Chancellor’s spending plans are toxic

Another Spending Review, yet more bad news for public services, the people who work in them and benefit claimants. TUC General Secretary Frances O’Grady said: ‘This is a toxic mix of bad economics, nasty politics and dishonest presentation.

‘The last thing our struggling economy needs is further cuts to spending to try to close a deficit made worse by the Chancellor’s earlier cuts. When the medicine is not working and side effects are choking the patient you need a change in treatment not more of the same.

‘Many services will be hard hit. Worst of all is a new attack on some of the most vulnerable in our society through the seven day wait and other conditions for social security payments. The Chancellor may think attacks on welfare go down well with voters, but these will lead to parents not having enough cash to feed their children.

‘And for all the talk of new investment, the truth is that the overall capital spend in 2015 will be exactly the same as the Chancellor forecast in his Budget earlier this year.’

Public service pay and jobs squeeze goes on

The Chancellor announced ‘further reductions in the number of people working in the public sector’ – a cut of 144,000 jobs. Looking at the small print of the OBR’s March 2013 report (p79), this appears to be a confirmation of the OBR projection made back at the time of the Budget. So, as they predicted, an average of 36,000 public service jobs a quarter (395 a day) will still be being cut in 2015-16 as a result of government policies, on track with their estimate of a total of 1 million job cuts from the beginning of 2011 to the start of 2018.

He also confirmed another Budget announcement, that there would be a further year’s 1 per cent cap on pay increases in the public sector, following the two or three year 1 per cent cap and two or three year freeze (depending on where you work). What this means in practice, of course, is living standards falling further and further as real terms pay cuts bite. TUC research published earlier this week showed the impact this had had on households, pushing 180,000 children with a parent in the public sector into poverty.

Seven days wait for family and housing benefits for unemployed claimants

Full information on what the new ‘seven day waiting period’ for unemployed claimants will mean is not yet available. But from what’s available so far it doesn’t look good for people who lose their jobs, or their families. The CSR policy costings document specifies that the policy will:

Introduce seven waiting days in Universal Credit for new claimants that have not had a Universal Credit claim in the past six months, where at least one person in the household is subject to conditionality. This costing assumes a 2015-16 start date for the measure.

The measure is forecast to save around £250 million a year, and is calculated on the basis that:

From April 2015 new awards of Universal Credit in each month for claimants who would be subject to conditionality are reduced by the average amount of Universal Credit claimed per claimant per week.

UC claimants ‘who will be subject to conditionality’ includes a very large group of claimants currently on Jobseeker’s Allowance and could even be taken to mean that those on Income Support (a benefit claimed primarily by lone parents with very young children), or those subject to the benefit cap, are included. Today’s announcement that lone parents will have to start preparing for work once their children are three underlines this point. People in these groups face conditions, just not to actively apply for jobs. More details on which conditionality regime this new policy will apply to is needed before we can rule certain groups out of this new process. We do know that at least those claiming Employment and Support Allowance and contributory JSA will not be affected.

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It is also not just unemployed claimants who are affected, those ‘not earning as much as the government expects them to’ will also see their income fall. This means people earning less than the NMW at 35 hours a week (or whatever their specific rule is – requirements will be less for those who are only required to seek part-time work). Households who are working, but see their income fall, will now have to wait a week to claim UC even if they remain in work with reduced hours during this period.

But the most worrying point is that Universal Credit will bring together all cash benefits into a single payment – so a delay in UC can also mean a delay in benefits currently classified as child and working tax credits, housing benefit, council tax benefits and many more. This policy sounds as if it will do far more than simply affect access to £71.70 of JSA for unemployed claimants (hard as that would be by itself) – it looks as if it is also their rent, their bills and their children’s food costs which won’t be met.

The Macroeconomics of the CSR

James Plunkett, director of policy and development at the Resolution Foundation, stated the £11.5bn of cuts for 2015/16 have been pencilled in for sometime and today was more about getting the detail than the direction of travel. James also noted:

The Chancellor needs a further £13bn in both 2016-17 and 2017-18 on top of today’s cuts in order to meet his deficit targets.

In other words, under the current fiscal framework, there is a lot more pain to come.

So the bigger questions today should be about that fiscal framework. It has utterly failed. The triple A rating has been lost, austerity has been extended from 4 years to at least 8, debt/GDP will still be rising at the end of this Parliament and the fiscal rules have either been broken (falling debt/GDP) or proved meaningless (the rolling structural deficit target).

Sources:

Public service pay and jobs squeeze goes onAlice HoodTouchstone Blog Copyright © 2013 Trades Union Congress

Seven days wait for family and housing benefits for unemployed claimantsNicola SmithTouchstone Blog Copyright © 2013 Trades Union Congress

The Macroeconomics of the CSR
Duncan WeldonTouchstone Blog Copyright © 2013 Trades Union Congress

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The Great Train Robbery

Rail privatisation has failed to deliver for rail users and taxpayers; has brought in little private sector investment and private train companies are heavily dependent upon the public purse to enable them to run services, according to a new TUC- commissioned report, The Great Train Robbery – written by the Centre for Research on Social-Cultural Change (CRESC) at the University of Manchester.

And when train companies do make a profit, barely any of it is re-invested in the railways, says the study. It reveals that those firms receiving the largest state subsidies spend, on average, over 90 per cent of their profits on shareholder dividends.

This contrasts sharply with the East Coast Mainline, which is currently state run and which re-invests all of its profits into improving the service.

great train robbery network rail private investment

The Great Train Robbery looks at many of the key objectives behind the decision of John Major’s government to privatise the railways in 1994. The report questions whether any of these have been achieved:

  • Cost effectiveness – train operating companies are entirely reliant upon public subsidies to run services. The top five recipients alone received almost £3bn in taxpayer support between 2007 and 2011. This allowed them to make operating profits of £504m – over 90 per cent (£466m) of which was paid to shareholders.
  • Extra investment – the report shows how the average age of trains has risen since rail privatisation, from 16 years in 1996 to 18 years old today. Just £1.9bn was spent on rolling stock between 2008 and 2012, compared to £3.2bn between 1989 and 1993 (the four years before privatisation.)
  • Over 90 per cent of new investment in recent years has been financed by Network Rail (the taxpayer funded body responsible for rail infrastructure), and comes mainly from taxpayer funding or government-underwritten borrowing, says the report.
  • Significant upgrades to infrastructure, such as the development of the West Coast Mainline, have been paid for by Network Rail.
  • Passenger comfort – the report says while there has been a 60 per cent increase in passengers since 1994/95, there has only been a 3 per cent increase in new carriages, resulting in serious overcrowding on many routes.
  • Innovation – even where there has been private sector investment in new technology, such as Virgin’s tilting trains, it has been underwritten by the state through subsidies to train operating companies and guarantees to rolling stock leasing companies.
  • Added value – The Great Train Robbery shows how train operating companies paid Network Rail just £1.59bn in track access charges in 2012, compared to £3.18bn paid to its predecessor Railtrack in 1994. This represents an ‘indirect subsidy’ from taxpayers as train companies are getting track access on the cheap. It also means that the full extent of taxpayer subsidy is far greater than is often reported.
  • Investment in infrastructure has largely been funded through borrowing by Network Rail which now has debts of over £30bn, and is spending more on repaying this debt than on railway maintenance, says the report.
  • Competitive fares – the UK has the most expensive rail fares in Europe. Long distance, day return and season tickets are all around twice the price of similar tickets in France, Germany, Italy and Spain, which have publicly-run rail systems. Average train fares in the UK increased at three times the rate of average wages between 2008 and 2012.
  • More passengers – the report dismisses claims that privatisation has helped increase the number of people travelling on the railways.It says that passenger growth has mostly been down to rising GDP and changes in employment patterns rather than because of privatisation.

Great train robbery net profits dividends

Commenting on the report, TUC General Secretary Frances O’Grady said: ‘This study explodes the myth that rail firms are bringing added value to our railways. In reality they rely upon taxpayers to turn a profit, virtually all of which ends up in shareholders’ pockets, rather than being used to improve services.

‘Rail privatisation has not brought the improvements its cheerleaders promised – the average age of trains has increased and most new investment is funded by the state.

‘The claim that private train operators are responsible for more people using the railways must also be taken with a huge pinch of salt. Passenger growth has mirrored changes in the wider economy and is not the result of creative marketing drives by companies.

‘The government must accept that the current model is broken. Its determination to impose franchising across the network – even on the East Coast Mainline which is performing well as a nationalised service – shows ministers are ignoring the evidence of 20 years of failure.’

CRESC Director Professor Karel Williams said: ‘The privately owned train operating companies have hijacked the government’s rail reform agenda which is all about ‘getting franchising back on track’.

‘Our research shows how the franchising system allows them to distribute profits at low cost from public subsidy.

‘It would make sense to abolish the train operating companies and it would cost the taxpayer nothing if it were done as the franchises expired.

”Train and track operation could then be integrated under a new publicly-owned National Rail, operating within defined budgets over sustained funding periods.’

The Great Train Robbery says that:

  • Train operating companies should be abolished as a crucial first step. This could be achieved within the next ten years as companies have relatively short leases with contract termination points and there is no requirement for shareholder compensation when the franchises expire.
  • Train and rail infrastructure should be organised by a new not for profit company, National Rail, built around the core of Network Rail.
  • Just as with Crossrail in London, the government should introduce a business levy to raise extra funds for the railways. The report estimates this could generate £21bn a year.

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The People’s Assembly: Draft statement and proposed action plan

The declaration below represents the beginning of a democratic process leading towards a second People’s Assembly in early 2014. This declaration represents the views of all those who initially called for the People’s Assembly. We hope it will be endorsed by the People’s Assembly on 22nd June. It will then be open to the local People’s Assembly’s, union bodies and campaign groups who support the People’s Assembly to suggest amendments, additions, or deletions. These will then all be discussed and decided upon at the recall People’s Assembly in 2014.

The plans for action are simply the most obvious rallying points for a national anti-cuts movement for the remainder of 2013. They are not intended to supersede local or sectional action by existing campaigns or trade unions. They are intended to be focus national, collective action by the whole anti-austerity movement.

The People’s Assembly, meeting in Westminster Central Hall, declares:

We face a choice that will shape our society for decades to come. It is a choice faced by ordinary people in every part of the globe.

We can defend education, health and welfare provision funded from general taxation and available to all, or we can surrender the gains that have improved the lives of millions of people for over more than 50 years.

We do not accept that government’s austerity programme is necessary. The banks and the major corporations should be taxed at a rate which can provide the necessary resources. Austerity does not work: it is a failure in its own terms resulting in neither deficit reduction nor growth. It is not just: the government takes money from the pockets of those who did not cause the crisis and rewards those who did. It is immoral: our children face a bleaker future if our services and living standards are devastated. It is undemocratic: at the last election a majority voted against the return of a Tory government. The Con-Dem coalition has delivered us into the grip of the Tories’ whose political project is the destruction of a universal welfare state.

We therefore choose to resist. We refuse to be divided against ourselves by stories of those on ‘golden pensions’, or of ‘scroungers’, or the ‘undeserving poor’. We do not blame our neighbours, whatever race or religion they maybe. We are not joining the race to the bottom. We stand with the movement of resistance across Europe.

We are clear in our minds that our stand will require us to defend the people’s right to protest, and so we support the right of unions and campaigns to organise and take such action as their members democratically decide is necessary.

We stand with all those who have made the case against the government so far: in the student movement, in the unions, in the many campaigns to defend services, the NHS, and in the Coalition of Resistance, the People’s Charter, UK Uncut, the environmental movement and the Occupy movement.

We do not seek to replace any organisations fighting cuts. All are necessary. But we do believe that a single united national movement is required to challenge more effectively a nationally led government austerity programme.

We have a plain and simple goal: to make government abandon its austerity programme. If it will not it must be replaced with one that will.

We will concentrate on action not words. We aim to provide the maximum solidarity for unions and other organisations and others taking action. We support every and all effective forms action and aim to build a united national movement of resistance.

Our case is clear. The government’s austerity programme does not work; it is unjust, immoral and undemocratic. Alternatives exist. Debts can be dropped. Privatisation can be reversed and common ownership embraced. A living wage can begin to combat poverty. Strong trade unions can help redistribute profit. The vast wealth held by corporations and the trillions held by the super rich in tax havens can be tapped. Green technology, alternatives to the arms industries, a rebuilt infrastructure including growth in manufacturing are all desperately needed. We are fighting for an alternative future for this generation and for those that come after us.

Proposed actions:

  • The People’s Assembly will support every genuine movement and action taken against any and all of the cuts. We support all current industrial actions by the unions. We encourage and will help to organise the maximum solidarity action with the PCS and teaching union members taking strike action the week after the People’s Assembly, as well as with other action by unions planned for the autumn.
  • Peoples Assemblies against the cuts should be organised in towns and cities across our nations, bringing all those fighting the cuts together into a broad democratic alliance on a local basis.
  • The national and the local Assemblies, in partnership with Trades Unions, Trades Councils, campaigning and community groups, can unite our movement and strengthen our campaigns. Local Assemblies will help us to organise a recalled National Assembly to review our work in the early spring of 2014.
  • We will work together with leading experts and campaigners both here and abroad, and friendly think tanks, to develop rapidly key policies and an alternative programme for a new anti-austerity government. We will continue to welcome support from all who fight the cuts.
  • We will call a national day of civil disobedience and direct action against austerity.
  • We will call a day of co-ordinated local demonstrations in the early autumn.
  • We will work with the trade unions and others to call a national demonstration in November.

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Save Our Royal Mail

Not everything in life should be defined by its monetary value. Royal Mail is part of the fabric of the nation but it is under threat of being ripped apart. If the Royal Mail is sold off:

  • Prices will go up
  • Business will be squeezed
  • The countryside will be isolated
  • Services for the blind will be scrapped
  • Free post for HM Armed Forces will be stopped
  • Heritage will be lost

Save Our Royal Mail are campaigning to persuade politicians that they must act now and guarantee that these vital services do not disappear. They have the support of groups and individuals representing the countryside, the blind and partially sighted, the elderly and small businesses. You can help them by getting involved. Use the social networking tools on their site to promote the campaign and most importantly write to your MP setting out your concerns. As the campaign grows so will their site. So please return to them regularly to keep updated on news and other campaign developments.

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Police sponsorship deals: the thin end of the wedge of police privatisation

In a recent article in the Daily Echo, Martyn Underhill, the Police and Crime Commissioner (PCC) for Dorset said he would consider sponsorship deals with “reputable organisations”. He said ideas could include adverts on police cars, website links or plugs on Twitter and that there was “huge potential” in sponsorship, but it would be long-term. He added: “This will help us to plan and sustain projects that might otherwise not have been possible due to the ongoing financial constraints.”

He also advised that he had already spoken to a possible sponsor. So if the government’s savage programme of austerity is anything to go by, it may not be too long before we see something along these lines patrolling our streets:

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Mr Underhill’s election slogan was “keep politics out of policing”, so it is disappointing to see him advocating the introduction of private sector finance to fund policing. He may see this as assisting in planning and sustaining projects but most recent examples where private sector money has been used in place of government funding have ended in abject failure, like for example PFI funding.

Sponsorship deals of the police may only be the small end of the wedge regarding opening up the police service to the the private sector but it is still a legitimate concern and however it is spun, it is a political decision in line with the policies of the current government.

Although both West Midlands and Surrey Police have deferred plans to partially privatise their forces, the chief of G4S, the world’s biggest security firm, has predicted that private companies will be running large parts of the UK’s police service within five years. Ironically one of the driving factors behind Surrey’s decision to suspend the decision to sell off services was their reservations about one of the partner groups, G4S, following their shambolic failure to provide adequate numbers of security staff for the Olympics. If you have any doubts about whether police services should be outsourced to private companies, the logic against it, is there for all to see in a nutshell.

The role of a PCC is yet another scatter brain policy of the coalition and the elections attracted very little public interest. In Dorset the turnout was 16.77% which was higher than the national average. Of those who bothered to vote, 45.2% marked Martyn Underhill as their first preference. This equates to 7.38% of the electorate in Dorset, so hardly an overwhelming mandate to make radical decisions as to how our police force is funded. Also there was no mention of ‘sponsorship deals’ in his manifesto.

The Police Federation have been warning for some time now that the cuts to Police budgets will inevitably hit the front line and Trade Unions such as Unite and Unison have been running campaigns against police privatisation.

Fighting crime takes teamwork. From the bobby on the street to the investigators and forensic experts gathering information to secure a conviction. Police forces need a joined up force working together to serve and protect the people. If you break up and sell off chunks of the service to ‘profit first’ companies, police forces will not be more efficient – it will put lives at risk.

When you have the likes of G4S and Serco waiting in the wings to bid to run core crime functions, such as 999 call handling, custody and detention, investigating crime forensics and patrolling neighbourhoods, you know public policing is under threat,

Police sponsorship deals may be the thin edge of the wedge of police privatisation but if you believe that our police force should remain in the public sector, do not allow the door leading to privatisation to be pushed further ajar. Please make your PCC aware of your views. Click here for Martyn Underhill’s contact details.

Local trade unions mark Workers’ Memorial Day saying “We didn’t vote to die at work”

Press release from Bournemouth, Christchuch and Poole Trades Council

Trade unionists in Bournemouth, Christchurch and Poole are calling on the public and employers to observe a minute’s silence at 12 noon on Sunday 28 April, as a way of remembering those who have died or been injured whilst at work. The call comes as as part of the TUC backed Workers’ Memorial Day.

To mark the event, the local TUC plans to stage a ceremony at the War Memorial in Bournemouth Central Gardens at midday on Sunday, accompanied by speeches and the laying of a wreath. The TUC has also written to the three local councils requesting that they fly their town hall flags at half-mast on the day as a mark of respect.

According to figures from the Health and Safety Executive, every single year over 8000 people die of cancers that are caused by their work, and another 4000 die from lung disease. In addition 800 people are killed on the roads while working and 8000 die from work-related heart problems. Last year a staggering 1.9m people also suffered an illness that was caused or made worse by their work. As a result, the UK comes 20th out of the 34 OECD countries when judged on its safety record. The TUC believes all these deaths and injuries could have been avoided if employers took the proper precautions.

Neil Duncan-Jordan, BCP TUC president said: “There is nothing more basic than having the right to go to work in the morning and return home again at the end of the day, but for a significant number of people work is a hazard to their health.
Workers expect proper protection when at work and it is essential that the government are not allowed to make further cuts to vital health and safety legislation. On Workers’ Memorial Day we will be remembering the dead, but pledging to continue the fight for the living. We certainly didn’t vote to die at work.”

Programme for Workers’ Memorial Day

11.45am Assemble War Memorial, Bournemouth Central Gardens

12noon Minute’s silence followed by the wreath laying and a brief speech

12.15pm Event ends

For more information, please email info@bcptuc.org

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Construction sector has shrunk by 10 per cent since coalition took office, says TUC

Press release from TUC

Commenting on figures released on 25th April by the Office for National Statistics (ONS), which show that the UK economy grew by 0.3 per cent in the first quarter of 2013, TUC General Secretary Frances O’Grady said:

“The Chancellor has set the economic bar so low that avoiding the UK’s first ever triple dip recession is considered good news.
”Today’s figures have taken us back to where we were six months ago, and not much further on from when the Chancellor started his austerity experiment.

“The economy is flat-lining, unemployment is growing and the much-needed rebalancing of the economy, away from financial services and the South East, has failed to materialise. It’s no surprise we face a housing shortage when the construction sector is now nearly 10 per cent smaller than when the Chancellor took office.
“The government’s economic policies are still failing on every measure that matters to people.”

TUC