Tag: George Osborne

MERSEYSIDE BOWING THE KNEE TO CHANCELLOR?

 

DEVOLUTION.

If Merseyside councils outside Liverpool are recognising the power of George Osborne, they won’t be alone. The concerns of Wirral, St Helens, Sefton and other councils that an elected sub regional mayor will mean domination by Liverpool are valid and need to be addressed. But the Chancellor restated in the Summer Budget that the only way to substantial devolution for city regions is by accepting the new role.

The Tories and George Osborne are at the zenith of their power. The Chancellor gave a confident performance as he set out his vision for a higher wage, lower welfare economy. It was more than the annual stock keeping on the country’s economy. It was a statement of the Tory vision, the like of which we have not seen since Chancellor Geoffrey Howe began implementing Mrs Thatcher’s economic architecture in the eighties.

Leaderless Labour see their policy of a living wage shamelessly pillaged by a Tory government that now seems to believe it’s the government’s job to meddle in what private firms pay their employees. The Scottish Nationalists are challenged by Osborne to use their powers instead of bellyaching for more and the Lib Dems, who used to have Danny Alexander at Osborne’s side as Chief Secretary to the Treasury have become an irrelevance.

In these circumstances it is unlikely that concerns about the governance of the Mersey City Region are going to get much of a hearing. The chair of the Combined Authority, Phil Davies, says they will be setting out their demands next week. However Treasury Minister Jim O’Neill tells us the councils have agreed on an elected city region mayor in principle and the talks will be about the timetable and powers.

George Osborne also made clear that similar talks are under way in South and West Yorkshire so there is a real prospect that in 2017 elections will be held for powerful city region mayors across the North.

So it is full steam ahead for the Northern Powerhouse? By no means. A government that reneges on a promise to electrify the Leeds- Manchester rail line can’t be trusted. Liverpool Mayor Joe Anderson complained that the Budget contained no commitment to HS3 connecting Hull to Liverpool, “we could end up with a house without power.” Indeed we could. By their deeds we will know them.

WAR ON THE YOUNG.

The Chancellor wants to cut drastically the welfare state and abolish tax credits but he was careful to avoid the criticism that his measures were totally unbalanced in favour of the rich. So whilst we had a four year freeze on benefits and a 1% public sector pay rise over the same period we also had measures against Non Doms, tax evaders and wealthy car owners.

But Osborne has not taken a balanced approach to the young. They will be losing housing benefit and tax relief on pensions, not getting the £7.20 living wage, and maintenance grants for the poorest students are being turned into loans. A dangerous gap is opening up between how poor young people and wealthy pensioners are being treated.

WAGE INTERVENTION.

Tax credits were allowing some firms that could afford to pay better wages to get state subsidies but the planned increase of the living wage by 10% next year and up to £9 by 2020 is going to put a strain on some smaller businesses that genuinely can’t afford it.

It is a big increase at a time when inflation is at 1%. Politically it is an extraordinary move by a Tory government. In the seventies Harold Wilson’s government loved its Prices and Incomes Board. The state meddled in companies’ affairs for a pastime. Margaret Thatcher wanted the market to decide these things. But George knows best.

 

A TORY DECADE AFTER THIS BUDGET?

 

OSBORNE SHOOTS LABOUR’S FOXES

A roller coaster takes you up as well as down. Critics of George Osborne’s budget have focused on the steep level of public spending cuts until 2018 followed by a positive spending forecast for 2019. To me it seems the Chancellor has plotted a route for the Tories to be in government until 2025.

The budget will probably convince enough people that this government has done enough to turn the economy around to make the Tories the largest party on May 7th.

If the Conservatives are able to deliver their economic plan in the next parliament then by the time of the next election, they will be in a position to put the pain of cuts behind them and seek a full mandate on the back of positive public spending.

A lot can go wrong and the Chancellor is refusing to explain where the 2016-18 cuts of £12bn will fall. There is also the small matter of what damage will be done to the economy by the uncertainty over our membership of the European Union. But broadly this was a confident display by George Osborne who has put Labour on the back foot nationally and in respect of the Northern Powerhouse.

The budget had numerous references to that proposal, including the claim that Yorkshire was creating more jobs than France and that growth in the north was faster than the south. The Northern Transport Strategy will pave the way for the trans Pennine HS3 which is more relevant to the economy of the North than HS2.

The weakness in Osborne’s approach to the Northern Powerhouse is the apparent favouritism of Greater Manchester. The announcement that the councils can keep 100% of additional growth from business rates follows on from its combined authority and NHS deals. Meanwhile the West Yorkshire deal announced this week has been described by the leader of Leeds Council as “not matching our ambitions.” They are paying the price for not agreeing to an elected mayor.

The Tories have developed a strong relationship with Labour Manchester with Ed Miliband’s and Ed Balls’ vision for the North left unclear. They are right to point to the unfair share of the cuts being borne up here but there is no way they should have allowed the Conservatives to become the champions of cities where they scarcely have a councillor.

It was a budget designed to shoot as many of Labour’s foxes as possible. The expected £23bn surplus forecast in the autumn statement led to claims Osborne was taking us back to spending levels from the 1930s. The surplus has now been reduced to £7bn.

The £900m bank levy and tax evasion measures were designed to blunt Labour’s attack. To answer the charge that the Tories were shamelessly courting the grey vote, we have the cut in tax relief on pension contributions and the ISA for first time buyers.

CONSTITUENCY FOCUS: LANCASTER AND FLEETWOOD.

This is Labour’s top target in the North West. The Tory MP Eric Ollerenshaw has a majority of just 333 in this seat that strangely combines two quite different communities. Fleetwood on one side of the Wyre estuary has a fishing background whilst miles away to the north Lancaster is a university city where the Greens have strength on the council.

The likely winner is Labour’s Cat Smith whose job involves supporting social work professionals.

 

OSBORNE ELECTION WINNER….AND AFTER?

 

 

 

AUTUMN STATEMENT.

 

George Osborne may well have done enough to ensure the Conservatives are the largest party after next May’s General Election.

 

The underlying perception that the government has stabilised the economy has been around for a while and probably would have been enough to secure electoral success. This week’s blatantly electioneering autumn statement and accompanying announcements on roads, flood relief schemes and the scrapping of the trans Pennine pacer trains should prove the icing on the cake.

 

The fact that the election will be followed by a further massive attack on council spending, a probable failure to eliminate the deficit at any time in the next parliament and the real possibility of tax rises…well we’ll deal with that later.

 

EFFECT ON THE NORTH.

 

Labour must be worried by the way that George Osborne has positioned himself as champion of the Northern Powerhouse but before we look at those measures, there is an important question. What happened to Nick Clegg’s promise that Leeds and Sheffield were to get their devolution packages before the Autumn Statement? Perhaps that was why the Lib Dem leader absented himself from the Commons. The word is that Clegg’s insistence that the package should not involve a directly elected mayor has not gone down well with the Treasury.

 

It is striking what benefits Greater Manchester is reaping from its coherent political leadership. On top of last month’s devolution package it is to get the Sir Henry Royce Materials Research Centre and a new theatre space at the old Granada TV site. It is to be called The Factory Theatre, a fitting tribute to Tony Wilson, founder of Factory Records, who did so much to champion the cause of Northern devolution.

 

But the rest of the north hasn’t been forgotten. Improved access to the Port of Liverpool, flood defence schemes at Rossall in Lancashire and the Humber Estuary and a College to train people for the oil and gas industries in Blackpool are all welcome.

 

A sovereign wealth fund is be set up so that northern communities can benefit from shale gas extraction and under new franchises for Northern and Trans Pennine rail services, the dreaded pacer trains are to finally be replaced.

 

The government is still not addressing the major devolution questions for the whole of the North, people are on low wages, food banks grow and the services people depend on may be swept away, but it is going to be difficult for Labour to match the Tories Northern Powerhouse concept.

 

ALL IN IT TOGETHER.

 

There has been criticism that George Osborne has had two jobs, as Chancellor and Tory Party strategist. But you can see the virtue of it after Wednesday’s statement.

 

The Stamp Duty changes make Labour’s mansion tax proposals look clumsy and complex. It is true that their mansion tax would bring in a revenue stream every year whereas Stamp Duty is paid once. However the rich really will be clobbered by the changes whilst people buying lower priced houses are benefiting immediately from a welcome windfall.

 

To further tackle the perception that the Chancellor favours his rich friends, banks are facing a new tax and there will be an attempt to get multinationals to pay tax properly in the UK, although Osborne’s unilateral move is attracting criticism that it is not being coordinated internationally.

 

National insurance relief on apprentices, loans for post graduates, measures on Air Passenger Duty and ISAs, plus the petrol duty freeze will all contribute to a good feeling going into the election campaign.

 

Labour will rightly point to the big picture failure of the Chancellor to redeem his promise to balance the books in this parliament and the day of reckoning that awaits us all, but will that sway the voters?

 

 

 

 

 

THE RIGHT TO BUY…A LAMBORGHINI.

BUDGET OVERVIEW

 

George Osborne’s reform of annuities is being compared to Margarent Thatcher giving council tenants the right to buy their homes. That’s probably overdoing it but it plays to the same Tory belief that people should be trusted with economic decisions. Few will actually buy sports cars but many will thank the Chancellor for the freedom to decide.

 

 

Improving economic figures, radical pension savings reform, backing for major Northern projects and a few good jokes made this the most confident Budget performance by George Osborne since he became Chancellor four years ago.

 

It shamelessly played to the older voter who might be flirting with UKIP and didn’t have enough to deal with youth unemployment. Yet the overall impression was left that the Coalition’s policies for the economy are beginning to work, albeit three years late.

 

Labour will hope that their question, “Do you feel better off than 4 years ago?” will continue to be answered in the negative, but they face a danger in doing that. They could end up appealing to a narrow section of the electorate whilst more people get jobs and older voters thank the Chancellor for doing something about the pitiful returns they have been getting on their savings.

 

Osborne threw down the challenge to Labour when he referred to the need for further cuts in public spending to achieve a surplus in 2018. He said the question for the British people was who had the credibility to do it?

 

I will never forgive the government for scrapping regional policy but while we are under this heavily centralised system, it is better that Whitehall backs Northern projects than ignores us altogether. So praise is due for the £42m Alan Turing Institute to help businesses use Big Data to help their manufacturing. I particularly liked the way the Chancellor, in announcing the project, referred to the disgraceful treatment Turing received in the 1950s because he was gay. The £270m guarantee for the Mersey Gateway Bridge should finally see this scheme get under way, the new centre for high level training in the commercial exploitation of graphene is welcome. Our regional theatre touring companies are to get a tax break. The future of Colin Parry’s Survivors For Peace programme in Warrington is to be secured when Lottery funding expires

 

The Budget documents also show that the government has asked HS2 Ltd to flesh out their proposals to accelerate the project with a view to opening the line to Crewe by 2027.

 

THE ECONOMY.

 

As George Osborne announced a series of economic indicators all pointing in the right direction, I had to check the one where he claimed unemployment in the North West is lower than in London. Surprisingly it’s true, 8.1% in London, 7.9% here. Yorkshire is 8.4%.

 

It was important that the Chancellor announced new moves against tax evasion. If we are cracking down on benefit, we must be even tougher on the fat cats who evade their responsibilities.

 

The biggest surprise in the Chancellor’s red box was the help for savers. Low interest rates may be good for the economy in difficult times but they have left savers angry. The reform of ISAs, freedom from the necessity for the elderly to get low yielding annuities and the new pensioners bond will please a section of the population with a high voting record.

 

The cut in beer and bingo tax and the freeze on petrol duty added to the feel good factor.

 

The Liberal Democrats also contributed to this Budget. The help with child care and the raising of the tax limit to £10,500 in 2015 are there policies. George Osborne praised his “excellent” Chief Secretary Danny Alexander. Will that be all the gratitude the Lib Dems get as they languish at 7% in the polls?

 

There were disappointments. The government’s green credentials are compromised by freezing the carbon floor price, there was no reform of business rates and very little on youth unemployment.

 

Anxieties remain about whether the recovery can be sustained especially if commodity rices rise in response to a worsening crisis in the Ukraine.

 

A lot will depend on how business responds to measures like the hike in investment allowances, but at the moment Osborne looks a happier man than Ed Miliband who managed a smile once during the Budget statement. It was when Osborne announced government backing for celebrations to mark the 800th anniversary of Magna Carta.

 

King John was a central figure in that, recalled the Chancellor. A weak leader who betrayed his brother and then was bullied by unruly bar