Top ten facts on Universal Credit

February 17, 2011 12:12 pm by Alex Barker

Here are some of the highlights from the DWP impact assessment:

1) Higher bill: The reforms in total will add £2.6bn to the welfare bill overall. There could be other “dynamic benefits” not included in the model.

2) Fraud savings offset by better take-up: Expected savings of £2bn on tackling fraud will be smaller than the £2.6bn of extra spending expected as more claimants take up benefits they’re entitled to.

3) 2.7m winners: a 100,000 expected to gain by at least £4,000 a year. About 1m households will see an increase in income of at least £25 a week

4) 1.7m losers once transition complete: Around 425,000 households will lose more than £25 a week or £1,300 a year. About 100,000 will lose more than £75 a week. That’s almost £4,000 a year.

5) A mixed result on work incentives: Around 1.5m households will be able to keep more of the money they earn from working an extra hour. But 2.1m households will see their marginal deduction rates rise.

6) Incentives for the average worker deteriorate The average marginal deduction rate increase by 4 per cent under universal credit. So by this measure, on average the plan worsens the incentive to work an extra hour. But the anomaly, apparently, is partly because some households will be receiving more benefit.

7) Childcare kicked into long grass IDS has yet to take a decision on what happens to childcare payments, which will have a big impact on work incentives and the estimates on winners and losers.

8 ) Council tax benefit kicked into long grass: No decision yet. But the impact assessment nevertheless rolls council tax benefit into the universal credit model. This is important. Administration of the benefit is being devolved to local government and, depending on how it is handled, it could make IDS’s UC numbers look less rosy.

9) Bad for second earners: Around 330,000 second earners will see their incentives to work deteriorate under universal credit. Most of the other losers will be: working more than 30 hours a week; receiving tax credits; and not claiming housing benefit or council tax relief.

10) Crackdown on stay-at-home mums!? A new “individualised” set of rules will mean that stay-at-home mothers with partners will now face the same requirements to find a job as single mothers.

Tags: Iain Duncan Smith, universal credit, Welfare reform
Posted in Coalition, Conservatives, David Cameron, UK politics | Permalink

The IDS rule that punishes savers

February 16, 2011 11:08 am by Alex Barker

A new means test. A savers penalty. A hit in income for 600,000 prudent households. Is this really Tory policy?

Buried in the welfare reform bill, published tomorrow, is a new rule that will achieve just that. You have to wonder whether it will survive in its current form.

Iain Duncan Smith’s ambitious plan to create a new Universal Credit will extend a savings means test — applied to those on out of work benefits — to working families that would currently be eligible for tax credits.

This will mean any working family with savings of more than £16,000 will have no entitlement to universal credit, once the system is in place.

That affects around 400,000 working households, taking in some cases more than £100 a week from their wallets.

Continue reading: “The IDS rule that punishes savers”

Tags: Benefits, Iain Duncan Smith, universal credit, Welfare
Posted in Coalition | Permalink

Will DD’s office be big enough for all his friends?

February 14, 2011 12:03 pm by Alex Barker

David Davis is busy stocking up for Westminster’s underground party of the year.

Here’s the invitation freshly sent out to a select group of likeminded troublemakers:

Thank your for supporting the motion on prisoner voting last week.

It has been a long time since four newspapers have carried front pages being flattering about Members of Parliament.

We thought we’d have a little drinks party for everybody who supported the motion.

The evening will take place on XXXXX in Room XX Portcullis House

DD

Little drinks party? For all 234 MPs who voted for the motion? Is there a room in Portcullis big enough for all DD’s new comrades in arms?

Tags: David Davis, European Court of Human Rights, Party, Prisoner voting
Posted in Conservatives, UK politics | Permalink

Le Pen heaps praise on Cameron

February 9, 2011 8:11 pm by Alex Barker

This is probably not the kind of endorsement Downing Street expected.

Marine Le Pen, the new leader of the French National Front, has saluted David Cameron’s speech rejecting multiculturalism.

“It is exactly this type of statement that has barred us from public life for 30 years,” she told the Financial Times. “I sense an evolution at European level, even in classic governments. I can only congratulate him.”

In an interview with my colleague Peggy Hollinger in Paris, Le Pen goes on to claim that Cameron is more closely aligning himself with the views of the National Front, a party founded by her firebrand father Jean-Marie.

…..Ms Le Pen said it was “indisputable” that Mr Cameron was taking his party closer to the traditional positions held by the National Front. “Moreover,” she said, “he will do something about it, unlike Nicolas Sarkozy who talks a lot without taking political decisions.”

Team Cameron are not returning the compliments. A Tory spokesman said:

“She has clearly failed to understand the prime minister’s speech.”

Tags: France, Le Pen, Multiculturalism, National Front
Posted in David Cameron | Permalink

The Merlin trick on transparency

February 9, 2011 2:47 pm by Alex Barker

How transparent is Merlin? George Osborne says it will make London the most transparent financial centre in the world on remuneration.

But that won’t mean the public will be able to gawp at the pay packages of the top earners at Britain’s biggest banks. Watch out for Merlin’s sleight of hand.

The “two-plus-five” deal means that the remuneration of the five highest paid “senior executive officers” will be published alongside that of the two executive directors on the board.

This is a slightly tougher version of the rules in New York. But it falls short of Hong Kong in one respect — it does not require the disclosure of the top five pay packages.

These senior executive officers — who will remain anonymous under Merlin — could well be corporate managers whose pay is relatively humble, at least when compared to the hot-shots on the trading floor.

This compromise is in the interests of Osborne, as well as the banks. Remember that there are around 200 state employees at Royal Bank of Scotland who will be awarded a bonus worth more than £1m this year. The more information the public is given, the more Osborne is put on the backfoot.

So these titans of the public sector, these public servants on the trading floor, will again have to remain anonymous this year. Their selfless work on behalf of the exchequer will go unrecognised by the nation.

Meanwhile the coalition is planning to name all 15,000 council managers earning £58,000 or more as part of a crackdown on waste.

The tensions in the approach are obvious. Merlin is more transparent. But it is not as enlightening or rigorous as Sir David Walker’s proposals, which were ditched by Osborne.

And the Merlin spell carefully ensures that some rather uncomfortable political truths remain secret.

Tags: Banks, Bonuses, George Osborne, Merlin
Posted in Conservatives | Permalink

Mandelson: Gamal Mubarak a “leading” reformer

February 2, 2011 7:40 pm by Alex Barker

Lord Mandelson has never been one to shy away from defending doomed politicians.

But it was still a surprise to see him riding to the support of reformers within the Mubarak regime — not least the president’s son Gamal.

In a fascinating letter to the FT, Mandelson argues that it is too “simplistic” to cast Gamal Mubarak as the “putative beneficiary of a nepotistic transfer of family power, the continuation of ‘tyranny’ with a change of faces at the top”.

He warns that this diverts attention from the hidebound military and intelligence service figures who are really exercising control behind the scenes.

These security forces, he says, have been engaged in a tug of war with Gamal — a man who “has been the leading voice in favour of change within the government and the ruling party”.

An “orderly transition” (did he ever use that phrase about Gordon Brown?) should involve forging an alliance between secular opposition figures and reformers like Gamal in the government, he adds.

The letter is in full below. Well worth a read. I’m not sure how much support it would garner on the streets of Cairo. But it certainly shows that Mandelson still has an appetite for unpopular causes.

Continue reading: “Mandelson: Gamal Mubarak a “leading” reformer”

Tags: Egypt, Gamal Mubarak, Hosni Mubarak, Lord Mandelson, Revolution
Posted in Foreign policy, Labour, UK politics | Permalink

Free schools: double your money by taking poor kids

January 31, 2011 2:41 pm by Alex Barker

Now here is a startling statistic uncovered by my colleague Chris Cook.

Free schools will receive almost twice as much state funding for taking a poor pupil rather than a child from a more well-off background.

It is the pupil premium on steroids.

Just look how the numbers compare. Under the coalition plans, all state schools will receive around £430 extra for each pupil on free school meals.

That rises significantly for free schools. A primary school pupil from a poor background will generate £2,415 more for the school than the basic £3,175 paid for each child.

This is apparently to make up for the money that local authorities funnel to schools that take on more poor children.

You’d think that a statistic like this would be relentlessly used by ministers as evidence of their commitment to poor children — particularly given the fears that Free Schools will become Free Middle Class Schools.

But when Chris Cook rang the department with the figure, a few senior figures didn’t believe him — even though the calculation was based on the department’s own ready reckoner. Such is life in Whitehall.

Tags: Michael Gove, Pupil premium, Schools
Posted in Coalition, Conservatives | Permalink

Exclusive: Military police investigate £6bn privatisation deal

January 27, 2011 7:41 pm by Alex Barker

Military police have been called in to examine allegations of improper conduct during bidding for the £6bn privatisation of the search and rescue helicopter service.

It has brought the deal to the brink of collapse.

We’ve broken the story online because the redoubtable Cathy Newman of Channel 4 News has been chasing the same tale. The main elements are:

– MoD police are investigating the access to information given to bidders and the relationship between a military officer, who has since left the forces, and CHC, a Canadian helicopter operator that is part of the Soteria consortium chosen as preferred bidder.

– Royal Bank of Scotland have pulled out of the Soteria consortium because their concerns over the allegations. It will make it much harder for the deal to be revived, even if the concerns over improper conduct prove to be unfounded.

– Ministers are urgently examining options on how to proceed, including re-tendering the contract and scrapping the private finance initiative model altogether.

This is the deal, remember, that so angered Prince William he raised his concerns with the prime minister.

Read on for more details.

Continue reading: “Exclusive: Military police investigate £6bn privatisation deal”

Posted in UK politics | Permalink

Exit Coulson, enter Cummings

January 27, 2011 6:53 pm by Alex Barker

On the day the coalition was formed, Michael Gove entered Downing Street with his consigliere Dominic Cummings. Only one of them left with a job.

It was one of the clearest demonstrations of Andy Coulson’s power. On Coulson’s advice, David Cameron offered Gove the position of education secretary on the condition that he sacked Cummings. Gove did not take it well.

The reason for the veto? Coulson suspected him of leaks, which was enough to convince Cameron to serve a dramatic ultimatum to one of his closest friends in the cabinet. Looking back, it was probably a bit unfair and unwise. Cummings, as a former strategy director for the party, has at times been sorely missed.

Little wonder then that as Coulson leaves No 10, Cummings is finally taking up a berth at the education department. After months of staying in the shadows, today he could be seen at Gove’s right hand as he briefed journalists on the education bill. He’ll soon take a salary as a special adviser.

Sweet timing? Apparently not. My sources insist that Cummings was brought in from the cold well before Coulson abruptly announced his departure. This whole saga is a neat reminder of how suddenly the fortunes of courtiers can change.

Tags: Andy Coulson, Dominic Cummings, Education, Special advisers
Posted in Coalition, Conservatives, David Cameron, UK politics | Permalink

Gordon Brown’s “internal market” for MI6

January 25, 2011 12:07 pm by Alex Barker

This must be one of the stranger ideas to emerge from Gordon Brown’s Treasury.

Lord Wilson, the former cabinet secretary, has just told the Iraq inquiry of his one-man battle to stop the chancellor from introducing an internal market for intelligence.

Under the scheme, the James Bonds of this world earn their way by convincing other Whitehall departments to pay for bits of intelligence. Roll up, roll up! Secrets for sale!

Wilson described it as “trying to introduce a customer relationship between the agency and their departments.” He wasn’t specific about the timing but it must have been just before the 2000 spending review.

Neither did he explain whether the prices were set before the information came in, or on the basis of how many people wanted to read it in Whitehall.

But it is not hard to see this plan ushering in a tabloid era in British spookery. Top piece of intel on Afghan tribal divisions in Helmand? I’ll give you £1,000. Some vivid accounts of Silvio Berlusconi’s house parties? Take £10,000.

Understandably, Wilson was most unhappy.

“I fought a furious battle to resist that, a battle I am pleased to say I won.”

But he won without much support from No 10.

“I asked number 10 for help on this….they had other priorities. They were negotiating with the chancellor on bigger issues than mine.”

Posted in UK politics | Permalink

Live blog, part 2: Blair at the Iraq inquiry

January 21, 2011 12:46 pm by Alex Barker

Welcome back. The FT’s Westminster team is reporting live on former prime minister Tony Blair’s appearance at the Chilcot Inquiry into the Iraq war. This post will automatically refresh every three minutes, although it may take longer on mobile devices.

Read our earlier post here.

1411 Details are emerging from the room. The atmosphere was obviously more fraught than it appeared on telly. The mood changed as soon as Blair started talking tough on Iran. People began to fidget more and sigh. Then when Blair expressed regrets about the loss of life in Iraq, a woman shouted: “Well stop trying to kill them.” Two women stood up and walked out; another audience member turned her back on Blair and faced the wall. As Blair began to leave the room, one audience member shouted “It is too late”, another said “he’ll never look us in the eye”. Then Rose Gentle, who lost her son in Iraq,delivered the final blow. “Your lies killed my son,” she said. “I hope you can live with it.”

1402 That’s it folks. We’re winding up. Chilcot has thanked the audience. A calmer and slightly more contrite performance from Tony Blair, but no less assured than his first appearance before the inquiry. The main difference has been the Chilcot panel’s approach — much more detailed questions, much more forensic and at times incredibly boring. They are clearly close to the end of writing the report and are relatively settled on the conclusions, which will not make pleasant reading for Blair.

Continue reading: “Live blog, part 2: Blair at the Iraq inquiry”

Tags: Iraq Inquiry, Tony Blair
Posted in Foreign policy, UK politics | Permalink

Riven Vincent and the perils of localism

January 20, 2011 1:31 pm by Alex Barker

A senior Tory predicted to me in opposition that austerity would usher in a new era of decentralisation in government.

New Labour, he said, couldn’t resist micromanaging public services; they had to show results from a spending spree.

By contrast ministers tasked with slashing budgets would be desperate to pass down responsibility for the worst decisions. This is the kind of power politicians are keen to give away.

He was right. The coalition have embraced the agenda of localism with some gusto. Now heartwrenching case of Riven Vincent has come along to test David Cameron’s resolve.

Continue reading: “Riven Vincent and the perils of localism”

Posted in UK politics | Permalink