Daily Archives: February 8, 2011

Jim Pickard

John Bercow, the Speaker, has published his submission to the review by IPSA, the parliamentary standards body. He has questioned the way that the new regime excludes children over 5 from its definition of “dependents”. He has also criticised a strict definition of London MPs which means that 128 (up from 25) are not eligible for most expenses. This is “improbably high,” he suggests. His robust argument will win him kudos among MPs, some of whom have been grumbling about him in recent weeks.

In his conclusion he shows sympathy to those MPs who have been complaining:

The basic tenets of my submission can be readily summarised. The old expenses regime was wrong and had to be replaced. The fundamental principle that the new system should be independent remains sound. The sheer speed with which the new arrangements had to be introduced has led to significant operational problems and real grievances amongst Members, threatening both their family lives and their capacity to discharge their duties as MPs as fully as they wish.

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Jim Pickard

We wrote in this morning’s FT that Volunteering England, which offers training to volunteers, may have to close 30 of its centres around the country. The charity is also set to lay off staff, as are the NCVO (National Council for Voluntary Organisations) and NAVCA (National Association of Voluntary and Community Action).

The Labour party argues that the estimated cuts to the sector will be £1.1bn next year and £3.1bn annually by 2014/15 – equivalent to 24 per cent of statutory funding for the civil sector. A group of charities are collating where the cuts are falling at this map, which already has around 200 local examples of reductions to funding. By the summer that is likely to run into the thousands.

Meanwhile Francis Maude faced criticism last night from Camila Batmanghelidjh, founder of the charity Kids’ Company, on Newsnight. She said:

“I’m waiting for some leadership in it and some structure. I’m very saddened that the debate is presenting itself as a division between the voluntary forces doing something in the community, and the state. Actually, what really works – and where the Big Society would really succeed – is where there is an infrastructure that supports both. And that’s lacking.”

The comments are damaging because Batmanghelidjh was at the launch of the original Big Society, where she was sat at the right hand of David Cameron.

It is still too early to see the sweeping impact of the cuts to councils’ budgets; ministers are insisting that they should trim their own Read more

Jim Pickard

It is a political victory of sorts for Ed Miliband that the Treasury announced this morning that another £800m would be added this year to the levy on Britain’s banks.

George Osborne had introduced a bank levy of about £2.5bn a year in his first Budget last summer, but initially decided it should be introduced at a starter rate of £1.7bn. (In technical terms, it was a temporary levy of 0.05 per cent on balance sheets, then going up to 0.075 per cent). The theory was that this lower rate would allow banks – weakened by the credit crunch – to build up their capital positions. But the huge bonus round being paid out this spring rather undermined this theory.

Now Osborne has said that the banks are strong enough after all to withstand the higher rate of the levy.

So why is it a vindication of Ed Miliband? Because back in early January the Labour leader came to blow (metaphorically) with David Cameron at PMQs over the apparent fall in bank tax for the current year. Without this political knockabout it is possible that few people outside the Treasury would have noticed the discrepancy. (James Kirkup agrees).

As we wrote at the time, the figures showed a temporary drop in the levy for this year after last year’s £3.5bn one-off tax on bank bonuses:

2010: £3.5bn 2011: £1.7bn (now £2.5bn) 2012: £2.3bn 2013: £2.6bn 2014: £2.6bn.

By lifting this year’s figure to £2.5bn Osborne seems to be merely ironing out the glitch in his new levy.

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