Comprehensive Spending Review

After the weeks and weeks of build up – today was the Comprehensive Spending Review (CSR).

The amount of work and effort that has gone into the thinking behind this CSR is huge – and it showed. Whilst definitely medicine in parts – all that thought and effort had produced something not only economically credible but a radical reforming agenda It wasn’t just cuts – it was about a different way of doing things.

And – outside of George Osborne’s clever rabbit out of a hat finish in which all the coalition cuts (at 19%) still come out at less than the 20% cuts that Labour were proposing (without a single idea on the table as to what they would have been) the key thing was that this CSR addresses the Why of the cuts and the How of the cuts.

In terms of the Why – economically it is about freeing the nation of debt and the waste of interest payments. It is nuts to pay £43 billion in interest a year – you can never get clear and never get on to doing the things that bring real change and real improvements to peoples’ lives. In fact – the pain is longer and worse for everyone – but especially the poor – if the deficit is not dealt with swiftly.

As for the How – this CSR has been done in a way that is fairly spread (a lot of work on equality impacts and effort made to make sure that those who have the most pay the most) – and in a way that promotes future fairness and future prosperity.

As you read about all the measures announced today or watch the reports on the television – you can see that there is clearly a Liberal Democrat approach hard-wired into it – but it is ultimately a coalition process – with full involvement of LibDem Ministers – and the result is most definitely a coalition product. It is a far, far better product for the steel and fire in which it has been forged in the crossfire of two parties with very different approaches but aiming for the same outcome – a fairer (solvent) country.

It is:

pro-fairness– with items like the £7 billion ‘fairness premium’ including £2.5 billion to go into our schools with the funding following underprivileged children; with the NHS being protected; with us being the first country in the world to delivery 0.7% GDP for International Aid

pro-growth– thank goodness carrying on with capital infrastructure investment including Crossrail; investment in science and HE. Next week there will be a whole raft of details on capital projects going ahead right across the land.

pro-green: with £2billion for the Green Investment Bank (for starters), public transport investment, feed-in tariffs, a funded Renewable Health Incentive, a ports competition to encourage offshore wind manufacturing industry

The CSR was only the beginning really – and gave for the most part – the global percentage cuts in each department. How each department now takes the reduction forward will be the further test of our administration’s commitment to fairness during the deficit reduction.

There was one particular issue that I have been worried about – both in terms of national but also local funding – the voluntary sector. I wrote about here a while back.

So for me –  one very important announcement was the £100 million fund being created for a year to support the voluntary sector during the transition phase. I have been stomping around pointing out to everyone the vulnerability of this sector – a sector who we in government are expecting to grow and blossom in the ‘big society’ but which without support might not have survived the transition.

Happily somehow that message seems to have got through.

I have Violence Against Women and Girls in my portfolio, for example, and the voluntary sector is absolutely crucial in supporting victims of Domestic Violence. So this was a very welcome part of the CSR!

Coming up this week

Early in the week, we will have the announcement on the Strategic Defense Review – a very important announcement in terms of the future safety of the realm and how we address the changing face of war and enemies in a world long past the cold war.

We have three further days of debate on the Parliamentary Voting System and Constituencies Bill.

And then on Wednesday, we will have the long awaited Statement on the Comprehensive Spending Review – the ‘cuts’ . We will then know in global terms the scale of the cuts in each department to see what part of the £83 billion will be born by each.

The push back argument from Labour – who left this mess and who would themselves have made cuts ‘deeper than Thatcher’ is the speed of the cuts – ie why not phase them over a longer period. My push back to that is as in my recent Ham & High column.

Imagine you have a friend who is a bit short of cash. They have explained to you that they need a loan to get them over a rough patch this week, but that they are cleaning up their act and in a few weeks will pay you back.

You might even lend them a bit of cash. If, however, a couple of weeks later you see them out partying and you find out they haven’t cleaned up their act then you may not feel so happy about this.

The situation with the government deficit is much like this. The government needs to borrow over £150,000,000,000 (that’s billion – but the noughts are compelling) between April 1 2010 and 31st March 2010 to cover the difference between tax income and expenditures on services and benefits. Those people who are lending the government money want to be certain that they will get the money that they lend back.
If the government says, as the coalition has done, that they are cleaning up their act and won’t need to borrow in a few years time then those with the readies are more willing to lend money. More importantly the lenders will lend the money at a lower interest rate.

In 2015 – when this parliament ends – government debt will be more than £1,000,000,000,000 (one Trillion pounds). The government is planning on cutting the amount borrowed each year, but isn’t planning to pay back any debt as getting borrowing down is seen as a good strategy and a matter of urgency.

This is important because the interest rate the UK is paying on 10 year debt is now 3.12%. Ireland is paying 5.82% and Greece is paying 11.37% (four times as much as the UK). Greek debt has a much higher interest rate because lenders are worried that Greece will not pay them back. Ireland, which is not in as bad a state as Greece, is still paying 2.7% more interest than the UK!.

These figures sound small as percentages, but on £1,000,000,000,000 of debt that would be £27,000,000,000 A YEAR. You can do an awful lot of good with £27 billion a year!

Labour are saying that the coalition are planning to reduce each year’s borrowings by too much. This means that under Labour’s plans we would have to pay interest on both more debt and also a higher interest rate. If they want to do this then they need to explain where they will get the extra £27,000,000,000 a year from. Would that be more cuts or more tax. £27bn is another 5% on VAT.

Tony Blair has admitted in his memoirs that Labour lost control of the public finances from 2005 onwards. He said “.. from 2005 onwards Labour was insufficiently vigorous in limiting or eliminating the potential structural deficit.” (page 681-682)

Tony Blair as with Alistair Darling wanted Labour to have increased VAT. He said in his memoirs that Labour should have had “a gradual rise in VAT”. (page 680) Labour today have been beating the drum about VAT being a regressive tax, but Tony Blair claimed to be a progressive. In fact when you look at the size of household incomes VAT is a mildly progressive tax. A higher proportion of wealthy households income is taken in VAT than poorer households. The poorest households actually get a cost of living increase that more than covers the extra VAT they pay.

The reason why there is an argument about whether VAT is progressive or not is that there is a dispute as to whether you should compare households by the size of their budget (expenditure deciles) or how much declared income they have (income deciles). The coalition believes that looking at expenditure is a better comparison. Many households have undeclared income or are students living on their parents’ income, but in a separate home. Those figures skew the income anaylsis which is why the budget size is important.
Another point highlighted by Tony Blair in his memoirs is that “if you study the figures for government projections in the UK, by the end of 2014 public spending will still be 42% of GDP.” (p682)

The coalition government’s financial plans are rational. They involve less being cut in the long term than Labour although more is being cut in the short term. They are also progressive in that the costs for richer households are more than the poorer households.

The Unions (at their conference) appear to now be campaigning against any cuts at all – as if there is no penny spent unwisely anywhere in government and threatening strikes against short term cuts. They need to recognise that in doing so they are calling for greater cuts in the long term as are Labour – who won’t utter a dickybird as to where they would have cut.

We will, however, continue doing what is right and fair for the UK and we will concentrate on protecting the weaker in society.

 

Catch up!

Haven’t had a moment to blog this week – so almost don’t know where to begin!

Parliamentwise – lobbies from the science community concerned about the looming Comprehensive Spending Review (everyone is worried in every sector to be quite frank) the argument forcefully put about investing in our future and cutting off our growth if we lose our cutting edge in science and lobbied in advance of the back bench committee debate on contamination of blood products.

I declare an interest in the blood products debate as someone very close to me has haemophilia and has been infected by the treatment given to him by the NHS. Although the motion itself didn’t pass – mainly because it had a price tag attached to it of £3billion and no government could just vote it through like that – it still succeeded in that a review of certain of Lord Archer’s recommendations in his Independent Report on the issue will now happen – and before Christmas. There are many aspects of life for those who have been infected additional to money: dentistry (has to be special because of bleeding and infections); insurance (can’t get life or travel insurance often) and other unfairnesses – such as those infected with Hepatitis C do not get compensation to match those infected with HIV. So – many wrongs still to be righted.

The ‘bonfire of the quangos’ saw many bodies axed. Two in my own department of Equalities were in line: the Equalities Commission (saved but will be radically reformed) and the Women’s National Commission terminated. The important thing about the WNC is that the function will continue (bringing the voices of women to government) and be expanded but using more direct techniques. I know a lot of women’s organisations will be upset by this – but after transition – they should be reassured that women’s voices will be heard louder and clearer and more directly than before.

I went to speak at the launch of ‘Communities, Councils & a Low Carbon Future’ – a new book out by Alexis Rowell – who is an amazing force majeure in terms of driving this agenda forward. Alexis was sustainability champion as a LibDem councillor in Camden – but has now taken to driving this forward in even bigger ponds. For anyone who knows Alexis – they will know that he is relentless in pursuit of the green agenda. There was a theme running through all the speeches about Alexis – that he was either a ‘pain in the arse’, ‘a pain in the neck’ or just a pain – but in a good way.

Alexis is so passionate that it colours every action and interaction he has. For example – going to a restaurant for dinner. What is the provenance of the meat, which farm, how farmed and what was the cow’s name! We are lucky that there is an Alexis – for without that force – things don’t change. Go Alexis!

Of course – tuition fees and Lord Browne’s report was probably the most contentious issue of the week.  The report suggests that the cap be lifted which would result in fees going up to £6000 or more. The fear being that this will become an elite occupation for the haves – and those from middle backgrounds (just above the poorest who wil be protected) will be put off – or will only go to universities that they can afford rather than the very best ones which may charge as much as £12,000 per annum.

The ending of the principle of free education by Labour with the introduction of tuition fees was in my view definitely the beginning of the end. In the current economic climate – it was inevitable that the proposals by Browne (commissioned by Labour) would recommend removal of the cap – and both Labour and Conservatives would almost certainly have done so. For the Liberal Democrats it poses a real problem – to do with the totemic nature of a commitment ultimately to scrap tuition fees and a fundamental belief that education should be free for all.

Vince Cable, ironically, is the man in charge of any new proposals and he faced the House this week too. There is no doubt that he has been working flat out to make the proposals as progressive as is humanly possible – given that students will have to pay for their course. Poorer students will be protected, pay back is when earnings reach a certain level – and really importantly – part time courses will come into line. Previously they were not included and therefore it made it very hard for people who wanted to change their circumstances to afford to do part time courses.

The Institute for Fiscal Studies pronouncement was that “the proposed reforms to repayments are highly progressive and ensure that poorest 30% of graduates are better off than under the current system, whilst ensuring that the richest 30% of graduates pay off their loans in full.”

So – there is about six weeks to go before this comes to decision time. I still do not subscribe to the 50% target Labour set for university entrants. Mind you – I was a great fan of Shirley Williams’ polytechnics – which I thought a brilliant microcosm of the world with all sorts of people mixing on a variety of courses of different standards from degree – to HND. In fact – the first campaign I ever fought was to stop Oxford Polytechnic becoming a uni. I did well at the time – but left after three years – and of course – now it is Oxford Brookes University. I still think I was right!

So – the Liberal Democrats (including me) will have three choices: support the new proposals when finalised – which are just about as good as they can get in terms of being progressive; abstain (the coalition agreement negotiated this opt out as it would have been very hard to get LibDems to sign up to coalition without it) or vote against.

Lastly – have just come back from knocking on doors in Hornsey ward as part of our Liberal Democrat campaign for a 20mph speed limit on residential roads in Haringey. Everyone seemed very keen on this campaign – and more generally – still keen on the coalition despite the looming spending review.

Events

Visited Friends of the Earth stall on Muswell Hill Broadway on Saturday to support their campaign for sustainable farming. FoE always have great props for these occasions. Today it was cow masks – except they wouldn’t let me wear one (no sarky comments please) as it would render me invisible and thus negate the point of the photos they were taking. This is all about a Private Member’s Bill that was presented to Parliament on 30 June 2010 – the Sustainable Livestock Bill and will be on the Order Paper for a Second Reading debate on 12 November 2010. This new Bill will commit the Government to real action to halt wildlife and rainforest destruction.

Straight on to Friends Meeting House to plant a tree in the garden which had received some funding (for which I helped support the bid) to plant a tree. There is a beautiful new gazebo, pond and embryo planting – and by next summer – this will be a fantastic place for children et al to come. I planted a field maple – so will visit next summer to see how it is doing.

It’s Sunday today – and I will be popping into Peter Thompson’s Ruby wedding. For anyone in Muswell Hill who doesn’t know Peter Thompson – he is just a complete star in terms of community activism. Not only does he run a legal advice surgery three times a week in St James’s Church – but he is always at and involved in all of the good work that goes on in terms of policing, the Muswell Hill Youth Centre – you name it – he is helping with it.

So – not only is 40 years of marriage a wonderful occasion to celebrate – but Peter is a one man example of the ‘Big Society’ long before it was even a gleam in Dave’s eye!

In Defence of Great Ormond Street Hospital management team

A consultant who works at Great Ormond Street Hospital came to see me at surgery today. He wanted to tell me his side of the story about the ‘no confidence’ letter signed by around forty doctors et al a little while back. He wanted me to know that he had worked there a number of years and whilst there were issues about one thing or another – he was happy with the management and felt they did a good job.

His telling about the big meeting of consultants that took place at the time of the ‘no confidence’ letter was that the majority of consultants at that meeting felt that they did have confidence in the management and that several consultants who had been signatories to the letter stood up and said they would never have signed the letter if they had known it was going to get publicised. He also said that the management had now hired an external medical director so that anyone with concerns could raise their issues in confidence.

I have posted on my blog a few times about Great Ormond Street, Baby Peter and Kim Holt – and I have been very concerned about a number of issues around management at GOSH, whistleblowers and their treatment and the vote of ‘no confidence’. I have, over the last year or so, been contacted and in one case  met up with doctors from Great Ormond Street who have described an atmosphere of intimidation and fear for their professional future if they rocked the boat.

It is not my role to judge, decide or intervene in the running of the hospital – but it is my role to raise issues of concern – which I have done. I have done it in Parliament and directly with Great Ormond Street. My concerns at this point in time still remain. But I was grateful for this doctor’s visit to me to put his views on the record. And in the pursuit of fairness am posting his views here – which he was very happy for me to do.

The Big Lottery

Such a pleasure to visit some of the projects funded by the Big Lottery in Hornsey & Wood Green.

I always enjoy it – and today was no exception. First off was a visit to Exposure  where lottery funding is being used in such an imaginative way. Young people with mental health issues produce their ‘mind journey’ in written, illustrated and printed form.

The project originally started with ‘mind films’ of which we saw three. In each case the young person with mental health issues supprtoed and enabled by the Exposure team was able to visualise their experience through the medium of film Absolutely breathtaking work – from the young man who found a degree of peace in the rituals of the Japanese tea ceremony (it may sound bizarre – but if you saw the film the connection was so clear), to the young man who told his story through the bumps and breakdowns of his car – to the final story of a woman whose suicide from the misery of the loss of her child inspired a young man who survived his own suicide attempt and was in hospital with her – to live and recognise how precious life it.  Grim in parts – but so powerful and true – and completely compelling as it was their story.

The second visit was to Action for Kids – where a very generous grant has facilitated the purchase of IT equipment that helps their young people (who have multiple physical and learning disabilities) to participate in actions and activities and have a voice in what they want to do or to happen. It’s quite difficult to explain in words – but when you see, for example, an enterprise project that results in a product – bags, mugs or mouse mats – you can really see how this works and how it builds confidence and participation. Clearly this new technology has enabled the young people to accessa whole new level of choice -(their choices)  through computer – using special touch screens or a specially devised mouse (in one case) for a boy who had no hand movement and could manipulate the mouse using his chin. He now, quite happily, works his way through YouTube with no problem.

So – a huge thank you to the Big Lottery – who are really helping so many organisations in the valuable work they are doing.

Suspicious minds

This is my column for the Ham & High this week:

I’ve never forgotten a woman coming to my advice surgery and sobbing her heart out. Reason? Her young son – her young black son – had been stopped by the police while he was playing Hide and Seek in the grounds of a local hospital.

His mates had run off and left him to face the music. Rotten mates! Except he hadn’t done anything except play a game we have all played – with lots of good places to hide. His mother was crying because despite the police letting him go without any further action of any sort – this record would remain on a police national database. She was sobbing because she knew that when he grew up – if he applied for a job that required an enhanced criminal record bureau check – this ‘soft’ information would come up and might harm his job prospects.

Now I don’t know the boy – but his potential to employer, his ability to earn and his future might be entirely changed (and not for the better) by that simple bit of information from years before.

The Home Secretary and I have commissioned an independent review of Criminal Records Bureau checks. Obviously if someone is charged and convicted you would expect that information to remain on the police database – and it does. But in the area of ‘soft’ information (ie non-conviction information) at present this remains on the database too. And ‘soft’ information varies – anything from the above incident of playing Hide and Seek – to the sort of ‘soft’ information about Ian Huntley – the murderer in the Holly Wells and Jessica Chapman murder in Soham..

In the wake of Soham, we were all so horrified by what had happened – that child protection concerns resulted in the introduction of the Vetting and Barring Scheme. All those who would wish to work with vulnerable adults and children had to go through this scheme (which would include CRB checks) to be vetted and if necessary barred from such work. Lists are kept of those who are barred from such work by the scheme.

The consequences of this scheme would have been nine million people having to register – had it become fully operational.

So – the allied action the Government is taking is a review of the Vetting and Barring Scheme to scale it back – as per the coalition agreement – to common sense levels. We are just in the process of setting the Terms of Reference for this review.

The world of suspicious minds we all inadvertently created went too far. Together, these two reviews, Vetting and Barring and the Criminal Records checks, will help us get the balance right.

Workingmums.co.uk

Early morning keynote speech yesterday at the first ever awards by Workingmums – Top Employer Awards 2010. After the speech came the awards and then a Q & A panel.

Congratulations to Gillian Nissim who set up Workingmums. As often happens – experience is a great teacher. And when Gillian became a mum – having worked in many different corporations – she saw the need for better work practises so that companies didn’t just lose their talented women because of babies. And women didn’t lose their jobs – just because at certain times of their lives – they couldn’t work the long hours they perhaps had before. Thus Workingmums was born – www.workingmums.co.uk 

And – congratulations to all the employers whose work practises like flexible working meant that they were short listed for an award. Flexible working is a phenomenal advantage to companies – but somehow we as a nation have not yet got it.

And thanks too to the sponsors – Deloitte and RBS! I am very keen to encourage corporates to get more and more involved in supporting all efforts in this direction.

But businesses who adopt flexible working do so to improve their bottom line – they are not charities. Companies like BT, for example, who introduced flexible working twenty years ago have seen great business benefits: 20% reduction in absenteeism, £500m saved on property costs and productivity up 30%. But whatever size your business – it is common sense (let alone a proper way to behave) to treat your staff well. 

Anyway – there were five categories – and Accenture won the best over all ‘Top Employer’ award. They won because they not only encourage flexible working, but because they walk the talk – and board members DO take days off to go to school plays etc. That leadership – saying it is OK right at the top of a firm – to put family first is really important too (including men!).

Currently, parents with children under 16, parent of children with disabilities and some carers are allowed to ask their employers for more flexible working.  Ed Davey f(Dept of Business) and I are currently working on the coalition commitment to extend the right to request flexible working to all.

We hope by normalising it (for too long flexible working has been about women) we can lift some of the stigma that discourages men from asking for it – leaving caring to be shared more evenly.

We are also looking into a system which will encourage shared parenting – for example by introducing flexible parental leave which will allow mothers and fathers to divide their time off how they see fit.

But we are doing all this consulting with employers. The time of  centralisation, top down targets and bureaucratic procedures is now over. This will only work if business is in the driving seat supported by the coalition.

That is why Workingmums and the awards yesterday are so important. There are employers out there who are leading the way in terms of flexible working and it was very nice to see them rewarded and acknowledged for their successful efforts.

Inaugural Attestation of Haringey Police Constables

This was a first! To celebrate the inaugural Attestation of Haringey Police Constables.

I’ve been before to passing out parades at Hendon – when new recruits complete their initial eighteen week training. But after that – they are allocated boroughs – and after two years probation become fully fledged Police Constables.

This was a ceremony to celebrate the completion of their probation. Thirty-eight young (and some not so young) men and women (and there were a lot of young women) recited the Attestation itself and then came up to receive their certificates.

Congratulations to all of them. 

I spent an hour after the ceremony talking to some of the constables and their families. A hugely bright cohort – they were full of ideas about a whole range of things in the police – of which I have since made copious notes.

On Wednesday I will be attending on behalf of the Home Secretary the 25th Anniversary of the Death of PC Keith Blakelock. There will be a parade and a wreath laying. A sober reminder of how those who serve do literally put their lives on the line to keep us safe.

So we should be all the more grateful that so many young people want to enter the police service and do it for all the right reasons. It was a very heartwarming occasion.

Susan Kramer for Party President

It was a surprise when Ros Scott announced that she was not going to stand for another term as LibDem Party President. She has done a fantastic job – up and down the country – exhorting, helping, challenging and supporting local parties. Thank you Ros!

So – there’s a vacancy.

I am thrilled that Susan Kramer has put her hat in the ring for this – and I am supporting her 100%.

She will take on the mantle of caring and loving party members and local parties themselves the length of this land. In this brave new world of coalition – we need someone like Susan who has the time, the energy and the commitment to look after the Party, the local parties, the individual members and be a strong voice for Party members.

Go Susan!