Tim Farron makes yet another visit to Richmond Park, this time to talk about the disastrous effects of a hard Brexit ahead of the Autumn Statement, it’s worth taking a look at what Liberal Democrats make of the expected announcements so far. Unsurprisingly, the rhetoric of helping the poorest doesn’t really stack up with the reality.
Let’s take the reduction of the Universal Credit taper rate to 63%<b>.</b>For the vast majority of people getting Universal Credit, a 2p in the pound reduction in the taper rate will not offset the cuts to UC brought in by the Conservatives last year. They will also feel the pinch because of rising prices and slower growth in wages, so they are likely to end up worse off overall and that’s before you even start to factor in the effects of the post Brexit economic meltdown.
On housing, their headline pledge of 40,000 houses doesn’t even scratch the surface – bearing in mind that in Scotland alone, the target is 50,000 over 5 years. You have to remember that the Tories are not the best fans of social housing, telling Nick Clegg that they just housed Labour voters.
Lib Dems have long called for councils to be allowed to borrow for housebuilding as this is the fastest way to get more homes built.
And don’t think that their commitment to ban lettings fees for private tenants, averaging £337 came out of nowhere. As we said earlier, Olly Grender, Tom Brake and Lib Dem councillors the length of the country have been campaigning on this one.
Don’t be fooled either by the increase in the minimum wage, either. This is 10p per hour less than it would have been had average wages not been lower than expected, according to the Resolution Foundation.
It also is not a real living wage -the gap based on the Living Wage Foundation’s figures for 2015/6 (so before they are revised for April)
£1976 a year for someone on 40-hour week (£7.50p/h vs £8.45p/h)
£4680 a year for someone on 40-hour week in London (£7.50p/h vs £9.75p/h)
Then there is this claim that they are going to spend billions on research and development “helping create higher skilled, higher wage, jobs.”
Quite simply, this is hogwash. Not only is there little in the way of actual detail, but any such claim is massively undermined by the government’s pursuit of a hard Brexit which will put a strain and risk on all these things. The Government is not listening to the scientific community who are reliant on Horizon 2020 EU funding and free movement for scientists and researchers, both in jeopardy post Brexit.
Hammond will be trying to get us to believe that the Government has done loads in terms of childcare. Sure, hours have been extended but childcare providers don’t think that it has enough money behind it to deliver this commitment.
And, of course, we’ll have the twice yearly “Oh, and aren’t we wonderful, we’re raising the tax threshold.” We all remember that they had to be forced into it by Nick Clegg, having previously loudly and publicly declared it unaffordable. It is not their policy. It’s a Lib Dem one and one of the good legacies of our time in Government.
When I was growing up, the sight of a Tory chancellor on his feet delivering a budget was enough to make me cry. It feels even worse now. The rhetoric may be full of “we are helping working people” but the reality is that the poorest will be hit hardest, as usual.
* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings. You can find her on Bluesky at caronmlindsay.bsky.social
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21 Comments
Good news! Mars has announced that the price of Maltesers is not increasing.
Bad news! size of Maltesers will reduce by 13%.
We do not produce cocoa in the UK. The pound is down by 16% as the Chancellor said.
When George Osborne introduced the National Living Wage he set it at £7.20 from April 2016 and stated by 2020 it would be £9.00. To get to this figure four rises are needed and it could have been increased in four equal instalments of 45 pence. Therefore an increase of only 30 pence is too low. This is only 4.167%. If it was increased by 5.7% this year and the next three years the final increase to get to £9 would be 5.88%, making the rates:
2017 – £7.61; 2018 – £8.04; 2019 – £8.50; 2020 – £9.
@Michael BG
“When George Osborne introduced the National Living Wage he set it at £7.20 from April 2016 and stated by 2020 it would be £9.00.”
I don’t think he did state that, actually. The National Living Wage was announced as being intended to rise to 60% of median earnings by 2020. At the time of its original announcement that was expected to be around £9.00 per hour. However the expectation is now that the 60% of median earnings in 2020 will be rather lower than £9.00 per hour – thanks in part to Brexit.
@ Simon Shaw
“I don’t think he did state that, actually.”
Oh yes, he did:
“I am today introducing a new National Living Wage.
We’ve set it to reach £9 an hour by 2020.
The new National Living Wage will be compulsory.
Working people aged 25 and over will receive it.
It will start next April, at the rate of £7.20.” George Osborne Budget 8th July 2015 [near the end] (https://www.gov.uk/government/speeches/chancellor-george-osbornes-summer-budget-2015-speech).
And after “It will start next April, at the rate of £7.20” he then said:
“The Low Pay Commission will recommend future rises that achieve the Government’s objective of reaching 60% of median earnings by 2020.”
At the the 60% of median 2020 earnings was widely expected to be around £9.00 per hour, but it’s now expected to be rather less than that.
Osborne got the headlines he wanted, but (as always) it’s important to check the fine print.
Well its always nice to see Simon Shaw jumping to Osborne’s defence.
“Lib Dems have long called for councils to be allowed to borrow for housebuilding as this is the fastest way to get more homes built. ” I’m unsure how much land for development local councils actually own, so if they were allowed to borrow to build, all they could do is just redevelop their existing estates, perhaps to increase the density. How realistic is it to expect the housing crisis to be solved by the public sector? What about dealing with ‘land banking’ by the private sector by, for example, taxing undeveloped land? At the same time, is it fair to the private sector to insist it provides so-called affordable housing?
Interesting view of what constitutes “defence”.
If you think that saying a politician said something simplistic but slightly imprecise (i.e. “We’ve set it to reach …” so that he “got the headlines he wanted” counts as a defence, then you want to see one of my attacks.
We need a new economic model that shares out wealth in a fairer way, makes that wealth without damaging the planet and puts people and planet ahead of profit.
@Mark Frankel “How realistic is it to expect the housing crisis to be solved by the public sector? What about dealing with ‘land banking’ by the private sector by, for example, taxing undeveloped land? ”
The two approaches are not mutually exclusive, surely?
@Mark Frankel. The huge shortfall in house building over the last 30 years has been in the provision of social housing mainly by Councils. Private sector building has -on average -remained pretty constant over the decades since WW2. Social Housing provision however was rapidly wound down by Thatcher and stopped entirely by New Labour. Housing Associations et al were supposed to fill the gap but have not done so largely preferring to simply manage the existing stock acquired from Councils who were forced to more or less give it away under New Labour.
The private sector has never, in history, provided quantities of decent affordable housing for those who cannot afford to buy or for those at the lower end of the buyers market. Why would it as more profit, the entire driving purpose of private sector house builders, is always to be made elsewhere in the market? Why therefore would you believe against all historical evidence that concentrating on private sector, for profit, builders would be the solution?
The deliberate squeeze on social housing provision over the last 30 years has of course many negative effects. There are the well known social or human ones as in the return of ‘Cathy Come Home’ style issues but for ‘hard headed’ Economic Liberals there is also the obvious effect on the Private rental and to buy market. Shortage of social housing to rent drives up private rental costs and tax payers through Housing Benefit often for example collectively pay multiple times the rent level for ‘social housing’ including former Council properties, that they would pay if such properties were still with the Council. That attracts more and more property landlord/buy to let owners into the market, that in turn drives up house prices which squeezes out first time buyers who then put more upward pressure on private rental levels and so the vicious cycle continues.
Hence the traditional Liberal support for Council Housing from Joseph Chamberlains Municipal Liberalism of the 1880’s and Lloyd George’s Housing Legislation onwards. Social Liberalism believes that where there are market failures they should be rectified not simply accepted with a shrug of the shoulders.
“What about dealing with ‘land banking’ by the private sector by, for example, taxing undeveloped land? “ Mark Frankel
Well first you actually need to define “land bank” then you need to have some robust assessment criteria against which you can determine if land really is “undeveloped”. I suspect you will rapidly get into similar problems HMRC have in determining whether a scheme that is UK tax efficient is a genuine investment scheme or exists primarily to avoid UK tax.
I’m unsure how much land for development local councils actually own, so if they were allowed to borrow to build, all they could do is just redevelop their existing estates, perhaps to increase the density. How realistic is it to expect the housing crisis to be solved by the public sector?
Well I suspect we will see more of what has happened in my area: developer purchased farm land without direct access to public highway and outside of areas designated for future development, submitted plans for development (5,000 homes) that include a token amount of social housing. When the council highlighted the access problem, the developer suggested the council should use their monies to compulsory purchase property to provide the access, given the social housing element, government housing targets etc.
@ Simon Shaw
George Osborne [b]actually[/b] said, “I am today introducing a new National Living Wage. We’ve set it to reach £9 an hour by 2020.”
And so what you should have written was that he [b]actually lied[/b] because he did not mean that what he meant was “60% of median 2020 earnings”.
@Michael BG
“And so what you should have written was that he [b]actually lied[/b] because he did not mean that what he meant was “60% of median 2020 earnings”.”
I’m fairly certain he did mean the latter because that’s precisely what he said – that was the very next sentence after the ones you quoted at 12.11am from his budget speech.
Are we at cross purposes here?
Can we agree that there are two things that Osborne said in the same section of his speech:
(1) “I am today introducing a new National Living Wage. We’ve set it to reach £9 an hour by 2020.”
(2) “The Low Pay Commission will recommend future rises that achieve the Government’s objective of reaching 60% of median earnings by 2020.”
I don’t know if you are suggesting that this is meant as effectively a Double Lock, i.e. in 2020 it will be £9.00 per hour OR 60% of median earnings IF GREATER, but that’s not how HR experts read it.
If you read the fine print the National Living Wage is meant to increase to reach 60% of median earnings by 2020, subject to sustained economic growth. When announced, in 2015, that was genuinely expected/projected to be around £9.00 per hour. But not any longer, since median earnings are projected to be lower than expected.
@ Simon Shaw
As we agree that George Osborne said both, I don’t understand why you wish to refute the idea that when he said “I am today introducing a new National Living Wage. We’ve set it to reach £9 an hour by 2020” he was actually lying because what he should have said was “I am today introducing a new National Living Wage. We’ve set it to reach 60% of median earnings by 2020 and this is estimated to be £9 an hour by then”?
My points are very simple.
1. You were wrong when you said George Osborne had not announced that the National Minimum Wage would reach £9 by 2020;
2. George Osborne lied when he stated it would reach £9 by 2020
3. George Osborne meant it would reach 60% of median 2020 earnings not £9 an hour.
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@Michael BG
“As we agree that George Osborne said both, I don’t understand why you wish to refute the idea that when he said “I am today introducing a new National Living Wage. We’ve set it to reach £9 an hour by 2020” he was actually lying because what he should have said was “I am today introducing a new National Living Wage. We’ve set it to reach 60% of median earnings by 2020 and this is estimated to be £9 an hour by then”?”
Yes, it would have been much more correct for him to say that. I happen to think the press is responsible for simplistic reporting, although I am quite certain that Osborne knew exactly what he was doing (which is why I said above “Osborne got the headlines he wanted”).
May I remind you that my first comment on this point said “The National Living Wage was announced as being intended to rise to 60% of median earnings by 2020. At the time of its original announcement that was expected to be around £9.00 per hour. However the expectation is now that the 60% of median earnings in 2020 will be rather lower than £9.00 per hour – thanks in part to Brexit.”
I stand by that.
@ Paul Walter
Thank you. I was close but not close enough. Not […] but .
@ Simon Shaw
I do not understand why you cannot just admit you were mistaken when you wrote, “I don’t think he did state that, actually” and that you should have pointed out that what he said and what he meant were not the same.
@Michael BG
“I do not understand why you cannot just admit you were mistaken when you wrote, “I don’t think he did state that, actually” and that you should have pointed out that what he said and what he meant were not the same.”
But you still appear to be missing what he did say. In fact you quoted what he said verbatim but then stopped just before you got to the key bit which was this: “The Low Pay Commission will recommend future rises that achieve the Government’s objective of reaching 60% of median earnings by 2020.”
Based on your very first comment I thought you were unaware of that. Was I right?
The National Living Wage is not even a Living Wage even if a person hs a full time 35 hour week job. 35 x £7.20 = £252 per week = £13 104 pa. If a mortgage is about 3 times annual earnings, a mortgage of £39 312 could be borrowed. Where can you buy a house for £40 000? A rent of £400 to £500+ per week would swallow up more than 50% of the income.
What is needed is a completely new System of Economic activity that produces a fair and just distribution of the nation’s income and wealth. The current system obviously does not. A Liberal Democrat government should provide an alternative equitable Economic System.
@ Simon Shaw
Can you never admit you were mistaken? My beef with you is not that you pointed out that George Osborne said the government’s objective was reaching 60% of median earnings by 2020, but that you can’t admit you were mistaken when you wrote “I don’t think he did state that, actually”. What you should have written was something along the lines of “he did say that, but he lied because just afterwards he redefined it as being reaching 60% of median earnings by 2020. The reason he did this was to get newspaper headlines about a £9 National Minimum Wage.”
This would have been less confrontational to towards what I had written and would have pointed out what you seem to think I was not aware of. And it would have been true unlike your claim he didn’t say that it was planned (set) for the National Minimum Wage to reach £9 by 2020.