Archive for the ‘Boris Backs Living Wage’ Category

Growing British Economy under Tories: M.Webster

jeudi, avril 23rd, 2015

There is too little understanding in the British public of the reasons that, under the Tories, the British economy is increasing by over 2% per year, while there is economic stagnation in most of the rest of Europe.

An important one is the reduction of bureaucratic administration. A BBC review of the French community in London revealed that the greatest motive for moving to London was the greater sense of freedom it offered them from the delays and constraints of life back home.

It is this, in a world where innovation has become a dominating theme in the economic world, which has given the impulse for Britain’s economic growth. It has taken a firm lead in the field of « Start-Ups ». It has several outstanding centres of excellence such as Cambridge and Hackney; being a major financial centre is also providing the venture capital to finance promising, innovating enterprises. This spirit of independent initiative goes deeper; 8 million people are now working alone.

Suffering under the handicap of austerity budgets the Government has nevertheless shown vision by several major undertakings: London?s Crossrail; The proposed HS2 high-speed line to the Midlands: The project for improving the rail system in the North.

This is part of their economic planning to reduce the disparity between North and South England. This includes plans to devolve power to the major cities, so that they will have restored to them authority over education, local planning and taxation etc. which were lost during the World Wars. This has already taken place in the case of Manchester. A number of Northern industrial towns have had their centres rebuilt. There are increasing signs of a return to industrial activity in the North.

Five years is not a long time in terms of economic trends. But in this time the Conservatives have planted the shoots for a British revival based on the principles of liberalism, of individual initiative and endeavour, relatively untrammeled by heavy bureaucracy and taxation.

A Labour victory in May would see a return to Socialist principles, risking a return to the static conditions we have witnessed in France.

Michael Webster
BCiP Member

The Government’s Record – by Robin Baker

mardi, avril 14th, 2015

Elections are decided on the personalities of the leaders of the parties, on the policies that they put forward but, above all, on the record of the government that has been in power up to the election. So let us have a look at what the Conservative led coalition has achieved and how the electorate should react to it.

The vital issue is the economy and the Conservative Party identified the Labour government?s budget deficit as the problem that they had to resolve.

Historically Conservative governments have always been strong in balancing public expenditure with the government?s revenue receipts. Under the Thatcher government, the 1990 budget was in surplus by £6 billion and the national debt stood at 27.7 per cent of GDP.

Gordon Brown, as Chancellor and as Prime Minister, decided to impose a ?Golden Rule?. This required the government to generate a budget surplus across the lifetime of an economic cycle. Unfortunately Labour?s inherent commitment to government spending was too strong, and they got round this commitment by defining the economic cycle to suit their own ends. So when the Coalition Government came to power in May 2010 it had inherited a budget deficit of £153.5 billion, 10.2% of GDP. Total expenditure was £673 billion, so the government was borrowing 23% of what they spent. In his June 2010 emergency Budget speech George Osborne said « As this is the last Budget in which the Golden Rule will appear, I would like to be the last Chancellor to report on it. We are set to miss the Golden Rule in this cycle by £485 billion. »

Conservatives believe that government deficits must be controlled not just out of blind adherence to political dogma but for sound practical reasons. Firstly higher government borrowing pushes interest rates up to a higher level than they would otherwise be, and that reduces private sector economic activity. Secondly, high borrowing results in pressures to increase taxation and taxation, however necessary, also reduces growth in the private sector economy. Finally increased public borrowing increases the National Debt, which requires greater government expenditure to service it. Those of us who live in France, of course, know all of that full well. So the government?s achievement on reducing the deficit to what is expected to be £90 billion in 2014/15, is strongly to be welcomed.

This has contributed to the trend for employment to rise and unemployment to fall that we have seen since late 2011/early 2012. There are currently 30.9 million people in work, 2 million more than when the government came to power. The official employment rate, i.e. the proportion of people aged from 16 to 64 in work, is 73.3%

The proportion of the economically active population who are unemployed (the unemployment rate) is 5.7%, compared to 7.8% when the government took office.

So the theory set out above works, and the reduction in the public deficit has yielded significant benefits to the UK economy. The painful austerity programme is not just adherence to political dogmatism that deserves public rejection, as our opponents would have the electorate believe, it is beneficial to the country as a whole, and particularly to those two million extra people who now have jobs.

Robin Baker
BCiP Member

Marginal Constituencies Win Elections

lundi, février 24th, 2014

Have a browse of the interactive BBC News link below.

It lists the marginal seats which could decide the next UK General Election in May 2015.

« government majorities are made or broken in the relatively small number of marginal seats with small majorities that change hands at elections ».

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.

Boris Johnson Backs UK Living Wage

jeudi, novembre 7th, 2013

Having decided that it has lost the argument to the governing Coalition on competence in managing the British economy as it returns to growth, the opposition Labour party has switched its attack to the cost of living crisis for the ?many? who, unlike the rich in society, are not sharing the benefits of growth. The opposition leader?s charge is that the link is broken between growth and living standards in what he described as a Wonga (payday loan) economy, symbolizing a cost of living crisis for poorer families. This has received popular support and represents dangerous ground for the government which, in wanting to be seen to be doing something, is moving into an area where Labour is currently strong.

The government under opposition pressure had to respond to the freeze on energy (electricity) prices proposed by Labour e.g. by a planned review of ?green? energy subsidies included in the price to the consumer as well as the overall competitiveness of the energy market. The water companies have also been asked to review any price increases they might have been planning to implement.

Overall public perception that something is really being done about the cost of living remains important, however, and this is where the popularity of the charismatic Mayor of London Boris Johnson can play a major role e.g. in demonstrating his practical support for paying the living wage. It is appropriate that London which is experiencing first and disproportionately the benefits of growth in the economy, should be taking the lead (as demonstrated by the Mayor) in encouraging more and more employers to pay the living wage rate and help households cope with rising bills. Quoting Boris Johnson, paying the living wage makes ?pure economic common sense? (less staff turnover and more productive) although he does not think it should be compulsory.

Comparing the additional peer and customer pressures on employers to voluntarily pay the living wage when their business allows, with the more prescriptive policy of Labour to legislate through a tax credit, the latter would place an additional administrative burden on HMRC to ensure compliance. This Labour approach also brings to mind the tax credits of Labour Chancellor Gordon Brown which boost the wages of the lower paid but again effectively provide a subsidy for employers via the tax payer. Finally, making the payment of the living wage compulsory through legislation (as for the minimum wage) could lead to layoffs of workers by firms still not able to absorb the additional wage costs.