Daily Archives: October 4, 2010

Jim Pickard

Not sure if this has had any pick-up but in Francis Maude’s speech he promised to set up his own army of community organisers:

So we’re creating a Big Society Bank, training a whole new generation of community organisers, involving more voluntary and social enterprises in public service provision. Social action; community engagement.

Could this possibly have been borrowed from David Miliband’s “Movement for Change”, modelled on Barack Obama’s similar campaign? Read more

1. The short game

Osborne has smashed some of the foundations of the welfare state today. An assault on universality has begun. But given the enormity of this decision, it is surprising he has raised so little money. Around £1bn from restricting child benefit is relatively small beer given the state of the public finances.

This suggests there is much more to come. He may return for another raid on child benefit (restrictions on payments for more than two children, or a cap on payments at 16). Other universal benefits such as winter fuel payments and free bus passes are also looking vulnerable. Read more

Jim Pickard

AB 12.45 Has Osborne just announced a “couple penalty” for benefit-reliant families? The cap will poll well — who could argue with a family earning more on benefits than their neighbours earning average household income? The problem is that for a couple with six children, the effective ceiling on their income gives them a pretty strong financial incentive to break up. This is not an issue that will be missed by claimants. The system will effectively pay parents that have “split up” into two households (in reality or in theory) significantly more than those who stay together under one roof. You can imagine that when faced with the prospect of being forced to move the 6-strong family into a house with rent less than £220 a week, this is a serious option to consider.

JP 12:43 One might not usually associate George Osborne with humour; but he had cracked a rather good joke about how well he is working with Vince Cable, the Lib Dem business secretary. “People said we wouldn’t get on, that we’d trade nicknames and knife each other in the back, end each other’s careers? Who do they think we are? Brothers?” Read more

Jim Pickard

An hour ago I referred vaguely to the concerns that the first high speed rail bill (covering London to Birmingham) may not even get through Parliament before the next general election – which is critical to the coalition’s plan to start work in 2015.

The details are worth explaining. The issue is this: because it is a hybrid bill, any landowner affected by the scheme has the right to come to Westminster and put his or her case to a joint committee of the Lords and Commons. With 440 homes likely to face compulsory purchase, that means endless hours of consultation. The whips are facing the difficult issue of finding MPs and peers (who must have no relevant interests) willing to sit on the committee for three or four years. Read more

Jim Pickard

When George Osborne announced that he was abolishing child benefit for all families on higher earnings on the BBC this morning it took some by surprise. The chancellor says the move will save about £1bn a year.

But it does not exactly come out of the blue. Politically it would be hugely dangerous for Osborne to be cutting benefits to the poor without him making this type of hit towards the more affluent.

The chancellor’s decision to axe from 2013 child benefits for households containing a 40 per cent higher rate taxpayer – anyone earning more than £44,000 – is likely to mark the beginning of a wider assault on middle class benefits such as winter fuel payments.

It is not a perfect measure. Osborne admitted on the Today programme that it will hit families with only one working adult on £44,000-plus – but would not affect households where both parents are earning just under the threshold. But the alternative, as he pointed out, would be a hugely complicated means test. Fair enough.

 Read more

Jim Pickard

Philip Hammond, the transport secretary, has proved his pragmatism this morning by announcing in his conference speech that the planned high-speed rail route will after all follow the “Y-shaped” pattern proposed by his Labour predecessor Lord Adonis. This means the route (if it ever gets built) will split just north of Birmingham; with one route going up the west coast to Scotland and the other heading through Leeds to Newcastle.

It’s an interesting decision because it means Hammond is scrapping the alternative plan pushed by Theresa Villiers, who was the Tory transport spokesperson until the election. Villiers wanted to build an “S-shaped” route which would go up to Manchester and then switch back east to Leeds. It was an idea described by one of my contacts in the industry as “a nonsense”. Read more