Archive for May, 2015

Government to stack electoral cards in their party’s favour

Heading Labour's way

Heading Labour’s way

Conservative government will make it harder for Labour to win power.

The Policy agenda laid out in the Queen’s speech is to convince voters that the leopard has changed its spots and that the government is the friend of the workingman and woman.

Attempting again to wear the mantle of one-nation Conservatism.

But its not just a hearts and minds job, there are taking practical steps to make Labour’s task of winning power much more difficult next time.

There are two strands to the strategy.

The first is to hit the party in their pocket. The device for this is the bill to change trade union law. The main purpose of bill is to make industrial action more difficult. Strikes in public services must be backed by 40% of eligible union members, and a minimum 50% turnout in strike ballots. They also propose to lift restrictions on the use of agency staff to replace striking workers.

Political levy

But why waste a trade union bill if it gives you an opportunity to put the boot into your political opponents. The Tories are never slow to take their chances

So they’ve aimed an Exocet directly at a major source of Labour funding – the political levy. 70 per cent of the party’s donations are from trade unions. But not for much longer if the government get their way.

Union members will have to opt-in to paying the political levy rather than having the right to opt out after being automatically enrolled.

Labour’s income will face a massive drop if this comes about.

In Northern Ireland, where an opt-in system already exists, just 40 per cent of members contribute, compared to 8.8 per cent who opt-out in the rest of UK.

The Tories already have considerably more money at their disposal than Labour. In 2014 they had £28,930,508 to Labour’s £18,747,702. This gap will certainly grow if the current proposals become law.

 Poor people don’t vote

Alongside this financial advantage the second strand of the strategy comes into play  - new constituency boundaries.

Not just redrawing the boundaries, but redrawing them on a new system. The plan is to base new constituencies on electoral registration, rather than population.

A technical point you may say. Yes, but and it’s a mighty big but for Labour. Urban and socially deprived areas where registration is low are likely to have fewer MPs per person than affluent areas where registration is high.

Now it doesn’t take a degree in political science to work out who gains in such a system. Some experts reckon that the current government’s majority of 12 would rise to about 50 under this new system.

Together they provide a double whammy to Labour’s election chances. Some serious thinking will be required if Labour is to overcome such disadvantage.

Electing a new leader is the easy bit; refashioning a party to face the new more arid political landscape is the challenge.

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Less tax for the poor, maybe?

Less tax for all?

Less tax for all?

No rises in income tax rates, value added tax (VAT) or national insurance for the next five years.

Well, that’s the headline. What was an election gimmick, has now been delivered by Her Majesty in her address from the throne. It will be law.

Great, less tax all round, we’ll all be better off. But some obviously will be better than others.

Now who, that is the question? The poor? Well certainly the Queen’s speech promised to help the less well off.

She even went so far as to include a promise of a new law  to ensure that people working 30 hours a week on the national minimum wage do not pay income tax.  This on top of the five year freeze on tax rates.

The government said “As part of our long-term plan to back working people and make work pay, the government is determined to reward work by letting people keep even more of the money they earn. The government has already committed to raising the income tax personal allowance to £12,500 by 2020.

Today the government is going further in its actions to offer more security to working people by confirming that legislation will be brought forward to ensure that future increases to the Income Tax personal allowance reflect changes to the National Minimum Wage.

This will mean that people working 30 hours a week on the minimum wage will not pay any Income Tax.”

The winners

So there you have it, no tax when your on minimum wage.

True only if you are on 30 hours a week or less. But most working weeks are considerably longer. The average in UK is just over 39 hours a week.

The minimum wage rate from October 2015 is £6.70 per hour for adults. So anyone working a 37 hours a week would earn about £13,000 a year, and would still be liable to income tax.

As for the higher personal allowances it will help the middle-classes. But the less well off then 44% of these are on such low incomes they don’t pay any income tax so are no better off,

What hits the poor is a tax they cannot avoid VAT. The VAT rate of 20% is the same for the millionaire as it is for the pauper.

According to the government’s own statistics the poorest 10% of households pay nearly 47% of their gross income in direct and indirect taxes, while the richest 10% pay 35% of their income in taxes.

The government are talking a fine game for the working poor.  But it’s the rich that are being looked after. It was always thus.

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New housing based on old sales

Selling off affordable  housing

Selling off affordable housing

Queen announces government’s housing policy.

The Right to Buy is to be extended to housing association tenants in England. The controversial election pledge is now in the Queens speech.

This will extend Margaret Thatcher’s right-to-buy scheme to 1.3 million housing association tenants in England.

The Welsh Government is out to consultation on wishing to scrap the right and Scotland has already scrapped it.

So this will be an English only law for English people. Poor things.

How will it work? Much like the current scheme. Tenants will be offered discounts worth up to £102,700 in London and £77,000 in the rest of England.

Of the 2.5 million housing association tenants in England 1.3 million have lived in their properties for three or more years and will be able to buy their home.

To pay for the scheme councils will be obliged to sell off the most valuable homes from their remaining stock.  It is reckoned that these sales will reap in £4.5 billion. The cash will be used to build a replacement affordable home on a one to one basis. Well, that’s the theory.

Selling off two affordable homes, the council’s expensive one and that of  the housing association, for the price of one. A slightly strange policy when there’s a massive shortage of affordable homes.

Two from the receipts of one?

But hold on, the government reckon that not only will they have enough cash to build two replacement homes in the area they were sold, and some left behind to pay the debt.

Oh yes, this is Mickey mouse economics.

In much of the country, Right to Buy property prices (after the discount) aren’t big enough to cover the cost of building a new home, especially when the Treasury are taking their cut.

What is announced today sounds very similar to the existing scheme why should it produce a different outcome?

As Albert Einstein said “Insanity: is doing the same thing over and over again and expecting different results.”  Your right Albert, the policy is insane.

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