Minimum Wage

Often confused with the living wage, in government Vince Cable delivered the largest increase in the minimum wage since 2007, benefiting over 1.4million lower-paid workers. Someone working full-time on the NMW has seen their salary increase by over £416.

According to the current trajectory the minimum wage is due to rise to £8.23 by October 2019.

Under Liberal Democrat plans people on the minimum wage working 35hrs a week will be £263 better off under Liberal Democrats as a consequence of our plans to increase the personal allowance to £12,500.

Inequality

This post deals with income and not wealth.

In Britain, the median (average in ranked order)  full time salary in 2010-11 was £26,200 per year, but someone working full time for the minimum wage would only earn around £11,000, while the top 10% earned over £52,600.  This is before taxes and benefits and these reduce inequality.

Gini - standard

Since the world financial crisis the Gini coefficient, a commonly used method to measure inequality, has fallen.  This coefficient summarises the degree of inequality in the income distribution in one number. The Gini coefficient takes a value of between 0 and 1, where the higher the value, the higher is inequality. Gini

However, summarising inequality in just one number can mask different patterns in changing inequality. To illustrate this, the chart above shows the change in the ratio of income at different points in the income distribution over time. For example, the 90/50 ratio is the level of income at the 90th percentile (the level of income that 90% of the population fall below and 10% fall above) divided by the level of income at the 50th percentile (the median). Again a higher number indicates greater inequality.

As the blue line compares the poorest 10% to the average we see that relatively the poorest 10% have approached the median in recent years suggesting that equality is improving.  Likewise, the red line, which compares the people on the 90% percentile to the median 50%, shows that in recent years equality is improving.

Reason that people consider inequity is increasing is because of what is happening above the 90% level. The gap between the people on 90% and the people on 99% has increased dramatically in recent decades – the green line.  The gap between the people on 99% and 99.999% has increased even faster.

This phenomenon has occurred throughout the world and it has not been caused by the coalition government.

Taxing the people in the 99.9999% bracket is notoriously difficult because of the nature of their business and because they can employ more tax accounts and lawyers than the government.

There interesting articles on this subject in both The Economist and Prospect magazines.

Tories slash Surrey education funding by £250 million

HeathsideConservatives will cut the education budget by £253 million in Surrey by 2020 if they were in national government on their own, official research shows.

The Tories would be forced to slash local spending on schools,colleges, and nurseries to keep pace with George Osborne’s plan to drastically reduce spending.

The research, based on official House of Commons library figures, shows schools will bear the brunt of Conservative cuts but childcare, college and early years budgets would also be hit hard.

Unlike both Labour and the Conservatives, the Liberal Democrats are committed to protecting cradle to college education spending.

Surrey Allowance Increases

money-43Cllr Hazel Watson, Leader of the Surrey Liberal Democrats wrote to the Secretary of State asking him to investigate the excessive increases (from £27,000 pa to £43,000 pa) in councillor allowances and the excessive number of special responsibility allowances pushed through by Surrey’s Conservative administration. She also asked him to check whether the national government’s own regulations had been followed by the Surrey administration.

Cllr Watson said : “I am delighted with the response I have received from Brandon Lewis, Parliamentary Under Secretary of State to my letter. He has condemned the decisions on councillors allowances as “deeply concerning” and agrees with me that Surrey did not comply with government regulations. He has stated that the national government expects those in public life to show restraint and to set levels of allowances for councillors and remuneration for officers which reflect the pressure on budgets and the need to pay off the deficit left by the last national administration. I totally agree with his comments.

“Given the national government’s clear condemnation of the decisions and also the outrage expressed by the Surrey people who have to foot the bill, I am again calling on Surrey’s Conservative administration to overturn their decisions on councillors allowances and replace them with something much more reasonable.

“Surrey’s Conservative administration is living in cloud cuckoo land if they think that they can get away with these outrageous councillor allowances. It is time for them to back down and admit they made a massive mistake to the detriment of the Surrey people.”

To read the letters to and from the national ministers click here.

New Mayor for Elmbridge

Homestart website

Following his election as Mayor of Elmbridge at the annual meeting of the borough’s council on Wednesday, 4 June, Councillor Barry Fairbank has chosen to support Home-Start Elmbridge during his Mayoral Year.

 

 

Cllr Fairbank, erstwhile leader of the Liberal Democrats at the borough,  represents Long Ditton but now lives in Weybridge.

Councillor Fairbank has been involved with Home-Start Elmbridge for several years and wanted to offer more support with his fundraising during his Mayoral year.

One of the aims of the fundraising for his mayoral year is to be able to train more volunteers to give their help and support to the many families, with a child under five, experiencing difficulties.

In an ideal world Home-Start Elmbridge wouldn’t be needed. But for many parents the pressures of family life are simply too much to cope with alone. There are so many reasons for this including; poverty, illness, family breakdowns and parental isolation.  And this is where Home-Start steps in… by recruiting and training local parent volunteers to offer emotional and practical support to families in their own homes. Home-Start volunteers provide vital early intervention support, often stopping a family from reaching crisis point. Life is getting tougher for many families, and the demand for Home-Start support is at an all-time high.

I think that Cllr Fairbanks choice of charity is excellent and you can donate here on-line. Remember ever little helps.  If you are an income taxpayer then you can even make the national government chip in too.

 

National Coalition offers 4.5% Extra School funding for Surrey

ClassroomSurrey Liberal Democrats have warmly welcomed proposals which will see Surrey receive nearly £25 million more in school funding than under the current system. This comes as part of an extra £350million boost to schools in the least fairly funded areas in the country.

The proposals announced in parliament by Liberal Democrat Education Minister David Laws will mean that funding will be allocated to local areas on the basis of the actual characteristics of their pupils and schools, rather than simply on the basis of historic levels of spending.

The proposed changes mean that, on average, schools in Surrey will receive £4,282 per pupil next year, an increase of around 4.5%.

Commenting on the announcement, Cllr Stella Lallement, the Liberal Democrat Education Spokesperson on Surrey County council said: “This is fantastic news for Surrey children and is a much needed reform. The school funding system inherited by the coalition was unfair. Labour knew it was unfair, but chose not to act.

“For too long, school funding has been based on historical data that no longer reflects pupils’ needs. Similar schools just miles apart can be funded at very different levels, just because they happen to be in different local authority areas.

“This announcement, along with the pupil premium, will mean that our children can get the education they deserve. It is more evidence that the Liberal Democrats in government are actively implementing policies to build a fairer society.”

Elmbridge Budget

Next Wednesday, Conservative-led Elmbridge plans to decrease the council tax in real terms for next year by keeping the rate the same. Prudent stewardship or a gradual collapse into private wealth and public squalor?

National government taxes like: income tax, national insurance, VAT and corporation tax increase each year automatically in line with either income or prices (unless income or prices fall) – known to economists as fiscal drag.

But the single tax supporting local government – council tax does not. So if council tax is not adjusted each year then it gradually falls – it does not keep up with prices or salaries.

So, oddly, if you want council tax to fall in real terms simply don’t change it.

The whole situation is greatly affected by the extra freeze grant that the national government hands out to local government to encourage no increase in the council tax rate. This grant is powerful because if Elmbridge raised the council tax by just 0.1% it would mean a total loss of the grant.   And this year the coalition guarantee the freeze grant for two years in succession (to get them past the national elections in 2015.  What a way to run the country!

What’s your view?

Weybridge Town Council

Weybridge, a hamlet in Byfleet manor, was governed since Saxon times from Chertsey. It became a self-governing village in the fourteenth century and a town in 1894.  By that time Weybridge had grown into a town of sufficient size to govern many of its own affairs. Weybridge built its own hospital, a fire station and an electric generating station. In 1933 the national government forceably removed Weybridge’s local government.

Weybridge-Map

I think that it is time for Weybridge to consider establishing its own government again. A number of people are planning to come together to initiate such a campaign.  Do contact me should you want to be a member of the working group.

Key Highlights from the Autumn Statement

Local Government Funding
While the chancellor has announced new, further departmental savings for departments, local government has been largely protected. The chancellor has said this is to encourage local governments to take up the national government’s offer of a council tax freeze which is again available in the coming financial year.

There will be a new national council tax discount of 50% for family annexes from April 2014. This will support extended families living together, for example with children saving for a new home or elderly parents (who would not otherwise qualify for the existing exemptions). It will be fully funded by the national government.

New Homes Bonus
Following the consultation carried out over the summer and in light of some powerful arguments made by colleagues in local government, the national government has confirmed that it will not pursue the proposal to top slice the NHB receipts for Local Enterprise Partnerships for councils outside London. The £2 billion Local Growth Fund will be made up from other decentralised budgets.

Cutting business rates and helping local shops
A series of measures have been announced to continue to prioritise small businesses and local growth. This includes:

  • The planned 3.2% RPI increase for 2014-15 will be reduced to 2%. There will be a £1,000 discount for all retail, pubs, cafes (excluding banks and betting offices) with rateable values below £50,000 for 2 years.
  • The doubling of Small Business Rate Relief will continue for a further year. Ratepayers will continue to keep their Small Business Rate Relief entitlement for a year where they take on a second property,
  • New occupiers of former retail premises which have been unoccupied for a year will receive a 50% discount for 18 months.

There will be a consultation on reforms to the business rates appeals process and a commitment to clear 95% of the September 2013 backlog of appeals before July 2015.
It has been reported that local governments will be fully refunded for the loss in revenue resulting from these changes.

Increasing funding for housing
A number of new measures to support house building were announced. This includes a £1 billion, six-year investment programme to fund infrastructure to unlock new locally-led, large housing sites. This will support the delivery of around 250,000 houses. More is being done to support Right to Buy; introducing agents help buyers complete their purchase, and a £100 million fund to improve applicants’ access to mortgage finance. There is also the intention to consult on a Right to Move for social tenants wanting to take up work or training in another area.

Announcement referred to a review into the role of local governments in supporting overall housing supply. Accompanying this, the national government has announced a limited increase in Housing Revenue Account borrowing.

The additional £300 million will be allocated via a competitive bidding process with support given to local governments which can produce good business cases, agreed by their local enterprise partnership, that bring in local authority owned land and other forms of cross-subsidy such as sales of high value vacant property, raising funds to provide more overall homes.

Delivering savings from cutting fraud
Alongside the roll of the Single Fraud Investigation Service, DCLG and DWP are investing in local government’s capacity to tackle non-welfare fraud. This package of support will include extra funding over 2014-15 and 2015-16 which will be able to support new fraud investigator posts in councils focussed on tackling corporate fraud.