grew slightly, but
all other client groups experienced cuts. The number of service users among working-age adults
with mental health problems dropped by 37 per cent and the number of physically disabled users
aged 65 or over fell by 32 per cent.
– Local services were increasingly targeted on adults assessed as having the most complex needs.
The proportion of social care clients being supported for five or fewer hours a week declined from
37 per cent to 28 per cent between 2009/10 and 2013/14. The proportion receiving care for more
than ten hours a week increased from 34 per cent to 45 per cent. At the same time, nearly three quarters
of councils now arrange some social care visits as short as 15 minutes.
– Monitoring of care services based on users’ perceptions suggests some quality of life outcomes
have improved. Nevertheless, statistics on the abuse of vulnerable adults show 37,685
substantiated cases in 2013/14, while Care Quality Commission inspections revealed serious
concerns about the quality of care in a fifth of nursing homes and a tenth of residential care
homes.

http://sticerd.lse.ac.uk/case/_new/news/year.asp?yyyy=2015#772

The Coalition’s Record on Health: Policy, Spending and Outcomes 2010-2015

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David Cameron promised in 2010 to “cut the deficit, not the NHS”. But how have the Coalition’s policies – including health reforms which are widely viewed as going beyond election commitments – impacted on health?

– While the Coalition has ‘protected’ health relative to other expenditure areas, growth in real health spending has been exceptionally low by the standards of previous governments. Average annual growth rates have lagged behind the rates that are deemed necessary to maintain and extend NHS care in response to increasing need and demand.
– Forecasts warn of an NHS ‘funding gap’ as wide as £30bn by 2020/21 unless the growing pressures on services are offset by productivity gains and funding increases during the next Parliament.
– Major health reforms emphasising decentralization, competition and outcomes have been implemented. These have transformed the policy landscape for the commissioning, management and provision of health services in England. The overall framework for political responsibility and accountability for health services in England has also changed.
– Minimum care standards, inspection and quality regulation have been revised and strengthened following the Mid-Staffordshire NHS Foundation Trust Public Inquiry.
– Key indicators point to increasing pressure on healthcare access and quality. These include indicators on patient access to GPs, accident and emergency services and cancer care. Public satisfaction with the NHS is considerably lower than a peak reached in 2010.
– The UK’s ranking on OECD “international league tables” remained disappointing for some health outcomes including female life expectancy and infant mortality.
– Suicide and mental health problems remained more prevalent following the 2007 economic crisis.
– Health inequalities remained deeply entrenched. The difference in average life expectancy between men living in the poorest and most prosperous areas of England is nine years, and six years for women.

http://sticerd.lse.ac.uk/case/_new/news/year.asp?yyyy=2015#772

The Chancellor’s 2014 Autumn Statement: Missed targets and missed opportunities

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George Osborne’s Autumn Statement was a reminder of the government’s missed targets and missed opportunities, writes John Van Reenen. The Chancellor’s promise to eliminate the structural deficit has failed spectacularly and the UK economy is barely above its pre-crisis level, a major cause of which was the the decision to launch a premature austerity programme in 2010. Crucially, Osborne’s plans fall short in addressing Britain’s chronic problem of low productivity.

There are things to like in the Autumn Statement. The reforms to end the “cliffs” in stamp duty and make it more graduated tax are welcome, but even better would have been to replace stamp duty entirely with a tax on land values. Rather than taxing people who move, tax the unmoveable wealth that they have. And if you have to raise taxes, few will feel sympathetic with multinationals who will find it harder to avoid taxes or banks who won’t be able to offset their accumulated losses against future taxes.

But the economic elephant in the room is what has happened to productivity. GDP per hour is over 15 per cent below where we would have expected on long-term pre-2008 trends. This is why wages are so low and the deficit remains high. There is nothing serious in the Chancellor’s plans to tackle this pressing issue.

Missed Fiscal Targets

In 2010 George Osborne pledged to eliminate the structural deficit by the end of this Parliament – the 2014/15 financial year. This has spectacularly failed to happen with forecasts of government borrowing rising to £91 billion this year and no expectation of balancing the books before 2018/19. And don’t hold your fiscal breath on it happening even by then.

So what went wrong? Less income taxes have come in than expected in the last year, partly because of the increase in personal allowances, but mainly because of low pay. It’s a stunning fact that real earnings have fallen by over 8 per cent since 2008. Many jobs have been created, but they have generally poorly paid. Low wages, low taxes.

Harpo Marxist Economics

The fundamental problem is that growth has been pretty lousy under the Chancellor’s rule. Don’t be fooled by the 3 per cent headline GDP growth rate. The size of the economy is barely larger than it was on the eve of the crisis representing the worst recovery in over a century. Our faster growth this year is like a “Harpo Marx” effect. The story goes that when Harpo was asked why he was banging his head against a wall. He responded “because it feels so good when I stop.” Similarly, it is unsurprising to have strong growth when you’ve been pushed so far underwater. The real surprise is why it took so long.

A major cause of low growth was the Chancellor’s decision to launch a premature austerity programme in 2010 which choked off the nascent recovery. Austerity eased somewhat since 2012/13, but even the OBR estimates that this knocked off a percentage point off growth per year in 2010/11 and 2011/12. The Eurozone crisis also played a part, as EU leaders administer the same fiscal medicine as Dr. Osborne with similarly disappointing results. Southern European countries can at least say they have no choice if they wish to keep the Euro, but there is no excuse for Northern EU countries like Germany to insist in balancing their own budgets in the face of serious deflationary risks.

Attempting even more severe austerity to meet the 2010 targets – as some on the right have argued – would have been an even more serious error. Like the government’s policy to reduce net migration to under 100,000, it is better to fail at imposing a silly policy than to cause terrible harm in trying to meet it.

But what to do about the productivity elephant?

As analysed by the LSE Growth Commission, Britain has a chronic problem of low productivity rooted in the failure make long-term investments. We argued that we could address this though radical supply side changes in the way we support innovation, and educate, tax and finance our citizens.

A major way of reducing public spending after 2010 was to slash public investment. With low interest rates, under-utilised resources and falling private investment, this was the exact opposite of standard economic advice. The outcome was widely predicted – rather than building, we dug ourselves into a deeper economic hole.

Some of this infrastructure destruction has been reversed, but the Chancellor plans again to accelerate public spending cuts to pay for tax cuts after the election. Since public investment creates capital that can be used in the long-term, it should not be lumped in with current spending like civil service salaries. But for purposes of creating an absolute budget surplus it has been and so, once again, will be ripe for the chop. The Liberal Democrats and Labour rightly want to keep capital investment separate. Let’s hope, if re-elected, this will be one more target that the government misses.

About the Author

John van Reenen is Professor of Economics at the LSE and Director of the Centre for Economic Performance. He tweets from @JohnVanReenen

http://blogs.lse.ac.uk/politicsandpolicy/the-chancellors-2014-autumn-statement-missed-targets-and-missed-opportunities/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+BritishPoliticsAndPolicyAtLse+%28British+politics+and+policy+at+LSE%29

Hey UKIP, this is awkward – Daily Mirror

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Posted by Mike Sivier Reblogged from http://voxpoliticalonline.com/2014/11/09/hey-ukip-this-is-awkward-daily-mirror/

Vox Political has tried to resist this, but the graph is just too significant to ignore. From the Daily Mirror:

141109mirrormigrantgraph

New research has shown recent immigrants have made a net contribution of £25bn to the UK over the last ten years.

That means immigrants who have arrived in the country since 2000 have paid more in taxes than they have received in benefits and services.

Over the same period the native UK population used £617bn more in services and benefits than they paid in taxes.

A lot of it is down to age. When we look at adult populations, which this study did, immigrants are likely to be younger – which means they have more of their working lives ahead of them. The native population, on the other hand, contains far many more retired people, who use much more than they pay in.

In 2011, the last year for which the study had data, the average age of someone born in the UK was 40. The average age of an immigrant from Europe was 34 and from elsewhere 32.

The UK-born population is also more likely to claim benefits and social housing, according to the study.

Immigrants from the European Economic Area make the strongest contributions, including those from the ‘A10′ countries which joined the EU in 2004 – for example Poland, Latvia, Lithuania.

141109proportion-with-degree

An immigrant is much more likely to have a degree than someone born in the UK. The difference is even more stark if you look only at recent immigrants – 62% of immigrants from non-A10 EU countries (e.g. France, Italy) have a degree.

Far fewer immigrants are under-educated. This year in the UK around half of the population over 23 left school before 17. Only 1 in 5 immigrants from Europe has similarly low education, and 1 in 4 from outside Europe.

The study suggests that the cost of all immigrants was a loss to the UK of £113bn between 1995 and 2011, although that’s somewhat mitigated by the estimated £35bn saving made through their being educated abroad.

A recent Ipsos Mori poll found we think there are twice as many immigrants as there actually are – 24%, when the reality is 13%. This is a pattern of error repeated across the world.

141109native-and-immigrant-populations

Unemployment rate could be twice as high as figures claim

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Reblogged from http://voxpoliticalonline.com/2014/11/12/unemployment-rate-could-be-twice-as-high-as-figures-claim/

12 Wednesday Nov 2014

Posted by Mike Sivier

The Office for National Statistics has put out new figures on the number of people in work – and it’s more than last month. Hooray!

But, as ever, the devil’s in the detail and – as usual – the small print is annoyingly devoid of the detail we need. Boo!

We are told that figures for September showed employment continued to rise (by 112,000 since the April-June period) and unemployment continued to fall (by 115,000 people). There appear to be 3,000 people for whom these figures don’t account. Interesting…

(Perhaps they’re now on Universal Credit – as those figures aren’t counted in these figures, meaning the current way of calculating these statistics is misleading from the start.)

Pay rates – excluding bonuses – was 1.3 per cent higher than at this time last year. This was being trumpeted as a huge success, as pay has risen about the Consumer Price Index (CPI) calculation of inflation, which stood at 1.2 per cent in September. What a shame the more accurate (which is why the government doesn’t use it) Retail Price Index (RPI) calculation of inflation stood at 2.3 per cent, well above in increase in pay rates.

Let’s all take a moment to remind ourselves of where those wages are going, too. Tom Pride, over at Pride’s Purge, has a little graphic for it, which is stolen and reproduced below:

141112average-uk-pay-risesTomPride

So all those bankers, directors and MPs are taking all the cash, leaving the rest of us with – what? This article suggests that, when you take out all the variations – like bonuses, wages for people who do real jobs (unlike bankers, directors and MPs) increased by just 0.6 per cent in the past year. That’s from the Bank of England.

If employment has increased – and there’s no reason to say it hasn’t – we can also conclude that the reason employers are more willing to take people on is that they can pay peanuts for them and rely on the government to top them up with in-work benefits. It seems likely that the work was always there but employers weren’t going to take anybody on if it meant increasing the wages bill and reducing the amount of profit available to them. Now that zero-hours contracts are available, along with part-time schemes that deny people pensions and holiday pay, it’s a different matter.

Of course the trade unions are in no position to stand up for workers’ rights – they have been stripped of any influence over the past 35 years of neoliberal, free-market rule.

The number of people who were self-employed increased by a staggering 186,000, to reach 3.25 million, while people working as self-employed part-time increased by 93,000 to reach 1.27 million. That’s 4.52 million – almost one-sixth of the total number of people in work. If you think that’s great, you haven’t been paying attention. Remember this article, warning that the increase was due to older people staying in work? And what about the catastrophic collapse in self-employed earnings we discovered at the same time?

How many of these are people who have been persuaded to claim tax credits as self-employed people, rather than jump through the increasingly-difficult hoops set out for them if they claimed Jobseekers’ Allowance – and do they know they’ll have to pay all the money back when their deception is discovered?

The number of people in part-time employment has also increased, by 28,000 to reach 6.82 million. Are we to take it that this means under-employment has increased again?

Public sector employment has fallen again. If you want to know why the government keeps messing you around, there’s your answer. There aren’t enough people to do the job. This month’s statistics show 11,000 fewer public sector employees than in March, and 282,000 fewer than this time last year.

Unemployment is said to have dropped – but remember, this is not counting people who have been sanctioned. A recent study by Professor David Stuckler of Oxford University suggests as many as half a million people could have been sanctioned off-benefit in order to massage the figures, meaning that the total listed – 931,700 – is probably wrong. Remember also that Universal Credit claimants aren’t counted, nor are those on government work schemes – another 123,000 people.

This means the actual unemployment rate is likely to be double the number provided by the official statistics.

And what about people on ESA/DLA/PIP?

It’s said that the numbers don’t lie.

What a shame that can’t be said about the people manipulating them.

The idea that there is a welfare-dependent underclass is wrong

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A new book by John Hills explores key issues in the current debate about ‘welfare’ and the welfare state. The debate contrasts a stagnant group of people benefiting from it all with the rest who pay in and get nothing back – ‘skivers’ against ‘strivers’. John explains how, because people’s lives and circumstances change, most of us get back something at least close to what we pay in over our lives towards the welfare state.

Twenty-five years ago Granada television and my colleague in LSE’s social policy department, Julian Le Grand, came up with a novel way of presenting the effects of social policy. Instead of graphs, tables and talk, they used a TV game show between two families – the Ackroyds, from Salford in Greater Manchester, and the Osbornes, from Alderley Edge in Cheshire – to illustrate who got what out of the welfare state of the time. Which of these stereotypical working-class and middle-class families were the true ‘Spongers’ of the show’s title, most ‘dependent on government’ in current formulations, if one could look over their whole lives?

As it happens, the longer-living, university-educated, opera-loving middle-class Osbornes turned out to be the winners, getting more than the working-class Ackroyds. A follow-up programme which I helped with, Beat the Taxman, two years later looked at which family had done best as a share of income out of the tax reforms of the Thatcher years. Perhaps less surprisingly, the Osbornes won that one too.

What was special about these families was that, in the words of the game show host Nicholas Parsons, “we’ve invented them”. A quarter of a century later I’ve gone back to those families and their (newly invented) children and grandchildren to explore key issues in the current debate about ‘welfare’ and the welfare state.

Good times bad times [FC]In my new book, Good Times, Bad Times: The welfare myth of them and us, I present the results of research over the last decade or more in LSE’s Centre for Analysis of Social Exclusion (CASE) and elsewhere using large datasets, our own surveys, government statistics, and the results of computer simulations.

But the continuing lives of the Osbornes and the Ackroyds may bring home some of its key points. There are Gary and Denise Ackroyd, whose incomes vary widely from month to month as his hours as a van driver change and her work in a school only brings in pay only in term-time, contrasting with the stable and predictable incomes of people like young civil servant Charlotte Osborne (and of many academics).

Over the 2000s, the circumstances of the Osborne parents, Stephen and Henrietta changed a lot, particularly after Stephen’s heart attacks and decision to down-shift his accountancy work, but they still remained in the top 2 per cent of the income distribution. By contrast, the changes in the size of their family and the effects of Jim Ackroyd losing his job in 2006 meant that he and his wife Tracy bounced around the income distribution – close to being in the poorest tenth in two years, but just above the middle by the time they were empty nesters in 2010.

The book also looks at the life chances of the newest grandchildren, George Ackroyd and Edward Osborne, born at the same time in July last year. If we knew nothing about them apart from where they were born, we would already expect Edward to live nearly four years longer. And although some of the educational gaps have closed in the last decade, the chances are that Edward will be doing better at school from the very start, leave with better qualifications, go to a better university, earn much more and build up a far higher level of wealth. There’s nothing predetermined about that, and George Ackroyd might buck the trend – it’s just that he starts with the odds against him.

And looking at the recent past, the poorest of the families, lone mother Michelle Ackroyd, working 16 hours a week on a low wage, turns out to have lost 6 per cent of her income from tax credit and benefit cuts and austerity tax rises since May 2010. By contrast the most affluent of the families – Stephen Osborne with £97,000 per year earnings and his wife with £9,000 from her part-time teaching, plus significant investment income – have lost slightly less in weekly cash than Michelle, and only 0.7 per cent of their income.

Twenty-five years on, more than ever, the debate around ‘welfare’ contrasts a stagnant group of people benefiting from it all, while the rest pay in and get nothing back – ‘skivers’ against ‘strivers’; dishonest scroungers against honest taxpayers; families where three generations have never worked against hard-working families; people with their curtains still drawn mid-morning against alarm-clock Britain; ‘Benefits Street’ against the rest of the country; undeserving and deserving; them against us. We are always in work, pay our taxes and get nothing from the state. They are a welfare-dependent underclass, pay nothing to the taxman, and get everything from the state.

But we don’t need made-up examples to know that arid picture of unchanging lives is wrong. We know from our own experiences, those of our families – and from TV soap operas and nearly every novel – that people’s lives and circumstances change, and what we get out and put in changes over our lives.

It remains true that people starting advantaged remain much more likely than others to end up advantaged, and those who start poorer are more likely to end up poorer. But there is considerable variation and uncertainty around such average differences in life trajectories. This does not just include the long-term changes over the life cycle that we all go through, but also other variations and changes, from at one end the rapid variations many people experience in circumstances and need for support from week to week to, at the other end, the factors that affect the life chances of our children and our grandchildren.

As a result of all this variation in circumstances over our lives, most of us get back something at least close to what we pay in towards the welfare state. When we pay in more than we get out, we are helping our parents, our children, ourselves at another time – and ourselves as we might have been if life had not turned out quite so well for us. In that sense, we are all – or nearly all – in it together.

Good Times, Bad Times: The welfare myth of them and us is published by Policy Press. For further information, follow this link: Good times, bad times

About the Author

John HillsJohn Hills is Professor of Social Policy and Director of the Centre for Analysis of Social Exclusion (CASE) at the London School of Economics.

http://blogs.lse.ac.uk/politicsandpolicy/the-welfare-states-surprising-winners/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+BritishPoliticsAndPolicyAtLse+%28British+politics+and+policy+at+LSE%29

This is how the ‘annual tax statement’ SHOULD have appeared!

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05 Wednesday Nov 2014

Posted by Mike Sivier http://voxpoliticalonline.com/2014/11/05/this-is-how-the-annual-tax-statement-should-have-appeared/

We all owe a debt of thanks to Richard Murphy, over at Tax Research UK. He has broken down the information in George Osborne’s misleading ‘annual tax statement’ into its component parts and then put a new version together, under categories that more accurately describe the spending concerned.

Then he turned the information into a handy pie chart – similar to Osborne’s but with one major change:

This version is accurate.

Here it is:

141105richardmurphy1

Let’s just compare it with Osborne’s…

141105osbornetaxsummary

Big difference!

The most interesting to Vox Political is the perception gap between Mr Murphy’s calculation of the total proportion of tax spent on unemployment benefits – 0.67 per cent – and Osborne’s ‘Welfare’ heading, which constitutes 24 per cent of spending.

Talk to most people about ‘Welfare’ and they’ll think you mean unemployment benefits – so the Osborne chart will make them think that government spending on the unemployed is no less than 16 times as much as is in fact the case.

When a government minister exaggerates the facts by that much, he might as well come out and admit that he’s lying to the people.

Mr Murphy wrote: “This is the statement George Osborne would not want you to see because it makes clear that subsidies, allowances and reliefs extend right across the UK economy. And they do not, by any means, appear to go to those who necessarily need them most. The view he has presented on this issue has been partial, to say the least, and frankly deeply misleading at best.”

He wrote: “Add together the cost of subsidies to banks, the subsidy to pensions and the subsidy to savings (call them together the subsidy to the City of London) and they cost £103.4bn a year – more than the cost of education in the UK.

“It’s also no wonder house prices are so distorted when the implicit tax subsidy for home ownership is £12.6 billion a year.”

He also pointed out that unemployment benefits cost only half the amount used to subsidise personal savings and investments.

For full details of Mr Murphy’s calculations, visit his article on the Tax Research UK site.

Mr Murphy tweeted yesterday: “Almost every commentator now agrees that Osborne is going to spend a fortune sending out tax statements that are wrong. Why not cancel now?”

He won’t unless he’s forced to; he has a political agenda to follow.

That is why Vox Political launched a petition to achieve just that.

If you haven’t already, please visit the petition on the Change.org website, sign it, and share it with your friends.

ztaxleaflets

While you’re at it, feel free to share the infographic, created to support the petition:

ztaxleaflets

Please also read yesterday’s Vox Political article on Osborne’s ‘annual tax summaries’, if you haven’t already.

Austerity not so welcome when it hits the rich

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by stevehilditch http://wp.me/p1a6W6-TP

Labour has run into a little local difficulty with its Mansion Tax proposal. Perhaps the biggest problem is that, although the proposal is very popular amongst the general public, many of the people affected by it have easy access to the media – notably journalists themselves, so-called ‘celebrities’, and other powerful people. There are also large clusters of them in some inner London marginal Labour seats. So they can raise a stink in a few hours while it took months of extremely hard slog by a lot of people to get some coverage for the abomination known as the bedroom tax, which hit much poorer people much harder.

The latest ‘celebrity’ to get acres of coverage was the unutterably unfunny Griff Rhys Jones, who said he would leave the country if it is introduced. ‘Goodbye’ was the common Twitter response. This man made much of his money from the BBC at our expense and, although it appears he has carried out major improvement works to his home, its value (assessed at £7m by Zoopla) has risen with the tide of the property market rather than through his own efforts. The media has been full of the notion that people owning very valuable properties do so because of their ‘hard work’ and ‘prudence’ rather than a taxpayer-subsidised and economically damaging inflation which has given them a windfall. And, unlike most people, Rhys Jones always has the option of living on his yacht.

Property taxation is in a mess. The exemption of primary residences from capital gains tax – the only major class of asset to be exempt – costs the Treasury an estimated £10bn a year and is the key ‘subsidy’ to home owners. Council tax stops rising on homes worth £320,000 and more, they are all banded together. It is not progressive, which creates the extraordinary outcome that tenants living in ordinary homes pay as much council tax as a Russian oligarch living in a £20m home in Chelsea. Not only is this unfair but the system as a whole feeds rather than manages house price inflation.

Mansion Tax is one effort to tackle extreme housing wealth inequality. It is aimed at tackling wealth that is largely unearned and, so far, untaxed. It is one way of demonstrating that we are ‘all in this together’ and the money will go towards saving the most popular British institution of them all, the NHS.

Labour has thought through how it might operate in practice to avoid some of the pitfalls that have been identified. The threshold will rise in line with the general increase in value of such properties so more and more properties should not become subject to the tax. It will be a banded system rather than depending on valuation of each individual property, making it easier to administer. Home owners who are asset-rich but cash-poor (incomes up to £42k) will be able to defer the charge until the property is sold. Paul Dimoldenberg, the Leader of the Labour Group on Westminster Council, has revealed that there are only 61 H-band council tax payers in the borough who currently receive Council Tax Benefit, so the size of the problem seems manageable and is significantly less than some of the scare stories.

Ed Balls has already made it clear that the tax will be applied progressively. Owners of properties worth £2-£3 million will pay around £3,000 a year but it will rise above that, so the biggest burden will be shouldered by those owning the most valuable properties. It seems that the rate for £2m-£3m properties will be close to what people would have to pay if the other alternative – adding extra bands to the Council Tax – were adopted instead.

My own preference would be for a more thorough-going reform of property and land taxation, as I have argued on Red Brick before. I would prefer to see a more progressive Council Tax regime with more bands, with the additional income being netted off the grant received by councils from central government (so the benefit could be applied nationally).

The argument that the Mansion Tax is unfair on London has been widely repeated. But I agree with Paul Wheeler on this point: ‘Yes the mansion tax is a ‘tax on London’ but only to the extent that Corporation Tax on Banks is a tax on London because that’s where the money is’. Labour should not resile from the principle that the owners of the greatest wealth and the most valuable properties should pay more tax. There is still room for debate about how it should be applied. For example, the £2m threshold could be re-set by apply the proposed inflation-link retrospectively. Mansion Tax was first mooted at £2m about 4-5 years ago. It could be raised to take account of inflation since, taking a significant number of the ‘just £2m’ properties out of the scope of the tax. This would reduce the initial tax take but I think it would be seen as fair and would take some of the sting out of the political debate.

Whilst of course welcoming the extra money for the NHS that will come from the Tax, I must admit to some disappointment that, as a property tax, it will not be reapplied to boost housing capital spending. Previous commitments to boost housing grant for affordable homes – a share of the 4G bandwidth sale and a share of the bankers bonus tax – have quietly disappeared. Labour’s only specific commitment to raising housing grant is to give housing higher priority within existing capital programmes. That just doesn’t seem robust enough to meet the party’s commitment to build 200,000 homes a year by 2020.

Labour needs policies that end low paid and low skilled work

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By Tony Burke | Published: October 27, 2014

The UK has too many poorly performing workplaces, according to a new report

On October 23, the Smith Institute launched a report entitled ‘Making work better: an agenda for government‘ – an independent inquiry into the world of work by Ed Sweeney.

Sweeney of course is the former chair of the Advisory Conciliation and Arbitration Service (ACAS), former deputy general secretary of Unite and former general secretary of the finance union Unifi, now part of Unite.

The report, which runs to over 100 pages, is the product of a nine month inquiry involving research, interviews, discussion events around the UK as well as opinion polling.

It sets out the argument that the UK has too many poorly performing workplaces, with poor treatment of workers who Sweeney’s report states are “underpaid, over-worked and ignored”.

The report also argues that the UK has a “long tail of broken workplaces” which are holding back the recovery and costing the country billions in lost income and in the payment of welfare benefits to those out of work but also to those workers eking out a living in low paid, precarious and agency work.

The report has been welcomed by Labour, the TUC and EEF (the manufacturing employers’ organisation), who were all represented at the report’s launch: shadow business secretary Chuka Umunna for Labour; general secretary Frances O’Grady for the TUC and Judith Hogarth, head Of employment policy of the EEF

Sweeney’s report highlights the UK’s poor performance on a range of indicators, including:

poor productivity, with the USA, France and Germany being 30 per cent more productive than the UK;
a skills shortage and mismatch, with half of employees interviewed saying that their jobs do not make full use of their skills and abilities;
job insecurity with over half of employees worried about loss of employment or job status – the Office of National Statistics now estimates there are 1.4 million zero-hour contract workers;
stagnating pay levels – since 2004 wages for workers on the median wage or less have stagnated or fallen in real terms and since 2010 median wages have fallen by more that 6 per cent in real terms;
and 50 of workers interviewed said they faced unreasonable treatment, while 40 per cent faced disrespect from employers.

The report also recommends that the government should amend the Information & Consultation Regulations to giver workers a stronger voice and bring the UK into line with other EU countries.

The ICE Regulations are barely used by unions to establish these structures as they are dauntingly complex and unions usually face open hostility from some of the worst employers who do not wish to hear the views of their workers, never mind consult with them.

The report makes a series of important recommendations, including a new mandate for the Low Pay Commission to increase the national minimum wage towards 60 per cent of the median wage; a target for government of lift one million workers to the living wage by 2020 and, interestingly, a requirement on the government to promote the positive role trade unions play in achieving fair pay and giving ACAS the power to promote collective bargaining and good employment relations.

At the launch, the issue of collective bargaining was a major talking point, with a number of speakers and questioners (including academics and trade unions) arguing strongly that the restoration of widespread collective bargaining would do much to restore decent work and pay equality.

Speakers pointed out that this was always ACAS’s role (it was the Major government who scrapped ACAS’s role in promoting collective bargaining) and it would require significant political and financial support.

On the role of trade unions, Chuka Umunna said in his remarks:

“The report is right to highlight that trade unions have an important role to play here in boosting training, pay and conditions for their members and helping Britain win that race to the top.

“At a time of rapid global economic change and a cost of living crisis at home, it is vital that the UK continues to have strong and modern trade unions as a genuine voice fighting against discrimination and abuse.”

Building on Ed Sweeney’s report, Chuka Umunna also announced the setting up a further review of Labour’s policies in regard to the world of work, to be lead by John Monks, former head of the TUC and the ETUC, Douglas McCormick, former MD of Atkins UK Rail and Alison Downie, head of the Employment Department at Goodman Derrick LLP.

Frances O’Grady hit the nail on the head at the launch when she said:

“With so many facing stagnant pay and too many new jobs made insecure through zero-hours contracts, agency working or low value self employment, we won’t fix the economy without fixing the workplace.”

Labour has to recognise that in order to win the election and win back working people, there is crying a need to promote clear policies to end low paid and low skilled work; but also to end exploitation, firmly regulate precarious work and create decent employment in decent workplaces.

Tony Burke is assistant general secretary of Unite
http://leftfootforward.org/2014/10/labour-needs-policies-that-end-low-paid-and-low-skilled-work/#more-89607

Increase in number of people on low pay

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Increase in number of people on low pay
By Left Foot Forward | Published: November 3, 2014

The number of people on low pay has risen by 147,000 to 5.3 million in the last year, according to a study by KPMG.

Childcare vouchersjThe research indicates that 22 per cent of employees are now earning less than the Living Wage – up from 21 per cent last year.

According to the data, part-time, female and young workers are the most likely to be earning a wage that fails to provide a decent standard of living.

The research, conducted by Markit for KPMG, also found that the proportion of people earning less than £7.65 per hour (£8.80 in London) is higher amongst part-time workers. More than 4 in 10 part-time workers take home less than the Living Wage, compared to 13 percent of full-time employees.

There are also more part-time roles paying less than the Living Wage (2.98 million) than full-time jobs (2.29 million), despite making up less than a third of all UK jobs.

The research revealed that during October of this year almost three times as many people who earned less than the Living Wage (29 per cent) reported that their household finances had worsened over the month, compared to just 10 per cent who saw an improvement. Meanwhile, twice as many people who earn below the Living Wage (18 per cent) reported an increase in their need to borrow, compared to 9 per cent who saw a reduction.

The financial outlook for many remains bleak. Five per cent of those earning less than the Living Wage said they expected to see their household finances worsen between now and November 2015. Almost a quarter (22 per cent) also reported fears over job security.

Commenting on the research, head of Living Wage at KPMG Mike Kelly said:

“Although there are almost 1,000 organisations pledged to pay a Living Wage, far too many UK employees are stuck in the spiral of low pay.

“With the cost of living still high the squeeze on household finances remains acute, meaning that the reality for many is that they are forced to live hand to mouth. Inflation may be easing, but unless wages rise we will continue to see huge swathes of people caught between the desire to contribute to society and the inability to afford to do so.

“For some time it was easy for businesses to hide behind the argument that increased wages hit their bottom line, but there is ample evidence to suggest the opposite – in the shape of higher retention and higher productivity. It may not be possible for every business, but it is certainly not impossible to explore the feasibility of paying a Living Wage.”

http://leftfootforward.org/2014/11/increase-in-number-of-people-on-low-pay/