Pick of the Papers
By Kevin Augustine
Source: The Guardian
As Topic: Elections
A2 Politics: Environment
Fracking has the ability to give the UK another supply for energy, which has the potential to drive down energy prices for the economy. However, this has caused great controversy in safe Tory seats, with constituents pledging to run anti-fracking campaigns and research from Greenpeace and the Guardian has shown that 120 safe seats have protest groups in them. On top of this, 31 of the 40 key marginal seats identified by the party have these protest groups. This bodes ill for the Conservative party, who have deviated from green policy.
Source: The Guardian
A2 Topic: Economic Policy
The TTIP is a treaty between the EU and the USA, being marketed by its champions as a economic stimulus package for ailing Europe, providing up to £100bn in extra growth. It is presented as a free trade agreement, but existing tariffs on either side of the Atlantic are already weak because of common membership of organisations such as the World Trade Organisation. But you will not see UKIP nor Cameron riding to British defence as the actual aim is to strip away obstacles to large corporations making profits such as regulations that protect our privacy, the environment, food safety and the economy from a rapacious financial sector. And crucially TTIP further opens up public services to private companies motivated primarily by profit rather than people’s needs.
Source: The Guardian
As Topic: Judiciary
A2 Topic: Crime and Order
The right of victims of crime to directly confront the offenders in court is to be enshrined in law, the government has said. And publicly funded lawyers are to be barred from taking on serious sex offence cases unless they have undergone specialist training. Grayling said: “Our criminal justice system can be daunting, and victims, especially the most vulnerable, can find it traumatic and difficult to know where to turn to for advice and support.” These reforms aim to put the victim first and solidify the victim’s rights in law.
Source: The Guardian
A2 Topic: Economic policy
The Bank of England’s governor, Mark Carney, has warned workers that interest rates will rise before they see a rise in real wages. At the TUC conference in Liverpool, Carney cited bank forecasts of real wage growth about the middle of next year. Wages fell 0.2% in the three months to June this year, a decline that contrasted sharply with inflation of 1.6% in July. Carney warned that workers would have to improve productivity and skills to have any chance of getting real-term pay.
Source: The Independent
A2 Topic: Britain and the EU
David Cameron’s hopes of winning a better deal in Europe for Britain were boosted today after Lord Hill, the UK’s new European Commissioner, was chosen for the key financial services post in Brussels. But Lord Hill’s honeymoon lasted only a few hours, as Socialist and Green MEPs threatened to veto his appointment unless he promises to take a tough line on bankers’ bonuses.
Is the economy rebalancing as proposed?
It is coming up to 4 years since Osborne decided the UK economy needed to be rebalanced. By ‘rebalancing’, he proposed a self-sustainable and largely export led economy. An economy that no longer relied on the financial services of the City, which appears to benefit suited men who know better how to ruin an economy better than those on Downing Street know how to fix one. Moreover Osborne pleaded for an economy with a higher propensity to save as opposed to one which will pay the price for further unsustainable private and public debt. Four years on, there seems to be a lack of policy aimed towards accomplishing a rebalanced economy.
When the economic recovery began in 2009 the conditions seemed to be in place for a manufacturing exports-led resurgence. The pound depreciated significantly during the financial crisis, providing UK manufacturers with a competitive edge. And with domestic spending still slow, it wouldn’t have been surprising for UK firms to look to overseas sales for growth. Manufactured goods are the dominant element in international trade – accounting for 75% of all UK exports. However as expected it is the services industries which have driven the UK recovery. Service output has now passed its pre-crisis peak, whereas manufacturing production is languishing nearly 10% down on its early 2008 level.
Moreover, whilst the UK has many successful manufacturing firms, our strengths are concentrated in a small number of sectors – aerospace, pharmaceuticals, high-value engineering and car production. Britain does not have the broad manufacturing base which has allowed Germany to be so successful in expanding its exports to Asia and other high growth emerging market economies. However economists at Citi reckon the UK’s exports have risen by 182%, in cash terms, in the last 10 years – five times faster than the UK’s exports to advanced economies. Within that, exports to China have risen six-fold since 2002, and exports to India are nearly five times higher. Goods exports to emerging markets now account for nearly a third of our goods exports, up from 17% in 2002. However with the emerging market economies slowing down, our hopes of rebalancing further may be even more dependent on the Eurozone’s recovery than they were before.
Over the recovery, the private sector has created 1.5 million jobs – predominantly in services – greatly offsetting the reduction of about 500,000 in public sector employment. This ideological approach to rebalancing has been working, although it has been isolating those in the public sector greatly whose lack of skills and the lack of private sector employment in regions such as the North East mean they have added to the inconsistent shift from public to private sector growth.
The UK economy is rebalancing – but not as we expected. Rebalancing is happening within the services industries rather than in favour of the manufacturing industry. As long as this is accompanied by export success and rising employment, as it has been so far, we should welcome and support Britain’s services-led recovery.
*** Economy update – March 2014 ***
The tide has somewhat turned in the Conservatives favour. Less than 18 months until the General election and the economy seems to be resuscitating. Better late than never I suppose. With Mr Osborne revealing his last budget for this Parliament next week, the Tory party are trying to map out their economic stance. It is clear that the 2015 general election will be laden with tax and spend policies, as the main parties not only try to prove that they are economically credible but that their policies seek to benefit the hard working.
The first three years of the coalition were characterised by flat lining growth, missed targets, a loss of Britain’s AAA debt rating and a triple-dip recession scare. However, the latter part of 2013 saw improvements in almost all macroeconomic sections. Economic growth for 2013 measured up at 1.8% compared to the sluggish 0.3% of 2012. Osborne insists that his “long term economic plan is working”, with economic growth complemented by increased investment and fast pace job creation in the service sector. Despite Osborne’s “long term” economic plan, Labour still maintain that the government is not meeting its longer term goals as the majority are yet to feel the benefits of this recovery as their wages are eroded by inflation and battle with the so called “cost of living” crisis. Not to mention, the economy is still smaller than it was pre-crisis and this recovery has taken far too long. Economists have started to water down expected forecasts for the economy as low productivity levels stifle economic growth.
Unemployment figures have also fallen to 7.2%. As we approach the 7% figure earlier than expected, the Bank of England has revised its earlier decision to raise interest rates when unemployment falls below 7%. Significantly, youth and long term unemployment have also fallen, an issue that poses the most threat to the economy. Rachel Reeves, Shadow Work and Pensions Secretary, believes unemployment levels are still too high and that there is still more work to be done. The fall, although welcomed by the Labour Party had the caveat “the government must not be complacent”. Miliband insists wages are £1,600 less than what they were in 2010, and that 13 million people are living in poverty. As unemployment continues to decrease, so does the spare capacity within the economy – what this means is that the economy needs to grow by a faster rate in order to deter inflationary pressures. Inflation is now close to the Bank of England’s inflation target (2%) as it dropped to 1.9% in December to January. Although wages have only risen by 1.3%, some expect wages to rise at a similar rate of inflation, and with plans to raise the minimum wage to £6.50 in October this seems likely to happen before May 2015.
Both Labour and Conservatives have committed themselves to running a budget surplus in the next Parliament but this is very difficult to visualise since the deficit still remains at £111bn. The Lib Dems have accepted the Conservatives’ plans to eliminate the deficit but say that they would go about it in a much ‘fairer’ way; through a mixture of higher taxes and cuts in government expenditure. Just a few months ago, the Lib Dems proposed to raise the personal tax allowance to £10,500. What this would mean is that the first £10,500 earned would be tax exempt. The Tories have now claimed this policy as their own. Cameron says that he will prioritise tax cuts for the low paid in an attempt to shake off the perception they are out of touch, protecting the rich.
It is still premature to conclude that this upturn is down to fiscal conservatism and austerity, but confidence in the economy is key, and with people spending more and businesses increasing investment it is likely that the economy will continue to strengthen in the lead up to the election. All the parties know what the next election will be fought on, as Bill Clinton once said, ‘it’s the economy stupid’.
Weekly Parliament Roundup: 22/01/14-29/01/14
50p Tax rate for the Rich:
Ed Balls recently said that a future Labour government promises to achieve a budget surplus, falling national debt and a 50p top rate of tax for the rich. Businesses have criticised the third proposal by saying that it will harm the economy and put a stunt on job production. However, Ed Balls said that Labour’s Plans to reintroduce the 50p top rate of tax does not mean that the party is against business. Despite this, more business figures have said it is sending the wrong signals. Alistair Darling supported Ed Balls by saying that the timing for making this proposal was right since the General Elections are only about 15 months away. Even though there’s a lot of support for the proposal, Former trade minister Lord Digby called it ‘lousy economics’ in the sense that it might prevent businesses from investing in England.
The Immigration Bill
The Immigration bill was back in the Commons last week and Tory rebels have been threating to reinstate controls over Romanian and Bulgarian immigrants. There’s a big fear among David Cameron and Senior Ministers regarding how the Conservatives react after the European elections. Cameron has become unsure whether the party become unmanageable and more blatantly Eurosceptic following the results of the elections. Many of the Tory rebels are threatening to reinstate controls over immigration because Cameron and Hague though they could park the issue with Europe and they are getting frustrated because Cameron and Hague aren’t doing more to explain what they mean by a renegotiation of power with Brussels.
Lord Rennard Aftermath
Following last week’s Lord Rennard issues, Nick Clegg hopes that mediation is the way they would now solve the issue. He is disappointed by the fact that things have been made more difficult as legal procedures have been brought in by Lord Rennard. In regards to the reputation of the Liberal Democrat party and Nick Clegg himself, he doesn’t seem to be such a strong leader as shown through the way in which he has handled the situation. In addition, the internal procedures that were taken in the party during the last week don’t seem to be fit for a governing party.
Ed Miliband’s Syria success (PMQs)
Last week we saw Ed Miliband pressurising David Cameron into allowing a certain amount of Syrian refugees into entering Britain and despite a disagreement by Cameron who stressed that we were already helping them enough by providing them with aid, the Conservatives still gave in. After Ed Miliband’s demand for Syrian refugees to be allowed in Britain, Home Secretary Theresa May made an announcement stating that hundreds of Syrian Victims, especially fragile victims such as Orphans will be able to come to Britain as refugees.
Miliband’s triumph in getting Cameron to agree and accept his demands regarding the Syrian refugees was evident in his confident and assured demeanour in this week’s PMQs. Not sounding too boastful, he was able to once again act calm and professional while questioning the Prime Minister regarding the 50p tax rate. He was shown as strong and persistent as he continuously asked Cameron to rule out a reduction in the top rate of income tax to 40p, leaving Cameron tongue –tied and embarrassed. So far, we can well and truly say that Miliband has achieved his first big win.
Pick of the Papers (13/01/2014 – 19/01/2014)
Woodhouse’ weekly pick of the papers is devoted to keeping A level politics students up to date with the political news and on track with the Unit 1 and Unit 2 syllabus.
Source: The Independent
Politics Topic: Party Policies and Ideas
Summary: A shock to the Conservatives and the Labour Party as UKIP is seen as the nation’s favourite party. This will underline concerns that UKIP could come first in May’s European election and this could be potentially deny either the Labour Party or the Conservatives an outright majority in the 2015 general election.
Source: The Guardian
Politics Topic: Party Policies and Ideas
Summary: The Chancellor of the Exchequer reflects his party’s worry of Miliband and they are worried that Miliband is turning voters against them and onto things that matter. This is enough to stop a man who is wedded to his long term goal of shrinking the state and minimising government intervention.
Source: The Telegraph
Politics Topic: Parliament
Summary: When Cameron gave his speech last year on a EU referendum last year, it set a direction for the Conservatives but lacking in detail. It would be time for the European system to be brought back under clear, democratic control. But this has undermined a Government bill to promote EU citizenship, bringing ‘Europe closer to its citizens’, which is directly the opposite of Cameron’s speech stating that a ‘ever closer Union is not the objective’
Source: The New Statesman
Politics Topic: Party Policies and Ideas
Summary: By promising big changes to the economy, the Labour leader has the ability to make a new coalition between two big areas of voters. But this is uncharted territory as the middle class tend to benefit from the success fro the City; where Miliband wants to break down the banks in the City.
Parliament Roundup: 4/12/13-11/12/13
MPs to receive 11% pay rise:
IPSA(Independent Parliament Standards Authority) have recently proposed to provide MPs with a pay rise of 11% which will increase their salary to £74,000. They have stated that there will be changes to the pension scheme which will save tax payer 2.5 billion pounds if the rise is to take place. Even though this might be seen as a great thing for the MPs, lots of them are scared to state publicly that they think it is a good idea. The main issue with this proposal is that it might be the wrong time to make such high rises in MP’s salaries when other public sectors are facing difficult freezes. However, of this proposal is to go ahead, it will take legislation in 2015 to stop this from occurring.
The public might not like the sound of the proposal at first because many might feel that the MPs don’t deserve such a high pay rise as they have failed to improve costs of living. Despite this, the huge worry for IPSA and for several MPs is that the public won’t fully understand the fact that this will not affect them in any major way. This money will not be taken out of the tax payer’s pockets and in fact, it might even aid them. This proposal will also mean that there might be tougher regulations on expenses.
Shadow Red Ed
Following George Osborne’s autumn statement stating that ‘Britain’s economic plan is working’ and that ‘The hard work of the British people is paying off, and we will not squander their efforts’, Ed Balls made one of the most disastrous responses which led him to be mocked by Osborne and the rest of the opposition. In his response, he stated that Labour was winning the economic argument despite being contradicted by recent polls. Despite this, he has recently stated that he’s not bothered at all about the gossip about his performance in House of Commons and he also refuses to accept the fact that his response was weak. David Cameron also attempted to throw an attack at him again in this week’s PMQs by saying that ‘He can dish it out but he can’t take it.’
Tributes to Mandela
After the death of former South African President Nelson Mandela, Parliament paid tribute to the iconic figure on Monday. All parties stressed upon the fact that he’s legacy will stay imminent in our lives. David Cameron also talked about Mandela’s strength of character and mentioned the fact that progress is not won by people accept the way things are but dreaming of what it can be. Cameron,Clegg and Miliband went to Johannesburg for Mandela’s memorial service on earlier on this week and Prince Charles will be attending the funeral on Sunday.
This week’s PMQs saw the return of Cameron Vs Miliband on another round of Cost of living, only this time the debate was dominated by the 11% proposed pay rise for MPs which Ed Miliband used to strengthen his argument of course. Mr Miliband asked Cameron that if given the current living standards issues among families should MPs receive a pay rise. Surprisingly, the two men agreed on the fact that these proposals were in fact unacceptable and Cameron reemphasized the fact that these decision weren’t finally. After a few seconds of agreement, Cameron once again played the blame game and replied to Miliband’s request to work together on the issue by saying that the Conservatives are still left with the mess that Labour has left behind.
1. Tax – Difference
Labour argues that the Coalitions economic plans are hitting the ‘poorest, hardest’. The Conservatives have lowered the top rate tax to 45% and staged a decrease in corporation tax which is to be 20% by 2015. The corporation tax cut will cost the Chancellor 400m in 2015-16 and so he is taking a risk on business which links into a later point. The Labour party has said it would consider the mansion tax proposed by the Liberals. This was partly a political manoeuvre to appeal to the Liberals or cause tensions in the coalition but also to show they are the party on the side of the working class. Ed Balls claimed that the benefits of the rising of the personal allowance to £10,000 would be swamped out by the higher VAT and cuts to tax credits. Figures from the IFS supported this showing that one earner families would lose an average of just under £4,000.
2. The private sector – Difference
Osborne went about such a strong cuts agenda believing that the private sector would step in when the public sector left. The IMF has suggested the UK slow down its austerity or even look for a ‘plan B’ in the face of a ‘weak private sector’. Despite these warnings for the Chancellor, plans were unveiled earlier this year that as many as one in six civil servants would be moved into the private sector as government services such as the nudge unit and possibly the ONS become ‘mutualised’ so part owned by the private sector. You can make a synoptic link here about the commissioning of giving out disability benefits to private companies and the commissioning of the work programme to private companies. Also link it to Thatcherism. How this differs from Labour is tenuous and is basically that Labour has not announced any plans for this type of reliance on the public sector and it would be polar to their ideology. Brown said he did not want to ‘lean on the private sector’ before entering office as Chancellor.
3. Banking – Difference
The way to deal with the banks following the financial crisis is actually a clear difference between the Coalition and Labour. In Labour’s 5 point plan it says a £2bn tax on bank bonuses to fund a real jobs guarantee for all young people out of work for a year and build 25,000 more affordable homes. The Coalition has steered away from anything to severe on the banking sector for example the cap on bankers bonuses through EU legislation was heavily opposed by Osborne. Furthermore, when Osborne announced he would ‘electrify the ring fence‘ between retail and investment banking, Labour argued this did not go far enough and Darling said there needed to be a ‘Chinese Wall’ to ensure a complete separation and protect tax payers from future problems seen from needing to bailout big banks such as RBS.
4. Cuts – Similarity
Prior to the election, Labour had said they would cut 20% in each department whilst the Conservatives said 25%. The difference is not huge and Labour had not specified what areas would be cut, nor had they ring fenced certain pots of spending. In the face of cuts to policing, local government and welfare, Labour has condemned the cuts but not said what it would do differently. It has not pledged to reverse any of the cuts either. Labour’s inaction is suggestive of passive agreement, the lack of a clear plan from the party makes it difficult to see how their cuts agenda would differ from the Coalitions. In a speech to the Fabian Society, Balls said he accepted every spending cut being imposed by the coalition and endorsed George Osborne’s public sector pay freeze, adding that it might need to continue beyond the end of the current parliament. Many see this as Balls trying to appear credible on the economy.
5. Investment – Similarity
Programmes like HS2 were initiated by the previous Labour government and survived through the Coalition. Both the government and opposition believe in investment in infrastructure projects and more projects like HS2 which can ‘help the North-South divide’ and aid future economic growth. In 2012 the government agreed for up to 40bn to be put towards infrastructure projects. Since then that figure has increased also it was recently reported that 1 in 4 projects is not set to finish on time, pressuring Osborne to speed up capital spending. Labour supports these projects and has only criticised the government for not spending more on infrastructure investment.
Can you think of any other points? Tweet us and share your ideas!
The coalition government has confirmed that it is revising its plans to cap child benefits from higher rate taxpayers who earn above £42,735. While the treasury maintains that it is a popular move, the legislation has attracted opposition from across the political spectrum.