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2011 and all that… a wheel of fortune?

January 6th, 2011 by Andrew Gwynne

As we enter a new year, it is always customary to look ahead and to attempt to make predictions for the coming twelve months.

Don’t worry, I don’t intend to predict the events of 2011. I will have to live through them and if I get my predictions wildly wrong, there will always be some smart Alec who’ll point it out to me during a parliamentary debate, or in a future blog.

2011 is certainly going to be an eventful year, however.  It’s the year that the Coalition’s austerity plans will start to be felt by ordinary folk. The long-talked about cuts will start to be implemented and people will start to see it affecting their daily lives.  It is also a year of electoral tests – starting with the Oldham East and Saddleworth by-election next Thursday. Will it mark a Liberal Democrat comeback, or will it highlight just how far they’ve plummeted in public opinion? Then, in May, there are elections to the Scottish Parliament, Welsh Assembly and to a large number of English councils.  Can Labour snatch Holyrood back from the Nationalists? And who’ll triumph in the town halls? It’s all intriguing stuff for political junkies.

Then there’s the referendum on the Alternative Vote.  Just how excited will the Great British public be for supporting electoral reform? Who knows?

Of course, political events will certainly determine the mood in the three main parties – and the future for the leaders. But it will be economic events that will determine the mood of the nation.  As Bill Clinton once put it, “it’s the economy, stupid”.

And 2011 looks set to be another difficult year, even if the expected growth in the economy continues. We’ll all feel a more than a little squeezed by next year because of a combination of things:

Firstly, there are tax increases. VAT went up to 20% this week and national insurance employee contributions increase in April. Added to that, many people will experience some form of wage restraint this year. But the thing that’s going to hurt us the most – and make us feel poorer – are price increases.

Globally, prices are increasing rapidly for all kinds of commodities. Very soon this will filter through to the prices we pay for every day goods at the tills. Rising prices will also cause a headache for the Bank of England, who will want to ensure that inflation doesn’t become too much of an issue. It also takes away some of their capacity to stimulate the economy with another round of quantitative easing (basically, increasing the money supply) if the austerity measures fail.

So the only prediction I will make is that 2011 is the year when we’ll all be paying more and getting less. The year that we all started to feel a little bit squeezed.

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Categories [ Cuts, Economic, General musings, UK Politics ]

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Unpicking the pupil premium

December 13th, 2010 by Andrew Gwynne

So now we know what the much lauded ‘pupil premium’ will be worth. Schools in England will apparently get an extra £430 for each disadvantaged pupil they take from next year.

The pupil premium has long been a flagship Liberal Democrat policy and it was incorporated into the Coalition Agreement as a quid-pro-quo for supporting policies such as increasing university tuition fees. All schools will receive the money for every pupil whose parents have an annual income of less than £16,000.

On the face of it, it seeks to redress the imbalance of funding for pupils in different local authorities. At present, per pupil funding is allocated on the basis of poverty, but at a local authority level.

In a constituency like mine, which crosses two local authorities (Tameside and Stockport) it means that Tameside pupils currently have more spent on them than Stockport pupils (by almost £1,000), because that borough is the poorer of the two, and so it receives more funding.  Having said that, the two Reddish Wards – in the part of Stockport I represent – are in the least affluent part of my constituency, so in theory, the pupil premium will help out the schools located there.

However, and here’s the sting, this isn’t really extra money.  What the government appears to be doing is redistributing money already allocated to schools.  In future, there will be a flat per-pupil fund throughout England – so every child will receive the same funding – with the pupil premium topping up funds for those on free school meals.  But put bluntly, a flat fund will mean that money will inevitably be taken out of areas like Tameside (the 56th most deprived local authority in England).  And this means that many of my Tameside schools will see shrinking budgets in the years ahead.  As John Denham put it on the BBC, it’s a case of “robbing Peter to pay Paul.”

The pupil premium is a good idea. It is right to target extra resources on those who need the most help, wherever they live; but starving poorer boroughs of education funding to pay for it is far from progressive. As a teacher might say, the Coalition must try harder.

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Gordon, Thank EU!

November 29th, 2010 by Andrew Gwynne

Thank heavens for Gordon Brown. Ok, I admit they are not the most widely used five words in the English vocabulary, but I sincerely mean them. And to be precise, I extend the thanks to his immediate advisors as Chancellor, including Ed Balls, for devising a formula that would effectively keep Britain out of the Eurozone.

Faced with a Prime Minister obsessed with embracing the European project at full speed, the Blair Labour Government did indeed commit the UK to joining the single currency, but with five tests (that were almost certainly never likely to be met) placed firmly in the way by a sceptical Mr Brown, it wasn’t going to happen in the immediate future.  And after the events in Ireland, we should be very thankful for that.

Of course, the argument goes (and I have some sympathy with the ‘theory’) for the EU to be a proper single market, it has to operate a single currency. But there is one fundamental flaw: The EU is a single market only because the member states have allowed – by pooling together various laws and regulations – the free movement of goods, services and labour.  It is not a single European economy.

And that’s the baseline weakness in the Eurozone.  The economy of Portugal is quite different to that of France, and Greece that of Germany.  Back in the early days, there was supposed to be convergence criteria in place to allow the economies to harmonise more closely, but it was fudged.

The reality is the economies of the various member states are as diverse now as they’ve ever been. Some might argue that they’re even further apart! And this places great strain on the single currency, for a monetary decision to suit the Greek economy is almost certainly the wrong kind of medicine for the Germans and vice versa.

Now I’m no Mystic Meg, but I predict that Ireland’s woes may spread, possibly to Portugal and Greece and maybe to other Mediterranean countries. Weak economies are always picked off as we ourselves found on Black Wednesday in 1992. This time there will also be mounting pressure from France and Germany for the Eurozone to be split into two distinct groups, but once that happens, much of the argument for the Euro disappears with it.

Nor is it in Britain’s interests for the Eurozone project to fail. Economic woes rarely stop at the English Channel. Almost certainly there will be an impact on EU trade which will in turn impact on British jobs and that’s before we are faced with a share of any bail-out bills!

But there is a salutary lesson for those – from across the political divide – who would have seen Britain rush into this project from day one. Thank heavens for Gordon Brown!

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The Freshers’ fair hangover

November 11th, 2010 by Andrew Gwynne

There is a salutary lesson for politicians of all political parties: don’t make categorical promises if you intend to break them, particularly so soon after the election.

Sometimes the breaking of election pledges (and we all do it at some time!) marks a parting with the electorate. While they didn’t quite take to the streets, John Major was certainly haunted by his ‘no new taxes’ pledge in the early 1990s, and especially after his government imposed VAT on domestic fuel. Voters never really forgave him for the ‘22 Tory Tax rises’ breaking what they thought was a very specific pledge at the 1992 General Election, where tax had played a deciding factor in the outcome (remember the Tax Bombshell?)

Jump forward almost two decades and we have thousands of students in uproar (and a small minority of them behaving criminally) at the Liberal Democrats for their apparent u-turn on tuition fees.  And it is the Lib Dems they blame, though ironically it was Tory HQ the militant activists trashed! The banners and effigies, the chants and the speeches; they all targeted the Liberal Democrats and Nick Clegg specifically.

Poor Nick had a torrid time at PMQ’s, standing in for his boss who was over in China trying to whip up trade.  Harriet Harman was especially withering, using humour to very good effect: “You are at Freshers’ week. You meet up with a dodgy bloke and you do things that you regret. Is not the truth of it that the Deputy Prime Minister has been led astray by the Tories?” she said.

There was no real comeback, and a floundering Deputy Prime Minister knew it.

For Nick Clegg, when of course he wasn’t the Deputy Prime Minister, had not only gone on YouTube and said that he and his party would categorically not support an increase in tuition fees, but that he would aim to reduce tuition fees as a first step to abolishing them. A rise to £7,000 a year would be a “disaster”, he said (the Coalition is proposing up to £9,000 a year). And worse still for the Lib Dems, every one of their MP’s – including Nick Clegg – signed a very specific pledge to vote against a rise; one they are now very clearly breaking!

So there will undoubtedly be difficult times ahead for the Coalition. I expect tuition fees will rise as proposed (unless some other rabbit is pulled out of George Osborne’s hat) and that, even with a number of Lib Dems abstaining or even rebelling, the government has enough of them on the payroll to ensure the necessary votes are won.

It might, however, be the breaking point for a section of the electorate who have – certainly since 2005 – been disproportionately supportive of the Liberal Democrats.  It is also a wake-up that governing isn’t quite as easy as opposition.

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There’s no place like home

November 4th, 2010 by Andrew Gwynne

I’ve been a bit busy lately to blog… no, my Shadow Ministerial responsibilities aren’t yet totally dictating my life (though they’re starting to, believe me!!); my family were down in London for the kids’ half term break, so I was off doing “family things” when not in the House of Commons.

Anyway, since my previous blog article was posted, there’s been a lot of discussion about the potential cuts to Housing Benefit.  The media hype has tended to focus on so-called ‘benefit scroungers’ and ‘undeserving poor’, but something not foremost in the debate so-far at least has been the extent that hard working people on low wages are just as likely to be hit. This is something that one of my ‘favourite’ Tory followers on Twitter (@oxfordspring) asked me to expand on, so here goes…

A constituency like Denton and Reddish is a bit of a paradox. It is, to many extents, a typical North West English, predominantly white, “working class” constituency. Wages are low. But, so too, is unemployment.  Yes, even during this economic downturn, the jobless total in my constituency has remained below the Greater Manchester, North West and the national averages.

The downturn has meant though, that more low paid families – perhaps losing one income out of a two income household – have needed help through housing benefit; and it’s worth noting that benefit expenditure for those in the working age group has increased 20 per cent over the past few years, which completely mirrors conditions in the labour market. Indeed housing benefit claims were fairly steady in the years before the recession hit.   And the sad fact is that over a quarter of all those set to lose out are currently in employment, while one in five of those affected by the cuts are on Job Seekers Allowance (and many of these tend to be unemployed for under a year).

As much of the media has concentrated on, the region most likely to be effected is London, but the North West comes just behind it. The figures for the Tameside and Stockport metropolitan boroughs (where my constituency sits) show some 7,320 people in total will be affected.

It seems to me that the government has a clear intention to drive all those on Housing Benefit to the very bottom of the rental market, which represents a very unfortunate change to social protection. The government continues to claim that the changes will simply mean that Housing Benefit recipients will be placed in the same position as low income working households not receiving the allowance. And here’s the rub, they expect people to adjust their accommodation choices to their incomes. In fact many recipients are already in that position.

Research by the Department for Work and Pensions themselves have shown that there’s no significant difference in the average rent paid by Local Housing Allowance households and low income working households more generally.

The notion that LHA was allowing very large numbers of families to occupy housing which they could not have afforded if they were working is essentially a myth!

You know when you’ve been Quango’d!

October 14th, 2010 by Andrew Gwynne

Last November, I was lucky enough to be drawn third in the Private Members Bill ballot in the House of Commons.

In the days that followed, I was bombarded with all kinds of offers for which piece of legislation I should take up as my ‘cause’. The suggestions came from a variety of sources: the public, charities, lobbyists and, of course, the government whips!

From the whip, I was handed a piece of paper containing several suggested draft bills, which the government would support if taken up by a willing MP. One of the suggestions to catch my eye was to abolish an organisation which had long become defunct, had ceased to operate, but required legislation to technically close it down.

My memory fails me, and I cannot remember the name of the organisation to be abolished, but for the sake of this article we’ll call it the National Potato Council (it was something just as riveting in any case!)

Obviously, I was tempted away from such an action – to focus my energies (or at least those of Sally Keeble, who kindly stepped in when I was taken ill) on the Debt Relief (Developing Countries) Bill, which successfully made it on to the statute book in May.

But all of this raises a serious point. The business of government changes over time, and the structures need to shift to reflect those changes. So today, the Government has listed around 200 Quasi-Autonomous Non-Governmental Organisations – Quangos to you and me – set for the chop.

Now some of these organisations were established for good reason, but – like my fictional National Potato Council – they have long become unnecessary, and so do need to be abolished. Other organisations though, still perform perfectly good functions to this day and maybe ought to be retained.

The Quangos whose functions are being returned to Whitehall departments include the Disability Living Allowance/Attendance Allowance Advisory Board and the Appointments Commission. Others, like the Zoos Forum, the Herbal Medicines Advisory Committee and the Air Quality Expert Group, will be replaced by “committees of experts”; And the Olympic Park Legacy Company will have its functions transferred to London Mayor Boris Johnson.

Of course, Quangos don’t just remove certain day-to-day functions from a government department, they also – sometimes conveniently for a Minister – remove the direct accountability to parliament, too.

By abolishing Quangos, Ministers should prepare themselves to be overwhelmed with direct questions about ‘potato quotas’, which would, up to abolition, be the jurisdiction of my National Potato Council.

Oh what fun we’ll have in Parliament once that happens!

NB – it appears my fictional National Potato Council actually exists (see comment below!)…

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Graduate grumblings or Coalition catastrophe?

October 11th, 2010 by Andrew Gwynne

First of all a big thank you to all those who’ve sent me congratulatory messages regarding my recent appointment to Labour’s front bench in parliament.

For those who haven’t been following the announcements, Ed Miliband has asked me to be a Shadow Transport Minister – a post I am really looking forward to. Conveniently, I am typing this blog on the train (the two hours’ journey from Stockport-Euston is an ideal amount of time to gather my thoughts and put it all down in a suitable piece).

There’s another political row brewing; this time over student fees.  Unless addressed, it could put the Lib/Con Coalition under real pressure, and perhaps event to breaking point.

From the outset, let me state that I benefited from the old system whereby my student fees were paid and I also received a maintenance grant – albeit almost whittled down to nothing by the Major government which was introducing student loans at the time.

In recent years, the Higher Education sector had grown massively and to a point where the old system of financing it could not be sustained.  That was fundamentally the Blair Government’s argument for introducing a system of tuition fees together with larger loans in England (HE funding is a devolved matter elsewhere in the UK); a decision which was controversial at the time, and which still rumbles on to this day.

Of course, the Liberal Democrats took a political – at the time they argued a principled – decision to oppose the introduction of fees; a position which was certainly fruitful in the 2005 General Election with ‘University seat’ gains in places like Cambridge and Manchester, and near wins in places like Durham.  As recently as the 2010 election, the Liberal Democrats publicly pledged to oppose any attempts by the government to lift the current cap on fees.

So it is of little surprise that many LibDem MPs’ are bewildered by the (LibDem) Business Secretary’s apparent u-turn on Higher Education finance.  The rejection of a graduate tax (which most LibDem MPs would support) and the introduction of variable interest rates for students is bad enough, but the suggestion that universities could be allowed to charge as much as £12,000 a year is a complete anathema to them.

I’ll save the rights and wrongs of the proposals for another blog piece, what will be interesting to watch is just how the party managers fix this. Can the Coalition withstand a major row on this issue? Moreover, will trust in the Liberal Democrats as a party sink to a new low if people feel that even this totem has been ditched in the pursuit of power-sharing with the Tories?

Interesting times, as they say…

Fair’s fair?

October 5th, 2010 by Andrew Gwynne

Firstly, a big thank you for sticking with me. As you can see from previous postings, I’ve not been around for some time. Those of you who have been following my Tweets will know what a torrid summer I have had – including a five week stay in hospital!  Anyway, I’m back!

Secondly another big thank you to those who voted for me in the Total Politics Poll.  It was quite a surprise to find myself in the top 10 MP’s blogs (at number 9)… the real pressure now is to stay there, or improve!

What a time to start blogging again; and where do I start? A new Labour leader in place, Tory ’slash and burn’ policies, the Lib Dems’ poll collapse…

Well the hot topic of the day is the Chancellor’s announcement about removing Child Benefit from higher rate tax payers.  And what a storm it’s caused!  Of course, if  such a key Tory announcement has even managed to upset the Daily Mail, it is surely worthy of looking at in more depth; so here’s my opening blog post!

Now let me declare an interest. On an MP’s salary (circa £66,000) I’m a 40% taxpayer.  I am also a father of three.  We receive Child Benefit.  If I’m honest, while it helps, as a family, we don’t really need it and we’ll survive without it.  So as a starting point I don’t really have an issue with the policy.

As always though, the devil is in the detail.  This is targeted solely at the higher rate taxpayer (the threshold of which is an income of about £43,000).  As has been pointed out by the right-wing media, this means a single earner family on £45,000 a year will lose their entitlement to Child Benefit while a two-income family potentially bringing in £80,000 a year will still receive it.

Of course, there is a solution. That is to bring in a proper system of means testing.  That costs money to administer – indeed, probably more than the £1bn saved (which is why it is easier to have a universal system). Even the Prime Minister – often the master of the political wriggle – looked uncomfortable on Sky News. He could not justify the basic ‘unfairness’ his new Child Benefit policy introduces.

And he went further to undermine his ‘fairness’ argument – universal benefits to pensioners will remain. So while it’s ‘fair’ that a top rate taxpayer loses Child Benefit, it’s also ‘fair’ that a top rate taxpayer will keep their Winter Fuel Payment. Of course, cynically, pensioners vote in disproportionately large numbers! I also suspect we’ll hear a lot about the ‘hard pressed’ middle over the next few years.

The Child Benefit cuts, of course are put off for three years, and so anger and resentment may stew over that time. Could this issue become the Con-Dems’ 10p Tax moment?

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Free markets + schools = disaster

July 12th, 2010 by Andrew Gwynne

There is no money’ – this is the message blasted across the Chamber by Ministers every time an Opposition MP (and increasingly, some Coalition backbenchers) condemn a decision to cut a project in their constituency. And to some extent, this is true. The public finances could not grow indefinitely and, given the banking crisis and the global recession, huge deficits followed. Had Labour won the 2010 General Election, there would still have been cuts – deep cuts – though not as severe or immediate as the Coalition’s plans.

However, for Building Schools for the Future, this wasn’t the case. Gove tried to use the mantra that the money wasn’t there, only to be shot down by his own Permanent Secretary who confirmed that Ed Balls was correct to say that full Treasury approval had been given to BSF. The money was there.

And if the money was there, it must still be there.  Now call me a cynic but I’ve not yet seen Gove scurrying up Downing Street with his bags of treasure wishing to please his master in Number Ten. So has this all been a cunning ploy to generate a slush fund of capital money for Gove’s ‘Free Schools’ plan? I suspect it might be.

You see, apart from a small number of middle-class mavericks who may be quite happy to have their Tarquin (apologies if any readers are called Traquin) educated above a shop or in an industrial unit rather than mixing with ordinary kids in the Comp down the road, most parents are not going to buy into that.  They want their children taught with the best facilities too, and for ‘Free Schools’ to work, they need to be in shiny new buildings.

The real concern is that this whole policy will be at the expense of the majority of children. It cannot be cost effective to create extra capacity in the schooling system when there is just no need for it. And nor can Local Authorities effectively plan for the future when, if parents don’t like a sound strategic decision, they can just declare UDI!

I have very real doubts that this free market approach to schooling will work. I also have very real concerns that in these financially tight years ahead, it will waste public funds on a scale rarely seen; and in the process, will have denied our children of that best start in life that Building Schools for the Future promised so many.

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Lest we forget

July 6th, 2010 by Andrew Gwynne

Please stick with me. I know the first golden rule of blogging is to keep making regular posts and – where appropriate – to reply to readers’ comments. It is something I particularly enjoyed doing back in February and March when I was recovering from illness at home (and to be fair, had lots of time on my hands).

Sadly, in the past few weeks, I just haven’t had anything like the amount of time to sit down and gather up my thoughts – now I’ve started to receive emails, tugging at my heart strings to keep on blogging!

Firstly, I haven’t gone away.  Sadly (as a result of the illness earlier in the year) I am having to have lots of medical tests, which have put me out of action a bit. I’ve also been incredibly busy in the Commons, having secured a couple of debates – which take up spare time in preparation.

Anyway, I wanted to reassure my loyal band of followers that I haven’t forgotten about you. And I will be back to full operation soon! Promise!

I was going to post a blog on cuts, and particularly on the Bulding Schools for the Future programme, which was cruelly axed by the Conservative-LibDem Coalition Government yesterday. However, that and the AV referendum (another subject I will return to shortly) seem to pale into insignificance…

Earlier today I had the immense honour of attending the funeral of Lance Corporal Andrew Breeze at Christ Church, Denton.  It was one of the most moving church services I have ever attended.  And the people of Denton really did Andrew’s memory proud, lining the main street to the church and clapping him as he was carried from the hearse into the church.

Of course, any death in the service of one’s country is a tragedy.  These are young men – a similar age to me, in the case of Lance Corporal Breeze – who should have a full life before them. To have that life cut short is a cruel blow.

But it also serves as a reminder to politicians that the decision to commit our troops to combat is something that should never be taken lightly.  I don’t want to revisit the rights and wrongs of recent conflicts, particularly in Iraq and Afghanistan, but we do need to remember these painful consequences of decisions taken by politicians.  Yes, our armed services are professionals – I would say the best – and will go on missions throughout the globe as and when they are told to. Some will pay the heaviest price though.

On a sombre note, I sign off with the words used in Andrew Breeze’s funeral today: Greater love hath no man than this, that a man lay down his life for his friends.

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