I’m not drinking to this

It’s difficult to avoid the conclusion that David Cameron brought forward a statement about a consultation on a new Alcohol Strategy to try to get the media attention off the budget. This was only the fourth time in the last ten years that a government statement had been made on a Friday. The other three occasions had been on the Iraq war, swine flu and Libya.

The budget was presented as ‘fiscally neutral’ – that is, the amount of extra tax being collected from some is the same as that given away to others. Noticeably, the terms ‘we’re all in this together’ and ‘this is fair’ suddenly seemed to have disappeared off the agenda. It’s probably worth reflecting on who won and who lost as, clearly, millionaires won and millions lost. 

First, 14,000 people earning – or, rather, getting paid – more than £1m, or more, all got a tax cut of at least £40,000 a year. 300,000 high earners will gain an average £10,000 a year. Of those, only 4000 households a year will be caught by the increase in stamp duty.

By contrast, a family with children earning £20,000 will loose £253 a year, after the much publicized rise in personal allowances, because of the increase in petrol duty and the cuts in tax credits and child benefit. This will be the outcome for about 70,000 families in Sheffield alone. In addition, the VAT rise will cost the average family £450 a year.

Secondly, there was a £3 billion tax raid on pensioners. The freeze in the personal allowance for pensioners will see 4.5 million pensioners who pay income tax losing an average of £75 per year next April. People who turn 65 next year will lose out by £314.

However, there is a group of families who are really going to get a hammering who were not mentioned in this budget, because the decision to increase the eligibility criterion for working families’ tax credit was made last year, but only comes into effect from April this year. They will be losing up to a massive £728 a year.

In Sheffield alone, this will affect more than 2000 families. Bizarrely, government figures suggest that not a single one of these families live in Nick Clegg’s Sheffield Hallam constituency. No wonder, he felt able to say ‘Every Liberal Democrat can be proud of the Chancellor's Budget.’

Well, I’m not. And, I won’t be drinking to it either. And, it won’t be because of the Alcohol Strategy.

Youth challenge

We can all see the effects that cuts in public expenditure are having. What may surprise and concern you is that, by the end of this month, we will only have seen the effect of 6% of the cuts that the coalition government has agreed in the spending plans. Many families – especially low income working families – are going to start to experience massive reductions in their total income as cuts in working families’ tax credits and housing benefits begin in April.

Young people – and their families – were hit quickly, with the cuts to education maintenance allowances and the hike in tuition fees. This has been compounded by the massive rise in youth unemployment – already more than one million and growing; the highest since records began in 1992 – and £200 million cuts in youth services provided by local councils.

This comes despite the claim by Education Secretary Michael Gove that the Government is "protecting the frontline", and especially when we learn that Liberal Democrat (eg Kingston on Thames cut 100%) and Conservative (eg Peterborough 90% and Westminster 70%) controlled councils have made the biggest cuts in youth services between 2008 and now. The picture locally is mixed. Rotherham has cut by 58% and Doncaster by 20%, whilst Sheffield increased by 12% and Barnsley increased by 162%.

A report ‘Hidden Talents’ published this week suggests that attempts to get more than one million young people into work are being hampered by excessive bureaucracy, duplication and central government control. Young people aged people aged 13 to 24 receive support from at least eight different national organisations, who fund 33 different schemes and span 13 different age boundaries.

NEETs - young people, not in employment, education or training for more than 12 months - are growing at a faster rate than any other and have doubled in four years to 260,000. This means one in four young people out of work is now classed as long term unemployed and more likely to be living on benefits in later life. If the government is serious about tackling this challenge, it should devolve the budgets and responsibilities to local councils to work with local partners and agencies. That would be real localism.

Meanwhile, in the budget, a tax on bankers’ bonuses to fund 100,000 jobs for young people would be a good start.

Nick Clegg and the many mysteries of the mansion tax

In Nick Clegg’s house, there are many mansion taxes. He’s given them more re-launches than Frank Sinatra had final tours. Yet, despite the considerable national media coverage over the last 30 months, only in the last week have they begun to ask serious questions about what, why and the practicalities.

In June 2009, he ditched the Lib Dem policy commitment to a local income tax to replace council tax.

It was a sort of trial run for his later decision to resile on the tuition fees’ promise. He took the decision without even consulting his own local government spokeswoman Julia Goldsworthy, who just hours earlier, in response to my questions, had told the House of Commons that the Liberal Democrats were totally committed to the implementation of a local income tax. Having ditched LIT, Nick Clegg had a problem. He needed to find some alternative to satisfy his activists.

Again, without consulting his local government team – although he did have the courtesy to apologise this time – he announced a mansion tax which would apply to properties valued over £1m as an additional source of local government finance to supplement council tax.

I wrote to him to ask some simple questions like “How many £1m-plus mansions are there?”, “What tax rate is proposed?” and “What is the estimated tax take for each local authority?”

Of course, I didn’t get any response. The reason was simple. He hadn’t the faintest idea, but it made a good headline.

Then, in December 2009, he suddenly announced that the mansion tax would now only apply to properties valued at more than £2m. I wrote to him with the same questions and again there was silence.Nick Clegg went into the general election campaign with a policy vacuum on local government finance, simply finessing it with the occasional reference to mansion tax. David Cameron and the Conservatives went in with promises to halt the rise in council taxes and a commitment that there would be no revaluation of domestic properties for council tax purposes. Subsequently, the 28 per cent cut being made in aggregate financial support for local government means that there will be no central government grant to councils.

Then, suddenly, in the last few weeks, Nick Clegg and Vince Cable have again started making speeches about a mansion tax. However, this time, it has absolutely nothing to do with local government finance and everything to do with being a pawn in a coalition Government negotiation about the 50p income tax rate, stamp duty avoidance, bankers’ bonuses, inheritance tax, non-dom levies, and the level of and balance between taxes on income and wealth.

Let us be clear, the only reason why this coalition Government might consider a mansion tax for national income purposes is if it was prepared to admit that it has no realistic prospect of plugging the loopholes on stamp duty and capital gains tax that wealthy individuals (especially those overseas or non-domiciled) have been able to plug for so long. The great thing about property is that it doesn’t move easily and, of all UK taxes, council tax easily has the highest collection rate. I start from a different position. Irrespective of any consideration of a mansion tax, the Chancellor should act decisively in next week’s Budget to halt stamp-duty avoidance schemes and plug the gaps in capital gains tax. He must reject the heavy lobbying of wealthy individuals, companies and right-wing pressure groups whose rallying-call is “taxes are for little people”.

But, let us return to local government finance. If the Government is serious about a localism agenda, it also has to find ways of increasing finance localism. I believe that the last Labour government was quite wrong in cancelling the five year revaluations that were determined to be an essential component of the council tax framework.

That was the same sort of conscious neglect which brought the rates into disrepute. Further, I believe that there is a strong case for extending the number of council-tax bands. If the Government wants a mansion tax – a sort of council sur-tax, a tax collected locally to go into the national coffers – there will have to be a comprehensive revaluation. Just trying to revalue those properties in Band H – those valued at in excess of £320,000 some 20 years ago – is not a runner.

This, of course, still begs the fundamental question as to whether the Government is serious about enabling local councils to raise and keep significantly more of their income locally.

Adopting the wrong measures

This week, the coalition government has announced that councils are to be issued with score cards to measure how quickly they place children for adoption. Councils that fail to speed up adoption processes will be punished. The scorecards will track how long it takes local authorities to find kids a care home.

The overall aim – to try to ensure that children, often damaged by their life experience to date, find a new home in a caring and committed family – is surely unobjectionable. But, the government’s use of a single primary target – time taken – provides a very real danger of substituting speed for quality and appropriateness.

Isn’t this the same government which railed against, and then removed, the maximum 18 week targets for hospital in-patient treatment on the grounds that the target distorted good health services? Of course, since those targets were removed, the number of people waiting longer has shot up, nationally and locally.

Although, generally, a shorter time for treatment or adoption is a good thing, that does not always apply to the specific case. I well remember a GP telling me to be wary of the surgeon with the shortest waiting-list; he was likely to be the one who GPs suspected – evidence-based or otherwise – of producing the least satisfactory outcomes for patients and, therefore, was receiving the least referrals.

Children in care and adopters are not commodities to be processed as quickly as possible. The focus has to be on the quality of adoption rather than speed. Of course, time is one element, but quality of long-term success is far more important. Just think about the pressure that councils will now be under to place individual children rather than placing siblings together. I can already see the next set of headlines “Government target forces family break-up. Council told to ensure adoption of siblings in different families, rather than take an extra month to keep them all together.”

There are already five times more children waiting for adoption than there are adopters. The law currently requires 140 pages of assessments and many delays arise, not because of a council’s performance but because of lengthy court delays. There must be a determined attempt to identify and remove any systemic barriers. And, of course, sometimes adoption is not the right answer.

Adoption must be driven by what’s right for the child, not what’s the whim of a government minister.

Questions, questions….

Many people will be familiar with the weekly theatre of Prime Minister’s Questions – the weekly theatre, where the Leader of the opposition party and a small number of MPs, chosen by ballot get to put questions to the Prime Minister. It regularly features in the national broadcast and print media. I know that some people – including many overseas - watch it on the Parliamentary TV channel.

Far less attention is given to other Parliamentary questions and, more importantly, answers– both written and oral – which MPs ask to get information about policies and performance. Sometimes, this is like a game of cat and mouse, as Ministers try to find ways of avoiding giving answers which they know are embarrassing or unhelpful.

Here are some examples of questions I’ve asked and answers I’ve received recently, which shine some light on the real impact of government policies and show where the rhetoric doesn’t match the reality.

Eric Pickles – the Secretary of State for Communities and Local Government – has been telling us for nearly two years about the massive public clamour to keep or return to weekly refuse collection services. So, I asked him how many people had written to him about the issue from South Yorkshire. Well, just two from Sheffield – and one of those was Nick Clegg; I wonder who the other one was; perhaps it’s a case for Sherlock Holmes! – and no-one from Barnsley, Doncaster or Rotherham.

I also asked the Chancellor of the Exchequer how many households in Sheffield and South Yorkshire will lose their entitlement to working families’ tax credit from 6 April 2012 due to the government’s change in the minimum working hours’ criterion – from 16 to 24 hours per week. The answer is 2200 families in Sheffield and 5000 in South Yorkshire. And they are going to lose more than £75 p wk – a massive cut in the income of some of the lowest income working families.

I also asked the Secretary of State for Transport what plans she has to bring forward new legislation to deal with rogue companies who are offering to – or sell the equipment to - clock the recorded mileage of motor vehicles. Thousands of buyers of second-hand cars are being ripped off each year by unscrupulous sellers and dealers who cut the recorded mileage. She told me that she’s going to do nothing more, although MOT test certificates will in future show the recorded mileage at the last three tests. Not good enough!

Water, Water

The national media is carrying stories about water shortages and the potential for drought restrictions in the South-East, whereas the local media is reporting that reservoirs serving our area are full to bursting.

Coincidentally, water is the subject of a number of debates in Parliament this week.

It is only four years ago that we suffered some devastating floods. I was reminded of the rhyme from my childhood: ‘Water, water everywhere, but not a drop to drink.’  A recent NAO report shows that the increased government expenditure on flood defences since then has protected 182,000 homes.

In 2007, the Labour government negotiated an agreement with the insurance industry. In return for the government increasing funding in flood defences, there was a guarantee of universal flood insurance coverage for homes in affected areas. This agreement expires in 2013. Unfortunately, the coalition government has chosen to cut flood protection investment by 27% this year and in each of the next 3 years. Many projects in our area have been cancelled.

The Association of British Insurers (ABI) has now warned that 200,000 high-risk homes will not be able to get flood insurance once the agreement runs out, unless there is a sustainable alternative scheme in place. However, the government has said it has no intention of doing this. I see big problems ahead.

Meanwhile, the government is rushing forward with new legislation, mainly to cut £50 off the high water bills in the south-west, which arise from the last Conservative government’s botched privatization. Elsewhere, water bills will rise an average 5.7% from April. In the Severn-Trent area, 340,000 households spend more than 5% on their water bill, and in the Yorkshire Water area, more than 190,000 households.

A WaterSure tariff was introduced in 1999. It applies to households with three or more children living at home under the age of 19 or where someone in the household has a medical condition which necessitates high water use. But only one-third of eligible households make use of it.

The government should be using its data to ensure everyone eligible is on the lowest tariff. Meanwhile, if you are eligible, why not apply now?

Stay clear of sharks

The last government took concerted action to deal with loan sharks – unlicensed money-lenders, operating outside the law. They provide loans on bad terms, at exorbitant interest rates, and illegally harass people if they get behind with their payments. For the last five years, enforcement teams in every region have been cracking down on these illegal activities.

However, in their place, we’ve now seen the rise of the lawful loan sharks. It’s sometimes called payday lending. In 2006, the payday loans industry was worth about £350,000 a year. By last year, that had dramatically increased to more than £2bn.

Daytime TV is now flooded with adverts, tempting vulnerable people to see how easy it is to take a loan, which they can repay on their next pay-day at interest rates in excess of 2000%.

Clearly, increasing unemployment, falling wages and benefit cuts are taking their toll on ordinary families. However unrealistically optimistic, people are falling into the trap of believing that they can have one of these loans just once, repay it and move on.

The reality is different. Nearly half the people taking out payday loans are doing it to pay off another debt – usually at a vastly lower interest rate. The Debt Advice Foundation reports that more than 40% of people who go to them for help have financial problems because of payday loans, or similar debt with high interest rates. The Citizens Advice Bureau reports that they have seen a four-fold increase the number of people seen with payday loan problems in just two years.

Last October, I called on the government to take urgent action to cap interest rates on loans. Bluntly, the whole business is just obscene. But, I’m sorry to say, the government has refused to act. I shall keep up the pressure.

However, there is some movement. Last week, the Office of Fair Trading announced that it will carry out spot-checks of 50 major lenders and that it would look into concerns that people are being given loans without the proper checks being carried out. In particular, it will investigate whether firms are targeting people unsuitable for credit and are rolling over loans so that the charges escalate and they become unaffordable.

I have some simple advice for people who might be tempted by a payday loan:

‘’Don’t do it. Don’t even think of doing it. If you’re struggling with debt, go to your local CAB now before you do anything else.’” 

Gone to Sheffield

I don’t know anyone who doesn’t believe that any family should be better off on benefits than in going to work. That is one reason why Labour introduced Working Families Tax Credit – to give additional support to families on low wages. Together with increases in Child Benefit, it was one of the major reasons why child poverty dropped dramatically under the last government.

In cash terms, relatively few families are better off on benefits than from working. The biggest group are those living in private tenancies in very high rent areas – mainly inner-London. Despite all the government’s claims to the contrary, market rents have continued to rise far in excess of inflation.

But, instead of tackling unjustifiable rent increases, the government has decided to address the issue through a benefit cap. What they have forgotten – but what is shown in their own statistics – is that a high proportion of those affected are not permanently in receipt of benefits, but are families in short-term jobs, who go in and out of benefit.

All this makes the government’s decision to cut Working Families Tax Credit look ridiculous. Official figures show that nationally 212,000 households, containing 470,000 children, could lose the £3,870-a-year credit as a result. Thousands of working families in our area will be hard hit.

But, the cuts in WFTC are not the only ones being implemented over this next 12 months. I think most families have not realized the scale of the impact on them.

Last week, there was a major debate and a series of votes on some of these other cuts. They included cutting the housing benefit of families who are deemed to have a spare room – so grandparents are effectively penalized for having a bedroom where their grandchildren can stay with them, and cuts to employment support allowances – where those who are unable to work because of their treatment for cancer are going to be badly hit.

Now it has been revealed that Liberal Democrat Children’s Minister is totally opposed to these cuts. But, in what was a three-line whip – that is, every MP is told to be present to vote – she was absent. We now learn that David Cameron gave her special permission to visit Sheffield on that day, so that she could avoid the vote. Of course, voting against the government in line with her beliefs would have required her resignation. She chose a Ministerial salary instead.

Spin or Whoppers?

Over the last decade, the media have become obsessed with ‘spin’. It’s rare to pick up a newspaper without some reference to it. We have satirical programmes about it. But, I’m not sure there is any more of it today than when Bernard Ingham span for Margaret Thatcher, although it’s probably more professionally done nowadays.

We shouldn’t be surprised by ‘spin’, for it is simply ‘putting the best gloss on your story’. Surely nobody expects that anyone, whose reputation is in the public arena, would deliberately go out to ‘put the worst gloss’ on what they want to say?

But there is a big difference between ‘spin’ and ‘telling whoppers’. I only wish our media became more obsessed with the latter than the former. In that way, they would do a public service by properly holding public representatives to account.

My Barnsley colleague, Michael Dugher, has just published a long list of  ‘Whoppers’ that David Cameron has told at Prime Ministers’ Questions over the last 12 months. Of course, we all occasionally make mistakes. Last week, my friend David Blunkett got something wrong in an interview on Radio 4; but, discovering his mistake, he was back on the radio within 30 minutes to apologise and to correct his error. But, to the best of my knowledge, David Cameron hasn’t once set about correcting one of his ‘whoppers’. He does us all a dis-service.

And these things are not unimportant, because our Prime Ministers’s statements are publicised throughout the world and, if left uncorrected, give a clearly wrong impression of what is happening. Judge for yourself, with these examples of what Mr Cameron said at PMQs on January 25th and what the facts actually are:

David Cameron: “Hospital waiting times are down”

Fact: The number of patients not being treated within 18 weeks has soared by 43% since Mr Cameron became PM

David Cameron: “Disabled children will not have their benefits cut.”

Fact: Department for Work and Pensions’ assessment on the new universal credit showing that the rate paid to disabled children will fall from £53.84 to £26.75 a week.

David Cameron: “There are more people in work today than there were at the time of the last election”

Fact: The Office for National Statistics says there are now 26,000 fewer people in work than at the last election.

I’d prefer more spin and fewer whoppers.

Health concerns

A damning report by MPs on the Health Select Committee left David Cameron clutching at straws at Prime Ministers’ Questions last week, in his desperate bid to shore-up collapsing support for his Health Bill.  

The all-party Committee, which includes senior Conservative MPs, said the Bill was ‘a dangerous distraction’ to the NHS, which is trying to keep a grip on patient care as it is being required to make £20bn in efficiency savings. There is so much which is good about the NHS, but inevitably the chaos caused by the Health Bill will start to take its toll.

This week, the British Medical Journal, Health Service Journal and Nursing Times unanimously condemned the Government’s shakeup as a 'damaging … unholy mess'.

The latest data on waiting times showed that, nationally, 42% more patients were forced to wait longer than 18 weeks for their treatment, since 2010.Locally, the number of people waiting 18 weeks or more has shot up by 84% in Sheffield and a massive 135% in Derbyshire. These increases follow year-on-year decreases in waiting-times which followed the significant investment in new buildings and equipment and increases in doctors and nurses made by the last government.

 
If the Prime Minister succeeds in allowing hospitals to fill 49% of hospital beds with private patients, this is certain to get worse.

For the last 12 months, my colleague John Healey MP (Wentworth, Rotherham) has been asking Andrew Lansley, the Secretary of State for Health, to publish a report prepared for the government on the risks it was taking with its top-down NHS re-organisation proposals costing £2bn. Lansley has consistently refused to release the report, but now the Information Commissioner has instructed him to make it public. He must do that now, whilst Parliament is still debating his proposals.

The Prime Minister is pushing the NHS to the brink by re-organising at this time of financial stress. It’s time he listened to patients, staff and the independent experts. He should drop this Bill and put our NHS first.