Tag Archives: Welfare Reform Act 2012

Three more failed policies from the Coalition

photoAm I reading right can some punch my arm that free schools cost twice as much as the Government originally estimated and is failing to tackle the shortage of classroom places in many parts of the country a damning report by public spending watchdog. Which leads me to think what Michael Gove and Iain Duncan Smith has in common. Well blow me over the answer is they both introduced failed policies on behalf of the Nasty Party with the tax payers picking up the tabs.

Many of us are beginning to understand the impact of deep spending cuts coupled by very deep rumours that the grassroots of LidDems are not happy with their darling brain child Nick Clegg as it has been alleged that he has signed up to further deep cuts after the 2015 General Elections which can only mean that their beloved leader judgement day will cause a revolt by a leadership challenge if they get that far or many of them will begin to cross over to another political party. Whilst the coalition continues to play Judy and Punch politics with the voters it reminds me of the phrase those who laugh last laughs the best with the possibility of two leadership challenges in the pipeline. The questions for all of us will our MPs from cross party will accept the 11% pay rise after the new years and will coalition will start to build more properties for people to downside since the introduction of their Bedroom Tax .

The-coalition-cabinet-006When the coalition are enjoying their Christmas meals with their families let’s hope they will have a change of heart some people will say I say me thinks not the reasons are The government‘s assault on the poor includes abolishing council tax benefit. This is just as pernicious as the bedroom tax but has received less publicity. It came in on May 1.

Prior to this, council tax benefit was means-tested and administered by local authorities.

If you were on employment and support allowance or jobseeker’s allowance, or your income was at that level, you received 100 per cent council tax benefit, leaving you with nothing to pay.

Slightly higher incomes were means-tested, so that you could still receive some council tax benefit.

In place of council tax benefit, the government introduced a “council tax-reduction scheme.”

The name suggests lower council tax bills. It is nothing of the sort.

It is simply a subsidy from government to local authorities to replace council tax benefit.

But the big difference is that the “council tax-reduction” subsidy is only 80 per cent the amount that a local authority used to receive in council tax benefit.

So claimants who were receiving 100 per cent council tax benefit now only have 80 per cent of their council tax bill reduced, leaving them to pay 20 per cent. Around two million people are affected.

The difference between 100 per cent council tax benefit and 80 per cent council tax reduction is £400 million – that’s the amount cut by the government.

It never ceases to amaze me how this government can believe that someone who receives what the state decides is the bare minimum required to survive – and pay for food, heating, lighting and other essentials – can suddenly be asked to find extra money from that subsistence amount.

Jobseeker’s allowance was not calculated to include a 20 per cent contribution towards council tax, just as it was not calculated to include the bedroom tax.

The government’s intention is to blame local authorities for this cut.

By simply giving local authorities a pot of money equivalent to 80 per cent of the amount that they used to receive in council tax benefit, it can claim that if local authorities pass the 20 per cent shortfall onto each council taxpayer, that is their choice.

The government can say that local authorities could choose to reduce council tax by 100 per cent – on a means-tested basis – but have decided not to.

Of course, it is a fake choice. If a local authority decides to retain 100 per cent reduction of council tax, it will have to find the extra 20 per cent from its budget. So will be looking at making cuts elsewhere.

It falls to local authorities to collect council tax, and so we are suddenly back to the days of the poll tax.

Brent and Southwark councils have each issued thousands of applications for liability orders in the magistrate’s court, predominantly against people who previously received 100 per cent council tax benefit and are now being asked to find £2 to £5 per week towards council tax, even though their other benefits have not increased accordingly.

The method of challenging a council tax bill is immensely complex.

Each local authority has its own “council tax-reduction scheme,” which it should publish on its website.

That scheme sets out how the council tax will be reduced, on the basis of means-testing etc.

If you receive a council tax bill and you want to challenge it, you have to check your circumstances against the scheme published by your council.

If the council has got your details wrong and you should be entitled to a higher reduction, first of all complain to the council.

If the council refuses to change its decision or fails to reply within two months, you appeal to the valuation tribunal.

The appeal can only be on the basis that the council has wrongly applied its own scheme and your circumstances mean that you should be entitled to a greater reduction under the scheme.

The tribunal will not hear appeals arguing you cannot afford to pay the council tax.

Each council must also operate a council tax discretionary relief scheme or council tax hardship scheme and details should be in the published council tax-reduction scheme.

These are little-known provisions which give councils a discretion to reduce council tax liability in particular circumstances, usually applied to war pensioners or the very seriously disabled.

These discretionary relief schemes can help in the short-term to reduce council tax bills for those in real poverty.

If you simply can’t afford to pay your council tax but are not entitled to discretionary relief and you can’t argue that the council misapplied its own scheme, then you will eventually receive a summons to the magistrate’s court so that the council can obtain a liability order.

There are some technical arguments here – is the amount on the summons the correct amount, has the council applied the right time limits?

But, again, if the only reason why you are not paying your council tax is because you can’t afford to, the magistrate’s court has no discretion but to make a liability order. Poverty is not a defence.

In many ways, this is the new poll tax. Its aim is that everyone, even the poorest, should contribute to council tax.

It is implemented by local authorities – which may or may not have agreed with the cut depending on their political composition – and so local authorities take the political blame.

But, unlike the poll tax and much more like the bedroom tax, it is a tax on the poor.

It is a tax on people who were previously assessed as being so poor that they should receive 100 per cent discount on their council tax, through council tax benefit.

Garden Court Chambers, where I work, has launched Legal Action on Council Tax.

Our website contains detailed legal information as to how to appeal to a valuation tribunal and what happens when you are summonsed to the magistrate’s court.

No legal aid is available and so applicants have to represent themselves. Our hope is that the dissemination of information will give applicants the tools to make the argument and do just that.

Perhaps the best hope is that, like the poll tax, the collecting authorities and the courts will become so overwhelmed that government has to give in.

I’m delighted to learn that Parliament agrees with hard-working public servants deserve decent pay. Now we just want the idea extended beyond MPs’ own ranks.

Never mind the manufactured row over MPs’ 11 per cent pay rise. It seems likely the “independent” pay body Ipsa has been leaned on to propose the outrageous figure so that frontbenchers on both sides can make a great show of rejecting it.

The real pay scandal is the million public-sector workers whose shamefully low wages have been hacked back even further during three-and-a-half years of Con-Dem cuts.

It’s these workers who should be the focus of our fury at politicians over pay. They are the ones – disproportionately women – who toil day in, day out to feed our schoolchildren, care for our elderly and vulnerable and perform a hundred other vital jobs.

They have suffered terribly as the result of a deliberate campaign against the public sector aimed at dragging down pay and conditions to match the very worst that can be found in the private sector.

Combined with the cost-of-living crisis – caused largely by profiteering energy companies and money-grubbing private landlords – it means that some of our most valuable workers are being rewarded with grinding poverty that suggests we value them at almost nothing.

This is an entirely deliberate move by the Tories. They want to devalue public service, to punish those who perform it, to drive away competent and committed workers.

They say public services can’t work – so they have to destroy public services which do work so that the facts don’t contradict their dogma.

It’s also vital for the Tories to wreck the public sector so that it can’t put the private sector to shame.

Bosses have long been forced to up their game or risk losing their workers to a public sector where workers enjoy gender equality, strong trade union protections and collective pay bargaining.

The more the Tories hack back public services, the more the way is clear for bosses to join the race to the bottom on pay and conditions, to go back to Victorian-style exploitation, to play divide-and-rule with their workers and to widen the already huge gender pay gap.

The Tories and their media friends love to bleat on about public-sector pay as if these vital workers really were all taking home MP-sized salaries – and as if they didn’t deserve it.

If anyone is worthy of an 11 per cent pay rise it’s the public servants who do so much irreplaceable work to keep this country running and are rewarded with so little except falling pay, rising workloads and a constant barrage of lies from the Tory press.

It’s great to see Jack Straw admit that decent pay is vital to attract talented workers. Now let’s see Labour apply that principle not to MPs but to our much-slandered public servants.

Ed Balls needs to admit he was wrong to back a Tory pay freeze which had nothing to do with financial prudence and everything to do with sabotaging the public sector.

Labour needs to pledge to reverse council budget cuts, end outsourcing and ensure that every one of our public servants earns the decent wage they can expect from one of the world’s wealthiest countries.

Councils have been driven to embark on these firesales of valuable property by recent Con-Dem cuts which have left huge holes in their budgets.

But those are just the latest in decades of disastrous Tory housing policy.

Tony Blair’s Labour shamefully failed to reverse Margaret Thatcher’s attacks on council housing or her abolition of rent controls. And today – not just in London but in cities all across Britain – we are paying the price in soaring rents, ever-growing overcrowding, misery, squalor and homelessness.

The Tories aren’t just failing to confront those problems – they are actively encouraging them.

Intriguingly London Mayor Boris Johnson’s carefully cultivated buffoon persona conceals a cold-eyed neoliberal delighted by the sight of hundreds of ordinary Londoners driven from their homes to clear the way for private profit.

Communities Secretary Eric Pickles is more interested in destroying communities than defending them. And meanwhile at a national level Tory housing policy, like Tory economic policy, is so foolish and destructive it’s impossible to tell if the government is acting out of malice or incompetence.

It was always obvious to anyone with half a brain cell that George Osborne’s help-to-buy scheme would be a disaster for the people who actually need help with housing.

All it does is pump more air into the ever-inflating bubble – putting home ownership even further out of reach of most people.

It’s an obvious bribe to wealthy Tory voters in the run-up to the 2015 general election.

But what has Labour got to offer instead? Millions of people are crying out for a return to the days when decent, affordable council homes were available to all who wanted one.

Ed Miliband needs to be bold and stand up for those millions. No mealy-mouthed talk of “social housing” or housing associations, no half-hearted gestures like requiring a handful of “affordable” homes to be tacked on to vast developments aimed squarely at the super-rich.

But a massive programme of building good-quality council homes right across Britain, publicly owned, democratically controlled and at rents that undercut the private-sector profiteers. Only that way can we beat the Tories’ efforts to bring back the Victorian slum to 21st-century Britain.

Whilst on the other hand the average British household could eventually end up paying an extra £8,000 for its gas and electricity if George Osborne succeeds in delaying vital action to make Britain greener, the Government’s official climate change advisers warn.

Postponing decisive action to cut carbon emissions by 10 years to 2030, through measures such as a widespread shift to renewable energy sources, will add at least £100bn to Britain’s collective household energy bills between 2030 and 2050, according to the independent Committee on Climate Change (CCC). This works out to £4,000 per household.

The increase is because Britain would need to take even more drastic action to make up lost ground to ensure it hits its legally binding target of reducing carbon emissions by 80 per cent from 1990 levels.

And if fossil fuel prices soar to the top of the range of realistic forecasts, the bill to remedy the delayed switch to a low-carbon society could reach £200bn, or £8,000 per household, according to the committee’s calculations – the first time a figure has been put on the cost to the UK of postponing action.

The report rejects claims that renewable energy subsidies and other green levies are bad for households because they will accelerate increases in energy bills. The committee concedes that consumers will pay more in the short term to fund the transition to a greener economy, but will be handsomely rewarded in the long term as price increases are curbed.

Lord Debden, chairman of the CCC, said: “This report shows the clear economic benefits of acting to cut emissions through the 2020s. This provides insurance against the increased costs and risks of climate-related damage and rising energy bills that would result from an alternative approach to reduce and delay action.”

The report comes ahead of a key review in the spring of Britain’s carbon emission targets for the 2020s that David Cameron personally approved in 2011. The review was secured by Mr Osborne, who is concerned that the agreed emissions reductions might be bad for the economy and would reduce his scope to build dozens of new gas-fired power stations.

But the committee finds that watering down the carbon emissions targets would be far more costly than pressing ahead with the agreed cuts. It also argues that by fiddling with previously agreed energy targets, the Government could undermine the confidence of potential investors in energy projects.

This view is shared by a coalition of 100 parties, including Sainsbury’s, Asda, Ikea, O2, Sky, Nestlé and the consumer goods giant Unilever, which today calls on the Government to stick with its previously agreed plan to substantially reduce carbon emissions.

Speaking for the group, Lord Adair Turner, a former director-general of the CBI, said: “The majority of the business world is clear that ambitious and stable action to tackle climate change makes business sense. A stable policy environment is critical to attracting investment in the low-carbon sector.”

Lord Debden added: “The Government should confirm the [2020s carbon targets] as a matter of urgency. This would remove the current uncertainty and poor investment climate. It would provide a boost to the wide range of investors who stand ready to invest in low-carbon technologies.”

The CCC report comes at a time when consumer confidence in the so-called “Big Six” energy companies is low, following a series of inflation-busting price hikes that have greatly increased their profits. An estimated 10,000 people died in the UK last winter in connection with cold homes.

In the week after the Chancellor sought to knock £50 off household energy bills by watered down green levies, it emerged that only two of the Big Six have so far passed on the saving to their customers. They are British Gas and SSE – formerly known as Scottish & Southern Energy. MoneySuperMarket, the price comparison website, yesterday said some of the firms were “getting away with green murder”.

A Department of Energy and Climate Change spokesman said: “The UK takes its obligations under the Climate Change Act to cut emissions by 80 per cent by 2050 extremely seriously. The Committee’s advice has an important role in the 4th Carbon Budget review and we agree with them that it is important to make a final decision as quickly as possible. We will consider the CCC’s advice carefully as part of our work on the review, which will be published in the New Year.”

This will get everybody’s blood boiling to learn again that the government has increased its initial write-off of a failed IT system for universal credit by £6m to £40.1m, but acknowledged that a further £90m of software is likely to be written down in its value over the next five years.

The precise loss to the taxpayer will depend on how much of the existing IT software is retained after it has been merged with a new IT system being developed by the Cabinet Office’s Government Digital Service.

Universal credit, which brings together six existing benefits, is seen as potentially the biggest change to welfare since the second world war. Ministers had to concede last week that it had fallen behind schedule and would not be completed by 2017 as originally planned.

Seeking to explain the £40m write-off, Mike Driver, finance director general at the Department for Work and Pensions, said: “There is no use for the IT code built to run the computer systems. It has no future value. It is not going to generate any future return for the department.”


He insisted this level of write-off in the software industry was not unusual for a project of this kind. He said it would not be possible to seek any clawback in the contract since the specifications made by the department had changed, especially over security. The code was well written and engineered, the department added.

The latest statistics were given by the work and pensions secretary, Iain Duncan Smith, as he denied that the universal credit timetable was slipping or that it was losing control of its budget. Asked if further write-offs could be expected, he said: “If anything goes wrong going further forward, that might be different.”

But he added: “We have had to sit for some time while a lot of bogus nonsense has been talked about huge levels of additional write-offs. This note in front of you absolutely finishes that and ends it.

“The reality is that what our estimate was earlier on, when we first put it to the National Audit Office [NAO], and this total figure are very close together.

“This has been one of the most complex and detailed assessments that has taken place either in the public or private sector. It is now signed off and will be published very soon.”

Duncan Smith said the original IT system had got bogged down because of the need to provide security and the complexity of different elements interacting in one software programme.

The DWP said it was justifiable to declare the remaining £90m as not being written off because it would be written down over a five-year period, by which time universal credit would have been introduced.

The department added that it was legitimate for the £90m not to be written off since the NAO had accepted its definition.

The DWP said was unable to state at this stage the level of other non-software costs.

A spokesperson said: “It is not unexpected that IT requirements evolve on a long-term programme of reform and that some rework was required. But we are not complacent about this loss and are working to ensure that this project continues to roll out within the budget we have been set.

“This should be seen in the context of the £38bn economic benefit that universal credit will ultimately bring.”

At a two-hour evidence session, Howard Shiplee, the universal credit director general, said a new business case would be put to the Treasury early next year.

He accepted that the software was incomplete for some claimants, including couples and those with children. He was also reluctant to commit himself to deadlines.

“This is not an IT disaster. This will be delivered in time and on budget,” Iain Duncan Smith said in September 2013.

But last week he used the cover of the autumn statement to announce that he is to miss his deadline of getting all existing and new benefit claimants on to universal credit by 2017.

He also confirmed he is having to entirely rework the IT system at substantial cost because the original IT failed to meet the needs of claimants.

“What we are talking about will have no practical effect on the implementation of universal credit, which, by the way, is proceeding exactly in accordance with plans,” Duncan Smith told MPs in March.

But in September a scathing report by the National Audit Office (NAO) said the welfare changes had been poorly managed and were riddled with major IT problems, threatening to increase costs by hundreds of millions of pounds.

The NAO report also outlined how the project was “reset” a month before Duncan Smith’s comments to parliament, following the involvement of the Major Projects Authority, which has the power to intervene on behalf of taxpayers.

Officals at Duncan Smith’s department said in October 2011 that 2 million households will get a lower entitlement to benefits as a result of the universal credit scheme.

But in a revised impact assessment, the Department of Work and Pensions said in December 2012 that 2.8 million households will get a lower entitlement to benefits.

The much greater impact was regarded as being due to factors such as the deteriorating economic environment but officials also conceded that universal credit is less generous than first envisaged.


Which leader is best to lead UK ECONOMY?

Well checkout this Youtube have have fun to have a healthy debate:


Britain ElectionThe coalition is in crisis over the economy which they continue to talk about it behind closed doors and in public they say something different like all is well and we are ready to do battle with Labour.

Bank of England is at a loggerhead with the coalition as they continue to put more pressure on the bank to release more money to the business communities and the recent press release from the bank stating they want to see unemployment down to 5% before they are prepared to lend more money says a lot on who is in charge of the economy.

I have taken the opportunity to enclose the transcript of the interview with Jon Snow see below:

Jon Snow: Governor you seem to have been taken by surprise by the sheer strength and speed of the recovery?

Mark Carney: First I would say we welcome the strength of the recovery, we have inflation coming down, the economy is creating 60,000 jobs a month, growth is as strong as its been in six years, since 2008, since before the crisis, so all of that’s to be welcomed.

When I first arrived here, my colleagues and I at the bank thought the recovery was going to be stronger than others thought it was and we also thought inflation was going to be weaker, softer, moving more towards that 2 per cent target than others thought. What’s happened is it’s turned out to be at this moment a little stronger than we had expected and inflation in quite a welcome sense is softer so both of those are good things.

And yet in three months you’ve actually had to change your game plan a bit because you talked originally about the 7 per cent unemployment level as being a benchmark after which you’d then think about raising interest rates – and now there’s a lot of add on…

No, we haven’t changed…the important thing Jon is we haven’t changed our game plan at all. What we said to your listeners, to people across the country, businesspeople, is that the Bank of England is not even going to begin to think about raising interest rates until we see unemployment come down to a 7 per cent level.

Now today, unemployment rate is 7.6 per cent. So we want to see real people in real jobs and that unemployment rate moving to that level.

But you’ve moved your projection forward, do you think it could happen – a 2 in 5 chance it could happen next year, 3 in 5 chance the year after which is sooner than either of the projections than you put before…

And that’s a product of the fact that the economy, the recovery has taken hold, the economy has picked up. But the important thing is what will we do at that point, what will we do as the Bank of England with interest rates at that point. And we ‘re not automatically going to change interest rates at that point.

We’re going to take stock of where the economy is, how much spare capacity there is in the economy, how many people are out there looking for a job, or how many people are in a job who want to work more, how much spare capacity is there in our businesses to produce more with the machinery that they have, and taking that assessment then we’ll decide what to do with interest rates because the important thing is we’re going to learn a lot from this point until that point. As the economy grows we’ll find out how truly productive this economy is.

But what kind of recovery is this, is it frothy, is it financial services, is it kind of stuff that’s dicey or is it real, solid, manufacturing, the stuff that builds an economy long term? 

MC: Well there are two things. We need that type of recovery and we’re helping to try to secure it by providing this guidance on interest rates. Because what’s happened in this recovery – about six months ago, the British people started to decide that the world was not about to end because of problems outside our shores, problems in Europe, problems in the American financial system, what have you, the world’s not gonna come to an end.

And they started to reduce their savings from extremely high levels, precautionary savings levels, to more normal levels of saving. So we’re getting a one time boost from that adjustment. At the same time that that was happening, the housing market started to recover from quite frankly depressed levels relative to recent history. So we have those two factors. The question is how do we sustain that? Well we sustain that in a couple of ways. One we fix the financial system and my predecessor Governor, Lord King started that process and we’re going to finish the job. Secondly we provide the stimulus the economy needs for the length of time that the economy needs until the conditions are in place where we have that sustainable recovery that’s based on real jobs in real industries.

But then if the recovery is real, and is really under way as you say, then why do you need emergency levels of interest rates? And this is an emergency level…

Without question these are, interest rates are at a historic low. Think about the headwinds that are blowing into this recovery, that are holding back the strength of this recovery. Our major trading partner the European Union is still stagnating, it’s no longer shrinking rapidly but it’s still stagnating and probably will for some time.

We expect one per cent tight growth for the European Union, the UK’s growing at about three per cent right now. That’s one aspect. Secondly those banks – there’s been a lot of progress on the banks but they still need to build more capital, they still need to repair, they still need to fix some things. They’re not yet…I speak to a lot of small and medium sized enterprises and they’re still not fully satisfied with their access to capital. And thirdly…

But we can surely ease austerity…

Well that’s a judgement the government has to make. We take that as given and we set policy accordingly. But the other thing I was going to say Jon is that the British people are looking at their own balance sheets and that’s why they were saving more money out of every pay cheque than they did prior to the crisis and that process of repair, and that unwillingness, correct unwillingness, to return to a sort of debt-fuelled consumption, is something that also will moderate the pace of this recovery.

For all those reasons it is appropriate for the Bank of England to provide that stimulus and to provide people and entrepreneurs across this country with a degree of confidence about the conditions that would be necessary for us to start to take that off the table. We summarise that in the seven per cent unemployment rate but really we’re talking about when we get to that point, looking at the conditions in the economy – how much slack is there in the economy and how much momentum does the economy have – and then we’ll take stock and decide what to do.

We’re talking on quite a rare day, because we haven’t seen a Governor bounce into action like this talking in the way that you’ve been talking for quite some time. Therefore one wonders what this really means to the man and woman on the street. They are not feeling this. I don’t think they will find it easy to identify with what you’re saying – they’re going to say – we’re not experiencing this growth, our wages if anything are going down.

Well it’s a very important point. I think some – not everybody across the country is feeling this, without question. There’s still a million more people out of work than were in work prior to the crisis (JS but even those in work…) You’re right…but what is happening, and I don’t think we should downplay it, what is happening is 60,000 jobs per month, new jobs, are being created, most of those in the private sector, most of those full time. And that’s real work, real people. So let’s acknowledge that.

The second thing, you’re absolutely right, real wages are not picking up, they haven’t been for a number of years (JS when will they), and what’s required for them to pick up is the way I would phrase it – (JS they’ll want to know when) and what’s required is that business starts to have as much confidence in the recovery that’s necessary for them to start investing and that’s going to help boost real wages.

So when the second half of our forecast, middle of 2014 through to the end of 2016, embedded in that forecast that we just released today, is that you start to see real wage gains. In order to get that though, we need businesses to have the confidence that this recovery is going to be durable, which is why we’re doing what we’re doing with the banks, and what we’re doing with monetary policy.

This is your first tv interview since you were appointed and of course one question abides – are you your own man? And after all George Osborne scoured the world for you and even changed the employment parameters to make it attractive for you to come. Are you? 

Of course – absolutely I mean…(JS but aren’t you?) I’m an independent central banker. Well there’s two things, one is the great advantage of the structure that’s been put in place for the Bank of England is the governor is absolutely independent and in fact, the other members of the monetary policy committee which set interest rates and the financial policy committee which sets financial policy, we’re all independent. I have one term, I have one term. I’ve been appointed (JS nothing to lose?) well I have my reputation to lose and I will make sure, I will do everything I can to make a series of right decisions.

But I mean you know raise interest rates before a general election, if that had to be done, would you really do it? 

Well absolutely. I had the experience of being in a similar position during the crisis and in Canada we had the opposite issue which was should we cut interest rates in an emergency fashion in the teeth of the freefall after Lehman. That wasn’t as acknowledged around the world but that’s what was actually happening. We decided that was the right thing to do because it was the right thing to do for the Canadian economy. It was in the middle of an election campaign and we did it. In these jobs, and I have the experience of being in these jobs, you just have to do the right thing with an eye on the medium term. That’s the horizon for central bank policy…

But you’ve got another much more tricky judgement to make in some ways and that’s help to buy…it’s hard to imagine the governor of the Bank of England is really enthusiastic for such a scheme. Because surely you’re looking at a subsidy of 95 per cent for people’s mortgages and that’s what got us into trouble the last time. Why do you want to be involved in that now?

Well what we have to do when we look at the housing market is we have to identify whether or not there’s going to be risks that arise in the housing market, are people going to end up borrowing too much, is it going to be a risk to the banks and therefore a risk to the entire economy. And we have to look across a range of issues, whether it’s the structure of help to buy or any other government programme, whether it’s how much capital a bank holds against a mortgage, whether it’s how they conduct the test, whether individuals can afford to pay those mortgages back, all of those aspects we can have influence on.

Some of them we can control directly as the Bank of England, others we have a responsibility to stand up and say – if it can improve the financial stability of the economy, we have a responsibility to stand up and say – make this change, in our judgement, make this change.

Even though that is a golden acorn of the government’s policy and you could be having to do it less than six months before a general election?

We will do what’s right. We have very clear mandates at the Bank of England, we have a responsibility to deliver that 2 per cent inflation target so people can ultimately see real wage growth, we have a responsibility to make sure the financial system is resilient and we will take the steps necessary. In some cases – if I may, Jon – some cases we have direct responsibility, we can instantly change things, in others we have to make recommendations but we do those in public.

You mentioned the eurozone just now, Washington last week was pointing the finger at Germany, saying the very fact that Germany had these huge surpluses from its massive export market, and Brussels is doing the same thing today, do you see Germany as the problem?

I see Germany as part of the solution to a sustainable recovery in Europe.

Well to be part of the solution you can be part of the problem?

Well there are German exports and there are German exports. German exports outside the eurozone actually have a supply chain, in most cases, you think of German auto exports actually more than three quarters of the components of German auto exports come from other areas of the European Union including in some cases here. But there is a question about the strength of domestic demand and I don’t mean fiscal policy in Germany I mean more broadly domestic demand and there’s a series of structural measures that the German authorities are aware of that they could take which would help raise growth in Europe which would be good for Europe and would be good for us.

You used one of your early speeches to bolster the view that the City must grow, you want to see the City grow, you’re an enthusiast for the City and you’ve told the City that you’re an enthusiast for the City. You’re talking this up at a moment when still scandal stalks the City. Not least in the foreign exchange outrage which has been going on in which at least three British banks seem to be involved. Is this the right time to say grow the City – isn’t it time to say tame the City?

There are two things. I’ll come to taming the City in a moment… well you embed multiple – I’m choosing two of the many things I could pick from that question. But the first thing – we#re not, the Bank of England, I’m not, we’re not cheerleaders for the City. Our job is to make the City safe effectively, make the financial system safe. And then it will find its own size.

And the point I was making in the speech is that London is the global financial centre, and finance’s proportion of the global economy is going to grow. Not because it is going to grow in the advanced economies but because it is going to grow in the emerging economies. And London’s traditional role is to be in the centre of those flows. Now, if London follows that route, as it has in the past, for centuries, then it’s going to grow relative to the economy. If, if, if .

Our job is to make it safe. There’s two aspects of that. First, make it fair. Fairness means that if you make a mistake in the City, you pay the consequences. If you make a business mistake and you’re a big bank, you fail, just like you would if you were a small corner shop anywhere across this country, a farmer, whatever.

And is this part of the taming?

And this is part of the taming. I’m on my second, I’m sorry, I should have signalled. And so there’s a series of reforms we’re doing so to end “too big too fail”. And the second part of the taming and of the fairness is the integrity of these markets. There has to be, these have to have the most integrity of any of these markets. We have to change the structure of these markets and we’re working on that, and we have to root out corruption in these markets where it’s found. And we are very concerned about the allegations in the FX market, we are supporting the authorities, the FCA and others in their investigations, and we will do so and we collectively – it’s not our primary responsibility but we’ll do everything we can to root this out. And I’ll say the last thing on this, if I’m allowed three, which is ultimately these issues of integrity, they’re issues of culture within these organisations and they are the responsibility of the senior management and the boards of these organisations to set the right tone from the top all the way down through the organisation so that it can be delivered.

Does it set the right tone to be saying to the Chinese – come in, do business here, set up banks, and actually the regulation you’ll be subjected to will be actually lighter than that which we’ve applied to banks which have already gone off the rails?

That would not be the right thing to say but we certainly haven’t said it. (JS Well the implications are very strong) No absolutely not. What we have done is we have changed our policy for foreign branches in the UK and we have put an emphasis on this fairness point. What is crucial is the ability to resolve the institution if it makes a mistake and so we need an understanding with those foreign authorities. We might come to that understanding with the Chinese authorities, and it’s logical that the Chinese would be here, but the second thing that we’ve done is we have restricted that activity to what’s called wholesale activity.

So it’s not a retail activity, you and I aren’t going to have accounts at these banks, it’s going to be City-like activity if it indeed occurs. But these are the same rules for everybody. The Chinese aspect, is a product of the fact that the Chinese, it’s the second largest economy in the world, it’s one of those emerging market, financial sectors that’s growing quite rapidly, London is the global financial centre and it’s natural that some of this activity would gravitate to London but it’s got to be done in the right way.

By your own words you are a foreigner and you already look quite comfortable in the job. And I just wonder if having spent 10 years in this country earlier on in life, specially time at Oxford, gives you a kind of insight into the structures of this country in terms of the establishment, the public school system, the class system, which John Major, our former prime minister, has described as one of the things possibly even holding the country back. Do you understand the world you’re in? Do you resent it, find it difficult, or find it very easy?

I think as a foreigner you have a different perspective and maybe, I would hope, an objective perspective. I think I do understand – I know what I don’t know in this country and that’s quite a bit but it’s necessary…I have the friends and family extended relations I have in this country extend across the social spectrum…(JS and I gather across the Irish sea? You’re an Irish citizen?) And across the Irish sea…I am an Irish citizen, I’m a Canadian citizen and an Irish citizen.

You’re also a British subject – British citizenship can’t be far away?

I will – to take up my right to British citizenship there’s a residency requirement (JS so you are interested in doing it?) I made that commitment to the prime minister. The residency requirement actually extends to about the end of my term as it turns out despite the fact that I have been married to my British wife for 18 years.

Governor, thank you very much for talking to us.

A pleasure Jon, thank you.

Intriguingly well known economist David Blanchflower written an article for the newstatement Don’t celebrate too soon, this recovery is dangerously unsustainable.

The increase in growth has been driven by rising consumer debt and reverse austerity. Investment and wages remain stagnant.

The dashing Spectator editor, my old adversary Fraser Nelson, is at it again, dissing Ed Balls and Ed Miliband and arguing that all is well with the economy. He is hoping we forget this has been the worst recovery in British history and that only two-thirds of the fall in pre-recession output has been restored. We are five years in and counting, and it is touch and go whether the lost output will have been fully recovered by May 2015.

The risk is that we have been hit by a passing hurricane that will be gone in a flash. The previous nine quarters, three of which were negative, saw little growth at all (0.7%, 0.6% of which was down to the Olympics), followed by three quarters of modest output – 0.4%, 0.7% and 0.8% – and Fraser claims the UK is “off to the races”. The economy the coalition inherited, which Cameron, Osborne and Clegg claimed was “bankrupt”, grew by exactly the same amount (1.9%) over the first three quarters of 2010 as in the last three. Then austerity was imposed and growth evaporated.

It is true that Markit’s three PMIs for construction, manufacturing and services have all been strong, although the British Retail Consortium’s report on retail sales, which the PMIs exclude, has been much weaker. Despite this, NIESR is forecasting growth of 1.4% in 2013 and 2% in 2014, while the EU Commission is forecasting growth of 1.3% in 2013, 2.2% in 2014 and 2.4% in 2015. Growth under the Labour government from 1997 Q1 to 2008 Q1 averaged 0.8% a quarter.  Maybe this really is the moment when the economy zooms into life, but I wouldn’t bet on it, especially since unemployment is likely to rise. There is absolutely no sign of any real wage growth.

Osborne criticised the last Labour government for going from boom to bust; his response is to inflate another housing bubble that will inevitably implode, leaving the British taxpayer to pick up the tab. House price to earnings ratios are already unsustainably high, especially in London. What goes up must come down, Fraser.

It is clear that the recent rise in growth has been driven by reverse austerity. Government spending has increased and that is what has boosted output. We are now seeing that Ed Balls was completely right – austerity did kill off growth. The recovery we are now experiencing should have occurred in 2010, 2011 and 2012, and would have but for George Osborne’s foolishness. A recent study suggested the Chancellor was responsible for lowering GDP by at least 3%; he crashed the car and now wants credit for taking it to the garage for repair.

The other main driver of growth is rising consumer debt and dissaving, triggered by the recent rise in house prices as a result of the absurd Help to Buy scheme. Net trade and investment are not making positive contributions to growth, net business lending especially to SMEs continues to fall, as do real wages. The ONS confirmed this week that underemployment is rising sharply and there is every chance that the unemployment rate will rise again. Indeed, even if there is any growth, it is hard to see it translating into a rise in living standards for the median voter, especially outside London and the south east. Ed Miliband is right to warn that even if there is growth, it is for the few not the many.

Fraser argues that “when you think about all the cash that companies have been hoarding, too fearful to invest it, then there’s a good chance that success will breed success as corporations reopen their wallets”. But it is unclear why firms will actually start committing long-term UK investment with a slowing US economy, a flat-lining eurozone, and uncertainty over Britain’s EU membership.

Don’t celebrate too soon, Fraser.  If the next three quarters in a row have growth of more than 2%, I will buy you a very nice dinner; if not, you owe me. It does look to me like a light zephyr. Let’s hope for everyone’s sake I am wrong.

So when the coalition tries their best to drive a wedge between our supporters let us continue our fight will be with Conservatives and remember that the LibDems died in 2010 when they formed a coalition with Conservatives they broke another promise again to convince their LibDem members they will campaign against the Bedroom Tax at their 2013 annual conference when they voted with the Conservatives. Yet they have the gull to say Labour can’t be trusted with the economy. Funny enough the economy has taken the coalition three and an half years to grow which is relatively very low and its still flatlining. The risk for the coalition is when they get very complacent which would mean people can’t see the pay raise in the pocket and cost of living continue to show concern to voters as they struggle to put rice on the table for their family then the added cost of school uniform and shoes.

The LibDems are not in a position to tell Labour how to suck eggs and they need to keep their own house in order before comment on Labour Party affairs lets not forget there are some LibDems who are former Labour members so they like the Conservatives like to continue with their unorthodox scratch record of saying its Labour fault. Well we got news for the coalition most of the issues are happening under their watch they have to be held accountable for stop playing the blame game.

To sum it all up in a nutshell the LibDems are history as they have to depend on a hung parliament to form the government and Nick Clegg continues to fight for his political career to remain in a coalition while the Tories under David Cameron is also hanging for his political career to win a outright victory of a Conservatives Government as he does not want his rivals Teresa May or the return of Boris Johnson(if he ever decides to become MP) to be the next leader in waiting of the conservatives as nobody wants to be a captain of a sinking ship so there you have the whole moral of this story of both Conservatives and LibDems. Continue to pick sense out of nonsense.

Now the question is can Ed Miliband be the next Prime Minister which everybody is asking themselves. Hey believe it or not both David Cameron and Nick Clegg are asking themselves the same same questions. From behind the scenes I’ve been well informed from members of both parties are informing me some of them are still making up their minds whether to cross over to UKIP and Labour.

There has been much criticism over our new and former Shadow Works Pension Sec Rachel Reeves and Liam Byrne over their stance when they took over welfare reform that Tories introduced. Let’s not forget that they both inherited the position and more work needs to be addressed.

This article may or may not be popular to some people for now. I say that Welfare Reform does need an overhaul but not at a price that will affect the living conditions which will benefit the rich and let’s not forget our founding fathers who set up the welfare state. To be honest there is no easy way to say this there will be some decisions that will not be popular to many but understand this if the Welfare Reform does not take place if you think what the coalition is bad wait until after the 2025 General Elections if the Conservatives regain power they will continue to eradicate the Welfare Benefits system all together.

For those who constantly being critical of the comments of Rachel Reeves and Liam Byrne should remember this some of you need to spend some time in countries where there is NO benefit system and think how lucky we all are to have a system that caters for all but I stress that I’m NOT having a go at anybody all I ask for all critics to see for themselves what it really like to live in poverty which no clean water, food, and nowhere to have a crap but on the streets.

I kid you not when I say those words as I had the opportunity to travel the world to see for myself and experience it. There is a saying those who know it feels it.

Let us not forget another Labour politician viz Liam Byrne who continues to be one of the most hated person. Although he did introduce some of the reform of Welfare Benefits via Labour consultation documents to be added to the Labour Manifesto all of a sudden he is not being critiqued anymore it’s now our arch enemy Iain Duncan Smith.

To be frank with all of you I could not give a monkeys where a person is educated as children we had no choice which schools or universities whether it be private or publicly funded it was up to our parents who decided which schools or universities we attended depended on their wealth.

Our struggle is with the coalition let them continue with their in house fighting amongst themselves whilst we will continue with our fight against them. Let’s not forget Labour spent 18 years out of the political wilderness whist they fought amongst ourselves there is an alternative we either stand together or die in the proceeds so in a nutshell United we stand divided we fall. I’m sure that many of us do not want to be reminded of 1992 elections.

Labour lost the Housing Benefit Debate on Opposition Day

Before we all go into the debate on the rights or wrong of Bedroom Tax just pause for a moment and checkout this youtube to have a healthier debate then remind ourselves why we continue with the struggle:

Eyes        226         Nos 252

MPs are voting in the opposition day motion on Housing Benefits

Labour motion called on Government to end deductions to housing benefits and fund local authorities to better help people to move to suitable accommodation. (Motion defeated)

Eyes     253      Nos 226
The government amendment notes the substantial structure deflect of previous govt the need to bring expenditure on housing benefit under control and that reversal of the policy would cost half a billion pounds each year. (Government Admendedment won)  

#bedroomtaxWhen you look at the votes it means that Labour lost the vote by 26 and the battle continues. So the next time when a Conservative or LibDems comes knocking on your door seeking your vote remind them why you will not vote for them for details see Government Amendment to Housing Benefit. This is due to a pairing which means Parliamentary pairing means that MPs agree to have an opposite number, and that if one of the pair is in a Committee, constituency, abroad, or sick, or otherwise unable to vote then the other MP in the pair agrees not to go through the lobby and vote so as not to take advantage of the absence. In this way, a vote doesn’t depend on MPs actually being there.

Yes, Labour could have broken the agreement and all turned up last night, or at any other vote, to embarrass the Tories But it is a trick that will only work ONCE – for ever.

I mention this because the MPs “pairing” system seems to have wrong-footed a few commentators into thinking that last night’s Labour-generated vote on the Bedroom Tax was somehow let down by some MPs.

It wasn’t – pairing means that the vote went exactly the same way as it would if all MPs had been present.

Because an MP has to physically pass through the lobby to vote, some people may remember that in the past, the Tories have carried literally dying old men on stretchers through the lobby so their vote was counted!

So does this mean that Labour will ditch the real the Bedroom policy the answer is NO WAY and we will continue with the fight.

We were reminded again last night that the so-called ‘bedroom tax’ is the coalition’s most controversial (and unpopular?) ‘welfare reform’. From the Guardian:

“The Liberal Democrat president, Tim Farron, and one other Lib Dem MP joined Labour in voting against the bedroom tax in a Labour-inspired Commons debate on Tuesday that sparked rare passion including a claim by one Tory MP that feckless fathers should be chained and forced to work.

photo12234“The Labour motion calling for the abolition was defeated by 252 to 226, a substantial cut in the coalition majority. A handful of Lib Dem MPs abstained. The spare-room subsidy or bedroom tax cuts housing benefit for social housing tenants by 14% for those deemed to have an extra bedroom and 25% for claimants with two or more spare bedrooms.”

The Guardian report continues:

“A succession of Labour MPs produced personal stories of the impact of the bedroom tax drawn from their constituency surgeries. Steve Pound, said his brother was in danger of losing his home of 20 years even though his spare room was being used for a kidney dialysis unit.”

But it quotes Tory MP for Monmouth, David Davies, as saying: [Get hold of some of these feckless fathers, drag them off, put them in chains if necessary, make them work and make them pay back society for the cost of bringing up the children they chose to bring into this world.”

Hmm, some might argue that the bedroom tax prevents plenty of divorced dads from having their kids over to stay for the weekend.

gl123Many social tenants descended to parliament yesterday to lobby MPs to repeal the Bedroom Tax in Parliament many Labour MPs launched a blistering attack in the Commons debate but they themselves faces anger from lobbyists protesting from all sides of the three main political parties to fight evictions and attacks on benefits.

fuckthe polltaxCries of action not words greeted all the main three parties when they entered parliament. I can confirm that our number one enemy Work and pensions Secretary Iain Duncan Smith was nowhere to be seen at the Westminster Village. Well no guesses where he was on a plane to Paris to attend a conference on the EU youth unemployment crisis.

Before my read any further please checkout this Youtube and this sums up the mood of the nation:

Whilst this taking place he left his bed partners to hold the fort for him so they can carry out his dirty work. In the meantime Ian Lavery MP chaired a meeting which the lobbyists were very passionate of their concerns about the dreaded bedroom tax.

If Labour wins the election in 2015, we promise to scrap the Bedroom Tax immediately. Until then, we need to work together to keep up the pressure on this government to repeal it.

Don’t let people forget that Tory and Lib Dem MPs did the wrong thing last night



Another vote on Bedroom Tax on 12 November 2013

Checkout this Youtube and remember those who face eviction:

beaker_1743003cI’m sure many will be Intrigued to learn that Danny Alexander father who works for a housing association has blast his son and coalition over the most dreaded bedroom tax as particularly unfair in a stinging attack.

Di Alexander condemnation is his son’s favourite welfare reform can by revealed as Labour prepares to call on David Cameron and his sidekick George Osborne to kill the bedroom tax on a vote on 12 Nov 2013.

He said tenants forced out of their homes could not find alternative places to live and revealed that the Coalition’s welfare shake up meant “considerable challenges” for his housing association tenants in Scotland.

“It penalize both tenants and management team for not being able to magic up a supply of smaller properties particularly those with only one bedroom, when we have been funded by Coalition since our inception to build nothing smaller than two bedroom flats and houses”

The criticism is a major embarrassment for his Cabinet minister son and the Chancellor. The pair have claimed will save around 480 Million a per year and affect 600.000 people.

An ex-minister has warned that the ConDems‘ hated Bedroom Tax will actually end up costing the Government money.

_49789892_jex_858863_de27-1Labour’s former work and pensions minister Baroness Hollis of Heigham told the House of Lords that ministers have previously claimed the policy would lead to savings of £490m.

But Lady Hollis savaged the savings claim, saying the figure was based on assumptions that would not come true.

And she painted a grim picture of thousands of British families enduring a stressful ‘snakes and ladders’ existence as the tax forces them to be constantly on the move.

Lady Hollis, who spent eight years as social security and work and pensions minister in the previous government, issued her warning as peers debated the impact of the bedroom tax.

The policy – whose real name is the under-occupancy charge – means social housing tenants are docked up to 25 per cent of their benefit if they are deemed to have too much room.

Lady Hollis said the Government had assumed that 90% of people hit by the benefit cut would remain in their current homes, but surveys showed only 60% wanted to stay.

She told peers a more ‘realistic’ assumption was that 70% of people would stay and costs such as people running up rent arrears, moving into B&Bs and councils providing discretionary payments to some affected tenants had to be taken into account.

She said: “The public purse – I’ve done the stats – far from making savings, makes a significant loss.

“Tenants, far from enjoying a settled home, will face a snakes and ladders of moving up and down and across from one bed to two bed, perhaps to three bed all in different places and then down the snake again according to the age and gender of their children.

“Each move bringing huge moving costs, stress and dislocation especially to disabled families, their children and the local communities that support them.

“All this misery, all this cruelty, all this distress, to meet housing pressures that will actually now worsen and to make savings that now won’t happen.

“And we call this a housing policy? It’s strong language but I call this contemptible.”

Communities and local government minister Baroness Stowell of Beeston defended the Government’s policies

She said that affordable homes were now being built at the fastest annual rate for at least 20 years and the policy returned fairness to the housing benefit system by ‘levelling the playing field.’

stowellLady Stowell told peers: “It cannot be right that the taxpayer should continue to pay for homes which are too large for the households’ needs.”

She assured peers extensive research on impact of the policy had been commissioned and this would be published next year.

The government says it is providing £405m in discretionary housing payments while the new system is introduced.

But figures revealed last month show that more than 50,000 council tenants are facing eviction after falling behind on their rent because of the bedroom tax.

And a further 30,000 people living in housing association properties are also behind on their rent after the tax was introduced in April.