NEWS AND COMMENT FROM CHRIS LESLIE MP – 19th March 2016
Is it really fair for the Chancellor to cut disability independence payments and use that same sum of money to give a Capital Gains Tax cut to the very wealthiest? Absolutely not! And it appears even Cabinet Minister Iain Duncan Smith couldn’t stomach it either!
Wednesday’s Budget has well and truly unravelled as the small print beneath the ‘sugar tax’ headline starts to be noticed. The switch from disability payments to tax-cuts for the wealthy was particularly crass. Two hours after the Chancellor sat down I gave my reaction in a Commons speech (click here to watch) where I pointed this out – and also that on the key tests set by Osborne himself he was falling short: growth revised sharply down, debt higher, an implausible surplus target and productivity faltering.
As I set out in my article with the website LabourList (click the link here to read), the ‘Tycoon Tax Cut’ to capital gains tax was just one example of warped priorities pursued by the Government at the moment. Other changes in the Budget that caught by eye include:
- the transport budget falling 10 per cent from this year to the end of the Parliament
- Council services hit by an astronomical fall of a third from £10.8bn today to £6.2bn in 2020
- a £2bn raid on public service pensions of nurses, teachers, police officers and armed forces
The Office for Budget Responsibility cast doubt on the Chancellor’s record in the first page of their assessment, commenting that “the public finances look materially weaker”, that “the growth in average earnings has slowed again” and that optimism on productivity “was another false dawn”.
While I welcome the announcement of a soft drinks industry levy because of growing levels of childhood obesity, and there are also some worthwhile savings incentives in the Budget too, overall this was a missed opportunity and an approach that the Chancellor should not be proud of.
Iain Duncan Smith’s resignation probably says more about his anti-EU stance and desire to see Boris Johnson replace George Osborne – hence the attempt to damage the Chancellor at this moment of vulnerability. I hope that the Government may well back down on some of the disability proposals in the coming days, but the Tory Party tectonic plates are definitely on the move.
- This week I continued my visits to schools in the constituency and popped in to Scotholme Primary School in Hyson Green. I met with Headteacher Kate Hall, and we discussed a series of issues affecting the school, including the national announcement about forced ‘academisation’ and teacher recruitment pressures. We talked about the need for stability in the education system, and also about the particular challenges facing inner-city schools. The school have a really interesting approach – including a great outdoor classroom in the shape of a converted double-decker bus! (pictured below with Ms. Hall).
- A £100 million project to develop a hotel and conference centre on the site of the Guildhall on Burton Street has taken another step forward this week. The plans include the development of the adjoining police and fire stations, and Nottingham City Council have now finalised plans to acquire these sites once the police and fire services have relocated to their new premises (the fire service to a new site on London Road, and the police to Byron House on Maid Marian Way). The development will also include office space and student accommodation. Large parts of the Guildhall building have been unused for a few years now, so I am pleased to see a project that should offer a welcome boost and bring additional jobs and business to this area of Nottingham.
- I have discussed Nottingham University Hospitals’ long-term partnership with Sherwood Forest Hospitals in previous MP Update emails. Nottingham University Hospitals have recognised that many members of the public will have questions or concerns about how the partnership will affect care in the city, so they have organised a public Q&A session on Tuesday 5th April 2-3.30pm at the Postgraduate Education Centre at QMC. Senior members of the Nottingham University Hospitals team will lead the session. I would encourage anyone who has questions about the long-term partnership to go along to the meeting.
- I was sorry to hear that pupils and staff at Claremont Primary in Carrington were sent home on Thursday with the school remaining shut on Friday because of an outbreak of norovirus leaving 80 children absent and unwell. Public Health England have been advising how to tackle the virus and my very best wishes for a speedy recovery to those affected by this horrible bug. I hope things can get back to normal in the week ahead.
- This week I was invited by the Chair of Nottingham High School’s Politics Society to speak to pupils. We discussed a range of topics, including the EU and specific issues in Nottingham East constituency.
PARLIAMENT AND POLITICS
- At Prime Minister’s Questions this week I asked David Cameron whether, on reflection, it was wise of the Chancellor to bank on the theory of a £27billion ‘windfall’ in his pre-Christmas Spending Review, when it appears to have vanished over the course of the past three months. In many ways, Osborne’s hubris with that statistical opportunity has landed him into today’s Budget hot water – and it goes to show that sometimes caution is appropriate in forecasting the economy.
- On Tuesday I asked a question to the Business Secretary Sajid Javid during Business, Innovation and Skills Questions, urging him to highlight the risk to productivity that deciding not to remain in the European Union would bring for small and medium-sized businesses (a link to the question is here). A lot of discussion in the EU referendum debate has surrounded trade and the benefits our partnership brings in terms of exports. One benefit of trade that I feel has not been emphasised enough is the boost it brings for productivity (particularly relevant after the OBR revised down UK productivity growth on Wednesday). Healthy competition pushed firms to become more productive and to match the price of those competitors; a 2013 Government study showed that exporting firms achieve 59 per cent faster productivity growth than non-exporters.
- On Tuesday the Government’s Investigatory Powers Bill had its Second Reading debate in the House of Commons. It seeks to update and consolidate the country’s investigatory powers in a ‘clear and comprehensive’ new law. Our police and security services do need an up-to-date and effective legal framework to help prevent and investigate serious crimes such as terrorism, murder, child exploitation and locating missing people. But legislation like this must be subject to robust safeguards and independent scrutiny, and be transparent, necessary and proportionate. I have a few concerns with this Bill and I hope the Government can make a stronger case for the extensive powers with a better definition of what can and cannot be included in ‘Internet Connection Records’ (ICRs). There are also important arguments for improving judicial oversight. To have opposed this Bill at Second Reading would have risked leaving interim laws in place and left us with weaker safeguards. I therefore did not oppose the Bill on Monday and hope it will be improved as it progresses through Parliament.
- On Thursday the Education Secretary outlined the Government’s White Paper for Schools in the House of Commons, as part of the debate on the Budget. The White Paper sets out proposals for all schools to become academies by the end of 2022. However, only last week the Chief Inspector of Schools, Sir Michael Wilshaw, wrote to the Secretary of State for Education highlighting “serious weaknesses” in academy chains. Academisation on its own is not a panacea for some of the challenges in our school system, but the Government is pressing forward with it. I think that choices on structure should be for the schools, governors and parents themselves to initiate and not be forced into a particular model. Analysis of the Budget shows that the academisation of the schools system could cost around £700 million, yet the Chancellor has only allocated £140 million. I also disagree with the abolition of parent-governor posts which will now be voluntary. Parent-governors are an important connection between families and the school management team and it is a sad day when this link is put in jeopardy, in my view.
- On Monday the Government’s Energy Bill returned to the House of Commons. I support elements of this Bill that are about protecting jobs and investment in the oil and gas industries in the North Sea. I did not, therefore, oppose it. I also welcome the Government’s acceptance that we must ultimately build a carbon-neutral economy. However, I am concerned about how the Government plans to honour this commitment when it is dismantling the clean energy schemes that could help address climate change. I voted for a number of amendments on this Bill, including one for the Government to adopt a new Carbon Capture and Storage strategy and others aimed at attracting investment in new energy projects, creating jobs and improving energy security.
- On Monday the House of Commons voted on the draft Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2016. At the Spending Review in November the Government stated that it would abandon the proposed cuts to tax credits, however, the cut to the ‘income rise disregard’ is still going ahead. These Regulations will reduce the ‘income rise disregard’ in tax credits from £5000 to £2500 from April 2016. The Government has not produced an Impact or Equality Impact Assessment for these Regulations, which could potentially affect 800,000 working families across Britain. I am concerned that these changes will have a huge impact on low paid workers – especially those on zero hours contracts and in other forms of insecure work. I therefore voted against the Regulations, which unfortunately passed by 272 votes to 228.
WHAT DO YOU THINK?
With the political news moving so quickly this weekend, I’d be interested to know what you think about the Budget, the state of the Government and Cabinet, and whether you agree with my view that it is dangerous for the forthcoming EU referendum to be hijacked by Cabinet Ministers squabbling over who should become the next Tory leader.
What were your initial reactions to the contents of the Chancellor’s Budget statement? Will you be better or worse off? Were there elements you welcomed and other aspects you didn’t like? I set out my own feelings at the beginning of this email – but there was a lot of detail in the Budget including news about regeneration and devolution in the East Midlands. I’ll cover some of these specifics in future email MP Updates but if you’re interested in knowing more – do take a look through the official Budget ‘Red Book’ document which lists everything at the Treasury website link here.