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Saturday, September 23, 2017

Those Brexit blues

Perhaps the most unreal experience following Theresa May's Brexit concession speech in Florence yesterday was listening to all the hard line Brexiteers continue to spout the line that a promised land of milk and honey for the UK economy awaits us once we leave the EU.

That well-known champion of the under-privileged and sole saviour of the developing world's falling birth rate, Jacob Rees Mogg even suggested that in a post-Brexit world, the price of essential food stuffs would be lower.

He apparently overlooked one of the most marked effects of the referendum result, a falling pound which has put up the price of these staples and undermined the cost of living still further.

Today's Independent records yet another effect of Brexit, which its most ardent advocates seem to have overlooked, namely the fact that the UK's credit rating has been downgraded by Moody's Investor Service because of economic uncertainty caused by us leaving the single market.

They say that the downgrade came just hours after a major speech by Theresa May in which she had hoped would clarify the UK's position on Brexit. So that was a great success then!

The paper says that Moody's warned of "uncertainty for businesses" and said the current plans for Brexit will cause the "erosion of the UK's medium-term economic strength":

In a damning assessment of the Government's negotiating strategy to date, analysts said: "Moody's is no longer confident that the UK government will be able to secure a replacement free trade agreement with the EU which substantially mitigates the negative economic impact of Brexit.

"While the government seeks a 'deep and comprehensive free trade agreement' with the EU, even such a best-case scenario would not award the same access to the EU Single Market that the UK currently enjoys.

"It would likely impose additional costs, raise the regulatory and administrative burden on UK businesses and put at risk the close-knit supply chains that link the UK and the EU."

Moody's added that Theresa May's deal with the DUP was another reason for the downgrade. That is the reality of Brexit, not the rose-tinted picture painted by Rees Mogg and his pals.

Friday, September 22, 2017

Why we need to scrap the public pay cap

Public finances remain in a mess, the economy has barely recovered from the 2008 crash and hundreds of thousands of people are struggling to make ends meet, with the in-work poverty and a reliance on food banks growing by the day.

The on-going public sector pay freeze has exacerbated this problem for those who have dedicated their working lives to keeping vital services going. This is especially harsh in the health service, where nurses, ambulance staff, junior doctors, professions allied to medicine and auxiliary staff have seen their commitment and dedication unrewarded for a number of years.

The scale of the problem is reduced to pounds and pence in this Independent article. They say that the average health worker has endured a real terms cut of almost £2,000 over the past seven years. They support this assertion by comparing the median average salary of all NHS staff in June 2017, which was £31,526 a year, with the like-for-like figure of £29,132 in August 2010. As consumer price inflation has risen by 15 per cent over that period, this translates into a real terms cut for these workers of £1,985 a year.

The average though, conceals that some NHS workers have suffered still bigger real terms reductions in pay. The pay of ambulance staff is down £5,286 in real terms and for midwives it is £3,504 lower. The Institute for Fiscal Studies believes that public services will struggle to recruit and retain the staff they need unless ministers ease the restraint on pay They say that the gap between public and private pay has now returned to pre-crisis levels.

It is little wonder that trade unions are balloting for strike action. The need to lift the pay cap for all public sector workers has never been more urgent. I hope that the Government heeds the many calls to yield on this demand so as to make those strikes unnecessary.

Thursday, September 21, 2017

Why we need to abolish the bloated, undemocratic House of Lords

Along with the introduction of a proportional voting system the creation of an elected second chamber to complement the House of Commons is the missing link in UK constitutional reform that needs to be addressed.

There are currently about 800 members who are eligible to take part in the work of the House of Lords. The majority are life peers and have therefore been appointed as a result of political patronage. That is an unwieldy and unworkable body. It is little wonder that a large number rarely, if ever show their face in the chamber.

According to the Independent, Peers who have barely spoken in the House of Lords for an entire year have claimed more than £7m in expenses and allowances. They report on an Electoral Reform Society analysis which found that 115 peers – around one in seven – failed to speak at all in debates during the 2016-17 session, despite claiming more than £1.3m in attendance fees.

They add that nearly half of the 798 peers made 10 contributions or fewer in the same year, claiming £7.3m, while some £4m was pocketed by 277 members who spoke five times or fewer. Claimants included Northern Ireland peer Lord Laird, who got £48,000 in expenses despite only voting twice, and steel magnate Lord Paul who spoke twice while claiming £38,000 in expenses.

Work is ongoing to draw up proposals to reduce the size of the Lords, but that is effectively just tinkering with the system. We need to rid the UK of this bloated, undemocratic body and replace it with a democratically elected second chamber which reflects the geographical make-up of the UK and which is at least accountable to the people who pay for it.

Wednesday, September 20, 2017

Our ever increasing debt burden

The Guardian reports that the chairs of two powerful parliamentary committees have urged the government to set up an independent public inquiry into the £200bn of debt amassed by households.

The paper says that the £200bn of debt amassed on credit cards, personal loans and car deals is now at the same level it reached before the 2008 financial crisis and there are fears that rises in interest rates could put more households under pressure. Mark Carney, the governor of the Bank of England, warned on Monday that interest rates were likely to rise in response to rising inflation and skills shortages brought on by Brexit that will increase pressure on wages.

They add that the Money Advice Service believes that there are now 8.3 million people in the UK with problem debts. The government’s official economic forecaster, the Office for Budget Responsibility, has predicted that unsecured consumer debt – which includes loans, credit cards, overdrafts and car financing – will soar as a proportion of national income over the next four years back above its previous peak in 2007.

The two MPs are right to be concerned. The problem has been made worse by the freeze on public sector pay, the general fall in living standards since 2008 and the level of in-work poverty. People are borrowing to make ends meet and the market is allowing them to extend themselves beyond their means.

In my view, the government and the various select committees already have access to the information they need to start tackling this problem. A further review by the Treasury Select Committee may well add to that. I am not sure that the expense and delay involved in  a public inquiry will add much value to the debate on this subject.

As Vince Cable says, “The government must also immediately implement its manifesto commitment to introduce a ‘breathing space’ for people with problematic debt, conveniently forgotten since the election but now more urgent than ever.”

They also need to lift the cap on public sector pay, overhaul the regulation of financial markets and crack down even more on payday lenders and extortionate interest rates. The key to this however is economic recovery. Our economy remains sluggish. We need some investment in major capital projects to kick start it as well as a realisation that if we leave the EU then things will only get worse.

Tuesday, September 19, 2017

Why housing has to be a Lib Dem priority

Today's Guardian highlights a speech by the head of the National Housing Federation, David Orr in which he stresses the urgency of tackling the social housing crisis facing the UK. To be fair he is actually talking about England but some of the problems and issues he raises apply to Wales as well.

He says it is “absurd” that the government is spending less on social housing in England now than in the 1990s while paying increasing sums to private landlords via housing benefit:

“There’s more than a billion pounds that remains unspent on Starter Homes. Let’s put this money to use and let housing associations build 20,000 of the genuinely affordable homes the nation needs.”

Orr, who is chief executive of the federation, is expected to argue for a complete shift in government policy.

Since 2010 the government has overseen a massive reduction in the provision of homes for social rent, instead focusing on “affordable” rents, which can be as much as 80% of the market value.

A report by the federation, produced to coincide with the conference, says the amount of capital committed by the government to homebuilding has fallen from £11.4bn in 2009 to £5.3bn in 2015.

In combination with this, the decision to stop public funding for social rented homes led to a decline in construction of these from 36,000 starts in 2010/11 to slightly over 3,000 the next year.

The report says the only new social rent homes now are coming either from previous funding commitments or through cross-subsidies within housing associations projects, amounting to just under 1,000 starts in 2016/17.

It says the increase in rented housing stock has instead come from the private sector, with a 57% rise in real terms over the past two decades.

In Wales we are also facing a supply-side crisis. The Welsh Government has a commitment to build 20,000 new affordable homes, partly as a result of the progressive agreement with the Liberal Democrats that brought Kirsty Williams into the government. Work is underway on another Lib Dem commitment to bring in a 'rent to own' product that will enable somebody to rent a property at a market rent, with a percentage of that money being made available as a deposit after five years to help them get a mortgage.

The Welsh problem however is that there are not enough private sector homes being built. That is because lower house prices means that the big builders have smaller profit margins.. The solution must be to do more to assist smaller indigenous house builders by removing barriers, simplifying planning regimes, helping them access finance and making land available.

This is a priority for the Welsh Liberal Democrats. It must be a party priority in England too.

Monday, September 18, 2017

Is the DUP deal on the skids?

As far as we are concerned Theresa May's so-called 'pact with the Devil' deal with the DUP to secure a majority in the House of Commons looked like a done-deal. That was before the DUP voted with Labour against the Government on the issue of tuition fees.

Gina Miller who, heroically, took the government on over the need for Parliamentary approval to trigger Article 50, has been doing some digging and has discovered that things are not as signed, sealed and delivered as the Tories would have us believe.

As she says in her Guardian piece, she felt it was necessary to test whether the deal was within the law:

'To our great surprise, the government’s lawyers responded by making an extraordinary admission. “No additional funding contemplated by the agreement [with the DUP] has yet been made available and no timetable has been established for the provision of funding,” their letter said. “We have also explained that additional payments contemplated by the agreement will be authorised by parliament.”

We were stunned. At no time, either when May struck the deal with the DUP or since, had the government admitted it required prior parliamentary authorisation before taxpayers’ money could be handed over to Northern Ireland. By never disclosing this crucial detail, senior members of the government look very much as if they had intentionally misled parliament, the parliamentary Conservative party, the public and, quite possibly, their prospective partners, the DUP.'

She continues: 'I question when, if indeed ever, the government intended to tell the truth, especially when both parties have repeatedly said that the first payment to Northern Ireland would be made this autumn. Both parties may well have claimed there is nothing “new or surprising” in what I have revealed about the £1bn payment, but their legal team told a different story. “Proposals for central government funding are put before the House of Commons in the form of main and supplementary estimate,” they said in their letter. “Estimates are subject to a vote in the House of Commons and are typically subject to debate in that house.”

Something just doesn’t add up. On the one hand, senior DUP members were vocal about pressing for a payment as soon as this October, but the central government supply estimates 2017-18 covers supply estimates for the year to 31 March 2018, which would mean the new legislation permitting this payment, even if as the government suggest “is a mere formality”, would not allow for it until the next financial year, commencing April 2018. Similarly, the budget doesn’t take place until 22 November, so it looks like the government’s IOU is getting bigger by the day. This doesn’t speak very well to the government’s commitment to open dealings with its parliamentary partners, nor its sense of accountability to parliament and the public. With the government saying that no timetable has been set for parliamentary authorisation of this additional payment to Northern Ireland, the question remains: when?

We need to be absolutely clear about what all this means. Last week, the government asked MPs to approve its keystone European Union (withdrawal) bill, granting it sweeping new “Henry VIII” powers that will allow ministers to meddle with our basic freedoms as they see fit, away from parliament and the scrutiny necessary to ensure our rights and protections are not diminished or extinguished. MPs need to fear the worst when it comes to what this government may do without proper parliamentary scrutiny.

As the Guardian says elsewhere, any parliamentary debate about the extra funding required would allow Labour and other opposition parties to exploit the government’s embarrassment at having to get this deal rubber-stamped. No matter how unhappy they are with working on a supply and confidence basis with the DUP, Tory MPs are unlikely to rebel on a matter that guarantees the safety of the government, but they will undoubtedly squirm as every detail of the agreement is taken apart by MPs.

As Gina Miller says, the British public deserves better than a government blatantly attempting to put itself above the law and seeking to bypass parliamentary scrutiny simply to cling to power. She adds: 'If there is one lesson to be learned from all this, it is that we need to watch this government – and all future governments, for that matter – like a hawk, and be prepared to ask awkward but legitimate questions. The price of liberty, as Thomas Jefferson so rightly said, is eternal vigilance.'

Sunday, September 17, 2017

Boris repeats the £350m lie

All the attention on Boris Johnson's 4,000 word article about Brexit has been on how it positions him as a potential challenger to Theresa May. Indeed, as the Observer points out the piece appears to have achieved the desired effect with Tory MPs infuriated at the challenge and, in some cases at Theresa May for not sacking her foreign secretary.

However what Boris had to say is also significant, not least the repetition of the lie that leaving the EU will nets an additional £350 million pounds for public services. In fact during the referendum campaign it was shown conclusively that the net benefit to the UK is likely to be just over £100 million pounds.

When this lie was emblazoned on the side of a bus and repeated by senior Brexit campaigners they at least had the advantage of not being in government, thus they could not be pinned down on the claim or properly scrutinised by Parliament. Boris Johnson though is a member of the UK Cabinet and holds one of the three great offices of state.

The fact that Theresa May has not contradicted his claim or sacked him ties her government into the 'promise' that Brexit' will yield an additional £350m for her to spend on front line services. It is now legitimate to expect that extra investment and to hold the government to account if they do not deliver.

Has Boris Johnson found the elusive 'magic money tree'.

Saturday, September 16, 2017

Government needs to reform lobbying act

Very few people will argue with the view that charitable organisations should avoid getting embroiled in party politics but the current law goes too far in restricting the way they are able to carry out their work in the run-up to a General Election. That is not just my view nor that of the charities themselves, it is also the view of a government appointed body given the task of reviewing the Lobbying Act.

Many campaign groups believe that they will be left unable to speak out for vulnerable and marginalised people in society because the law as it his currently cast has a chilling effect on freedom of speech.

The Lobbying Act restricts what non-governmental organisations can say in the year before a general election. However, Conservative peer, Lord Hodgson of Astley Abbotts who was asked to look at the Act has called for its scope to be reduced to include only activity intended to influence how the public vote. He has also called for the period during which its rules apply to be reduced from a year.

He has to be right. If the law prevents charities doing their job then it needs to be changed. The Government must listen.

Friday, September 15, 2017

How Brexit is devaluing the pound in our pocket

The new £10 note has been launched today, complete with a portrait of Jane Austen on the reverse. Ironically, the fact that it is 15% smaller than its predecessor also reflects the fact that it is 16% less valuable.

As the Independent points out, since the referendum on 23 June 2016, the pound has lost 16% of its strength as measured against Britain's main trading partners. As a result today’s new tenner is only worth £8.60 of pre-referendum money on the international markets.

As Eloise Todd, CEO of pro-EU campaign group Best for Britain, says: "Since the referendum on 23 June 2016, the pound has lost 16% of its strength as measured against Britain's main trading partners. So today’s new tenner is only worth £8.60 of pre-referendum money on the international markets,” she said.

"When it comes to what we can buy in Europe, the decline against the euro is even more dramatic: down to under £8.40.

"This represents much more than a squeeze on spending money for a family holiday. The Ministry of Defence is planning to spend £19 billion on equipment priced in dollars and £3 billion on equipment priced in euros over the next decade. The Brexit devaluation means either getting less – potentially leaving our forces under-equipped – or paying more, so starving other projects of money.

"The exposure of the NHS to the costs of the Great Brexit Devaluation is almost certainly even greater. The British Medical Association says that Brexit is already having a ‘negative impact’ on the NHS and poses ‘serious risks’ in the future.

"In other words, today's new tenner will buy Britain's NHS, Britain's armed forces and millions of British holiday makers £8.60's worth of pre-referendum goods and services."

So good job, Brexiteers. Their obsession with leaving the EU has sold the UK down the river again.

Thursday, September 14, 2017

Welsh Government comes under fire on sustainability of M4 extension

It is not unusual for the Welsh Government to face criticism for their plan to build a huge M4 by-pass around Newport to remove congestion on the existing motorway.

The Welsh Liberal Democrats are already on record as opposing this development. We are opposed to the route as it infringes on five SSSIs, to the fact that once more the Government is investing in polluting motor vehicles instead of public transport and that the whole development is contrary to the Wellbeing of Future Generations Act, which advocates a sustainable future for Wales.

I would add that the congestion on this stretch of the M4 is no worse than that around Port Talbot and Swansea, but the former gets priority because it benefits Cardiff. Yet another example of the Cardiff-centric bias of Welsh Government.

I am heartened this morning to find yet another ally in our opposition to this new motorway. As the BBC report, the future generations commissioner, a one time Labour activist and Councillor in Cardiff, has set out her opposition to the plan.

Sophie Howe argues that Welsh ministers are misinterpreting their own legislation in their case for a new motorway in Newport and that they could be setting a "dangerous precedent" in the way they have interpreted the Future Generations Act:

The Future Generations Act, which also created Ms Howe's job, requires ministers to take into account the economic, social, environmental and cultural impact of any policy decision.

Ms Howe, who has already raised objections to relief road, said the Welsh Government's QC, Morag Ellis, was wrong to suggest to the public inquiry that there would have to be trade-offs between those issues when deciding whether to press ahead with the new motorway.

In a letter to the public inquiry team, Ms Howe wrote: "I fully recognise the challenge of transitioning from a traditional approach (when the idea of a new section of motorway was conceived) to this new innovative and revolutionary way of working in the Act, but I believe that we must all rise to the challenge to ensure the benefits foreseen by the Act are fully realised.

"Business as usual is no longer an option.

"As I previously said the M4 project, given its scale and importance, must not set the wrong example which could permanently damage the spirit of the legislation."

Isn't it time the Welsh Government dropped this plan.

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