Tag: UK

WE SHOULD HEED OBAMA.

 

YES WE SHOULD.

 I would guess that Barack Obama is more popular with the British people than most of our domestic politicians. His two terms in the White House have been characterised by cautious and wise leadership of the western world and efforts to create something resembling the National Health Service in America. In the latter endeavour he has had fight every inch of the way against a stubborn, narrow minded and nasty Republican dominated Congress.

When asked this weekend, he will offer the view that we should vote to stay in the European Union. He will do that from the vantage point of having had to take a global view of affairs since 2009. And what has the President observed in those eight troubled years? The emergence of Daesh in the Middle East, the growing economic power of China and a newly aggressive Russia on Europe’s eastern flank. On the last point nobody would be more delighted if the UK quits the EU than President Putin. He wants a weakened EU. Obama knows this and is fully entitled to support the Remain cause during his visit.

Of course the British people will decide, but they will have the President’s opinion to think about which is similar to most world leaders including the old Commonwealth that the Brexiteers remember with such affection. They will also be taking into account the hugely authoritative Treasury document that came out this week. Its claim that we would all be over £4300 worse off captured the headlines but perhaps more significant was its analysis that our current membership of the Single Market (which will not be available if we leave) is better than all the other models the Brexiteers favour (Norway, Canada or the World Trade Organisation.

VOTERS ON THE BEAT.

It is certain that more people will vote in the Police and Crime Commissioner(PCC) elections in two weeks time than did so the first time around. The average 15% turnout in the gloom of November 2012 is not a very high bar to overcome. Early summer is clearly a more sensible time for such elections and people will also be voting for local councils at the same time.

There is another reason why interest in these posts might rise a little. The government are signalling that they see PCCs as a way of pursuing the growing agenda to join up public services. This is aimed at saving money and delivering more coherent delivery. The Home Secretary Theresa May has spoken about PCCs bringing many other services under their wing. These may include fire and rescue, probation and court services and possibly schools to support troubled kids and keep them out of crime.

Labour dominated the initial PCC elections in the Downtown area and there is little reason to expect a change this time. In West Yorkshire, which includes Leeds, Labour’s Mark Burns-Williamson is seeking a second term as is Clive Grunshaw in Lancashire. Grunshaw’s time in office has been overshadowed by two rows over his expenses. His strongest challenger is likely to be the Tory candidate, former Lancashire Police Superintendent Andrew Pratt.

On Merseyside, the former Labour MP Jane Kennedy looks nailed on for a second term, but in Greater Manchester there will be no PCC election. The post has already been absorbed into the office of the interim elected mayor Tony Lloyd, a trend that may develop across much of the North as the devolution process unfolds.

 

DON’T ROCK THE REFERENDUM BOAT CHANCELLOR!

 

PETROL TAX IS TEMPTING TARGET FOR OSBORNE.

George Osborne is in danger of being caught in an ambush of his own making when he presents his budget next week.

He needs to keep voters sweet ahead of the EU referendum but recently announced that the optimistic note he struck at the time of the autumn statement has now gone flat. There was always a danger that mid term unpopularity might lead people to vote against the government for reasons unrelated to Europe. At the moment the Conservatives hold a healthy lead over Labour, but an unpopular budget with new cuts and tax rises could change that before June.

The Chancellor was too bullish in the autumn and now that the economic headwinds are beginning to blow, he is thrashing around for answers to keep his pledge of a budget surplus by 2020 intact. The suggestion of a major reform of pensions was a spectacular example of this. The idea was floated to remove tax relief on pension contributions rather than taxing withdrawals later in life. This would have been a complete reversal of the current position but would have given Mr Osborne more tax revenue now. The plan met severe criticism, not least because a future Chancellor might be tempted to tax withdrawals as well.

That pledge of a budget balance by 2020 is crucial if George Osborne is going to make a bid for the premiership, but it certainly restricts his room for manoeuvre as uncertainty persists on the international front. With growth forecasts cut and average earnings rising more slowly, tax revenues are not what he expected as recently as November.

Reaching for more cuts in public services is going to prove very difficult. The well reported difficulties faced by councils like Lancashire clearly show there is no low hanging fruit on the public spending tree. Indeed the Chancellor will need a long neck to munch much more. So let’s nickname any more economies in this area, the giraffe cuts!

It is always difficult to predict what Chancellors will do, but I would be surprised if petrol duty remains frozen as it has been since 2011. With the drop in forecourt prices to around a pound a litre, this would be a relatively pain free area to raise tax. He ought to do something about taxing the amount of sugar we consume but there seems to be a reluctance to do so.

With virtually zero interest rates the climate remains favourable for investment and consumer growth remains strong. However the latter familiar development in the UK economy may be storing up trouble in the future. If only the manufacturing figures were as healthy.

Osborne will be entitled to say that his campaign to make multinationals pay their UK taxes is beginning to work. This is an essential development as people grow weary of the austerity agenda.

Wednesday’s budget will be both a temporary distraction from debate on the EU referendum, whilst also potentially affecting its outcome. Osborne has been in post nearly six years now. He will need all his political skills to get through this Budget.

 

EU. REFERENDUM WON OR LOST NEXT WEEK?

 

 

Business should demand that next week’s European Summit should settle the terms on which the referendum will be fought in June.

The year has begun badly with the markets jittery and talk of a new recession. There are uncertainties we can’t control in Europe like the Syrian war and oil prices but business should be demanding that the leaders of the EU finally settle Britain’s renegotiation next week so that we can end this tedious debate which is debilitating for business.

Although perhaps one is being naïve in thinking that the June referendum will end this debate. It will if we vote to leave but I fear a narrow vote to stay will result in Euro sceptics blaming an establishment conspiracy and vowing to fight on. Just look at the Scottish Referendum. That’s why this whole referendum idea was a bad idea and I suspect David Cameron agrees with me.

I’m sad to say the whole European project is facing the biggest crisis in its history with its poor handling of the refugee crisis, economic issues and Russian pressure in the East. To lose the UK would be a hammer blow and therefore it is to be hoped that the other 27 countries will not water down the terms that the Prime Minister has negotiated. They are modest, as I always knew they would be, and will be difficult to sell to the British people as it is. But if next week we see Cameron humiliated by an attempt to modify his new terms, then the chances of a vote to leave will grow further.

The temptation will be to put off a decision with the result that the referendum will have to be deferred to the autumn or beyond. That would be highly undesirable for business waiting to make vital investment decisions.

I remain nervous that we will vote to leave as the refugee crisis intensifies during the summer and the Murdoch dominated press continues to spew out its rubbish about the EU. However all is not lost. The disarray in the leave campaign is laughable. Vote Leave, Leave EU, and Grassroots Out are all squabbling with each other. That shows a truth about those that want us to become little islanders off the coast of Europe. Their mentality is to divide and argue whereas the European project is to unite to solve our mutual problems.

So let’s look at what Cameron has negotiated in a positive light. He has won recognition that the UK is not committed to an ever closer union. He has a renewed commitment to a more competitive Europe and protection from Euro Zone decisions. The issue of migrant benefits has assumed an importance to our whole continuation in the EU that it does not merit. However an emergency break and a four year curb will be possible with agreement and there would be lower repatriated child benefit for migrant parents living here.

So for business sake let’s hope the renegotiated terms are agreed next week and all those who believe our future lies within the EU can unite against the squabbling Euro sceptics.

 

DON’T MENTION THE NORTHERN POWERHOUSE IN BUDGET GEORGE.

 

RAIL BETRAYAL.

I have rarely been so angered as I was on hearing the government had pulled the rug on major rail plans including the electrification of the Leeds- Manchester line.

It’s difficult to know where to start with this act of betrayal, almost deceit, being perpetrated on the people of the North. So here is a brief list of the things that were wrong with the announcement of the Transport Secretary Patrick McLoughlin.

Number one, the fundamental principle of the Northern Powerhouse is connectivity, bringing closer together the great cities of Liverpool, Manchester, Leeds, Hull and Newcastle. This “pause” which is a Whitehall weasel word for cancel, drives a coach and horses through the whole proposition.

Number two, for decades businesses dependent on government contracts have complained about the stop start approach of Ministers. The reason why our infrastructure is so poor is that successive governments have kept turning the investment tap on and off, making long term planning impossible.

Number three, for a year in the run up to the General Election Tory politicians were promising more and more spending on our rail connections. They must have known at least some of the truth. No wonder people are utterly cynical about politicians’ promises.

Number four, the chairman of Network Rail is made the scapegoat when the Transport Secretary should have gone too.

And finally will Crossrail 2 in London be affected by this plan? I don’t expect so. In which case the huge disparity between transport spend in the capital and the North will widen still further.

The only answer is to to devolve most of the transport budget to a Northern devolved government where we can make decisions for ourselves.

So George Osborne, don’t dare to tell us how much you support the Northern Powerhouse when you announce your budget on Wednesday because few will believe you.

BUDGET PREVIEW.

In his first budget this year George Osborne had Lib Dem Chief Secretary to the Treasury Danny Alexander reminding him he was in a Coalition. Alexander has now gone back to his old job with the Highland Tourist Board for all I know. Anyway Osborne is now free to show us what the first fully Tory budget since 1997 looks like.

Will he implement £12bn of welfare cuts? Will he continue to hammer local council spending? Will he pursue an ideological approach to create a smaller state? The Chancellor has planned a roller-coaster of deep cuts at the beginning of the parliament followed by spending increases on the back of a surplus at the end. Great politics but it has attracted criticism from business that wants a smoother path to aid planning.

The Chancellor will have to fulfil his extraordinary promise to enshrine in law no increases in VAT, Income Tax and National Insurance. Other election promises centre around a rise in the threshold for Inheritance Tax and more measures on tax avoidance.

A growing issue is the UK’s poor productivity. Measures to tackle that would be good…..and that rail investment for the north.