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On the 23rd of November, 2016, The Chancellor of the Exchequer, Philip Hammond, delivered his first Autumn Statement. With Brexit on the horizon, some have called this Autumn Statement one of the most important economic statements in British history. Prime Minister Theresa May and the Chancellor have vowed to deliver an economy that benefits the working people of Britain. However, Hammond’s autumn statement proves that this promise is an empty one. Here are some of the key points of Hammond’s Autumn Statement…

The continuation of Austerity… But only for the workers.

If Theresa May and Philip Hammond were serious about delivering an economy in which the working people are benefited, the most obvious course of action would have been to scrap the brutal austerity measures, which were put in place under the previous Conservative leader and Prime Minister David Cameron. Austerity has put public services on their knees, especially the NHS. Labour’s Shadow Chancellor, John McDonnell, quite rightfully pointed out that NHS spending per-head has declined for the first time since 1948 – the year the NHS was created!

Not only has this Conservative government announced further austerity plans, they have also continued with their belief that those at the top should be treated better than the hard-working individuals, who generate the wealth of these business owners.  The Chancellor announced that the Conservatives will be lowering corporation tax again, this time from 20% to 17%.  In other words, it is austerity for the workers, but champagne parties for the wealthy. Jeremy Corbyn and John McDonnell have vowed to bring an end to tax cuts for the rich, as Labour believes those with the broadest shoulders should carry a heavier load.

Austerity is also crippling our economy.  The OBR (Office for Budget Responsibility) have predicted that the debt will rise over the next year or so, meaning that austerity has failed to deliver the debt cuts the last Tory administration promised it would. Hammond also admitted defeat, saying he will not be seeking surplus in 2019/2020, pushing back boundaries set by his predecessor, George Osborne – more evidence that both the Conservatives and austerity are failing our economy and people.  Our economic growth is also a lot slower than the OBR had forecasted, and slower than the Tories had hoped for. The estimated figure is a total growth in GDP of 1.4% for 2017. The OBR also predicts that the economic growth over the next five years will be 2.4% lower than originally forecast. It is believed that the drop is a result of the Brexit vote. However, Theresa May has given zero reassurance to the people and businesses of Britain, which could very well have added to the damage inflicted upon our economic growth – we simply don’t know what we are getting ourselves into!

A Tory lie: The Tories have been telling people that they are pumping an extra 10-billion pounds into the NHS. The Health Select Committee have said this of these figures: ‘[10-billion pounds is] misleading and incorrect, the real amount is less than half that claimed.’

Benefit cuts to the disabled

Hammond has said that he wishes to continue with the £30-a-week benefit cuts to disabled people. Under any circumstances these cuts are unnecessary and heartless, but when he has just announced a tax-cut to the very richest in our society, it makes these cuts sound brutal beyond description. Some of the most vulnerable people in our society are reliant upon this benefit, and £30-a-week less will be extremely damaging to the lives of these people. It should not be the disabled who have to suffer as a result of “securing fiscal balance”, that burden should fall upon the wealthiest in our society.

Tories fail with housing policy... AGAIN!

This Conservative government has consistently failed to address the ever-looming shadow of the housing crisis. Many areas of the UK, including our own county of Buckinghamshire, have a severe issue with housing; houses are simply too expensive, and there are far too few of them. In his autumn statement, Philip Hammond announced that his investments will allow 100,000 houses to be built, as well as an additional 40,000 “affordable” houses. Not only are these figures light-years away from the actual number of houses we need, Hammond also avoided describing what he would consider to be an affordable price for a house.  To put these figures into comparison, Jeremy Corbyn has vowed to build a million new homes, if he becomes Prime Minister. Labour has a real solution for solving the housing crisis.

Ignorant Tory “Living Wage”

Hammond announced that the so called “living wage” will rise from £7.20 to £7.50 in April, 2017. As a young individual living in High Wycombe, I consider this to be an insult. It is ignorant to believe that people can afford to live off £7.50 an hour, especially with the prices of renting and buying accommodation so high in places like Buckinghamshire, as well as elsewhere. The £7.50 “living wage” is not a trophy for this Conservative government, it is instead a prime example of how out of touch this Conservative government is with working people. John McDonnell has promised a minimum wage of “over £10 an hour” if Labour are victorious at the next general election; this is a wage increase that would significantly benefit the low paid.

 

Labour’s John McDonnell said the Autumn Statement was evidence that “the long term economic plan has failed”, and that this has been “six years wasted” for the people of Britain. Here are some facts from John McDonnell’s Autumn Statement speech…

 

. There was nothing in today’s statement to overturn the damage already done by the Tories

. Self-employed people-on average- earn less than a generation ago

. The Tories say they are striving for “fair taxation”, yet they have slashed recourses at HMRC by 40%, overloading those who help collect tax, as well as other massively important duties

. Working families who have lost up to £2,500 a year under the Conservatives are only getting back as little as £150 a year after this Autumn Statement

. The dream of young people being able to own a home will remain a dream, as Tories fail us with their housing policy yet again

In conclusion, it is evident that this Conservative Party is still the “nasty party”, no matter what picture Theresa May tries to paint. The continuation of austerity will hit the public like a steam train, damaging our public services, such as Wycombe Hospital. They have delivered a “living wage” that is impossible to live off, whilst giving tax-cuts to the rich. The Labour Party is the only party that has the principles and strategy to deliver an economy that works for the majority of working people.

 

Mitchell Foyle-York

Trade Union Liaison and Affiliated Organisations Officer- Wycombe CLP

Autumn Statement Report- 2016

On the 23rd of November, 2016, The Chancellor of the Exchequer, Philip Hammond, delivered his first Autumn Statement. With Brexit on the horizon, some have called this Autumn Statement one...

In 2014, 40 black or Afro-Caribbean children took the 11+.  None passed.

Percentage passed – 0%

In 2015, 47 black or Afro- Caribbean children took the test.  6 passed.

Percentage passed -13%

 

 

In comparison

22% of children from state schools in Bucks passed

47% of children from schools outside Bucks passed.

60% of children from private schools passed.

11+ - a complete sham for black and Afro-Caribbean children

In 2014, 40 black or Afro-Caribbean children took the 11+.  None passed. Percentage passed – 0% In 2015, 47 black or Afro- Caribbean children took the test.  6 passed. Percentage...

Bucks County Council's Finances

Facts


1.BCC performs two basic functions for the residents of the county: it delivers services in specific areas (including health, education, transport and children’s’ services) and it manages a portfolio of county assets that includes infrastructure and other long term commitments.

2. In both areas, it is performing poorly. BCC has been overspending on services (running a deficit) year on year on year, despite making significant cuts. 

3. In 2015/6 it overspent by over £21million: in 2014/ it overspent by over £40million. 

4. At the same time, BCC has consistently run down the net asset position of the county: between 2011 and 2015 the balance sheet saw a reduction from £660million to £450million. The year to March 2016 showed a slight balance sheet improvement (to £517million), but this was driven by a technical adjustments and masks a significant reduction in ‘useable reserves’.

5. On 31st May, BCC will have to pay out £180 million which is the final installment of its contribution to the Energy from Waste (EfW) disposal facility at Greatmoor.  This facility, built at BCC expense, will be run by FCC Environment for 30 years and promises to deliver net savings of £5million per year in the cost of processing waste. However, these savings will depend on the facility providing economies of scale by filling around 2/3 of its capacity with waste from outside the county, something which many experts doubt. Up to £90million of the £180million payment due on May 31
st will be funded by additional borrowing; the rest will come from reductions in reserves.

6. BCC has been supportive of the central government’s austerity programs, accepting additional reductions in the revenue support grant it receives every year.  The reductions in 2014/15 and 2015/16 were 7% and 13.5% respectively. The reduction for the current year is expected to be 20.5% and close to 25% in each of the next three years.

7.  BCC has been seeking to plug the gap in its operating budget by speculative investment i.e. by using capital reserves and borrowed capital to invest in commercial activities that will generate a profit. This approach allows them to sidestep regulations that prohibit the use of capital assets to fund operating costs.

8. Examples of these investments include the EfW plant and the recent acquisition of an Equestrian Centre. In both these cases, the ‘yield’ (percentage of savings or profit) is less than the cost of borrowing, so the net impact will be reductions in BCC’s balance sheet.

9. The BCC portfolio that most obviously demonstrates the impact of these policies on our county is transport, and in particular our highway network. By BCC’s own calculations, the backlog in road maintenance currently stands somewhere in the range £75million to £150million. Each year, net new damage to the highway network is in the range £10million - £14million, depending on the severity of the winter. Over recent years, net spending on road maintenance has been around £15million and this is set to fall to £10 million from next year. At the current rate of spend, we are taking between £1million and £5milion off the backlog each year: in other words, it will take us between 15 and 150 years to catch up. At the new rate of spend, we will never catch up.

10.  A national re-evaluation of infrastructure assets will impact BCC by revaluing the highway network from £340million to £9.1billion.  This will provide an equity boost to the balance sheet, making it easier for BCC to borrow (and so continue on its current strategy).  

Our opinion of BCC's financial management

1. BCC is financially incompetent – grossly so.   It has progressively run down the assets of the county, while also overseeing the biggest reductions in services we’ve seen in 60 years.

2.  The Government’s creative accounting in re-evaluating the roads allows the Council to drastically lower its ratio of overspend to assets.  However the evaluation is purely notional – how the asset of a road network could ever be “realised” is impossible to guess.

3.  Speculating with borrowings, which are secured on a rapidly degrading highway system, will saddle future generations with massive debts.  It is reckless.  Comparisons with the Enron debacle of 15 years ago are hard to avoid.

4. BCC is irresponsible in its management of capital. Among the most critical assets backed by its shrinking (but soon to be boosted by the highway revaluation) balance sheet is BCC’s pension fund. The value of BCC’s pension fund liability currently exceeds the net balance sheet position. It will be of little consolation to BCC staff, past and present, to know that their pension fund is supported by a notional revaluation of the A413.

5. BCC’s track record on making sound investments is poor.  For example, the business case for investing in the EfW plant – (spending £180 million now to save £150 million over 30 years) does not stack up.    Meanwhile Bucks will become the dustbin for the region.  New borrowing is at 3% interest, existing borrowing (which totaled £164million in March 2016) is at an average interest rate of nearly 6% - the business plan for the EfW plant represents a return of 2.7% at best – whichever way you look at it, BCC would have been better using its reserves to pay down existing debt.

6. Risks have been very poorly considered – for example, experts in the waste disposal and recycling sector expect the UK to have a surplus in incineration capacity by 2019. There is a high probability that extra capacity expected to be filled from out of county will never be filled, which will eliminate the economies of scale and so the savings to BCC. Were that to happen, we will have constructed a £180million white elephant - money that could have been invested in core services and highway maintenance.

7. We do not believe it makes sense for BCC to act as though it is an investment bank or hedge fund manager.  It lacks the capacity and expertise in this area and is contrary to current policies that devolve risk to businesses. 

8. We believe that BCCs role is to represent voters, manage our infrastructure and provide services, not to undertake risky speculation with the county’s scarce resources.

 

What the Labour Party would do

1. We do not believe the steady removal of the Government grant is justified.  This is part of the Government’s austerity cuts which are proving to be so damaging to Bucks residents and to our economy. The current BCC cabinet has been far too accepting and its reward for doing so has been deeper cuts. BCC should be working for us, not to accelerate central government policies.  The Labour Party nationally and in the County will continue to call for an alternative economic approach.

2. We would call for a national re-evaluation of residential property (last carried out in 1991) so that Council tax would be based on current values of property and fairer.

3. We would push to extend the bands for Council tax beyond Band H (currently the highest band).   Bucks is a prosperous county and has a disproportionately high share of very expensive properties.  Nationally, 3% of properties are in band G (valued in the range £160,000 to £320,000 in 1991) and 1% are band H (valued at more than £320,000 in 1991). In Bucks, 21% are band G and 5% Band H. The council tax paid on a property valued at £320,000 in 1991 and one valued at more than £10million in 1991 is the same.

4. We would propose to follow the lead of some Scottish councils and introduce one or more bands above band H. We would increase Council tax for the new higher bands and raise more revenue.

5. We would not invest purely for the sake of providing an income stream which could then only be justified by requiring high rates of return and therefore would be high risk.   In other words, we would not speculate or gamble with taxpayers’ money.  We would ensure any investments we make were aligned with the priorities of county residents, so they deliver improvements in core services

6.  In particular, we would invest in social housing to provide vital housing for people currently struggling to survive. We will ensure that our plans deliver the housing required at affordable rents and that the investments include all the broader costs of education, healthcare and transport for the residents concerned. In doing so, we will generate additional revenue to fund core services and begin a strategic rebuilding of the county’s balance sheet at the same time.   

 

Bucks County Council's finances

Bucks County Council's Finances Facts 1.BCC performs two basic functions for the residents of the county: it delivers services in specific areas (including health, education, transport and children’s’ services) and...

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