South Shields MP Emma Lewell-Buck today claimed George Osborne’s fifth budget would only widen the north-south divide.
She believes Osborne’s statement demonstrated the Coalition Government is “out of touch” with people in the constituency.
She said: “He tried to say that the economy is turning around, but households in South Shields who have seen their wages fall while prices rise month after month will see right through him.
“It’s clear whose side the Chancellor is on. Wages in London’s banking sector are rising nearly five times faster than the national average, and even then he won’t rule out tax cuts for the top earners. Meanwhile, those on low incomes are continuing to see their living standards fall.”
Coun Iain Malcolm, the leader of South Tyneside Council, labelled the budget a “gimmick”.
He said: “The budget was classic ‘smoke and mirrors’, full of pre-election gimmicks. They announced that they would cut inheritance tax for emergency service workers killed in duty – but this only applies to those leaving more than £325,000, so it is difficult to calculate how many would actually benefit.”
Coun Malcolm said new support to build 200,000 new homes was “simply nowhere near enough to resolve the housing crisis facing this country”.
The budget received a more positive response from a senior member of the borough’s business community.
Julie Lightfoot, managing director of South Shields-based Solar Solve Ltd, said: “As a local family-owned business who exports 85 per cent of our turnover, it’s encouraging that the Government is supporting British manufacturers by introducing a £7bn package to cut energy bills
“Although we aren’t an intensive energy user, every little saving helps, although we’ll have to wait and see what the actual savings will be. However, it’s nice to know that half of the firms that will benefit the most by cuts in manufacturing costs are in the north of England.”
Jarrow MP Stephen Hepburn said: “This is a government that has pushed down living standards to such an extent it has left working people £1,600 a year worse off.
“Osborne and the Tories only stand up for the privileged few.”
Merv Butler, branch secretary of Unison South Tyneside, said: “The Chancellor should have had the courage of his convictions and stood by his support of a £7 minimum wage. Moving to the Living Wage is the best way to raise tax revenue and put money into people’s pockets. It would boost consumer confidence and increase spending in local shops and businesses.”
North East Chamber of Commerce policy director Ross Smith said: “This was a sensible budget, and the conditions within which North East businesses can continue their strong contribution to UK growth have been strengthened by these announcements.”
Source – Shields Gazette, 21 March 2014
By Jenny Howarth
Chancellor George Osborne has delivered his fourth budget. It was clear from his opening gambit – “If you’re a maker, a doer or a saver: this Budget is for you” – that this budget would help the few and not the many. If you were not a ‘hard-worker’, business owner or saver then there would be no point in listening any further.
For Osborne, the budget was an opportunity to say that their long-term economic plan is delivering security for the people of this country. The emphasis was on support for businesses who invest and export, on support for manufacturers, on support for savers or rather making sure “hardworking people keep more of what they earn – and more of what they save” – all aimed towards the central mission: economic security for the people of Britain.
By the end of his 55 minute speech it was very clear that the economic security he spoke of was for the few not the many. He tried to convince people that his budget was for the “makers, doers and savers”, yet it came across as “I’m hoping to gain the over-50 vote”. He promised a budget of “hard truths” which could be implied as “if you think I’m going to help the unemployed, disabled and vulnerable then think again”.
Osborne’s budget was more ‘out of touch with reality’ than ‘hard truths’. He spoke of economic growth, a Britain on the road to recovery, even mentioning the new resilient pound coin to match the resilient economy. However, for thousands of families waking up the morning after the Budget, life is still a struggle. For them the budget was meaningless, doing nothing to improve their desperate situation and here is why.
Julia Unwin, Chief Executive of the Joseph Rowntree Foundation said:
“This is a Budget for the people who already have, not for the people who need to benefit most from the return to growth. It is a lost opportunity for the 13 million people in poverty who need active intervention to tackle the structural barriers that keep them in poverty”. Adding, “People on low incomes are unlikely to see the welcome benefits of growth unless there is targeted help with household and housing costs, with child care and with the nature of jobs and training. The expense and inefficiency of high levels of poverty continue to put a drag on growth”.
A view shared by other charities. William Higham, Save the Children’s director of UK poverty, said:
“The Budget was a missed opportunity to address the needs of families that are struggling to pay their food bill and children whose parents cannot afford to pay for uniforms and school trips”.
It is for these reasons, George Osborne’s fourth budget was a budget for the few. It failed to address the fact that living standards are falling – despite the 2010 Manifesto promising “An economy where…[people’s] standard of living…rises steadily and sustainably”. It failed to help the 350 000 reliant on food banks or the 400 000 disabled people paying bedroom tax. His “resilient pound for a resilient economy” ignores the fact that working people are £1600 worse off.
Osborne may believe that increasing personal tax to £10 500 will help improve living standards but whilst it lifts three million out of taxation, it does nothing for the many families who depend on housing benefit to top up the little wage they get. “The vast majority of this will be deducted from their benefits – giving with one hand while taking with the other”, says Matthew Reed, Chief Executive of The Children’s Society.
Matthew Reed’s comment raises another important point – benefits. Osborne had nothing to say on this except to announce a cap on the welfare budget. This will see Tax credits and housing benefit limited to £119.5bn in a bid to cut the deficit. Critics say that this limit to benefit claims over the next four years will hit disabled people and the low paid without tackling the underlying causes of Britain’s growing social security bill.
Whilst it may appear to be political suicide by Shadow Chancellor Ed Balls saying Labour will vote for the cap, it is not. According to Jonathan Portes, director of the National Institute for Economic and Social Research (NIESR), the cap was simply a “gesture” and served no purpose other than to kick the “problem of spending cuts into the next parliament”.
For Portes it was “meaningless” to put a number on the cap without having policies in place to deliver it or to state how the cuts would be achieved. Adding that the charter would commit MPs to renewing the cap each year. “As Parliament already votes on measures to change social security budgets, this charter will not make much difference”.
It would appear that Osborne’s welfare cap charter is not new but something that already exists. It could be argued that whilst Labour is voting for it, there is plenty scope to amend the limit and bring in policies that would help not hit. Moreover, the question that needs to be asked is would a successive conservative government do that or would they continue with their long-term economic plan that they insist is bringing security to the people of Britain.
For now it would appear they are committed to helping the few, committed to bringing security to the hard-workers, business owners and savers. Alison Garnham, Chief Executive of Child Poverty Action Group, says:
“Today’s Budget tries to lock-in austerity for millions of low-paid families, poor children, carer’s and disabled people. Announcing a cap for social security spending without a plan to address the root causes of low pay, high rents and high childcare costs, simply forces the most vulnerable in society to pay the price for inaction”.
Source – Welfare News Service, 20 March 2014
he Chancellor has been told his Budget today must address the North East’s unemployment record.
Businesses, house builders and unions have said the Government needs to start growing all parts of the UK economy, not just the South, and urged George Osborne to use his Budget to tackle the number of people out of work in the region.
At 10%, the region’s unemployment rate stands as the highest in the UK, remaining around that level even as unemployment falls in large parts of the rest of the country.
The North East Chamber of Commerce has already written to the Treasury calling for a renewed focus on tackling job creation in all parts of the UK.
Policy director Ross Smith said: “We have seen the recovery really accelerate over the past year. We now need to see measures that will sustain this for the longer term and make it better balanced – not a series of pre-election gimmicks.
“North East businesses are making a huge contribution to that recovery, but doing so within an economic system that is still skewed towards the South East. We need to see measures that will capitalise on the region’s export success, energy expertise and capacity for growth.
“That includes taking better account of the regional implications of taxes such as fuel duty and air passenger duty, better balanced delivery of infrastructure, and greater scope to ensure skills training matches the labour market needs in this region.”
The need for a regional focus was repeated by Beth Farhat, regional secretary of the Northern TUC.
She said: “Most people in the North East aren’t experiencing a real recovery and in fact for many here it’s getting worse, with unemployment for women rising 20% in the last year alone.
“We need a Budget focused on creating more North East jobs, with better quality work alongside with fairer pay. Ministers should end their ideologically obsession with cuts and privatisations to public services and focus much more on a thought-out approach to developing the economy, particularly in regions like ours.
“When eight out of 10 private sector jobs are being created in London it’s clear the current plan isn’t working and the economy is still geared towards London and the South East at the expense of everywhere else.
“There is a consensus across the region about what we need to do, so I’d urge the Chancellor to hand us the economic tools, powers and investment needed to enable us to contribute to regional success and balanced national growth.”
Newcastle Council leader Nick Forbes said house building was a key way of kickstarting the North East. He said: “What we need is a tax break to incentivise house building on brownfield development sites – this would help deal with the chronic shortage of housing and make it financially viable for construction companies to take on more apprenticeships.
> Would it ? Or are we just talking about more housing that the majority of us couldn’t afford even if we are working ?
“The Government has announced their intention on building a New Town at Ebbsfleet, but a tax break like this would help us rebuild areas like Scotswood and Walker Old Towns.”
And the North East-based Home Group has also had its say, calling on the Government to force through better use of public land, making it easier for firms to build.
The affordable housing group called for the creation of special Housing Zones in which, like the business-led enterprise zones, incentives would be offered to kick start the building process.
Source – Newcastle Journal, 19 March 2014
A jobs warning has been sounded as the region is told of the risk of Scottish independence.
As Chancellor George Osborne set out why the UK would not let a breakaway Scotland keep the pound, Hexham MP Guy Opperman has warned of the regional impact of a new international border on the doorsteps of Northumberland.
The Conservative MP said: “If keeping the pound would not be possible as part of a formal sterling currency union; if the SNP no longer wishes to join the euro, which one can see; and if there is no prospect of an independent country with border control—my constituents are somewhat concerned that there might be a rerun of Hadrian’s wall—where are we?”
He said the situation in Scotland was clearly of concern to the North East, adding: “I am speaking as an MP whose area has a border that divides Scotland and England—my local businesses, the North East chamber of commerce and the local authorities have all indicated that there would be a negative impact on jobs, growth and the development of our respective economies in Scotland and England were the referendum to go ahead.”
> Would that be the same jobs, growth and development (or lack of) that makes the North East the area with the highest unemployment ?
He told MPs: “I speak as a Brit, a mongrel Englishman, a lover of Scotland and an MP whose constituency borders Scotland. Were there to be Scottish independence, I have no doubt that tourism and trade would continue, but it would be naive not to accept that trade on a cross-border basis would unquestionably be affected.
“That is not some Conservative Member of Parliamentspeaking; that is the opinion of the chambers of commerce, local authorities and business groups I have spoken to on both sides of the border.”
> All organizations with the welfare of the common man at heart…
In Edinburgh yesterday the Chancellor ruled out a currency union with an independent Scotland after “strong” advice from the Treasury’s leading official, which was published.
Sir Nicholas Macpherson said that unions are “fraught with difficulty” and raised serious concerns about the Scottish Government’s commitment to making it work. Scotland’s banking sector is too big in relation to national income, the UK could end up bailing the country out.
> Perhaps the North East (and Cumbria, for that matter) should apply to become part of an independent Scotland. Until relatively recently the border was pretty fluid, the old kingdom of Northumbria took in chunks of both, and Hadrian’s Wall is nowadays a long way from the current border (although, of course, neither England or Scotland existed when it was built).
But who do we have more in common with – Scotland or the London city state ?
Source – Newcastle Journal 14 Feb 2014
From April this year, the UK government will cap overall spending on welfare. Chris Johnes (Oxfam) hoped this would encourage government departments to invest in long-term programmes tackling poverty to cut future spending… but the current social housing strategy seems to be aiming for exactly the opposite.
Tackling the high cost of welfare is one of the government’s top priorities. Isn’t it? Both the Prime Minister and the Chancellor have repeatedly said that cutting welfare costs is essential to getting the budget deficit under control. So after freezing many benefits for working age people last year, the government has since decided it will introduce an overall cap on many benefits starting from next financial year.
This should be a spur to government departments to look at ways they can get the welfare bill down. Indeed, our experience as a charity is that the Treasury is interested at looking at how longer term preventative programmes – which help people tackle deep rooted personal problems – can be supported to cut the need for welfare spend in the future. These kinds of preventative spending could include family support, more tailored back to work schemes, expanding the supply of cheaper housing and better vocational education.
However, nobody seems to have told the Department for Communities and Local Government (DCLG), which seems determined to continue a housing strategy for England that will further push up rents. The strategy – which doesn’t include plans for building new homes for “social rent” (ie genuinely affordable rent) – will also drive up the need for people on low incomes to draw on housing benefit to be able to afford their rent.
The reality is that the current mix of jobs and housing available means that many people in work, especially in the south east, need housing benefit to be able to pay their rent. And the DCLG’s policy is based quite deliberately on allowing the housing benefit bill to rise – it’s not their problem, it’s another department’s budget. However, it could soon become the tenants’ problem in a big way.
If the welfare spending cap is breached, then housing benefit is an obvious target – it’s one of the largest benefits covered by the cap (it costs £24bn per year) – which means the amount of housing benefit available per person could be reduced if overall welfare spend goes too high.
And if people on low incomes will no longer have their rents fully covered, then they will face their household budgets getting even more squeezed and being forced to choose between paying the rent, heating their homes or eating. In other words, severe hardship will be imposed on thousands, if not hundreds of thousands of families because different bits of government failed to work effectively together.
There is, of course, an alternative, as charities have been telling the Treasury and governments in other parts of the UK have been pursuing. This is to put proper investment in genuinely affordable social housing – it may be expensive initially, but its long-term impact on rents will save both government money and human misery in the future.
Source – Chris Johnes, Director, UK Poverty Programme, Oxfam
Health chiefs have received pay rises of up to 17% while nurses and health care assistants experience real term cuts topping 12%, a union has revealed.
Analysis of senior executive NHS pay by the Royal College of Nursing (RCN) has shown that bosses at hospital trusts in the region were awarded salary increases averaging 10.5% between 2010 and 2013, while mid-band nurses managed a paltry 0.1%. Taking into account inflation some suffered a real terms cut of 12%.
Health Secretary Jeremy Hunt previously warned that health service employees would face a pay freeze until March 2016 and that they might not get the 1% promised for 2014 unless unions accept greater pay restraint.
Glenn Turp, regional director for the RCN northern region, said: “Frontline nurses and health care assistants have already borne the brunt of the Government’s pay restraint policy over many years. And we know that, once inflation is factored in, NHS salaries have in fact been cut between 8% and 12% in real terms, between the period 2010 and 2014.
“The Chancellor promised to deliver a 1% pay rise this year for the front line, but the Secretary of State for Health is now trying to introduce a further pay freeze until March 2016.
“This is completely unacceptable. It is particularly galling that the Government is quite happy for NHS managers to get significant pay rises, while at the same time, the front line takes another hit.
“A 1% pay increase is a perfectly reasonable and proportionate request, particularly when put in the context of the rises in senior managers’ pay. The Government needs to stop having one rule for the frontline nursing staff, and another for senior bosses.”
The RCN northern region compared the salaries of chief executives across all North East trusts for the financial year 2010-11, with the most recent financial year data available, 2012-13.
Ian Renwick, chief executive of Gateshead Health NHS Foundation Trust, received the largest pay rise of 17% as his wages jumped from £190,000 to just under £223,000.
Jim Mackey from Northumbria Healthcare NHS Foundation Trust saw his salary rise 9%, from £211,000 to £230,000.
Newcastle Hospital’s NHS Foundation Trust’s chief executive, Sir Leonard Fenwick, is paid the most at £246,000, although the trust has insisted he has had no pay rise in three years, despite the RCN suggesting he had received a 6% increase.
A spokesperson for Gateshead Health NHS Foundation Trust said: “The salaries of our chief executive and of all our executive directors are decided by an independent nominations and remuneration committee and this is to ensure they are in line with publicly available salary benchmarking information.
“As one of the country’s top performing NHS Foundation Trusts, it is important that those with ultimate accountability are remunerated appropriately so that we can retain the very best healthcare leaders in the North East NHS.”
Figures show that a mid-band 5 nurse salary in the North East increased from £23,563 in 2010/11 to just £23,589 in 2012/13, a rise of just 0.1%. In 2011-12 a pay freeze was implemented by the Government to NHS staff earning more than £21,000.
A spokesperson from Northumbria Healthcare NHS Foundation Trust said: “The remuneration of our leadership team is decided independently to make sure that salaries are in line with those of other high performing NHS organisations.
“To be clear, however, along with the rest of our staff, no director at Northumbria Healthcare has had an increase in pay since the pay freeze was implemented in 2011/12.”
Last night, the Department of Health defended its decision to limit pay rises for NHS frontline staff.
A spokesperson said: “The NHS is rightly playing its role in public sector pay restraint.
“Average pay has increased by around 1%. Despite this, many NHS staff continue to be well paid for the lifesaving work they do and the majority of staff have received additional incremental pay increases of up to 6%.
“The number of admin staff, managers and senior managers in the NHS has fallen by over 21,000. This will lead to a significant reduction in managers’ costs.”
Source – Newcastle Journal 03 Feb 2014
Successive Government policies that unfairly target the young are making this the worst time to grow up in decades, campaigners say.
High levels of youth unemployment, increased university tuition fees and the difficulty of getting a mortgage have been cited as problems affecting young people, along with changes to the benefit system and cuts to youth support services.
People working with young people in the North East say they are being disproportionately targeted in the Government austerity cuts so that Ministers can protect older people who are statistically more likely to vote.
And there have been warnings that the situation is creating a “a generation without hope” who do not feel part of society.
Liz Emerson, co-founder of the Intergenerational Foundation, a national charity set up to ensure fairness between the generations, said: “This is the first period in recent history where children will have worst standards of living than their parents and their grandparents.
Successive Governments have put the interests of older generations before the interests of younger ones. They’ve taken away the EMA, they’ve taken away Sure Start schemes for young people, they’re taking away their travel concessions.”
Concerns about the young being unfairly targeted came earlier this month when Chancellor George Osborne signalled benefit cuts for the under-26s just a day after Prime Minister David Cameron said he would “triple lock” the state pension, which accounts for half of all welfare spending.
Jeff Hurst, who runs the Newcastle YMCA and is vice-chair of the city’s children’s trust board, said: “I was brought up in a generation where anything was possible and everything was positive. Now we are creating a generation without hope.
“What I see is fantastic young people who are motivated, who are clever, who are innovative who are able, but who are very frustrated.”
Mr Hurst said the combined effect of higher pension ages, more graduates, and a flood of axed public sector workers were squeezing the young out of the labour market until far into their twenties.
The situation is particularly acute in the North East, which has the highest rate of youth unemployment at nearly 24% and the worst score of any region on the Intergenerational Foundation’s age fairness index.
Geoff Mount of the charity Barnados, which has a number of youth projects in the region, said: “Times are tough for young people. Funding for courses is being cut, young people now are having to take out loans, and EMA has been taken away. We’ve got a bursary scheme in place but that doesn’t meet in my opinion the needs of those young people in greatest financial need. There are fewer job opportunities out there than ever before.”
Workers also cited a squeeze on housing, with last week’s ONS figures showing a quarter of 34-year-olds are now living with their parents.
The number of “boomerang children” has soared by 25% in the last 17 years, despite the youth population remaining the same, with under-24s in the North East the least likely in the country to have a mortgage.
Source – Newcastle Journal, 27 Jan 2014