Monday, 30 September 2013

DWP looking at making it harder for sick and disabled to claim benefits

Iain Duncan Smith is examining how to make it harder for sick and disabled people to claim benefits, according to leaked documents from the Department of Work and Pensions.

The powers being discussed also include forcing sick and disabled people to take up offers of work. If those with serious but time-limited health conditions refuse the offer, DWP staff would then have the power to strip them of their benefits.

The revelation comes as the DWP told the Guardian it had indefinitely postponed a week-long staff "celebration" of a new, tougher sanctions regime for more than a million job seekers.

Friday, 27 September 2013

DWP attempt to obtain NHS data rings 'alarm bells'

The Department for Work and Pensions attempted to obtain access to confidential patient data so that it could be linked to information about employment, tax credits and benefits claims, the Health Service Journal has learned.

Privacy campaigners said news of the abortive attempt “should be ringing alarm bells”, and warned that such activities by government departments could undermine public trust in the NHS. The DWP, however, insisted that it had intended to use the data only for “research purposes”, and to anonymise it “at the earliest possible opportunity”. 

The DWP application, unreported until now, was rejected by the then NHS Commissioning Board’s ethics and confidentiality committee in December. Minutes of the committee meeting, uncovered by HSJ, said: “This application detailed the linkage of DWP, HM Revenue and Customs and National Treatment Agency data. This linkage would enable analysis of the effect that drug use has on employment [and] understanding of the role that employment plays in the recovery journey, and would help build a cost benefit case for further investment in employment support for this group.”

Access to “confidential patient information was requested to allow National Drug Treatment Monitoring System data to be transferred to DWP with an identifiable unique reference attached,” the minutes added. The minutes said this would allow the data to be linked to specified HMRC and DWP data relating to employment, tax credits and benefit claims. Committee members expressed concern that the medical purpose for the requested access was “not sufficiently defined”, and the request was turned down. 

Phil Booth, coordinator with privacy campaign group medConfidential, said: “That government departments are already seeking to access highly sensitive patient information for non-medical purposes should be ringing alarm bells.” He added that such activities could undermine trust in the NHS and could lead to patients “withholding information or simply not seeking the care they need”.

A DWP spokesman said: “To better understand the recovery journeys of people with a drug or alcohol dependency, we draw on all available information, ensuring that legal and ethical procedures are followed at all times. Our plans were for the data to be anonymised at the earliest possible opportunity and only used for research purposes to understand the benefit and employment journeys of people in treatment.

“The DWP continues to work closely with organisations including Public Health England and drug and alcohol treatment providers to ensure our policies are based on the most robust evidence possible and we can help transform the lives of the most disadvantaged people, including those with a drug or alcohol dependency.”

James Illman, Health Service Journal

Osborne has now been proved wrong on austerity

The UK economy is recovering. The government is vindicated. Its critics should crawl into a hole. This, in essence, is what George Osborne, the chancellor of the exchequer, claimed in a rousing speech delivered earlier this month. In particular, he argues, Plan A has worked. Those who have been advocating a Plan B – slower fiscal tightening – have proved to be wrong. Here, then, is my response.

Yes, the economy is recovering. But the performance since Mr Osborne took office in May 2010 has been dismal. Over three years, the economy has grown by a cumulative total of 2. 2 per cent. In June 2010 the Office for Budget Responsibility forecast that the economy would expand by 8.2 per cent between 2010 and 2013. The real figure may end up being a third of that. In the second quarter of this year, gross domestic product was still 3.3 per cent below the pre-crisis peak and 18 per cent below its 1980-2007 trend – the slowest British recovery on record.

Financial crises do cause havoc. That explains some of this awful performance. But Spencer Dale and James Talbot of the Bank of England have shown that UK performance is dismal even by the standards of other crisis-hit, high-income economies. The eurozone has performed as badly as the UK. But, given the mess there and the UK’s control over all policy levers, that is hardly something to boast about.

Mr Osborne can (and does) point to a strong labour market performance. This has been a saving grace for Britain. Had the UK enjoyed normal productivity performance, unemployment might now be more than 15 per cent. Unemployment has remained low because labour productivity has now fallen back to 2005 levels. That is hardly something to boast about.

Mr Osborne responds that fiscal policy did not cause the dismal under-performance. That was due to inflation shocks and the eurozone. Since Mr Osborne was a cheerleader for the eurozone’s austerity, he cannot wash his hands of all blame. But the more important point, as Simon Wren-Lewis of Oxford University has pointed out, is that the debate is not about what caused the unforecast slowdown. What matters is whether the economy has been weaker with austerity than without it.

Little doubt exists over the answer to this question. With interest rates at the zero bound, austerity weakened the economy relative to what might otherwise have happened. The question is only how much it has done so. It is impossible to know counterfactuals. But Oscar Jordà and Alan Taylor of the University of California, Davis, concluded that in 2013 UK GDP will be about 3 per cent smaller than it would otherwise have been. Is that right? Nobody knows. But it is in the right direction.

Oh no, it is not, proponents of austerity respond. This ignores the fact that the programme delivered credibility and lower interest rates. In the febrile circumstances of 2010, when people thought, foolishly, that the UK might become Greece, that view might have made some sense. But it soon became clear it did not. In June 2010, the OBR forecast cumulative net borrowing of £322bn between 2011-12 and 2015-16. In March 2013 this was up to £564bn. In June 2010 the structural current budget was forecast to be in surplus by 2014-15. By March 2013 this had slipped two years. In June 2010 the ratio of public sector net debt to GDP was forecast to start falling in 2014-15. By March 2013 this had moved back to 2017-18. The peak level of net debt also jumped from 70.3 per cent to 85.6 per cent of GDP. Yet the impact of this slippage on long-term interest rates was zero. Only improved prospects for recovery and so of earlier rises in short-term rates raised longer-term rates.

So the chancellor had other options. As I have argued before, he could have stuck to the same plans for current spending, while temporarily lowering rather than raising value added tax. He also could have taken advantage of low borrowing rates to increase rather than reduce public investment. In fact, he is too hard on himself. He has allowed the fiscal position to slip and used the public balance sheet to support investment and the housing market. Call it Plan A minus. But he could certainly have been more deliberate and aggressive about it.

To this the chancellor would reply that none of this matters because the economy is recovering strongly anyway. Moreover, he insists, his critics thought this was impossible. But nobody thought recovery would never happen under austerity, merely that it would be damagingly delayed. The politics of this policy may not be too bad for Mr Osborne if the unnecessarily slow recovery becomes a faster bounceback in the run-in to the 2015 election. But it is hard to see an economic case for it.

One thing ought to be quite clear: the fact that the economy grows in the end does not prove that needlessly weakening the recovery was a sound idea. This has been an unnecessarily protracted slump. It is good that recovery is here, though it is far too soon to tell its quality and durability. But this does not justify what remains a large unforced error.

Martin Wolf, Financial Times

Thursday, 26 September 2013

'Captain Invisible' replaced: Sir David Higgins named as new HS2 chief

HS2’s chairman Doug Oakervee has been dumped in favour of the knight who led the construction of the London 2012 Olympic Park. Sir David Higgins, who will earn almost £600,000 a year, will take up his new role in January. The Australian is currently chief executive at Network Rail, which looks after Britain’s existing rail infrastructure, and has been praised for restructuring and commercialising what has been viewed as a cumbersome, costly organisation. 

Sir David said: “HS2 is vital for both passengers and the economy and will put the UK in a different league in terms of infrastructure. My first priority will be to rigorously scrutinise costs to ensure they remain under control.” His appointment suggests that Cameron and Osborne are determined to win over the doubters. Sir David was awarded a knighthood for bringing in the Olympics under budget and on time following a difficult start that had seen costs wildly underestimated.

HS2’s current chairman Doug Oakervee, dubbed “Captain Invisible”, will leave at the end of the year. He has endured a dreadful summer in which it has been claimed that the project could end up costing £80bn, while one-time supporters including former Chancellor Alistair Darling have had second thoughts about its merits. Mr Oakervee, 72, has dismissed HS2’s hundreds of thousands of opponents as a “quite vociferous small minority”.

Saturday, 21 September 2013

Rachel Reeves didn't say 'people on £60,000 aren't rich' - The Telegraph did!

Rachel Reeves has reason to feel hard done by this morning as hundreds of people take her to task  for saying that people who earn £60,000 a year aren't rich. However, Reeves didn't quite say that.

Following an interview with The Telegraph, Tim Ross, Mary Riddell and James Kirkup came up with the headline "People on £60,000 aren’t rich, says Labour's Rachel Reeves". But that's not what Reeves said at all. What she tried to explain was that you'd have a hard time trying to convince people in London and the south-east on salaries of £50-60,000 that they were rich, given the amount of money they had to pay out every month. And that people earning this amount were just as angry as lower-paid workers about the highest earners getting a tax cut. Reeves's problem, however, is that she didn't put it that effectively and her statement has been deliberately misconstrued by The Telegraph - and then repeated all over the media.

Here are the appropriate paragraphs from the interview:

“I think the focus should be on those privileged few right at the top, and that’s not people earning £50,000 or £60,000 a year,” Miss Reeves said in an interview with The Telegraph. “We don’t have any plans or desire to increase taxes amongst people in that band of income.”

The Liberal Democrats have said they would find the money by taxing the richest, which a leaked party document suggested meant anyone earning more than £50,000. 

Miss Reeves said that it was wrong to consider such people as “rich”. [?]

“If you’re a single-earner family in London or the South East on £50,000 or £60,000, you don’t feel particularly rich and you’d be equally aggrieved that people earning between £150,000 and £1 million are getting a tax cut at the same time your taxes are going up.”

Not quite the same as 'people on £60,000 aren't rich'.

Friday, 20 September 2013

A Labour government would scrap Osborne's shares-for-rights scheme

The much-criticised shares-for-rights scheme, and effective tax cuts for hedge funds, would be scrapped under a Labour government, Ed Balls will say on Monday as he attacks George Osborne for “standing up for a privileged few”. The shadow chancellor will seize on these – as well as touching on the 45p tax rate – as evidence of how the chancellor and David Cameron are out of touch with ordinary people and too cosy with those who have the most in society.

“David Cameron and George Osborne have been happy to write cheques on behalf of the taxpayer to their friends and Tory party donors. They’ve been standing up for a privileged few while ordinary families have struggled with a cost of living crisis,” Mr Balls will say when he takes to the stage at the Labour party conference in Brighton.

Mr Osborne has made great play of the shares-for-rights scheme, which he unveiled to great fanfare at the Tory conference last year. But the scheme, which allows workers to receive shares in return for giving up some employment rights, has come under fire from businesses and think-tanks which have warned that it could end up as little more than a tax dodge for private equity companies.

“The shares-for-rights scheme also seems to have become a tax avoider’s charter. As the OBR has pointed out, it could end up costing the Treasury up to £1bn. We should be cracking down on tax avoidance, not opening new ways for it to happen,” Mr Balls will say.

Earlier this week, the Financial Times reported that managers of Whitworths, the century-old supplier of dried fruits and nuts, had become one of the first adopters of the scheme. Eight of its executives were offered “shares for rights”, worth up to £50,000 each, by its new private equity owner Equistone.

The Liberal Democrats, meeting for their conference in Glasgow, said they, too, would campaign to scrap the scheme at the next election. One Lib Dem minister called it “half-baked nonsense”.

Mr Balls also plans to cut the £145m tax cut offered to hedge funds in the last Budget and will tell delegates that he plans to use the “hundreds of millions of pounds” in savings to “focus resources on our priorities”.

The party is also expected to announce a reversal of the so-called “bedroom tax”, which reduces benefits to those living in council homes with spare rooms.

Elizabeth Rigby, Deputy Political Editor, Financial Times

Wednesday, 18 September 2013

RMT: It's Tory cuts ruining the tracks, not Network Rail

The National Union of Rail, Maritime and Transport Workers (RMT) has reacted angrily after a government minister tried to shift the blame for failing track renewals away from Tory cuts and onto Network Rail. During an interview on BBC Radio 4's Today programme, transport minister Norman Baker said that Network Rail was failing to carry out regular repairs. His comments followed the release of a report from the Office of Rail Regulation (ORR) which found Network Rail had failed to deliver on government funding plans to renew Britain's railways.

"They've taken their eye off the ball on the day-to-day maintenance of the network, which is leading to an increased number of overruns on engineering works and unnecessary delays for passengers as a consequence of minor failures in the network," Baker said. "The rail regulators have set out very clearly their concerns. They can require Network Rail to adjust their programme and that's what they are doing."

RMT rubbished the claims that Network Rail had paid "inadequate attention" to areas such as embankment and drainage systems, blaming funding cuts imposed by the government. "RMT has been warning for some time that we are facing a major crisis on rail maintenance and renewals with lethal consequences, driven by the demand for cuts from the government and their agents the ORR, who are both regulator and budget holder," said RMT general secretary Bob Crow. "More cuts are planned under the government's McNulty rail review and the latest financial settlements. With staffing levels and capacity already hacked to the bone this is a crisis set to get worse."

Baker said the government thought the solution was to "have much greater co-ordination between Network Rail and the train companies." However, he ruled out the creation of "vertically integrated" companies responsible for both trains and tracks in the different regions of the country. Meanwhile, Crow called for another way to end the crisis: "The solution is simple: call off the staffing and capacity cuts, end the fragmentation and profiteering of privatisation and renationalise our railways as a single entity."

In response to the ORR report, Network Rail said it had experienced "increased congestion due to growing demand for travel."

Ryan Fletcher, Morning Star

Monday, 16 September 2013

Government proposals spell the end of a universal postal service

Responding to the announcement that the Government intends to push ahead with the privatisation of Royal Mail, Mario Dunn, campaign director of Save Our Royal Mail, said:

“This is a good day for city bankers and share dealers but a bad day for Royal Mail’s customers. People in rural areas, small businesses and the elderly are all particularly vulnerable to what will be the inevitable price rises and rural service reductions.

“Privatising Royal Mail fires the starting gun on the race to end the universal postal service as we know it. A privately owned Royal Mail will not want to maintain loss making rural deliveries. The 2011 Postal Services Act allows it to opt out of delivering loss making services.

“With price caps removed the consumer protections in place are extremely flimsy. It will not be long before we begin to see the worst excesses we have come to associate with other sectors such as banking”.

Latest polling shows that 70% of the British public oppose the sale of Royal Mail. The Government should listen to the public and halt this.

Save Our Royal Mail press release - 12th September 2013

Sunday, 15 September 2013

Compulsory national service to be debated in Parliament next year

A bill to reinstate compulsory national service for 18 to 26-year-olds is set to be debated in Parliament early next year.

Kettering’s Conservative MP Philip Hollobone, who sponsored the bill, is convinced that some form of service for youngsters, be it charitable work, care for the elderly, work linked to the NHS or participation in the armed forces, would help instil a greater sense of ‘self-respect, personal reliance, discipline and behaviour’ into society. “I believe that the introduction of a modern form of national service would prove popular with the public and be of immense benefit to the young people who take part,” he explained.

The scope of the scheme would include ‘instruction in personal financial budgeting, household bills, nutrition, cooking, time-keeping, life skills, tolerance towards others, treating elderly and disabled people with dignity and respect’ and teaching in basic aspects of the law relating to the most common offences involving young people. Those with severe mental or physical disabilities would be exempt from the one year full-time scheme, to be undertaken before the age of 26 in order to avoid committing an offence.

Hollobone, who is also arguing for facial coverings such as burkas to be banned in public, was due to have his National Service Bill debated in Parliament last Friday, but this was rescheduled to late February. Acknowledging that his Bills are highly unlikely to become law, Hollobone said: “Unfortunately, the arcane nature of parliamentary procedures surrounding private members’ bills and the lack of time they have for debate will mean that the merits and demerits of the Bill are unlikely to be debated and voted upon.”

Nevertheless, a Change petition to stop the Bill progressing through Parliament has been set up by Falmouth activist Debbie Sayers. Arguing that young people ‘should be able to choose their own futures’. An extract from her statement reads: “It is unacceptable to force any person to engage in training that has mandatory residential elements, military training or actual service in the military without the ability to refuse. We do not want our children and grandchildren to fight and die in wars, or in training that they or we have no control over.”

The Independent

Ministers face revolt by Tory MPs over Army cuts

Ministers are facing a revolt by Conservative MPs over plans to cut the size of the regular Army by 20,000 while boosting the numbers of reservists.

• Tory MP John Baron claims the plans were motivated by cost and not by an awareness of the challenges troops will face in the future.

• MPs say in a letter that ministers have failed to give them “comprehensive answers” and have called for full details of planned cost savings.

Cameron's attempt to put an end to "benefit tourism" undermined by lack of evidence

• A House of Lords committee points out that despite several requests the government has failed to offer anything more than anecdotal claims.

• The European commissioner for employment and social affairs said: "It is important that policy ... is based on facts rather than gut feelings or perceptions."

• A further report concludes that any measures restricting the free movement of migrants would have a devastating effect on the British economy.


See also Channel 4's FactCheck report ‘Benefit tourism scare sent packing' from September 2011.

Wednesday, 11 September 2013

21,000 NHS jobs lost over the last three months

Commenting on the latest labour market figures published today by the Office for National Statistics, TUC General Secretary Frances O'Grady said:

'These figures show how government cuts are continuing to hit vital front-line services with 21,000 jobs lost in the NHS over the last three months alone. Despite the Chancellor's boasts this week, austerity is continuing to cause damage and we are far from a strong and sustained jobs recovery.

'While the headline figures show small improvements, youth employment has fallen sharply and long-term unemployment is still rising. There are also still record numbers of people trapped in involuntarily part-time work with underemployment continuing to soar.

'Across the economy ordinary people are yet to feel the benefits of tentative growth, with wages rising around three times slower than prices.'

Thursday, 5 September 2013

What were Iain Duncan Smith's 'welfare reforms' really about?

Whatever Iain Duncan Smith meant by his assault on benefits, it has failed – and the government's rhetoric has frightened the most vulnerable in the process.

But no welfare reform is failing more damagingly or harming more vulnerable people than the national rollout of employment and support allowance (ESA) and the now infamous Atos work capability assessment.

Sue Marsh assesses the Secretary of State for Work and Pensions and finds him unfit for purpose.