Archive for the ‘Fairness’ Category

Government focus on the causes of poverty

Jeudi, octobre 15th, 2015

Here’s an interesting article by Tim Montgomerie in The Times of 15th October, 2015 on

“Lies, damned lies and poverty statistics”:


“The Tory plan is to supplement income-based measures of poverty with assessments of “life chances”. Applying the five pathways to poverty that the Centre for Social Justice popularised, ministers will be required to focus on joblessness, educational failure, family breakdown, indebtedness and addiction as the causes of poverty.”

“The illusion that poverty is in retreat just because benefits have been increased by 2, 5 or 10 per cent will be buried. Poverty only retreats on a sustainable basis if the private sector creates jobs, if pupils acquire real skills and if more children live in happy, stable homes. There will no longer just be a speedometer on the welfare dashboard — there’ll be a fuel gauge, a sat-nav and a lot more warning lights. The drive against poverty will, it is hoped, get a good deal more sophisticated.”

http://www.thetimes.co.uk/tto/opinion/columnists/article4586139.ece?shareToken=84a3405c655dda081c72e17de6244e25

David Cameron in Birmingham - by Michael Webster

Mercredi, octobre 8th, 2014

Prime Minister David Cameron is to be congratulated on the excellent speech he delivered at the Conservative Party’s 2014 conference in Birmingham, in marked contrast with Ed Miliband’s very poor one.

Interesting to note that he has promised $40 billion of spending cuts over two years, compared with French President Hollande’s $60 billion, and specifies these will come especially from Welfare, which M. Hollande is unlikely to dare to do.

Mr Cameron has at the same time promised tax cuts. This he is able to do because of the successful revival of the British economy. The IMF has just reported very favourably on it, withdrawing its previous criticisms of the austerity policy and stating that the country had emerged from the financial crisis and was due to grow at a faster rate than any other developed nation.

This is such a contrast with the lack-lustre French economy and the now faltering German one, that it should prove to be a vital factor which will win us the election.

Michael Webster,
BCiP member

Sharing Tax Benefits of Growth with “Squeezed Middle”

Mardi, novembre 19th, 2013

Increasing income inequality in the UK, together with policies to protect low-income families and the lowering of tax rates on high earners to encourage less tax avoidance, have resulted in the top 50% of tax payers now contributing over 90% of total income tax collected. Indeed the top 1% (those earning over £160,000 per year) pay around 30% of total income tax and the top 10% almost 60%. These high earners are, therefore, funding by far the largest proportion of Britain’s public services.

Yet the opposition Labour party has threatened to return the top rate of income tax back to 50% (from the current 45%) should it be returned to power at the next General Election in May 2015. At the other end of the scale, the governing Coalition of the Conservative & Liberal Democrat parties is also progressively increasing the tax-free allowance to some £10,000 or more before 2015.

However, with the economy now finally developing a solid pattern of growth, in good time for the Conservative party to benefit at the 2015 election, where is the associated policy to demonstrate sharing the financial benefit of growth with a broader part of the electorate e.g. the “squeezed middle” income earners? Raising the higher (40%) tax rate income threshold is one answer, if the projected overall increase in tax returns from growth will allow, although there is still the need to pay for the costs associated with any “green” taxes diverted from the energy bills of hard-pressed British consumers.

How to Widen Tory Appeal?

Mercredi, juillet 31st, 2013

Tim Montgomery writing in The Times July 29th 2013, proposes Five Ways to Widen the Tory Appeal and Win the next general election in 2015.

He assumes that by 2015, voters are likely to see the Tories as a party of deficit reduction, welfare control and Euro-scepticism. The party’s 2015 election campaign would then need to reinforce these strengths as well as counter an anticipated Liberal Democrat claim that, but for them in the Coalition, the Tories would have governed for the rich and powerful. Therefore, he suggests the five key pledges below for the next Tory manifesto which must also put concern for the lower-paid at its heart.

1. No more tax on petrol or home energy bills
2. A higher pension and a lower welfare cap.
3. Help for more first-time buyers to own their own home.
4. More apprenticeships for Britain’s youngest workers
5. A referendum on Britain’s membership of the EU.

These pledges are aimed at reaching more voters (e.g. private sector workers, home owners and the grey vote) than at the last election in 2010, while leaving the door open to the possibility of a second Lib-Dem Tory Coalition, instead of driving the Liberal Democrats into the arms of Labour.

The article also identifies other issues on which the Tories could still be vulnerable and which are generally the major concerns of voters such as the Economy, Health, Education and Immigration. However, on the major issue for the Conservative party itself (but not necessarily the voters) of an EU referendum , the author could be considered rather optimistic in suggesting that by 2015 it is likely that both Labour and the Liberal Democrats will have matched Mr Cameron’s EU referendum promise to “trust the people”.

The risk still remains of the party descending into civil war over Europe e.g. if Mr Cameron has to compromise on his EU referendum pledge during Coalition negotiations in 2015. The Conservative party also needs to more clearly differentiate itself from UKIP by not linking the issue of uncontrolled immigration to membership of the EU.

Welfare Benefits - Separating Fact from Fiction

Vendredi, avril 12th, 2013

With the Welfare debate developing as a key policy differentiator between the major political parties, the on-line Guardian newspaper on Saturday 6th April, 2013 carried the interesting article below on the overall benefits system in Britain:
Benefits in Britain: separating the facts from the fiction

For 2011-12 it is estimated that 0.8%, or £1.2bn, of total benefit expenditure was overpaid as a result of fraud. This is far lower than the figures widely believed by the public, as revealed repeatedly in opinion polls. A TUC poll recently revealed that people believe 27% of the welfare budget is claimed fraudulently.

Hard to judge, and hard to generalise. There is a lot of movement in and out of work, so many Job Seekers Allowance claims are very short. More than 80% of claimants never go near the work programme because they aren’t on the benefit for long enough. A lot are off it in under six months. For disability benefits, there are a lot more long-term claimants, of course. In 2012, 18% of working-age households were workless; in only 2% had no one ever worked. More than half of adults in households where no one has ever worked were under 25. So although the proportion of households where no one has ever worked has increased recently, it is likely to be a manifestation of high and rising young adult unemployment.”

This has been followed by an article in the on-line Sun newspaper on Sunday 7th April:
Brits say benefits are too generous. Poll backs Tories’ attack on State handouts.

“SIX out of ten voters think State handouts are far too generous, a poll reveals today.
In a massive vote of confidence for David Cameron’s blitz on benefits, they think the PM is right to CUT them.
Most people believe at least HALF of claimants are not in genuine need and don’t deserve any help.

And they think striving families struggling on low incomes are being squeezed at their expense.
The huge public support for an overhaul of the welfare state is spelled out in a YouGov poll for The Sun.”

Then Alister Heath writing in the on-line City A.M. Monday of 8th April, 2013 sums it all up quite well by bringing together what he terms the HYSTERIA surrounding reform of financial services and welfare in his article:
Facts are vital to the debate on welfare and banking reforms.

“With some caveats, I’m broadly in favour of the coalition’s reforms to the welfare state, and wish the changes went further. Instead of helping the most vulnerable get back on their feet, the present system all too often traps them in poverty; it is also unfair to those who work. But I’m worried about Iain Duncan Smith’s decision to rely on complex computer systems, an area in which governments tend to fail.
What is clear is that the case for a return to personal responsibility should be made without seeking to demonise the vast majority of those on benefits. Nobody should feel the need to exaggerate the present system’s many woes.”

The Conservative party is currently “making the political weather” as they say and leading Labour on the issue of welfare reform. However, with the public generally in favour but apprehensive about the actual impact on individual hardship cases, there’s a need to concentrate on the facts and ensure successful implementation of the new welfare benefits system before the May 2015 General Election.

Public perception of an issue is important in politics but getting it wrong will make it too easy for Labour, very much on the defensive, to respond with e.g. their pantomime “nasty party” label for the Tories and throw away a clear lead with the public on this issue in the opinion polls.

Francois Hollande & British Family Allowances

Vendredi, janvier 4th, 2013

Most of those of us who are towards the right of the political spectrum have been chuckling happily at the latest embarrassment of François Hollande. For those reading this from outside France, a flagship part of the President’s election manifesto was to tax annual incomes above a million euros at 75%. But his proposal to enact this has been struck down by the Constitutional Council. In France, unlike England, income taxes are levied on households not on individuals. But this “super tax” was to be levied on individuals. So a couple who both had incomes of 900,000€ would not pay this extra tax but a couple, with only one earner of over a million but with a significantly lower joint income than the other couple, would pay it. The Constitutional Council would not accept this because it was unfair.

For those of us who follow British politics, doesn’t that ring a bell? It does for me, in part because of a conversation I had with a member of my family recently in England. There the Government has, very reasonably in my view, decided to claw back all or part of the family allowances paid to the better off. But the amount the family will lose will depend on the income of the parent who is the higher earner, regardless of the income of the other. So, just as under the Government’s proposal in France, a couple with two earners each on £40,000 a year will not be penalised, whereas a couple where one of them earns £60,000 p.a. while the other stays at home caring for their children, will be.

We do not have a Constitutional Council in the UK; we rely on the good sense of ministers and parliamentarians under our system of parliamentary sovereignty. In general I believe that this system serves us well but, this time, it has let us down, badly. So has the Government. Of course, we are told, it is all very difficult, because we have separate taxation for husbands and wives. But the information, i.e. the income of both husband and wife, to make a system work fairly is known to the Government. If ministers had the power, when a senior civil servant tells them that something cannot be done, to find a more junior civil servant who can find a way in which it can be done and then make the two swap places, I believe that the problem would have been solved. As it would have been had David Cameron told Iain Duncan Smith that if he could not find a fair system, then he could not have his legislation and would have to raise the money elsewhere. All politicians know that there is no such thing as a tax that everybody considers fair. But that is no reason for adopting a system that everybody considers unfair.

The Government have done themselves electoral harm in two ways. Firstly the system is so daft that it has made them seem economically incompetent. And the battle for voters’ perception of economic competence is going to be a key element of the next election. Secondly they have stirred up considerable resentment among parents affected, many of who would otherwise have voted Conservative but who will certainly not do so now.

As the song has it: “Ain’t it all a blooming shame”.

Robin Baker

Hitech Manufacturing - BAE Systems

Mercredi, septembre 28th, 2011

With the British economy struggling for growth, defence company BAE Systems has now confirmed 2,942 job losses amongst its UK workforce as a further blow to the unemployment figures. These job losses which are aimed at reducing costs and maintaining the competitiveness of the company in international markets, have been blamed on government cuts, particularly in the budget of the MOD, with examples quoted such as the scrapping of the Nimrod air reconnaissance programme and the accelerated retirement of the Harrier vertical take-off aircraft. However, BAE Systems is also facing up to similar shrinkage of defence budgets in international markets and the cuts will , therefore, mainly affect its military aircraft division as a result of nations involved in the Typhoon fighter programme – the UK, Germany, Italy and Spain - cutting production rates.
Union officials have of course blamed the government cuts in the defence budget and described the job losses as a hammer blow to manufacturing, whilst the Business Secretary, Vince Cable, and his officials are trying to bring together the company, local authorities and local enterprise partnerships to ensure all possible support for those affected. The Shadow Defence Minister, Jim Murphy, is also demanding a fast response from ministers with a clear plan for action.
Now BAE Systems is a hi-tech manufacturing company in a market segment where the UK holds a significant competitive advantage. The government is also trying to rebalance the economy away from an over-reliance on financial services and towards e.g. manufacturing. In addition, once the highly skilled people in these jobs are let go the UK economy will be losing a precious resource of know-how for the future. Germany is much more protective of its key manufacturing resources and, during the financial downturn, Government, unions and employers came together to preserve jobs and maintain the skills base by short time working with the costs shared between government and employers. The UK should take a lesson from Germany which sets the benchmark for competitive manufacturing of high quality products.

Protection of Intellectual Property Rights

Samedi, février 26th, 2011

James Dyson, the British inventor and Chief Engineer of the Dyson Company (see also Categories/Chairman’s Blog/Fairness/Job Creation in the right hand index column), writing in the Sunday Times of 16th January, 2011 on protection of Intellectual Property (IP) rights, knows that ideas, technology and exports are key to reshaping the British economy with, as in Germany, manufacturing (& not just financial services) the driving force for recovery. Manufacturing he defines as the generation of unique goods to patent and export, independent of the location of final assembly i.e. on the model of Apple and Dyson. He views as promising, therefore, for the next generation of British inventors, the technical schools initiated by the Conservative peer Lord Baker and e.g. the engineering academy opened by JCB, the British construction equipment company. Citing China as a key market offering British exporters major opportunities, he raises the issue of how to protect IP rights.
Dyson in common with other technology companies invests heavily in research and development, the associated financial risk partly offset if it can rely on its ideas and products being protected. Taking protective action around the world is expensive and time consuming, its value based on being able to enforce the rules, assuming each country plays by the same set of rules. However, a robust and solid European Union patent system is continually undermined by e.g. companies in China (and China is said to be the worst offender) which continue to ignore this and other patent protection systems, steal IP and thereby produce counterfeit goods.
China apparently has indicated that it would do more to improve IP protection, wanting to increase the number of patents it grants to 2 million by 2015. With proper enforcement of IP law China would also be a fairer and more hospitable trading environment for the Dyson Company. The Asian taskforce established before the November last visit of David Cameron to China, is proposed as having a crucial role to play in influencing action on fair , global trade by all parties involved.

Squeezed Middle

Lundi, janvier 24th, 2011

One of the first sound-bite attempts of Ed. Milliband, as the newly elected Labour party leader, focussed on the Squeezed Middle of the British electorate for his future national election prospects, although he lost some credibility when questioned due to not being able to more precisely define what he meant by this part of the population. Indeed, the squeezed middle according to Mr Milliband seemed to include anyone neither very rich nor very poor i.e. just about everybody else or perhaps the 75% in the middle who also contribute around the same proportion of total income tax taken by the government. It is interesting then that Reuters today (24 January, 2011) issued a report on Life in Europe’’s Squeezed Middle.
In summary, even as Europe has begun to grow again, the global financial crisis which has adversely impacted tens of millions over the last three years is still influencing people and households to watch their budgets, save more and avoid over-extending. The plans and hopes of a generation are seen as having been scaled back and, even if the general economic situation improves, will affect the continent of Europe for years to come. Examples of the experiences so far of austerity affecting relatively affluent people are described for Spain, Germany, Greece, Romania and Britain. In Spain, working Spaniards are facing the fact that they will not be as rich as their parents. Germany is booming again but the experience of being forced to work shorter hours to keep more people employed has left many workers scarred. In Greece, there is a growing wave of emigration. For those Romanians who managed to avoid getting into too much debt from the wide availability of cheap credit, when Romania was the fastest growing economy in the EU two years ago, there are hopes for a better year ahead.
Addressing Britain, the example from the squeezed middle is a young mother with two children and currently unemployed but, thanks to the British policy of mixing affordable social housing with high-end real estate, receiving a subsidy from an independent, not-for-profit housing association to live with her family in one of the most expensive areas of London, next to Westminster Abbey and Big Ben. She, her partner and two children are currently insulated from the impact of the cap on housing benefit introduced by the government as part of the £81 billion public spending cuts. However, their monthly rent of £600 is only a third of what they could be charged on the private market if they were forced to move. That said their annual income of £32,000, just above the national average, comes largely from her partner who works for the London police but is concerned about the security of his job, given the 300,000 public sector positions expected to disappear with government budget cuts, including thousands in the police force. Even if he keeps his job, he will find his pay frozen for the next two years and be paying more into his pension fund. This squeezed middle family is, therefore, already cutting back on unnecessary expenditure before they start feeling the effects of the government cuts.
Considering the examples taken by the Reuters reporters, the squeezed middle covers a rather broad spectrum of which one imagines Conservative party strategists are already well aware. It also seems apparent that although the Office of National Statistics is attributing to the bad weather the unexpected 0.5% contraction in UK GDP for the last 3 months of 2010, the economy currently appears to be stagnating with the squeezed middle concerned about the future and, therefore, cutting back and spending less, offsetting somewhat e.g. the 1% or so growth in manufacturing.

Attack on Aspiration?

Mercredi, décembre 29th, 2010

Bagehot writing in The Economist magazine of the 18th of December, finds it a shocking failure for a Conservative-led government that, in too many families, its plans for increased tuition fees are seen as an attack on aspiration. The government is said to have been too much on the defensive in the tuition fees debate and should have turned the argument around more and better presented its case that e.g. students will also be more empowered to shop around for the best value for their degree courses. This approach could then link increased tuition fees together with more decentralisation and power to local government, a volunteer-based Big Society and the more autonomous Free Schools, within a single, radical and Conservative concept aimed at limiting what should be expected from the State.
The opportunity is there to win such an argument if one considers the results of an opinion poll by ComRes, taken just after the first student protests in November. Although 70% of the public agreed that higher fees will deter poorer young people from applying to university, the same poll found that 64% of the public agreed that students should share the burden of public sector spending cuts.
Some Conservatives believe that higher tuition fees will empower students because the resulting higher, upfront loans, repayable only after the recipients are earning above a certain level, will in practice encourage students to seek out those courses seeming to offer the best value for money in getting a degree. Such competition for students will in turn force colleges to improve their teaching and offer innovations such as shorter, more intensive courses, courses more tailored to meet the needs of prospective employers, thereby making degrees more accessible not less.
As it is, the Independent School sector is already preparing itself for the impact of increased university tuition fees, which could force middle-income parents to think twice about private education in order to save for the university stage of education. There is concern about competition from top state and grammar schools when children could be withdrawn from private school e.g. at the 6th form stage to cut costs before a degree course. The Education secretary is also planning to allow high-achieving comprehensive and grammar schools to expand, which will in turn create more places for those who might otherwise have gone for private education. Although the independent sector is responding e.g. by freezing school fees for next year, there is concern that Independent Schools will instead become much more the domain of the elite, with middle-income parents hardest hit.
In the case of the poorest would-be university students, Professor Eric Thomas, Vice-Chancellor of Bristol University and the next president of Universities UK, thinks that students from families on the lowest incomes should not pay tuition fees, in order to allow university Vice-Chancellors to charge other students the maximum amount. Therefore, he plans to scrap fees for the poorest students in an effort to widen participation, arguing that applicants from disadvantaged backgrounds do not want to get into debt. Indeed there is evidence from Ivy League universities in the US that the most effective way of increasing social mobility is to excuse those in most need from paying for their own tuition. In the case of Bristol University, the Vice-Chancellor proposes not only waiving tuition fees completely for the poorest students but also covering the cost of maintenance for such students. Professor Thomas also thought it apparent that as higher education was expanded in the past, it would not be possible for the taxpayer to carry all the cost, therefore making it inevitable that fees would have to increase.
The Higher Education White Paper is expected to set out rules governing universities that choose to charge fees above £6000 per year; there will have to be proof that the additional income is being used to increase numbers of students from low-income families.