All work and no pay

The next generation are taking over, after 25 years of being the sole bread winner in the family two of my three daughters are about to step into the world of work – well let’s hope so!  Being equipped with a degree is no longer a passport to wealth and prosperity it may not even be enough to secure a job.  One of these daughters has taken the option to take a year out from University to gain experience working for a number of business as an intern during a "year in industry", which is sandwiched between her 2nd and 3rd years.  She secured three internships, where she is working for no money to gain experience; some might say this has been a pretty poor introduction to the world of work.  The reality is that she has the opportunity to work for three outstanding companies and has already been offered a permanent position!  This “year in industry” seems an eminently sensible idea, she gets to see different businesses and roles close up and they get the chance to check her out.

Get on yer bike!

My daughter’s situation is a microcosm of the whole job market, which has been a buyer’s market since 2007.  Those of us who work in the private sector have had to survive wholesale downsizing, salary freezes, smaller or no bonuses and a broader squeeze on company benefits (pensions, etc).  This reduction in take home pay has reduced demand and slowed growth; but this flexibility has allowed the UK economy to maintain relatively high levels of employment.  Now the economy is growing again the somewhat vexed question is - how long will it take for this increased economic activity to feed through into higher take home pay and rising living standards?  I say vexed because living standards have fallen by as much at 5% over the last 5 years and in real terms by much more.

Other Men’s Flowers

There are plenty of people who live their life at work as is it were some intellectual exercise, choosing to take decisions that are for the great good but have a terrible impact on their own careers.  Field Marshal the Lord Wavell was one, he chose to pick a fight with an obdurate and all-powerful Churchill and was summarily dispatched to pull together his famous anthology of poetry “Other Men’sFlowers” rather than take any further part in the Second World War.  Britain lost her most talented commander but gained a literary gem. 

If you don't have it, do buy it

One might expect this kind of selfless attitude from a Wykehamist but it’s wholly unexpected, and unwelcome, from an Etonian and a politician to boot!

Money can't buy me love - but it'll get me new hip

In the last month there has be a sea change in British politics, which threatens to overturn the consensus that has held sway since 1945.  All the major political parties have finally recognised that there needs to be a more sustainable relationship between the size of our economy and the scale of our welfare state. We are all children of Beveridge and his report (published in 1942),  which set the roadmap for defeating the ‘the five greats’ - squalor, ignorance, want, idleness and disease.  It’s clear that much of his mission is now accomplished and its time to redefine these ‘greats’ (mine would be Debt, Greed, Intolerance, Ignorance and Security) but the vision can wait, all the focus is now devoted to the funding model for our state provided services.

The North South Divide - welfare reform adds to the problem

The UK is embarking on a long overdue revamp of its welfare provision, this includes unemployment benefits, incapacity benefits, pensions, housing benefits and a whole range of tax credits too numerous to name.  The aim of Mr Duncan Smiths reforms are to simplify the system, put the emphasis on work rather than paid-for idleness and to reduce the amount of expenditure.  These changes have been greeted with howls of anger from the Left, although Labour have made no firm commitment to reinstate these cuts if re-elected in 2015.

The quiet man of politics roars again

At a convivial 50^th birthday drinks party two years ago I managed to corner a backbench Tory MP who won the nomination for a very safe seat just before the 2010 election.  A year after the election he was bemoaning the all-consuming power of George Osborne and the dangers that this might create, foreseeing the Icarus career trajectory of our chancellor.  Two years on Peter Oborne in the Daily Telegraph highlights the problem, in a great article that shows how toxic the Osborne brand has become.


http://www.telegraph.co.uk/news/politics/georgeosborne/9974986/George-Osborne-cant-claim-credit-for-Iain-Duncan-Smiths-virtuous-reforms.html

The quiet man of politics

The evidence against George Osborne is starting to look water tight!  He has pursued Gordon Brown style fiscal policies tinkering with the tax and spend regime without making any tangible difference to the economy.  Corporation tax down a bit, allowances up a bit, National Insurance up a bit, VAT (sales tax) down and all kinds of changes to the duties we pay on booze, fags and fuel.  Having wasted a once in a life time opportunity to restructure our tax regime to improve the incentives for work rather than benefits he is now trying to steal the limelight from Ian Duncan-Smith who has been steering through the important revolution in our overblown welfare and benefits culture.

Archbishop Justin Welby buries his Talents

The last Archbishop of Canterbury was a self confessed 'Bearded Leftie' and although he looked the part the wild looking Welshman kept his political power dry for most of his time in office.  Although he did have one memorable dart at capitalism, calling the bankers and speculators behind the credit crisis "bank robbers" and "asset strippers".  Adding that Karl Marx had been right in his assessment of the nature of capitalism!!

At least he looks like a bishop

So the new chap is in good company and it has not taken Justin Welby, the new Archbishop of Canterbury, long to become mired in political controversy. You might think that career that has taken in Eton, Oxford and Energy broking he would be cheering on the Tory party, but not  a bit of it.  In fact, he has joined some other Left leaning clerics in an attack on the Government’s welfare reforms. In a letter to The Sunday Telegraph, the chaps in fancy dress opined that “children and families will pay the price” if plans to change the benefits system go ahead. Next week, the House of Lords is due to vote on legislation to cap benefit rises at 1 per cent until 2016.  Given that most of us in the private sector have seen a real decrease in income of around 5% since 2009 he won't find much sympathy for his observations in the working population.

Justin 'Welfare' Welby

Unsurprisingly,  Yvette Cooper, the second most annoying politician in Britain (she is married to the title holder) and  shadow home secretary, said the Church was “absolutely right” to speak out and described the proposals as “immoral”. Iain Duncan Smith the Work and Pensions Secretary (responsible for this sensible adjustment), also know as the "quiet man" of British politics, is yet to respond.

Interesting in the US the highly successful and well attended Church is generally on the side of the working man and a smaller state.  But like so many pillars of our establishment the Anglican Church (along with the BBC and The Civil Service) is unremittingly left wing, taking up the cudgel for those would bury their Talents rather than put them to work - Matthew 25:14-30

Thomas Becket

The original turbulent priest - he had a beard!

UK's answer to Las Vegas

The strip in Rochdale, a mass of flashing blue lights, a Kebab shop and a couple of pedestrian crossing lights winking in the mist.

Rochdale a Lancashire town of about 100,000 souls is one of the poorest towns in the UK, its main rivals for this accolade are all within in about an hours drive!  Poor town in a poor area.  The only good news is that Rochdale is set to become the Las Vegas of the North West.

The reason for this optimism is that the town has been gearing up and now has staggering total of 69 gambling terminals at 19 betting shops. With over £1million is staked on each “fixed odds betting machine”this amounts to £510 for every adult betting in the town, surprising when the town is home to the Falinge estate, recently named as the UK’s poorest area for the fifth year running — with 72 per cent unemployment.



To be fair this state of affairs says more about the impoverished state of our high streets (the gambling dens have moved in because of low rents) and dire local planning than the good people of Rochdale.  There needs to be a limit on the number of betting shops per square mile - about 1 would do!

Read more: http://www.thesun.co.uk/sol/homepage/news/4759995/Poorest-towns-72million-on-gambling-machines.html#ixzz2J6Kzkx86

Thanks Gordo

My friends on the left are not going to like this but the group affected most by the overall austerity package in the UK —not just in terms of pounds, but also as a proportion of their income—has been the richest.

Those in the top tenth of the income distribution have been hit by a combination of increases to income tax and national insurance contributions, restrictions to pension tax relief and withdrawal of child benefit. Research tells us that households in the top tenth of the income distribution will have lost about 7 per cent of their income as a result of the consolidation package, compared with between 4 and 5 per cent for those in the bottom third of the distribution, and about 3 per cent on average overall and don't forget that welfare payments were increase by 'only' +1% following inflationary linked rises for the last 4 years (during which time everyone else has had declining incomes) to howls of protest!

So to a large extent we really are “all in this together” or rather a quite small % of the population are now paying off the substantial part of Gordon Brown's debts!

See my last blog on this subject

http://getwd50.blogspot.com/2013/01/when-are-you-payingtwice.html

So thanks Gordo!
http://www.prospectmagazine.co.uk/author/paul-johnson-2

Electoral bribes

Mr Tristram Hunt - an unlikely name for a Labour MP, writes in today's Ft on the iniquities of the coalition’s plans for welfare cuts. He invokes the ghosts Betty Higden, in Charles Dickens’s Our Mutual Friend and William Beveridge to pad out his arguments.

 

http://www.ft.com/cms/s/0/ab35522c-5b1b-11e2-8ccc-00144feab49a.html#axzz2HUZoq0EM

 

And whilst I completely agree that the abandonment of universal benefits is a dangerous step towards a more divided and intolerant society. What dear old Trisram doesn't get is that society is also at risk from the overly lax regime of targeted benefits that is increasingly funded by the few. Over a 30 year period in productive work a middle income earner (60k p.a.) will contribute £180k to the welfare pot, gaining only a fraction of this in return as a pension. This is unsustainable and the coalition is right to redress the balance.

 

The main problem is the awful mess that Brown created with his ridiculous splurge on tax credits.

 

The latest statistics show that 4.7 million families, containing 7.8 million children, were tax credit recipients or were receiving the equivalent child support through benefits. These families comprised:

 

4.1 million families with children receiving CTC, or the equivalent via benefits:

1.5 million in which no adult was in-work

1.8 million in-work receiving the maximum CTC, and also receiving WTC

0.8 million in-work receiving CTC only

0.5 million families in-work without children, receiving only WTC.
http://www.hmrc.gov.uk/statistics/prov-main-stats/cwtc-dec12.pdf

Tax benefits for the working poor paid by the better off sounds democratic but in fact it was / is just an electoral bribe

Pay out and get nowt

A number of prominent flag wavers for the right have been busy making a noise about the madness of universal benefits.  Boris Johnson's clarion call for justice and fairness appeared in yesterdays Telegraph. 
  
http://www.telegraph.co.uk/comment/columnists/borisjohnson/9784103/What-a-relief-The-madness-of-child-benefit-for-all-ends-today.html

The dull argument goes - Why on earth should a dowager with a million in the bank receive the annual heating allowance or a couple making £200,000 a year receive child benefits. 

Actually these toffs have been missing the point – it’s all about the social contract we have as individuals with the state.  What these blue blooded agitators have forgotten is the while a limited number of benefits are universal (bus passes and so on) they are funded but a tax system that is progressive and takes proportionately more from the well off.  So whilst Judy Dench might not need the state to pay for her bus pass she has more than paid for it and it is right that she should have the benefit. 

The result of removing these benefits will be harmful in two ways, firstly it will actively disenfranchise those that contribute most and secondly it will promote differentiation by wealth -  I think there is something important in the fact that my wealth Aunt and her carer share the benefit and experience of the Bus pass and other universal benefits.  Without these small connection our society will become so much poorer.

A probable side effect of the mealymouthed approach will be to encourage tax avoidance and a growth in intolerance towards those who have made no or little contribution through their working lives.

As an example here is how a wage earner on £60,000 has their taxes spent in the UK - that's over £120,000 contributed to the welfare budget over 20 years - worth a bus pass??

'Angie - beautiful and sweet'

I think I'm in love. She may not be a sex bomb but she lights my fuse!



Angela Merkel makes the important point on the cost of welfare (Reported by FT) that Europe represents

7% of the world’s population

25% of the world’s GDP

And 50% of the world social spending

Reconciling the last two numbers is where the pain is.

For Ed Miliband and others on the left these are uncomfortable numbers and its annoying the Lazy Davey can't communicate these simple truths as eloquently as our Angie!

http://www.ft.com/cms/s/0/8cc0f584-45fa-11e2-b7ba-00144feabdc0.html