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Posts Tagged ‘Austerity’

Inequality and the Generation Gap. More Than Meets the Eye?

Tuesday, February 14th, 2017

Read any newspaper or magazine which focuses on economics and politics over the last few days and you will have almost certainly stumbled upon the idea of “intergenerational inequality”. The basic argument goes; for most of modern history in Britain every successive generation has enjoyed improved living standards compared to the generation that came before it. However, thanks to the economic crisis of the past decade there is a real chance that this will not hold true for the generation born between 1981-2000 (the so-called “millennials”). A basic tenant of our social contract and a fundamental aspiration for every parent, that our children should have a better life than we did, has been thrown into doubt in a way that is truly unprecedented.

Is that fear justified? I’d argue “Yes, up to a point”. It’s true that the figures don’t make for pretty reading. According to the Resolution Foundation, older millennials (around 30-35 years old) are the first workers to earn less than those born five years before them, and many of them entered work before the Great Recession. At the same time, it’s been reported recently that pensioner household incomes have overtaken those of working age equivalents for the first time.

Clearly something needs to be done, but the danger here is that we start seeing intergenerational inequality as a zero sum game, where making things better for young people can only be done by taking away from older people. Will, for example, will following the advice of some in abolishing the “triple lock” on pensions (where pension increase per year by the higher of the growth in average earnings, the Consumer Price Index or 2.5%) create good-quality, high-paid jobs for young people by itself? I’d argue not. Reducing inequality must come from lifting people up to the same level, not dragging them down.

I’d go further and say that treating entire generations like some vast amorphous block does nobody any favours. Take two young people born on the same day; one living in the countryside and another living in an inner city. Do they really have any similarities beyond the fact that they share a birthday? Do we miss any potential inequality in income and opportunity between these two because we’re more focused on how they’re doing compared to their parents? A few facts and figures can show what this means in practice. While some pensioners may be earning more than those in work, there are still 1.6 million pensioners (14% of the total pensioner population) living below the poverty line after housing costs. A higher income young person at age 20 has a greater income than a poorer member of their parent’s generation at any age.

We must resolve ourselves to fighting inequality wherever we see it, not setting up one generation against another. Fortunately, there are more than a few ways in which we can do this. Building more and better housing will benefit both young people looking to settle down and older people looking to move or downsize in retirement. Protecting pensions gives security not just to people on the verge of retirement age, but to young people who want to know that pensions will still be there for them decades from now. This is more than a dry debate about economics. If we accept that inequality both between and within generations is one of the gravest issues we face (and I believe it is) then how we deal with it says a lot about what kind of country we are.

I’ve had enough of the policies of scapegoating, divide-and-rule and “us versus them”. We need to be far more ambitious and far more progressive before we can even begin to put things right.

A Shocking Lack of Priorities

Wednesday, February 1st, 2017

Regular readers of this blog will know that I take every opportunity to criticise the hypocrisy of the government’s ideological austerity. The kind of austerity that sees services and investment cut to the bone but always seems to make vast amounts of money available for pet projects. After some excellent work by our very own Angela Rayner we’ve recently been given a clear example of the damage this kind of thinking has done to our country’s education system.

Cast your minds back to March of last year, when the then-Cameron government announced plans to force all schools in England to become academies. I wasn’t alone at the time in thinking that the plans were ruinously expensive, massively impractical and unlikely to increase standards. In the face of opposition from Parliament and the teaching profession the government was forced to first shelve and then abandon the plans completely.

“What does that have to do with what’s happening now?” I hear you ask. At the time the policy was announced the Treasury allocated £500 million of funding to support the mass academisation process. Now that it’s not going ahead, the government has clawed back £384 million of that funding (The rest, according the Department for Education, had already been spent on “other education projects”, whatever that means).

Let me say that another way. The government was willing to spend £500 million on making every school in England an academy. When that project was dropped they could have chosen to redirect that freed-up money to other forms of investment in our schools. Investments like smaller class sizes, better equipment and materials, or training for teachers. Investments that, unlike academisation, have solid evidence behind them to show that they lead to improved standards. Instead, they chose to let the money disappear back into the bowels of the Treasury. Probably never to be seen again.

It would be somewhat justifiable if our education system was already swimming in funding. What’s actually happening at the moment is the worst crisis in teacher recruitment in living memory and a warning from the National Audit Office that we’re on course for a £3 billion cut in school spending by 2020. The Grammar School Head’s Association say that their schools may resort to asking parents for hundreds of pounds a year to plug the gaps in funding cuts, and Cheshire East Council have gone as far as to confirm that they are looking at moving to a four day school week to make ends meet.

Tameside’s share of that £384 million would have amounted to almost £70 for every pupil in our schools. We’re probably not going to see increases in funding from any other source either. While on paper the government’s latest reforms to school funding gives Tameside a little extra money, Angela’s work has shown that when you throw in inflation and the impact of further cuts that we know are coming down the pipeline it amounts to slapping a sticking plaster onto a gaping wound.

If you thumbed through a copy of the Prime Minister’s Industrial Strategy you’ll have seen that one of the longest chapters is on “Developing Skills”, or to quote it verbatim “ensuring that everyone has the basic skills needed in a modern economy”. The kind of education system that delivers that isn’t something that happens by itself. It needs strong and fair funding. It needs to be run by people who know what works and have the freedom to put their expertise into practice.

What it absolutely doesn’t need are Ministers in Whitehall letting ideology and bias dictate their funding and policy decisions. Britain’s future and our children’s education is too important to be turned into a political football.

The Autumn Statement (Part 2): Inaction in the Face of Crisis

Thursday, December 1st, 2016


Last week I wrote my initial response to the government’s Autumn Statement expressing my disappointment that, despite some encouraging signs when she first took office, the Prime Minister has fallen into the familiar pattern of promising radical action and then failing to deliver in anything like the scale or size required. I said then that starving the country of investment in infrastructure and services and refusing to give much-needed support to struggling families had the potential to be catastrophic to our society and economy.

Unfortunately, it gives me no pleasure to say that as the dust settles it looks like several national organisations are in agreement with me.

Let’s take the Institute for Fiscal Studies (IFS) first. The IFS provides economic analysis independent of the government or any other political interest, and their reports are considered to be authoritative and well-respected. Their conclusions following the Autumn Statement are grim indeed. Their data shows that British workers are in the midst of the longest squeeze in their pay since the 1920s, and that real wages – pay adjusted for inflation – in the UK will not have recovered to their pre-Global Financial Crisis levels in 2021. That’s almost a decade and a half without a pay raise for a large amount of Britain’s workers, with the young and the low-paid being hit particularly hard. When it’s all said and done, the toxic brew of the government’s refusal to reverse cuts to Universal Credit, rising inflation and stagnant pay packets is estimated to cost 11 million households up to £390 a year. That’s money that many families working hard to keep their heads above water cannot afford to lose.

The second issue that is catching attention for all the wrong reasons is the Autumn Statement’s near complete silence on the subject of adult social care. The Association of Directors and Adult Social Services (ADASS) has warned that 62% of councils have faced residential and nursing home closures and 57% have had care providers hand back contracts in the past six months. We know that extra council tax raising powers are not bringing in anywhere near the money required, to say nothing about the unfair burden they place on councils with low tax bases which face higher demand with less ability to pay for it. That means that our residents are at serious risk of not getting the support they need to remain comfortable and independent at the end of their lives. That means that the National Health Service will face further financial and capacity pressures as people stay longer in hospital than they should, or are forced into hospital when they really shouldn’t have to be. A national crisis in adult social care is unfolding right now before our very eyes. National crises demand a national response, and the fact that the government has decided that it is unworthy of immediate financial attention is almost beyond belief.

Any government’s spending commitments tell you more than just the facts about what they’re going to spend; it tells you what their priorities are. Judging by the Autumn Statement so far, the government does not consider addressing a once-in-a-century crisis in living standards to be a priority. It does not consider the dignity and welfare of our oldest and most vulnerable citizens to be a priority. The time has come for them to take responsibility; they must either make extra funding and support available, or come clean about the impact of what they have let unfold on their watch. We will all suffer the consequences if they don’t.

Actions Speak Louder than Words

Thursday, November 24th, 2016


Cast your minds back for a moment to the weeks immediately after Brexit. When Theresa May walked into Downing Street she delivered a series of speeches unlike any I’ve heard from a Conservative Prime Minister in recent memory. Obviously, she talked a lot about Brexit, but she also talked about taking on vested interests, cracking down on tax avoidance, doing more for struggling families and giving employees more of a say in how their workplace is run. It was a surprising and welcome change of words, but I decided to wait to see what would happen in terms of action before I got too excited.

Five months or so later, and we’re getting some idea of what kind of action a May government is going to take. Unfortunately, following this week’s Autumn Statement, it appears that my scepticism back in the summer was justified.

Let’s talk about what the government said they would do first. They made the right noises about investment, but we’ve seen absolutely nothing in terms of new or radical solutions. The policy announcements we’ve seen in the Autumn Statement in no way matches the sheer scale of the challenge that we face in rolling back the damage and decay inflicted upon our infrastructure by austerity. £1.1 billion for roads might sound like a lot, but that barely covers what is required in Greater Manchester, never mind the entire country. Releasing money for 140,000 new homes sounds a considerably less impressive when we know that we need at least 200,000 a year every year just to keep our heads above water. Taking steps to reverse our decline in research and development spending – a vital part of building the economies of the 21st century – is welcome but it still leaves Britain far below the figure of 3% of GDP recommended by the Organisation for Economic Cooperation and Development (OECD). Time and time again, it’s bold talk followed by timid action.

Then let’s talk about what isn’t happening, such as the promise to put employees on company boards. This isn’t some kind of unique and radical policy. The Germans have had workers on boards for decades, and they have one of the most successful economies in Europe. During the summer the Prime Minister made this one of her flagship policies, but at a speech to the Confederation of British Industry this week she went out of her way to say that she was not going to force companies to do it. No matter what you think of the policy, that’s a complete and total U-turn. The government have also refused to abandon their planned cuts to Universal Credit. These cuts will cost many working families, the type of families that the Prime Minister claims to be looking out for, thousands of pounds in lost income by the end of the Parliament. They will also wipe many of the gains people will see from the increase in the “National Living Wage”, ensuring that the Chancellor repeats his predecessor’s trick of giving with one hand and immediately snatching away with the other.

So there we have it. Despite what they said, the government has flunked every opportunity to take the decisive and radical action they promised back in the summer. What we’ve ended up with is a familiar story for anybody who has lived through the last six years of governments. A pittance of investment that leaves our vital infrastructure on life support, headline-grabbing promises that are abandoned as soon as the ink is dry on the newspapers and always, always “jam tomorrow” for hard-working families that are struggling today. It would be bad enough in normal times. In these extraordinary times it’s the fast track to catastrophe.

So Much for the End of Austerity

Monday, November 7th, 2016


With everything that’s gone on in the past few months it’s not surprising that quite a few things, many of which would have been big news had they happened at a quieter time, have slipped under the radar. One of these happened today, as the lowered benefit cap came into force across the country.

It seems like a lifetime ago since it was announced, so allow me to refresh your memory. One of the first policies of the coalition government back in 2010 was to reduce the total sum people could receive in benefits to £26,000 a year for couples with or without children and lone parents. After the General Election in 2015 a further reduction was announced, bringing the cap down to £23,000 a year for families in London, and £20,000 a year for families outside. It is this second cap that takes effect today.

You might ask what difference this will make. The answer is “Quite a bit”. Research by Shelter shows that unless you lived in one of the more expensive bits of London, you would probably not have come up against the 2010 benefits cap. Renting a two bedroom property was still affordable in 94.1% of England for a couple with two children, and if you were a single parent with two children you could afford the same in 96.1% of England.

That isn’t the case as of today. Under the reduced benefits cap areas that nobody would describe as super-expensive have suddenly become unaffordable. That includes pretty much the entire south of England and chunks of Manchester, Leeds and Birmingham. All in all, it’s estimated that 57.9% of England will be off-limits. Remember as well that we’re not talking about this affecting tabloid-press caricature families with seventeen children; we’re talking about this affecting couples or single parents with one or two children. That’s a lot of families who woke up this morning facing a struggle to keep a roof over their heads and food on the table.

More broadly, this policy is a relic from a previous government. We knew what Cameron and Osborne wanted; balancing the books at any price. May and Hammond claim that fairness is their watchword. Where is the fairness in children being denied basic essentials such as food, shelter and heating because it’s been decided that their parents have too large a family, or that they live in the wrong part of the country? Where is the fairness in families from Tameside and elsewhere in the country continuing to pay the price for an austerity that not even the government believes in anymore?

Of course, the main concern of the government is getting people off the welfare bill and saving money, but even here the evidence suggests that, so far, the benefits cap has failed on both. Only 5% of those affected by the previous cap moved into paid work (and, despite what some might think, I’d be willing to bet that for a lot it wasn’t for lack of trying). In terms of savings, the previous benefit cap was estimated to save £65 million last year, but much of these savings went straight back out again through the costs of housing support grants, homelessness and providing skills support. When you look at the big picture, it’s difficult to argue with the IFS’ judgement that any savings from the reduced benefits cap will be “trivial”.

So, to sum up, we have a policy that will cause undue suffering and hardship, which will probably not achieve its goals, and was created to reach a target that no longer exists. On this day, isn’t it time we took a step back and wondered if this is really the kind of country we want to be?

The North Deserves a Better Budget

Friday, March 18th, 2016


It’s a familiar ritual by now. Every Budget Day for the past 6 years local government leaders up and down the country have woken up hoping for the best but preparing for the worst. Yesterday was much the same.

Local Government has so far borne the brunt of the Chancellor’s cuts to public spending, and Northern urban councils like Tameside have been affected worst of all. On current projections we are set to have had £200m taken away from us by the Government by 2020.

There are some limited crumbs of comfort in the Budget for Greater Manchester. The £300 million for transport infrastructure in the North is welcome. However far more money will be required before anything becomes a reality. It also does nothing to rectify the obscene North/South divide in transport investment. One project in London, the Elizabeth Line, has at £14.8 billion cost almost 50 times more than what has been allocated for the entire Northern Powerhouse in this Budget.

As we should have come to expect from this government, there are also far too many cases of ideology triumphing over evidence, common sense and indeed, basic reality. Nowhere is this more apparent than in their plans to turn every school into an academy by 2020.

In Tameside we’re for our young people getting the best possible education, be it from academies or local authority schools. 91% of children attending a local authority school in Tameside are at a good or outstanding school as opposed to 36% of those attending academies. All the evidence suggests that forcing local authority schools to become academies is one of the worst things you can do if you want to raise standards and local accountability. That’s why I’ve called for a Regional School Commissioner to be appointed for Greater Manchester as part of any future devolution deal, a call that I will state again here. If we’re supposed to continue being responsible for how well our children do in schools despite academisation we need to be given the power to make it happen.

And to go with the good and the bad we’ve got the ugly as well, in the form of the announcement of further £3.5 billion cut to the public sector and a £1.2 billion cut to disability benefits. These are cuts to some of the most vulnerable people in our society, either through taking money straight out of their pockets and through taking money out of the services that they rely on. All to pay for tax cuts for big corporations and some of the highest paid people in the country.

So what do we have when it’s all said a done? If you’re rich, live in the South or are a big business, then you’ll probably think it’s a good Budget. On the other hand, if you’re poor, live in the North or use public sector services then you’ll fear the worst. If that sounds familiar, it’s because it is. Once more, it falls to us to protect the most vulnerable and maintain the services that our communities rely on. It was a hard task before, and this Budget is not going to make it any easier.

Tameside Budget 2016-17 Agreed

Wednesday, February 24th, 2016

This Tuesday evening the Full Council met to discuss the budget for the financial year 2016-17. These discussions have been held in light of the release of the Local Government finance settlement, which imposed upon us a cut of £54 million over the next four years, on top of the £128 million we have already suffered since 2010. Instead of admitting that it has failed to fund local services adequately, the government has instead chosen to place the burden for maintaining these services on the shoulders of councils and local taxpayers.

As a result of this, councillors in Tameside have been forced, like the majority of other councils in the North West and throughout the country, to raise council tax by 1.99% and introduce the full 2% adult social care precept.

This is not a decision we have taken lightly, but due to government cuts our vital services are being put at risk. As an urban, Northern council we have also received no additional income from the government’s transition grant, most of which has gone to rural shire counties in the South and Home Counties. The 10 local authorities that received the most from the transition grant each received on average £12.72 million, over four times what we can legally raise through increasing council tax and the social care precept.

At the end of the last year, our online budget consultation showed that 75% of respondents were supportive of a council tax increase when they were made aware of the financial challenges that we face.

Tameside remains a low tax borough. Our total council tax increase over the last 10 years is lower than both the English and the North West average, and it’s a fact that even with this increase our council tax still remains one of the lowest in both Greater Manchester and the North West. The increase will also raise £2.8 million to ensure that we can continue to run the vital services that our elderly and vulnerable residents depend on.

We will keep making the case against austerity and for investment in local authority services at the regional and national level, as well as continuing our own plans to make Tameside a better place to live, work and do business in.

Austerity Isn’t Working

Monday, February 22nd, 2016


I am not a fan of the cuts that have been imposed on us by this government since 2010. Now, I’m fairly sure that this is something I’ve made blindingly obvious multiple times on this blog. Today however, I want to go into a bit more detail as to why exactly I think that.

The first reason is the damage that they have wreaked on lives up and down the country. From the public health cuts, to the funding gap in adult social care, to a chronic lack of investment in housebuilding and transport infrastructure, the Chancellor and the Treasury have done everything in their power to make our country poorer, less compassionate and less competitive. Nor have the cuts been passed around the country fairly, with the poorest and most vulnerable people in the most deprived parts of the country disproportionately bearing the worst of the impact.

The second reason requires us to take a longer view. I’m sure there are some people out there who still swallow the line that cuts now are necessary for a better future. The Chancellor has said that further cuts up to 2020 will allow him to run a £10 billion budget surplus by the end of this Parliament.

I’ve never believed him, and this month the Institute for Fiscal Studies have done an excellent job showing up the Chancellor’s nonsense about budget surpluses for what it is.

The IFS’s Green Budget shows that a truly mind-boggling amount of the accounting going into calculating a budget surplus could politely be described as “creative”. Literally everything has to go right for a budget surplus to be even a remote possibility. To give some examples of the holes that could be blown in the Chancellor’s plans.

If the Bank of England’s prediction that wages will be 1% lower in 2020 than the budget surplus calculations hope is correct, that’s a £5 billion hole.

If the current turmoil in the stock market continues to drive down equity prices, that’s a £2 billion hole due to lower capital gains tax receipts.

If the Chancellor is forced to explain where the money for his income tax cuts is going to come from, something that he’s refused to do so far, that’s an £8 billion hole.

If the Chancellor doesn’t increase fuel duty in line with inflation every year from now to 2020, that’s another £3 billion gone. Now bear in mind that he hasn’t increased fuel duty since 2011.

And I haven’t even started in what could happen outside the cloistered walls of the Treasury. Everything from the EU referendum, to a rise in oil prices from their current unusually low levels, to another sweetheart tax deal with a multi-national will force the Chancellor into either further cuts or tax rises, or an admission that his plans weren’t worth the spreadsheets they were written on.

So this is where six years of austerity has left us, with our economy and public services sacrificed at the altar of chasing a delusional budget surplus. “More of the same” isn’t just morally indefensible, it’s economically illiterate.

The Great Public Health Carve-Up (Part 3)

Thursday, February 18th, 2016


When people think of health services in this country they usually think of the NHS, but local government also has a significant role in keeping the citizens of the UK healthy. Local authorities such as the one I lead have a legal responsibility for a whole range of public health services, covering areas like sexual health, drug and alcohol misuse, stopping smoking and preventing obesity.

While these programs may go unnoticed by many people, they are absolutely vital to the health of our population and keeping the NHS running smoothly. Early intervention and prevention is always better than cure. Every person that can lose weight or beat addictions on a public health program is a person that won’t be costing the NHS far more time and money further down the line. It has been estimated that every £1 spent on prevention ended up saving £23 in health benefits.

But investment in public health isn’t just about saving money. It’s about helping our residents live longer and better lives as well. Through early intervention and prevention people can be supported to make healthier lifestyle choices that will ultimately help them to stay fit and healthy for as long as possible. When you combine them all: the smoker who died of lung cancer, to the heart-attack victim that never took any exercise, to the alcoholic whose liver finally gave out, we can drastically improve the quality of life of our residents while significantly reducing the demand for expensive health and social care services.

It’s in everybody’s interest to ensure that that opportunities to improve and sustain the health of our residents are as effective and well-funded as they can possibly be. Unfortunately, as I’ve written in the past, they’re currently suffering an all-out assault from government cuts. We had a £200 million cut last summer, which knocked £1 million off Tameside’s public health funding. Then, six months later, the government launched a consultation for a further cut on top of that £200 million.

Now the results of that have come in, and they aren’t pretty. We’re set to lose a further £363,000, which when combined with an increasing and aging population means a reduction on public health spending per head from £72 to £70. In Tameside, the average healthy life expectancy (How many years’ people can expect to live in a “healthy state”) is 57. Already there is a gap of 20 years in healthy life expectancy between the most affluent and most disadvantaged areas in the country.

This is unfair and unacceptable. It is absolute madness that councils across the country are now being forced to make savings now when we all know that those “savings” will be lost multiple times over by increased costs due to poor health outcomes and lives lost early. Once again, this government has proven that it knows the price of everything and the value of nothing.



Investment, not Austerity. Looking forward to 2016.

Friday, December 11th, 2015


Last week I delivered my annual keynote speech to the last Full Council meeting of the year, my sixth since I became Leader of Tameside Council. I wish I could that they’ve gotten easier, but for every year that passes keeping our vital services running in the face of relentless cuts by the government becomes harder and harder.

I have always said that we need to be honest with the people of Tameside about the reality of the task in front of us, no matter how difficult or uncomfortable it may be for people to hear. In that spirit, it gives me no pleasure to say that we are very rapidly approaching the point where we will begin to struggle to provide anything but the most basic of statutory services to our residents.

Over the past few months members and officers of the council have been hard at work drawing up plans for how to manage the next rounds of cuts in funding from the government. Whichever way you look at it, it does not make for pretty reading. In five years’ time we expect our budget to have been reduced by over £200m from 2010. Even today, 75% of what’s left of our controllable spend is used to fund adult social care alone.

From over 4,000 full-time employees in 2010 the council now has less than 1,800. Despite what you might read in the media, this will have significant repercussions on our ability to provide services that have been taken for granted up until now. Our customer service teams are so stretched that face-to-face contact with residents may soon be a thing of the past, and it’s also looking very likely that street cleaning teams will have to be reduced by half, doubling the length of the cleaning cycle from four to eight weeks.

It should be clear to everybody that we cannot go on like this. Not if we want local government to survive in any meaningful form. That’s why I also used my Full Council address to highlight the importance of showing, by our words and actions, that there is another way. Hope instead of despair. Community instead of isolation. Investment instead of austerity.

Our achievements this year have come from sticking to this basic principle. We have built and opened the first wholly new school in Tameside since the borough was created; we have successfully rolled out the Bin Swap scheme, which has already saved over half a million in landfill costs; we have invested in all our towns through cheaper car parking, the Tameside Loyalty Card Scheme and the Big Tidy Up; and cotton spinning has come back to Tameside for the first time in over half a century.

Our tasks for 2016 are therefore clear. We must stand up against austerity and deliver investment that will benefit all our residents; we must continue to work to protect vital services for the vulnerable and for those most in need; and we must preserve Tameside as a place to live, work and do business in.

I will be able to provide more details of how exactly members and officers of the Council will go about achieving these in the New Year, and I know that we will once again have the people of Tameside behind us as we do so.

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