Thursday, 24 April 2014

Cost of Living

I enjoyed this rather quirky piece from The Guardian in which Simon Jenkins sets out his explanation as to why the Chancellor, George Osborne, seems to have won hands down the argument about how to pull the UK economy out of recession.

According to Jenkins while talking tough, George Osborne has continued to curry favour with key groups such as drivers by abolishing the rule tax escalator at a cost of £22 billion over 5 years.

But of course the Labour Party would probably have done just the same even though the last Labour Government introduced the policy in the first place - the point being that there are still big giveaways to key interests groups in these austere times.

For example, people with mortgages continue to benefit enormously from the artificially low interest rates that the UK has enjoyed since 2008 and while Labour bangs on about the cost of living crisis - nowhere is the much lower costs of paying a mortgage factored into this equation. 

How Janus-faced George Osborne defied stereotype and triumphed


For a chancellor four years into office after presiding over the worst slump since the war, his popularity is remarkable


By Simon Jenkins - The Guardian

'If Osborne is happy to cut ­revenue in the hope of stimulating growth – Keynes rather than Laffer – the sky is the limit.' Photograph: Matthew Horwood/Getty Images

The Osborne star continues to rise, even as his Tory party slumps. In the latest Guardian/ICM poll, the Conservatives dropped three points against Labour, yet George Osborne as manager of the economy is ahead of Labour's team by two to one. For a chancellor four years into office after presiding over the worst slump since the war, this is remarkable.

How can it be? Osborne was supposedly the great Satan of the recessionary economy. To many Guardian readers, his perceived austerity, his love of bankers and his cruelty to underdogs have made him the new Thatcher in Tory demonology. Besides, chancellors are supposed to run behind their parties, especially when times are tough, not ahead of them.

Ever since Tony Blair it has become near impossible to construct a plausible narrative for the British economy, such is the consensus on such topics as taxation, centralisation of government and the public/private split. It is nowadays a matter of visceral tribalism and tedious cliches. Osborne's "hard-working families" are pitted against Ed Balls's "cost of living crisis". Labour's "squeezed middle" is pitted against the coalition's "government for the rich". Hard-hearted cuts fight against "a fairer way". There is no give in this. British politics in the run-up to an election is Jets and Sharks, cowboys and Indians.

The key to Osborne's success has lain in defying his stereotype. He has held his position as Colbert to David Cameron's Louis XIV through double-dip recession and into recovery, thereby able to claim vindication for his policies. Given the nature of this cycle, any chancellor able to stay that long can seem to have "rescued" Britain from whatever horrors afflicted it.

More crucial has been Osborne's assiduously crafted Janus face, stern austerity towards the outside world and a wholly different approach towards the public finances. As should be repeated over and again, Osborne has been no iron chancellor. He is firmly in the mould of Gordon Brown and Alistair Darling – high spending, high borrowing and a sucker for every trendy aircraft carrier, railway or wind turbine going.

On coming to office, Osborne did indeed cut the "planned rate of increase" in public spending, as Darling had pledged to do. In 2009 total spending was £634bn. By next year it will be £732bn, higher even in real terms. The only big item truly butchered has been local government, and the coalition cares not a fig for that. Osborne has missed all his budget balancing targets and is way off course on borrowing, which still hovers around £100bn. He would be savaging Balls if the latter had been in office. Compared with Greeks or Spaniards, Britons do not know the meaning of austerity.

On Monday, Osborne issued a revelatory document. It purported to show the success of his 2010 freeze on the fuel tax escalator, a device to raise the tax on petrol each year by inflation plus 1p per litre. The aim was to avoid the political unpopularity of raising it in each budget. Osborne reversed this objective and courted popularity by abolishing the escalator altogether. The cost over five years has been a staggering £22bn. He likewise began to reduce corporation tax from 28% to 21%. From an austere chancellor such giveaways to drivers and corporations were reckless.

Osborne now tries to rebut the charge by claiming his Treasury witches have stirred eye of newt and toe of frog – "behavioural economics and detailed modelling" – in the pot to prove the giveaways so boosted private spending that they earned enough in VAT and income tax to make up half the lost revenue. That gets back £11bn. This would give the economy a boost of up to 0.5% of GDP. These figures do not add up. They suggest that cutting petrol duty was indeed a big giveaway.

If Osborne is happy thus to cut revenue in the hope of stimulating growth – Keynes rather than Laffer – the sky is the limit. He clearly takes the same view of alcohol taxes, which he eased at the last budget. Was this to boost the economy as drinkers would spend the difference elsewhere?

And what of the second biggest industry in Britain, tourism? Osborne levies VAT on every holiday at home, yet not on foreign travel. This is a direct subsidy to spending abroad and explains why no travel agent ever advertises a British holiday in their window. The chancellor is directly subsidising a loss to the balance of payments.

He does likewise with his green super-tax on energy users and super-spends on subsidised energy investment, largely imported or generated by foreign firms and equipment. Another area of his tax largesse is house-building. But the bulk of the housing market, especially for first-time buyers, has nothing to do with his favourite mortgage-aided green-field estates. It is the renovation and conversion of existing urban properties. Yet he relieves new building of all VAT and imposes a discriminatory 20% on all renovation and urban renewal. This is a straight tax on the most efficient form of new housing.

All these cases show Osborne not as a demon cutter but as a normal political being among chancellors. The crazy vagaries of British tax policy have nothing to do with some underlying economic reality, let alone with Laffer curves. They are a ragbag of past giveaways and incentives, the detritus of lobbying pressure over years, if not decades, defended as crucial to the fate and finances of the chancellor's party. The energy companies, the house-builders, the drinks industry, the airlines, all troop through party conferences and down Whitehall corridors. They give the best parties and sing the best tunes – or in the case of airlines, offer the best upgrades. They are the hidden rulers of Britain, and we still have the cheek to accuse foreign governments of corruption.

When Osborne was depicted as a crazed axeman who ate little children for breakfast and smashed the economy, it suited his foes to associate him with austerity. Now the British economy is growing faster than any in Europe and earnings may this week overtake inflation. So Osborne is popular. Do his enemies really want austerity to get the credit? It surely makes more sense to tell the truth. It was not austerity that pulled the British economy out of recession but good old-fashioned borrowing and spending.

Cost of Living (4 December 2013)


In recent weeks the Labour Party has shifted the focus of its political attacks on the Coalition Government. 

No longer does Ed Miliband argue that the economy is stalling or flatlining - instead he says that the benefits of the economic recovery that appears to be slowly gathering pace are not being passed on to hard working families - and that the UK is experiencing a cost of living crisis. 

Now clearly this is not true for everyone and while there may be people who struggle to pay their bills and/or put enough food on the table - lots of others are actually much better off because of the artificially low interest rates the country has been experiencing since 2008.

For example, anyone with a large mortgage may be thousands of pounds a year better off - even if they are in a job where the pay has increased very little, if at all, over the past few years.

So it stands to reason that the people facing a big hit to their standard of living has to be someone without a mortgage - someone who pays rent - because their housing costs will have gone up rather than down since the UK economy went from boom to bust. 

All of which means that all this talk of a general cost of living crisis is untrue - and that a much fairer policy would be one which targeted help on citizens paying rent because they have not been fortunate enough to have been handed a big financial windfall - courtesy of nothing more than a sudden and fortuitous collapse in interest rates.


Free Money (8 January 2013)

I heard someone on the radio yesterday complaining that he would be losing out to the tune of £240 per month - as a result of the government's planned changes to child benefit payments. 

Now my heart almost bled as I listened to the chap claim (convincingly) that as a result of the unexpected drop in his income - that he might not be able to keep up his monthly mortgage payments.

Next my glass eye almost shed a tear as the poor man explained the terrible burden of having his company car taxed and treated - as an expensive benefit in kind.

'What kind of world do we live in?', I thought to myself - before quickly coming to my senses and dismissing his ridiculous claims as so much baloney and hot air.

Because as I've said before on the blog site anyone who has been paying a mortgage in recent years has very little to complain about - compared to lots of other fellow citizens at least.

For example workers in low paid jobs, people who rent instead of owning a property (via a mortgage) - or folks on a fixed income, such as pensioners.

The reason being, of course, that most people in these groups have little - if anything - to show for the artifically low interest rates which have greatly benefited UK mortgage payers in recent years - as can be seen from the previous posts below.

So my advice is simple - don't shed any tears for people losing out on child benefits because they earn more than £50,000 or £60,000 a year - because they don't need or deserve a hand-out of free money from the state.

Something For Nothing (17 July 2012)

I listened to a chap on the BBC the other day explaining how the artifically low interest rates - have been saving him £700 a month (net) on his mortgage for the past three years or so.

Now that's a fair old amount of money - in anyone's language - £8,400 in a single year or £25,200 over three years.

Or to put it another way - much more than the average salary in the UK - especially when you consider this is money in the chap's hand - net of tax and national insurance.

I've been banging on about this for a long time of course - as regular readers will know from previous posts on the blog site.

Yet so far at least - I've not heard a single politician remark on how unfair it is that so many people benefit so greatly - for doing absolutely nothing in return.


£20 Billion Windfall (5 January 2012)

I read something the other day - a claim by an organisation know as the Family and Parenting Institute (FPI) - of which I know very little.

Presumably it does what it says on the tin - seeks to speak up for families with children - because the FPI claims that average income of households with children will drop between 2011 and 2016.

By 4.2% would you believe or around £1,250 a year - depending on the exact income of the household in question.

But I say - so what - what does that have to do with the price of mince?

Because unless you factor in other things - such as how much some households have benefited from our artificially low mortgage rates - then the FPI's claim is completely meaningless.

I know some folks - some with others without children - who are saving hundreds of pounds every month necause of low interest rates - worth many thosuands of pounds a year.

So spare me all this special pleading from special interest groups - as ever they are concerned with their own narrow agenda - and have no time for the big picture.

And the big picture means big savings - not for everyone - but for those paying mortage interest when rates dropped like a stone - and the bigger the mortage the bigger some people's windfall.

Here's what I had to say on the issue in 2011 - no doubt the £20 billion figure now needs to be revised - in an upwards direction.

'All in this together' (September 15th 2011)

When people start urging us to take the view that 'we are all in this together' - it's time to stop and think.

Who's 'we'? - will do for a start.

The fact is that not everyone in the UK has been doing badly in these hard economic times - in fact people who are in a secure job and who have been paying a mortgage off - are doing very nicely thank you very much!

Compared to lots of other people anyway.

And just to demonstrate this point here's something I wrote back in March 2011 - arguing for a 'windfall tax' on the £20 billion that mortgage payers have saved in recent years - as a resul tof artificially low interest rates.

Now the people who are not part of this £20 billion windfall are - typically - the less well off and those on fixed incomes who rely on their savings - which produce little or no interest these days - to help pay the bills.

So why don't we hear any of this at the TUC conference - where delegates are good at telling everyone else what to do - but seldom come up with practical ideas for resolving problems.

A special windfall tax would recoup just some of the £20 billion that mortage payers have gained - simply through sheer luck - and it would seem to embrace the 'were all in this together approach'.

Which the present government and the trade unions both espouse - when it suits their own argument of course.

I imagine most union leaders are paying mortgages - because most live in private housing - and most will have benefited hugely out of the artifically low interest rates - we have witnessed in recent times.

Ironically the one union leader who would escape a special 'windfall tax' on mortgages - would be Bob Crow - who has been living in subsidised social housing in London for years.

But a windfall tax on mortgages would be redistribute income between the 'haves' and 'have nots'.

A windfall tax would be progressive because it would tax 'unearned income' - and would be likely to affect the majority of delegates this year's TUC.

In other words - a real life demonstration of solidarity - that we really are 'all in this together'.


Windfall Tax On Mortgages (March 4th 2011)

I read a remarkable statistic the other day - which made me stop and think.

The Financial Services Authority (FSA) has apparently calculated that the UK's artifically low interest rates in recent years - have meant an unexpected windfall of £20 billion to the nation's mortgage payers.

Yet another example of the old saying - 'It's an ill wind that blows nobody any good'.

In this case £20 billion to the good - and the bigger the mortgage - the bigger the killing people have made - without any effort or risk.

While those who can't afford or no longer need a mortgage (e.g. low paid workers and pensioners) - have lost out big time, comparatively speaking.

So I have a suggestion for the government and our policy makers.

Bring in a special windfall tax on mortgages which claws back some of this £20 billion - and use the money to reintroduce the 10p tax rate to help the low paid.

Low paid workers will spend the money - because they don't have a lot to start with - and that will help to boost the economy.

Readers will remember that the 10p tax rate was abolished by the 'man with a moral compass' - Gordon Brown - in one of his worst decisions as Prime Minister.

But here's a chance to right a great wrong - help the lower paid - boost our flagging economy - and with money that has simply fallen into people's laps by sheer luck - nothing else.

Equal Pay Campaign


I was at another well attended and lively equal pay meeting in North Lanarkshire the other night - this time in Newmains.

Lots of interesting points were raised and discussed on the night - here's a flavour of what was said:

What can we expect from our politicians?

Well, I think you can certainly expect them to stand up and speak out - instead of trying to act like postboxes by offering to write to the Council's chief executive passing on your views. What I would bee looking for from my councillor, MSP or MP is for that person to weight up what's been happening at the Employment Tribunal and to come off the fence:
  1. by making their own views clear about the Council's failure to grade key female posts such as Home Support Workers properly
  2. by commenting on the fact that bonus earnings have been used to assimilate male jobs onto the Council's new pay scales (thus preserving the old differences in pay)
  3. by demanding an investigation into the performance of the Council's senior officials who have presided over this mess while being in denial for years
In other words, don't be fobbed off by a politician who wants to take the easy way out by offering to write a letter - insist on getting your elected representative to explain where they stand personally, and if you don't like the answer tell them so - and look for better support elsewhere.

That's why people have a choice of councillor and MSP although sadly the same doesn't apply to Westminster MPs.


Can we attend the Employment Tribunal (ET) hearing?

Yes, all claimants are entitled to attend and the next dates are scheduled for 1 and 2 May 2014. The Glasgow ET office is a short 10 minute walk from Central Station going west along Bothwell Street. People don't need to stay all day but I'm sure it will send the right message back to the Council if senior managers have to give their evidence in front of some of the staff who have been affected by the way this whole thing has been handled.


Can I switch my claim to A4ES?

Yes, very easily. If you already have a claim registered with the Employment Tribunals and wish A4ES to take this over simply call the office (0131 652 7366) or drop an email to -  enquries@action4equality.uk - and your claim will be transferred across intact from the date it was originally registered with the tribunal. In others words, you are not starting over again and the time the claim has been in the system still counts.    


Will I receive a settlement if I don't have a claim registered?

No, definitely not. Lots of people were told this by their trade unions but found out to their cost that this is simply not true, for example in South Lanarkshire. 


What can we do to help?   

First of all, remember that many hands make light work!

So people can help in lots of practical ways - by asking for support from their councillors, MSPs and MPs and sharing what they have to say. Inside information is also vital and some of the women claimants will know the men who do traditional male jobs within the Council who can share details about how these jobs are paid - on a confidential basis of course. 

The argument about equal pay is not that the men are paid too much but that the women are paid too little, so look for support amongst the male workers as well. 

Housing Bubbles


The Centre for Economics and Business Research (CEBR) is predicting that house prices in London are set to rise by more than 50% in the next 6 years taking the average cost of a home to an incredible level - more than £700,000.

Now that's good news for the relatively small number of people currently living in London who want to seek out and move somewhere cheaper, home or abroad, because they will cash in on a capital asset which has grown hugely in value through no effort of their own.

No doubt lots of Westminster MPs who have properties in London with public funds will be rubbing their hands with glee, but for everyone else this is a disaster waiting to happen because galloping house price inflation can only harm the wider economy, especially when mortgage payers are already benefiting from the historically low interest rates that the UK has been enjoying since 2008.
      

London set for 54% rise in house prices


By Alexandra Goss - The Sunday Times
Properties in London already cost more than double the UK average

HOUSE prices in London could rise by 54% by 2020, taking the average price of a home in the capital to more than £700,000.

The Centre for Economics and Business Research (CEBR) think tank expects average prices across Britain to increase by 6.4% this year to £240,758 and by 28% by 2020 to £307,374. In London it thinks average values will soar to £703,206 by 2020.

“A significant improvement in economic growth, continued government support through the Help to Buy scheme, weak housing supply and low Bank of England base rates are all expected to support price rises over the next five years or so,” said Shehan Mohamed, senior economist at the CEBR.

The average London price has risen by 18% over the past 12 months and properties already cost more than double the UK average, the widest gap since records began in the 1970s, according to Nationwide building society.



Forecasts last week by the Royal Institution of Chartered Surveyors predicted price rises of 6% annually over the next five years, with London growing by 9.3% a year.

A first-time buyer requires an income of almost £40,000 to afford an average mortgage across Britain. If the typical London house price reached £700,000, buyers with a 10% deposit would need an income of at least £125,000 to be approved for a loan, said Ray Boulger, of the mortgage broker John Charcol.

Boulger does not expect such rapid annual growth for London, however. “I think the current divergence between London and the rest of the UK is at its peak,” he said.



Housing Bubbles (24 August 2014)




Dominic Lawson was bang on the money with this piece in the Independent recently - about the insanity of rising house prices combined with the effect of artificially low mortgage interest rates.

Taken together these two policies represent a huge subsidy for people in relatively secure work   and with a big mortgage - because the value of low mortgage interest rates far outweigh any drop in this group's living standards over recent years.

The big losers are people in work but who don't have a mortgage - those who rent or people who have retired - yet government policy is mainly focused on helping existing property owners which is likely, as Dominic Lawson points out, to fuel another housing bubble.

The real solution is to build more houses particularly in the south east where demand is at its greatest - and that's where I think bonkers Boris Johnson might actually be right about a new 21st century airport in the Tames Estuary - which would free up the whole of the Heathrow Airport site and the construction of 300,000 new homes complete with first class transport links. 

Now that would take house prices in London down a peg or two.       

Help to Buy is a dangerous political placebo...
...but rising house prices are among the economic figures making Labour feel sick


Now here’s a paradox. The Labour Party is choosing to make the cost of living the central point in its attacks on the coalition: you’ve never had it so bad. So you might think that rising house prices would fit in nicely to Ed Miliband’s critique. Think again. The fact that house prices have been rising in real terms for the past three months is causing Labour to twitch and the Tories to feel chipper.

Odder still, this particular rise in the cost of living is the consequence of deliberate policy by the Chancellor, George Osborne: under the slogan Help to Buy, his last budget offered up to £130bn of tax-payer funded support as security for mortgages that banks would otherwise have refused to underwrite. That is on top of his Funding for Lending scheme, which was intended to increase the credit supply to businesses, but which in practice has flooded into home loans.

Given that the growth in the country’s housing stock has been extremely sluggish, even as family formation has increased, the result is obvious: homes are getting more expensive again, not just in London (where there never was a collapse) but across the nation. Yet, as I say, this is widely taken as good news for the incumbent government.

One reason for this paradox is that unlike standard purchases, the home is seen as an asset whose value can increase and thus provide a gain in wealth. And when its value – on paper— does go up, that tends to makes the owner feel happier. The fact that the same owner will realise that increase in wealth only if he sells without having to buy something else of similar size; well, that side of the equation only causes pain when people actually do need to buy again. But just 3 per cent of the housing stock is actually bought and sold each year, so during that time there are 97 per cent of home-owners sitting back and enjoying an increase in their psychic wealth.

This is only a disaster for first-time buyers; it is precisely such people, most of whom can put down just a very small amount of cash, that Osborne’s latest scheme is designed to help. And for all borrowers, the combined effects of keeping Bank of England rates at abnormally low levels and the simultaneous injection of vast sums into bank balance sheets through quantitative easing, has made it possible for those in secure employment to get mortgages for as little as 1.5 per cent per annum.

So happy days are here again? Maybe not for long. These low rates for borrowers are not just abnormal but unsustainable. Normally, base rates are about 2 per cent above inflation, and the cost for individuals to borrow against property is about 2 per cent above that. In other words, the normal rate for a home loan, with inflation at around 3 per cent as it is now, should be at least 7 per cent. And it will be, when the money printing tap is turned off, and the government can no longer simply underwrite the bond market by buying its own debt.

What proportion of those now borrowing at say, 2 per cent, will be able to continue paying the mortgage installments when they are at 7 per cent – that is, three and half times more, in terms of cash required to meet the bill each month? A lot less than 100 per cent of them, that’s for sure. This was exactly the mechanism that caused the credit crunch—and the annihilation of vast swathes of the banking sector. Cheap mortgages in the United States, admittedly many of them self-certified in a way which would now not be possible, suddenly became not so cheap when rates began to move up quite sharply in 2007. It then turned out that many lenders — or the firms to whom they sold on their loans— were completely unprepared for the scale of debt delinquency. Result: bust.

The other aspect of this debacle was that successive US governments, obsessed with the idea of extending home ownership to poorer families, had instructed the state-insured mortgage firms Fannie Mae and Freddie Mac to direct at least half their loans to borrowers with below-average incomes. George Osborne’s Right to Buy might not have the institutionalised lobbying power of Fannie and Freddie—which had senators and congressmen in their pockets — but as a financial mechanism it is identical.

The only good thing in this potentially disastrous policy is that it gives the Financial Policy Committee of the Bank of England the right to end the scheme after three years; and the new Bank governor, Mark Carney, said earlier this month that “if Help to Buy is contributing to an underlying vulnerability to risk in the UK economy, I would fully expect that the Financial Policy Committee would not expect to extend it.”

Yet this presupposes that the scheme had indeed been contributing to economic vulnerability, rather than sustainable growth. It is also what one would expect. Perhaps the biggest long-term problem with the British economy is the way in which too much money has — with the active connivance of successive governments— been sunk into housing, and not enough into goods which actually have productive potential. As Adam Smith, the great prophet of market economics, observed centuries ago: a home is a grand thing for the people who live in it, but contributes nothing to anyone’s revenue –including the owner’s (unless it is rented out).

Fortunately, it is now not just the unproductive sector of the economy which is emerging, blinking, into the sunlight. Manufacturing is growing, with the car industry leading the way: the industry at one point in 2012 became a net exporter, for the first time since the 1960s. That is nothing like the turnaround in the oil and gas industry in the US, where fracking has caused a doubling of that country’s energy exports in the last year alone: it remains to be seen whether the motley band of c-list celebrities, eco-fruitcakes and full-time protestors manages to block the expansion of the British gas-production business – and with it the chance for our indigenous industries to benefit as US firms have done from low-cost local gas.

Regardless, George Osborne has already been able to refute his opposite number Ed Balls’ charge, made in 2011: “We were told that public sector job cuts would be outweighed by the rise in private sector jobs…it has been a complete fantasy.” Yesterday the Office for National Statistics released figures showing that while public sector employment has fallen by 423,000 under the coalition, private sector jobs have increased by 1.3 million; and last year the rise in private sector employment was almost five times the size of the drop in public sector jobs.

These are the figures which have caused the almost hysterical outbursts within the Labour Party atEd Miliband. Their original policy of waiting for the economy to win the election for them is past its sell-by date. Worse still for the opposition, Osborne’s highly political home loans policy is working like a happy pill – even though it’s a dangerous placebo.


Who Gets What and Why? (6 April 2014)


I've been saying for a long time that in these tough economic times people living in rented accommodation have been getting a raw deal compared to their neighbours and friends who have a mortgage.

And that's because mortgage payers have seen their housing costs fall significantly over the past five years with interest rates being at artificially low levels - whereas the cost of rented accommodation keeps going up as this article from the BBC web site shows with a big increase of 7.63% in West Dunbartonshire Council, for example. 

Yet to add insult to injury the Scottish Government has announced extra spending on free school meals for a Primary 1-3 school pupils which is worth £114 million over two years or around £330 a year for each child - for families with children.

But not to the less well off families of course because their children already receive free school meals, so all these extra millions of pounds are going to support the better off - like Scotland's school teachers who enjoy much better than average pay.

Now Scotland's largest teaching union, the EIS, has been campaigning in support of these changes which is understandable as it is clearly in the interest of EIS members, but the bigger question is "Is such a policy fair and socially responsible?".  

I say "No" because in my view the money would be much better spent on targeting the the less well off instead of further cushioning the lives of the better paid, especially when you stop and think that the majority of teachers will have been benefiting from the mortgage situation over the past five years.

So if you ask me, the Scottish Government and the Scottish Parliament has got this all wrong - the lower paid are the ones who deserve a break not people in already well paid jobs.  

West Dunbartonshire Council announces housing rent rise

Rents for council house tenants in West Dunbartonshire are to rise by 7.63% from 1 April, it has been announced.

The council said the increase would add an extra £4.67 each week to the average weekly rent over the year.

Housing convener, Cllr David McBride, said the rent rise was "needed to pay for the major improvements required to our properties".

He added: "Increasing rents is never an easy decision but I believe our tenants understand why we need to do this."


P1-3 pupils in Scotland to get free school meals

The Scottish government matched a plan being introduced in England

All Scottish P1-P3 pupils will get free school meals from January 2015, First Minister Alex Salmond has announced.

He said the move, affecting 165,000 youngsters, would boost health and was worth £330 a year for each child to families.

The move matches a plan being introduced in England, in September this year.

Opposition parties accused the Scottish government of playing catch-up, and taking credit for Westminster policies.

The first minister also told the Scottish Parliament that free childcare would be expanded to every two-year-old from a workless household in Scotland by August, affecting about 8,400 youngsters.

Mr Salmond said a further extension of the policy to reach 15,400 two-year-olds by August 2015 would see Scotland delivering 80 million hours of childcare to pre-school children, which he said was the greatest amount in the UK.

The free meals announcement came after UK ministers announced plans to offer pupils in the first three years of primary school in England a free cooked lunch.

Scottish ministers followed suit, partly by using extra money going to Scotland, through the Barnett Formula, as a consequence of the English plan.

Mr Salmond said the Scottish government announcements would bring improvements, but fell short of the childcare revolution which Scotland needed.

Ahead of the independence referendum on 18 September, the Scottish government said all three and four-year-olds, and vulnerable two-year-olds, would get 1,140 hours of childcare a year by the end of the first parliament, in the event of a "Yes" vote.

But opposition parties said SNP ministers had the devolved powers to realise their childcare plans now.

Mr Salmond told MSPs: "We need to create a tax welfare and childcare system that doesn't plunge children into poverty, as the UK government is doing, that puts us on a par with the best childcare systems in the world.

"That is why the future of Scotland's children is the future of Scotland, and why Scotland's future is an independent one."

Scottish Labour leader Johann Lamont said the free school meals plan was promised by the SNP in 2007, but never delivered, adding: "Now it has been reprised, because the UK government has acted on it and provided the money."

She said of Mr Salmond's childcare vision: "What he had was an opportunity to show his new-found commitment to childcare was more than a referendum ploy and start delivering for working families and children now."

Ruth Davidson, the Scottish Conservative leader, added: "A cynic might say that the SNP, having promised the earth and failed to deliver for years, has only now re-discovered its commitment to free school meals because the coalition government is delivering it.

"Today, we have a Westminster policy delivered with Westminster money, and the SNP playing catch-up but trying to claim the credit."

From Democracy Live: Alex Salmond announced his plan in parliament

However, the free school meal and childcare expansion plan, being funded at a total cost of £114m over two years, was welcomed by Scottish Liberal Democrat leader Willie Rennie, a long-time campaigner on the issue.

"The best educational investment we can make is in two-year-olds, because that can change their life," he said.

"If we're going to break the inter-generational cycle of poverty we can make efforts at later stages - we can do stuff about youth unemployment, we can try and improve life chances through schools - but the best impact we can make is in doing it at the age of two."

John Dickie, head of the Child Poverty Action Group, told BBC Scotland the school meals announcement was long overdue, adding: "The pressures on families and their ability to support their children are extraordinary, so providing a free school lunch to children in primary one to primary three is a very immediate, direct and well-evidenced way of supporting families at a time of increasing pressures."

Analysis

BBC Political editor, Scotland

Alex Salmond's critics suggested his enthusiasm for free school meals was driven by external factors: the availability of cash from the Treasury as a consequence of the previous announcement of a comparable scheme for England; a desire to cosset parents - and especially mothers - with an eye to the referendum.

The first minister insisted he was persuaded by the advantages of the policy: it encouraged uptake including among those who were nominally eligible at present; it improved the health and wellbeing of youngsters and thus their educational attainment

Give to the Needy (29 December 2013)


In the run up to Christmas Scotland's largest teaching union, the EIS, burst into fairy-lights by demanding that Scotland's 'share' of the extra public spending announced recently by the Coalition Government at Westminster - should be used to provide free school meals to all children in primaries 1, 2 and 3.

Now this is serious money we're talking about - around £60 million a year, I think, because Scotland will expect to get 10% or so of the extra public spending announced by the Chancellor, George Osborne, in his autumn statement.

Which is of course a free handout of taxpayers money to people who earn above average incomes - because school meals are already free to people on low incomes and to those claiming benefits.

So, the big beneficiaries of the new policy in England and Wales are the better off - since the less well off gain absolutely nothing from extending free school meals to children whose working parents are perfectly well able to meet the cost themselves.   

In fact the policy benefits people exactly like EIS members, as I can't believe that any of Scotland's teachers currently qualify for free school meals - as things stand.

But if I had a Magic Wand, I would target this £60 million on the less well off and probably not just those with children - since that leaves out a great many people who have never had children or whose kids have grown up.

To my mind, £60 million spent on those most in need, would do far more good than spreading £60 million across the whole population - or in this case just people with children of a certain age.

Now some people say that social benefits should be 'universal' or available to everyone on the same basis - free NHS prescriptions in Scotland are a good example although they are not really free since the cost is met out of general taxation.

Yet this approach does not apply to the cost of housing and I've written before about the £20 billion windfall that mortgage payers have enjoyed in recent times which has not been shared with people who rent their homes or living on a fixed income.    

So why not use the extra money in a more meaningful and imaginative way, for example, by holding down rents in the social housing sector?

Because this particular group within the Scottish population has not benefited from the artificially low interest rates that Scotland's mortgage payers have experienced in the past 5 years - which means that since 2008 mortgage payers have effectively been receiving special treatment as far as their standard of living is concerned.  

A much better and fairer use of £60 million, if you ask me, as such a policy would put a significant amount of money in the pockets of those at the bottom of the income ladder - instead of subsidising members of the teaching profession and EIS (Educational Institute  of Scotland). 

The statistics tell their own tale - Scotland's share of the great £20 billion mortgage windfall is around £2 billion which makes £60 million look like chickenfeed.

So the argument about universality, about everyone being treated the same way, does not stand up to serious scrutiny.  


£20 Billion Windfall

I read something the other day - a claim by an organisation know as the Family and Parenting Institute (FPI) - of which I know very little.

Presumably it does what it says on the tin - seeks to speak up for families with children - because the FPI claims that average income of households with children will drop between 2011 and 2016.

By 4.2% would you believe or around £1,250 a year - depending on the exact income of the household in question.

But I say - so what - what does that have to do with the price of mince?

Because unless you factor in other things - such as how much some households have benefited from our artificially low mortgage rates - then the FPI's claim is completely meaningless.

I know some folks - some with others without children - who are saving hundreds of pounds every month necause of low interest rates - worth many thosuands of pounds a year. 

So spare me all this special pleading from special interest groups - as ever they are concerned with their own narrow agenda - and have no time for the big picture.

And the big picture means big savings - not for everyone - but for those paying mortage interest when rates dropped like a stone - and the bigger the mortage the bigger some people's  windfall.

Here's what I had to say on the issue in 2011 - no doubt the £20 billion figure now needs to be revised - in an upwards direction.

'All in this together' (September 15th 2011)

When people start urging us to take the view that 'we are all in this together' - it's time to stop and think.

Who's 'we'? - will do for a start.

The fact is that not everyone in the UK has been doing badly in these hard economic times - in fact people who are in a secure job and who have been paying a mortgage off - are doing very nicely thank you very much!

Compared to lots of other people anyway.

And just to demonstrate this point here's something I wrote back in March 2011 - arguing for a 'windfall tax' on the £20 billion that mortgage payers have saved in recent years - as a resul tof artificially low interest rates.

Now the people who are not part of this £20 billion windfall are - typically - the less well off and those on fixed incomes who rely on their savings - which produce little or no interest these days - to help pay the bills.

So why don't we hear any of this at the TUC conference - where delegates are good at telling everyone else what to do - but seldom come up with practical ideas for resolving problems.

A special windfall tax would recoup just some of the £20 billion that mortage payers have gained - simply through sheer luck - and it would seem to embrace the 'were all in this together approach'.

Which the present government and the trade unions both espouse when it suits their own argument, of course.

I imagine most union leaders are paying mortgages - because most live in private housing - and most will have benefited hugely out of the artifically low interest rates - we have witnessed in recent times.

Ironically the one union leader who would escape a special 'windfall tax' on mortgages - would be Bob Crow - who has been living in subsidised social housing in London for years.

But a windfall tax on mortgages would be redistribute income between the 'haves' and 'have nots'.

A windfall tax would be progressive because it would tax 'unearned income' - and would be likely to affect the majority of delegates this year's TUC.
In other words - a real life demonstration of solidarity - that we really are 'all in this together'.

Windfall Tax On Mortgages (March 4th 2011)

I read a remarkable statistic the other day - which made me stop and think.

The Financial Services Authority (FSA) has apparently calculated that the UK's artifically low interest rates in recent years - have meant an unexpected windfall of £20 billion to the nation's mortgage payers.

Yet another example of the old saying - 'It's an ill wind that blows nobody any good'.

In this case £20 billion to the good - and the bigger the mortgage - the bigger the killing people have made - without any effort or risk.

While those who can't afford or no longer need a mortgage (e.g. low paid workers and pensioners) - have lost out big time, comparatively speaking.

So I have a suggestion for the government and our policy makers.

Bring in a special windfall tax on mortgages which claws back some of this £20 billion - and use the money to reintroduce the 10p tax rate to help the low paid.

Low paid workers will spend the money - because they don't have a lot to start with - and that will help to boost the economy.

Readers will remember that the 10p tax rate was abolished by the 'man with a moral compass' - Gordon Brown - in one of his worst decisions as Prime Minister.

But here's a chance to right a great wrong - help the lower paid - boost our flagging economy - and with money that has simply fallen into people's laps by sheer luck - nothing else.

Freedom Fighters?


The death of a young British has prompted further silly comparisons about the volunteers who fought in with the International Brigades in the Spanish Civil War, but this ridiculous rewriting of history should not be allowed to go unchallenged.

Because Spain's civil war was a battle for democracy which was sadly lost and ushered in four decades of fascist rule under General Franco, whereas it's far from clear that any of the combatants in Syria actually support the concept of democracy and the need to protect essential freedoms including minority rights.

Al-Qaeda link to British teen killed in Syria


Dipesh Gadher and Robin Henry - The Sunday Times
Abdullah Deghayes is thought to have been killed by a sniper

A BRITISH teenager killed fighting alongside his brothers in Syria had “most probably” joined the ranks of al-Qaeda’s main affiliate in the country, according to his father.

Abdullah Deghayes, 18, is thought to have been killed by a sniper in a battle involving extremists from Jabhat al-Nusra and the forces of Bashar al-Assad, the Syrian leader.

The fighting, which took place close to the Turkish border, was so fierce that it took five days to recover Abdullah’s body.

As new details emerged of Abdullah’s death, The Sunday Times has discovered that his father, Abubaker, had travelled to Syria several times.

When he returned to Britain from overseas last week, he was stopped by police at Gatwick airport and had his mobile phones taken away. They were not returned until three days later.

Abubaker Deghayes, of Brighton, East Sussex, described his son as a “martyr” and believes he died fighting for a “just cause”.

However, he insisted that Abdullah and his younger brother Jaffar, 16, had travelled to Syria in February without his consent and that he had tried to dissuade them from getting involved in armed conflict.

Their older brother, Amer, 20, had already entered the country to fight and was shot in the stomach during the same battle in which Abdullah was killed.

Yesterday Jaffar, who was unharmed and is believed to be the youngest British jihadist in Syria, changed his Facebook profile photo to an image of Abdullah’s corpse.

Asked which rebel faction his sons had joined, Deghayes said: “I’m not sure, but most probably Jabhat al-Nusra.”

The group, also known as al-Nusra Front, was involved in heavy clashes with Assad’s troops in late March at Kasab, a border crossing in northeast Syria, where Deghayes said his son had died.

Another Briton, Abdul Majid, 41, from Crawley, West Sussex, had carried out a suicide attack on a Syrian jail this year for al-Nusra Front.



On Friday Deghayes, 45, whose brother, Omar, was held as a terror suspect in Guantanamo Bay for five years and was then released without charge, posted a video on Facebook as a tribute to his son which appeared to celebrate the jihadists opposing Assad.

Deghayes denied that he was encouraging others to take up arms, claiming people were free to make a “personal choice” over whether to fight in Syria.

The grieving father is no stranger to the country and said he had travelled there “several times” since 2012 to deliver aid. “We have warehouses out there and have established a school,” he said.

Deghayes is a trustee of the Al-Quds mosque in Brighton where in 2006 he told an undercover Sunday Times reporter that Tony Blair was “a legitimate target”.

Deghayes said he had meant the former prime minister was a target to be brought down from government after taking Britain to war in Iraq. The Press Complaints Commission, the industry regulator, had rejected his complaint against the newspaper.

Last week Deghayes said he had flown to Turkey in an unsuccessful attempt to persuade Abdullah from joining the fight in Syria. He later travelled to Libya, the country from which his family originally fled as refugees.

Abdullah Deghayes was probably fighting with Jabhat al-NusraOn his return to Britain last Monday he was stopped at the airport. “I was questioned by police and my phones were taken to be checked,” he said.

When asked to elaborate, Deghayes said: “Is this a police investigation or [do] you want a story?” Sussex police refused to comment.

Abdullah was one of six siblings — five boys and a girl — who grew up in the UK. He was interested in engineering and was due to go to university next year. Friends said he had never mentioned Syria or shown signs of extremism.

Both Abdullah and his twin brother, Abdul, had been in trouble with police in the past although Deghayes said this was for “petty things”.

The Facebook musings of their younger brother, Jaffar, switch from those of a typical teenager — in one post he describes someone as a “tight ginger fat scav” — to the more political. One entry that he shared with friends states: “It seems the word ‘terrorism’ is only reserved for Muslims.”



Problem with Intellectuals (16 February 2014)




After reading this article by George Monbiot in the Guardian, I was left with the distinct impression that George approved of all the actions being taken to oust Bashar al Assad and his murderous regime from Syria - including the suicide attack on Halab prison in Aleppo.

But then I stopped and wondered to myself is the the same George Monbiot, a prominent supporter of the Stop the War Coalition, who opposed an limited military strike on the Syrian regime last year - which failed to win support in the House of Commons?

If so, I think we should be told because I'm confused as to what George Monbiot is on about as he appears to support the rebels in Syria who are fighting to oust President Assad while drawing no real distinction between the Free Syrian Army insurgents and those linked to al-Qaida such as the al-Nusra Front.  

George asks us to consider whether the suicide bomber was really a hero rather than a terrorist, but the answer that lies not so much in the act of blowing up the prison gates as in what al-Qaida stands for - what kind of society al-Qaida wants to create, if peace ever comes to Syria.

I read about the Foreign Enlistment Act 1870 the other week so Monbiot is far from being the first person to raise the link between civil war in Spain and Syria (almost 80 years later), yet the similarities are wildly overblown since the 2006 Terrorism Act is about the prevention of potential terrorist acts in the UK. 

Here are the main provisions of the 2006 Act and having read them carefully, I'm not sure what point George is trying to make, although I suppose that's the curse of being branded an intellectual, of being too clever by half. 

MAIN PROVISIONS

• Extends police powers to hold terrorist suspects from 14 days to 28 days without charge.
• Makes it a criminal offence to encourage terrorism by directly or indirectly inciting or encouraging others to commit acts of terrorism. This includes an offence of "glorification" of terror – people who "praise or celebrate" terrorism in a way that may encourage others to commit a terrorist act. The maximum penalty is seven years' imprisonment.
• Grants the home secretary greater powers to ban groups that glorify terrorism and to prevent proscribed organisations from using front organisations to continue operating
• Creates new offences relating to the sale, loan, distribution or transmission of terrorist publications. These can be: 
(a) publications that may indirectly or directly induce others to commit terrorist acts or 
(b) information that could be useful in the commission or preparation of an act of terrorism, eg a bomb-making manual. 
• Creates new offences to allow the prosecution of anyone who gives or receives training in terrorist techniques and to allow the prosecution of those who attend terror training camps or are believed to be preparing to commit an act of terrorism.
• Amends the Regulation of Investigatory Powers Act to increase the possible jail term for refusal to provide an encryption key from two years to up to five years and amends the same act extend the maximum period that intercept warrants can be issued for.
• Extends terrorism stop and search powers to cover bays and estuaries, and to enable the police to search boats and other vessels.
• Creates new offences relating to making or possessing radioactive devices or material and amends the Serious Organised Crime and Police Act to make it a criminal offence to trespass on a nuclear site, punishable by imprisonment for up to 51 weeks. 
• Sets out new procedures in preparing terrorist cases for trial

Since drafting this post I have since read that the British suicide bomber referred to by George Monbiot - Abu Soleiman al-Britani was a longstanding member of the banned Islamist group al-Mahajiroun and was questioned by the police during an investigation into a plot to bomb a shopping centre in Kent.

Now a man is innocent of a crime until proved guilty in court, beyond a reasonable doubt, but how coincidental is that - and how stupid does George Monbiot look for even raising the possibility that this poor chap (who had a wife and children) might be a hero. 
Orwell was hailed a hero for fighting in Spain. Today he'd be guilty of terrorism

The International Brigades are acclaimed for bravery. But British citizens who fight in Syria are damned. If only they did it for the money



By George Monbiot


'The British government did threaten people leaving to join the International Brigades, by reviving the Foreign Enlistment Act. But the act was unworkable.' Photograph: Christopher Thomond

If George Orwell and Laurie Lee were to return from the Spanish civil war today, they would be arrested under section five of the Terrorism Act 2006. If convicted of fighting abroad with a "political, ideological, religious or racial motive" – a charge they would find hard to contest – they would face a maximum sentence of life in prison. That they were fighting to defend an elected government against a fascist rebellion would have no bearing on the case. They would go down as terrorists.

As it happens, the British government did threaten people leaving the country to join the International Brigades, by reviving the Foreign Enlistment Act of 1870. In 1937 it warned that anyone volunteering to fight in Spain would be "liable on conviction to imprisonment up to two years". This was consistent with its policy of non-intervention, which even Winston Churchill, initially a supporter, came to see as "an elaborate system of official humbug". Britain, whose diplomatic service and military command were riddled with fascist sympathisers, helped to block munitions and support for the Republican government, while ignoring Italian and German deployments on Franco's side.

But the act was unworkable, and never used – unlike the Crown Prosecution Service's far graver threat to British citizens fighting in Syria. In January 16 people were arrested on terror charges after returning from Syria. Seven others are already awaiting trial. Sue Hemming, the CPS head of counter-terrorism, explained last week that "potentially it's an offence to go out and get involved in a conflict, however loathsome you think the people on the other side are ... We will apply the law robustly".

People fighting against forces that run a system of industrialised torture and murder and are systematically destroying entire communities could be banged up for life for their pains. Is this any fairer than imprisoning Orwell would have been?

I accept that some British fighters in Syria could be changed by their experience. I also accept that some are already motivated by the prospect of fighting a borderless jihad, and could return to Britain with the skills required to pursue it. But this is guilt by association. Some of those who go to fight in Syria might develop an interest in blowing up buses in Britain, just as some investment bankers might be tempted to launder cash for drug dealers and criminal gangs. We don't round up bankers on the grounds that their experience in one sector might tempt them to dabble in another. (The state won't prosecute them even when they do launder money for drug gangs and terrorists, as the HSBC scandal suggests.) But all those who leave Britain to fight in Syria potentially face terrorism charges, even if they seek only to defend their extended families.

Last week a British man who called himself Abu Suleiman al-Britani drove a truck full of explosives into the gate of Halab prison in Aleppo. The explosion, in which he died, allowed rebel fighters to swarm into the jail and release 300 prisoners. Was it terrorism or was it heroism? Terrorism, according to many commentators.

It's true that he carried out this act in the name of the al-Nusra Front, which the British government treats as synonymous with al-Qaida. But can anyone claim that liberating the inmates of Syrian government prisons is not a good thing? We now know that at least 11,000 people have been killed in these places, and that many were tortured to death. Pictures of their corpses were smuggled out of Syria by the government photographer employed to record them. There are probably many more. That combination of horror and bureaucracy – doing unspeakable things then ensuring that they are properly documented – has powerful historical resonances. It haunts us with another horror, and the questions that still hang over the Allied effort in the second world war: how much was known, how much could have been done?

As no one else is now likely to act, and as the raid on the prison would probably have been impossible without the suicide bomb, should we not be celebrating this act of extraordinary courage? Had David Cameron not lost the intervention vote, and had al-Britani been fighting for the British army, he might have been awarded a posthumous Victoria Cross.

When you think of the attempt by the British battalion in the Spanish civil war to defend a place they called "Suicide Hill", with the loss of 225 out of 600 men, do you see this as an act of terror – a suicide mission motivated by an extreme ideology – or as a valiant attempt to resist a terror campaign?

Sue Hemming claims it is "an offence to go out and get involved in a conflict", but that is not always true. You can be prosecuted if you possess a "political, ideological, religious or racial motive" for getting involved, but not, strangely, if you possess a financial motive. Far from it: such motives are now eminently respectable. You can even obtain a City &Guilds qualification as a naval mercenary. Sorry, "maritime security operative". As long as you don't care whom you kill or why, you're exempt from the law.

I expect that's a relief to Sir Malcolm Rifkind, the former foreign secretary who now chairs parliament's intelligence and security committee, where he ramps up public fears about terrorism. For several years he was chairman of ArmorGroup, whose business was to go out and get involved in conflict. The absence of one word from the legislation – financial – ensures that he is seen as a scourge of terrorism, rather than an accomplice. The British fighters in Syria should ask their commanders to pay them, then claim they're only in it for the money. They would, it seems, then be immune from prosecution.

Talking of which, what clearer case could there be of the "use or threat of action ... designed to influence the government ... for the purpose of advancing a political, religious, racial or ideological cause" than the war with Iraq? Tony Blair's ministers were, of course, protected by crown immunity, but could they have experienced no flicker of cognitive dissonance while preparing the 2006 act?

Whatever you might think of armed intervention in Syria, by states or citizens, Hemming's warning illustrates the arbitrary nature of our terrorism laws, the ring they throw around certain acts of violence while ignoring others, the risk that they will be used against brown and bearded people who present no threat. The non-intervention agreement of 1936 was not the last elaborate system of official humbug the British government devised.