What does QE3 mean for the real economy?
So QE3 here we come. The Bank of England is going to pump another £50 billion into the economy, taking the total amount of extra liquidity since 2009 to £325 billion.
It’s not a surprise, and neither should anybody be shocked that interest rates will remain at 0.5 per cent. Everybody was expecting the Bank to engage in another round of money printing. But will it make any difference?
The measures taken by the Bank of England and the European Central Bank over the past year to ease credit conditions have had little positive effect. The ECB’s programme of reducing the cost of its loans to banks has led to banks borrowing £500 billion from the ECB since the start of the year.
But while the central banks have undoubtedly helped banks improve their balance sheets, these emergency measures are precisely that – emergency. They have done little to help the ailing economic situation. Instead, without lending requirements, the banks have continued their post-credit crunch over-reaction in refusing to lend.
The Bank has rightly argued that the scheme of printing new money and buying government assets with it has helped keep a lid on borrowing costs and inflation. But there is little evidence that banks have passed on the effects to businesses.
In fact, QE has actively hit pensioners’ incomes by depressing annuity rates by up to 25 per cent. What we have, is a situation where extra money worth around 20 per cent of our annual GDP has been printed, yet lending is stagnant as is the UK economy. The stand-off between government, the banks and customers continues.
Stimulating lending is one of the most important tasks in staving off a prolonged double-dip recession. Many businesses are already feeling the pinch, with the likes of clothing-chain Peacocks just the latest high-street shop to close down. Without sustained bank lending, more will have to close their doors.
In fact, Ernst and Young’s Item Club has actually forecast total bank loans to reduce by 2.2 per cent in 2012, with just a marginal improvement of 0.9 per cent in 2013, having increased by an estimated 4.3 per cent in 2011.
The Item Club’s Neil Blake said that 2012 will see:
“The first time there will be an annual contraction in total loans since 2009, when the UK economy was still suffering from the immediate effects of the global financial crisis.”
Rather than rely that enough money will be printed to keep the economic wheels turning, the government or Bank of England should insist that lending targets to small businesses are kept to. There is no excuse for failure, particularly from RBS and Lloyd’s where the taxpayer is the largest shareholder. If necessary, failure to hit the ‘Project Merlin’ targets should result in fines.
So QE3 here we come. The Bank of England is going to pump another £50 billion into the economy, taking the total amount of extra liquidity since 2009 to £325 billion.
It’s not a surprise, and neither should anybody be shocked that interest rates will remain at 0.5 per cent. Everybody was expecting the Bank to engage in another round of money printing. But will it make any difference?
The measures taken by the Bank of England and the European Central Bank over the past year to ease credit conditions have had little positive effect. The ECB’s programme of reducing the cost of its loans to banks has led to banks borrowing £500 billion from the ECB since the start of the year.
But while the central banks have undoubtedly helped banks improve their balance sheets, these emergency measures are precisely that – emergency. They have done little to help the ailing economic situation. Instead, without lending requirements, the banks have continued their post-credit crunch over-reaction in refusing to lend.
The Bank has rightly argued that the scheme of printing new money and buying government assets with it has helped keep a lid on borrowing costs and inflation. But there is little evidence that banks have passed on the effects to businesses.
In fact, QE has actively hit pensioners’ incomes by depressing annuity rates by up to 25 per cent. What we have, is a situation where extra money worth around 20 per cent of our annual GDP has been printed, yet lending is stagnant as is the UK economy. The stand-off between government, the banks and customers continues.
Stimulating lending is one of the most important tasks in staving off a prolonged double-dip recession. Many businesses are already feeling the pinch, with the likes of clothing-chain Peacocks just the latest high-street shop to close down. Without sustained bank lending, more will have to close their doors.
In fact, Ernst and Young’s Item Club has actually forecast total bank loans to reduce by 2.2 per cent in 2012, with just a marginal improvement of 0.9 per cent in 2013, having increased by an estimated 4.3 per cent in 2011.
The Item Club’s Neil Blake said that 2012 will see:
“The first time there will be an annual contraction in total loans since 2009, when the UK economy was still suffering from the immediate effects of the global financial crisis.”
Rather than rely that enough money will be printed to keep the economic wheels turning, the government or Bank of England should insist that lending targets to small businesses are kept to. There is no excuse for failure, particularly from RBS and Lloyd’s where the taxpayer is the largest shareholder. If necessary, failure to hit the ‘Project Merlin’ targets should result in fines.
Indeed, the reaction of TUC general secretary Brendan Barber to today’s announcement is bang on the money, arguing that the new liquidity must get through to companies if it is to have a positive impact.
Barber commented that:
“More needs to be done to ensure that this latest injection of cash actually reaches the businesses that need it, rather than just gathering dust on banks’ balance sheets. The failure of banks to increase net lending to businesses, despite £275bn of quantitative easing, is holding back growth in the real economy.”
The government and the Bank of England must make sure that the extra liquidity announced today benefits the real economy. There is no value in allowing it to slosh around on the banks’ balance sheets.
See also:
• ConHome: Neuter the Health Bill – Daniel Elton, February 10th, 2012
• The Financial Times comes out against the NHS bill – Alex Hern, February 9th 2012
• Don’t believe the spin – the health reforms are Cameron’s just as much as Lansley’s – Shamik Das, February 8th 2012
• Miliband goes on attack as fight to save the NHS stepped up – Shamik Das, February 6th 2012
• Sign my petition to drop Lansley’s monster – Dr Kailash Chand OBE, November 24th 2011
ConHome: Neuter the Health Bill
It appears the health bill, which has been teetering on the edge of collapse for months, is now crumbling to pieces.
The Guardian reported last night that the ConservativeHome website “have almost been instructed to write” an editorial against the bill by three cabinet members who have clued up to what a mess it is.
And sure enough, the website Fleet Street loves to call the ‘Voice of the grassroots’ proclaimed this morning:
“The greatest mistake of his time as prime minister has been to put it [The NHS] back at the centre of political debate…
“Many Conservatives think that the NHS needs fundamental reform but for far-reaching reform to succeed certain pre-conditions must be met.
“The public needs to have been persuaded that substantial change is necessary.
“The government cannot be distracted by other consuming projects but its best brains must be focused and single-minded in ensuring the policy’s success. The Whitehall machine needs to be prepared and co-operative.
“The health secretary needs to enjoy significant goodwill amongst NHS staff and possess exceptional communication skills. Few – perhaps none – of those preconditions exist.”
We know the health profession is against the bill. We know the public are suspicious. We know it will make more bureaucracy not less, and will probably push up costs.
It is bad policy and bad legislation. Time to put it out of its misery
Update: As we should have made clear, ConservativeHome are specifically calling for the government to “[remove] all contentious components of the Bill”.
See also:
• The Financial Times comes out against the NHS bill – Alex Hern, February 9th 2012
• Ten reasons peers should vote against Lansley’s anti-NHS bill – Shamik Das, October 12th 2011
• Miliband goes on attack as fight to save the NHS stepped up – Shamik Das, February 6th 2012
• Sign my petition to drop Lansley’s monster – Dr Kailash Chand OBE, November 24th 2011
• Don’t believe the spin – the health reforms are Cameron’s just as much as Lansley’s – Shamik Das, February 8th 2012
It appears the health bill, which has been teetering on the edge of collapse for months, is now crumbling to pieces.
The Guardian reported last night that the ConservativeHome website “have almost been instructed to write” an editorial against the bill by three cabinet members who have clued up to what a mess it is.
And sure enough, the website Fleet Street loves to call the ‘Voice of the grassroots’ proclaimed this morning:
“The greatest mistake of his time as prime minister has been to put it [The NHS] back at the centre of political debate…
“Many Conservatives think that the NHS needs fundamental reform but for far-reaching reform to succeed certain pre-conditions must be met.
“The public needs to have been persuaded that substantial change is necessary.
“The government cannot be distracted by other consuming projects but its best brains must be focused and single-minded in ensuring the policy’s success. The Whitehall machine needs to be prepared and co-operative.
“The health secretary needs to enjoy significant goodwill amongst NHS staff and possess exceptional communication skills. Few – perhaps none – of those preconditions exist.”
We know the health profession is against the bill. We know the public are suspicious. We know it will make more bureaucracy not less, and will probably push up costs.
It is bad policy and bad legislation. Time to put it out of its misery
Update: As we should have made clear, ConservativeHome are specifically calling for the government to “[remove] all contentious components of the Bill”.
See also:
• The Financial Times comes out against the NHS bill – Alex Hern, February 9th 2012
• Ten reasons peers should vote against Lansley’s anti-NHS bill – Shamik Das, October 12th 2011
• Miliband goes on attack as fight to save the NHS stepped up – Shamik Das, February 6th 2012
• Sign my petition to drop Lansley’s monster – Dr Kailash Chand OBE, November 24th 2011
• Don’t believe the spin – the health reforms are Cameron’s just as much as Lansley’s – Shamik Das, February 8th 2012
“No one uses TfL” Tory: Users should pay, except when they are my voters
Adam Bienkov noted this afternoon the jaw dropping claim by a Tory member of the London Assembly that most Londoners don’t use public transport.
Bienkov reports:
Speaking at a City Hall debate on Boris Johnson’s budget, Tony Arbour claimed that:
“It is a fact is it not that relatively few Londoners use London transport in any way. Most people don’t use London transport with any sense of regularity.”
He went on to tell the Mayor that it was a “principal of conservatism” that “those [people] who receive a service are those who should pay for it.”
Boris Johnson replied that he would “need to get the figures” Arbour was referring to.
As both Bienkov and Mark Ferguson at LabourList have pointed out, Arbour is hopelessly wrong. With 1.1 billion tube journeys a year, 8.4 million combined daily trips on rail, underground, DLR, bus, tram and taxis, and all methods of transport except car drivers and motorcyclists increasing in the last ten years, it is not a fact that “few Londoners use London transport in any way”.
While his facts need a thorough going over, we at Left Foot Forward are always happy to see politicians staking out their principles, so Arbour’s ‘principle of conservatism’ that ‘those [people] who receive a service are those who should pay for it’, while wrong, could mark him out as a better type of politician.
Except when it comes to his own interests, he’s quite happy to treat principles with the same reckless abandon as facts.
In November 2009, the GLA reported that:
Tony Arbour has welcomed yesterday’s definitive assurance from the Mayor of London that the 24-hour Freedom Pass shall remain.
Commenting after Mayor Questions at City Hall during which Boris Johnson gave an assurance that the Pass would continue, Mr Arbour, the Assembly Member for South West London said:
“Boris delivered his promise for a round the clock Freedom Pass; who can doubt his commitment to keep it?”
And in January 2010, they wrote:
Tony Arbour, Richmond and Kingston’s GLA Member has called on the Royal Parks Agency to concentrate on repairing Richmond Park’s roads rather than attempting to turn its car parks into revenue-raising machines.
Tony said:
“Much of Richmond Park’s perimeter road is in a terrible state. The new aggregate used to resurface the road during the summer has dislodged and is now lying in the road. This has left patches of exposed tar that is being flicked up by passing cars and bikes getting only bodywork, clothes and skin, which is proving very difficult to clean off.
“I call on the Parks agency to deal with this serious problem as a matter of urgency instead of focusing on imposing car parking charges on Park visitors.”
Arbour may have raised the flag of conservative principles in City Hall, but in the end he’s just chasing re-election.
See also:
• Fact Check fact checked: London’s fares CAN be cut – Tom Copley, January 25th 2012
• The environment trumps the debate between a tunnel or a bridge – Darren Johnson AM, January 21st 2012
• Boris’s electric vehicle boasts are an inverted pyramid of piffle – Darren Johnson AM, January 10th 2012
• Boris fiddles as London prepares for transport chaos – Alex Hern, October 19th 2011
• Boris’s backward steps for London on pollution and traffic congestion – Eleanor Besley, June 3rd 2011
Adam Bienkov noted this afternoon the jaw dropping claim by a Tory member of the London Assembly that most Londoners don’t use public transport.
Bienkov reports:
Speaking at a City Hall debate on Boris Johnson’s budget, Tony Arbour claimed that:
“It is a fact is it not that relatively few Londoners use London transport in any way. Most people don’t use London transport with any sense of regularity.”
He went on to tell the Mayor that it was a “principal of conservatism” that “those [people] who receive a service are those who should pay for it.”
Boris Johnson replied that he would “need to get the figures” Arbour was referring to.
As both Bienkov and Mark Ferguson at LabourList have pointed out, Arbour is hopelessly wrong. With 1.1 billion tube journeys a year, 8.4 million combined daily trips on rail, underground, DLR, bus, tram and taxis, and all methods of transport except car drivers and motorcyclists increasing in the last ten years, it is not a fact that “few Londoners use London transport in any way”.
While his facts need a thorough going over, we at Left Foot Forward are always happy to see politicians staking out their principles, so Arbour’s ‘principle of conservatism’ that ‘those [people] who receive a service are those who should pay for it’, while wrong, could mark him out as a better type of politician.
Except when it comes to his own interests, he’s quite happy to treat principles with the same reckless abandon as facts.
In November 2009, the GLA reported that:
Tony Arbour has welcomed yesterday’s definitive assurance from the Mayor of London that the 24-hour Freedom Pass shall remain.
Commenting after Mayor Questions at City Hall during which Boris Johnson gave an assurance that the Pass would continue, Mr Arbour, the Assembly Member for South West London said:
“Boris delivered his promise for a round the clock Freedom Pass; who can doubt his commitment to keep it?”
And in January 2010, they wrote:
Tony Arbour, Richmond and Kingston’s GLA Member has called on the Royal Parks Agency to concentrate on repairing Richmond Park’s roads rather than attempting to turn its car parks into revenue-raising machines.
Tony said:
“Much of Richmond Park’s perimeter road is in a terrible state. The new aggregate used to resurface the road during the summer has dislodged and is now lying in the road. This has left patches of exposed tar that is being flicked up by passing cars and bikes getting only bodywork, clothes and skin, which is proving very difficult to clean off.
“I call on the Parks agency to deal with this serious problem as a matter of urgency instead of focusing on imposing car parking charges on Park visitors.”
Arbour may have raised the flag of conservative principles in City Hall, but in the end he’s just chasing re-election.
See also:
• Fact Check fact checked: London’s fares CAN be cut – Tom Copley, January 25th 2012
• The environment trumps the debate between a tunnel or a bridge – Darren Johnson AM, January 21st 2012
• Boris’s electric vehicle boasts are an inverted pyramid of piffle – Darren Johnson AM, January 10th 2012
• Boris fiddles as London prepares for transport chaos – Alex Hern, October 19th 2011
• Boris’s backward steps for London on pollution and traffic congestion – Eleanor Besley, June 3rd 2011
The Financial Times comes out against the NHS bill
The pro-NHS reform Financial Times has published a leader today pushing for the government to drop the “mess” that is the health and social care bill.
The paper begins by attacking the prime minister for failing to live up to his manifesto pledge to avoid top-down reorganisations of the NHS, but then praises the ultimate objectives of the bill. It lays the blame for its failings squarely at the feet of the “political skill”, or lack thereof, of the government, and Andrew Lansley in particular.
The leader concludes (£):
There is no easy escape from the mess the government has created. But its objective should be to pursue the course that offers the best chance of securing the substance of the reforms.
Dropping the bill and pursuing change without omnibus legislation looks on balance the better bet, even if it comes at a cost. The NHS is already adapting to the new structures. Some bureaucratic machinery might have to be rebuilt. Mr Lansley’s position would be weakened – perhaps fatally.
Although the FT is pro-reform, wrongly believing that “if the NHS is to become more efficient, as it must, there should be more clinical involvement in healthcare commissioning”, they have joined the CPHVA, RCGP, CSP, UNISON, UNITE, GMB, RCM, RCN, BMA, RCP, RCR, MiP, COT, IHSM and the Faculty of Public Health in calling for the government to drop the bill.
In May last year, Nick Clegg announced:
No bill is better than a bad bill.
Now that the consensus is that this is a bad bill, the time has come for him to live up to his words and join the coalition to save the NHS.
See also:
• Ten reasons peers should vote against Lansley’s anti-NHS bill – Shamik Das, October 12th 2011
• Miliband goes on attack as fight to save the NHS stepped up – Shamik Das, February 6th 2012
• Sign my petition to drop Lansley’s monster – Dr Kailash Chand OBE, November 24th 2011
• Don’t believe the spin – the health reforms are Cameron’s just as much as Lansley’s – Shamik Das, February 8th 2012
• Lord Owen turns on coalition health plans – Will Straw, January 19th 2011
The pro-NHS reform Financial Times has published a leader today pushing for the government to drop the “mess” that is the health and social care bill.
The paper begins by attacking the prime minister for failing to live up to his manifesto pledge to avoid top-down reorganisations of the NHS, but then praises the ultimate objectives of the bill. It lays the blame for its failings squarely at the feet of the “political skill”, or lack thereof, of the government, and Andrew Lansley in particular.
The leader concludes (£):
There is no easy escape from the mess the government has created. But its objective should be to pursue the course that offers the best chance of securing the substance of the reforms.
Dropping the bill and pursuing change without omnibus legislation looks on balance the better bet, even if it comes at a cost. The NHS is already adapting to the new structures. Some bureaucratic machinery might have to be rebuilt. Mr Lansley’s position would be weakened – perhaps fatally.
Although the FT is pro-reform, wrongly believing that “if the NHS is to become more efficient, as it must, there should be more clinical involvement in healthcare commissioning”, they have joined the CPHVA, RCGP, CSP, UNISON, UNITE, GMB, RCM, RCN, BMA, RCP, RCR, MiP, COT, IHSM and the Faculty of Public Health in calling for the government to drop the bill.
In May last year, Nick Clegg announced:
No bill is better than a bad bill.
Now that the consensus is that this is a bad bill, the time has come for him to live up to his words and join the coalition to save the NHS.
See also:
• Ten reasons peers should vote against Lansley’s anti-NHS bill – Shamik Das, October 12th 2011
• Miliband goes on attack as fight to save the NHS stepped up – Shamik Das, February 6th 2012
• Sign my petition to drop Lansley’s monster – Dr Kailash Chand OBE, November 24th 2011
• Don’t believe the spin – the health reforms are Cameron’s just as much as Lansley’s – Shamik Das, February 8th 2012
• Lord Owen turns on coalition health plans – Will Straw, January 19th 2011
Higher education reforms theaten a slump in UK’s international competitiveness
According to the latest EU statistics, the UK ranks a lowly 18th place when it comes to people with at least an upper secondary education (equivalent to A-levels) The UK should be at the top of the table when it comes to education. We pride ourselves on being world leaders in many areas and must not settle for mid-table obscurity.
Fewer people in Britain are well-educated than in countries such as Lithuania, the Czech Republic, Slovakia, Estonia, Latvia and Poland. Germany, Sweden, Denmark, Hungary and Bulgaria are also among the 18 countries who boast a better-qualified populace than the UK.
Even more worrying is the very real possibility that we will slide further down the table as people find it harder to access education following price hikes and restrictions on places.
In his recent State of the Union address, President Obama made the case for greater investment in education and warned that higher education must not become a luxury. He warned that if the US did not sustain investment then other countries would ‘win the race for the future.’
Worryingly, the things President Obama warned against – higher fees, loan repayments going up and cuts to research funding – have formed the plank of this government’s education policy.
If we want to enter, let alone win, any race for the future we need to urgently rethink our approach to further and higher education.
The government unveiled plans last month to axe the number of university places by 15,000 and has increased the cost of studying a degree to as much as £9,000 a year. Worryingly, it was revealed last week that 43,881 fewer people in the UK applied for a place at university than last year.
In further education the news is similarly bleak. People over the age of 24 wishing to study a level 3 qualification and above will now have to pay fees of up to £4,000 a year.
However, these charges come against a backdrop of decreasing numbers of people studying. The total number of learners participating in government-funded further education fell by 8.0 per cent to 4,264,900 in 2010/11.
We are already starting from mid-table and we cannot afford the government to push ahead with reforms to both further and higher education that risk us sliding further down the table.
See also:
• Coalition should heed Obama’s advice on higher education – not slash teaching grants – Sally Hunt, January 25th 2012
• Will 2012 see the first university bankruptcy? – Alex Hern, January 8th 2012
• A small mercy for the marching students of tomorrow – Laura McInerney, November 9th 2011
• University applications down 9 per cent on 2011 – Sally Hunt, October 24th 2011
• Rich kids will pay less student debt than middle classes – Sally Hunt, September 20th
According to the latest EU statistics, the UK ranks a lowly 18th place when it comes to people with at least an upper secondary education (equivalent to A-levels) The UK should be at the top of the table when it comes to education. We pride ourselves on being world leaders in many areas and must not settle for mid-table obscurity.
Fewer people in Britain are well-educated than in countries such as Lithuania, the Czech Republic, Slovakia, Estonia, Latvia and Poland. Germany, Sweden, Denmark, Hungary and Bulgaria are also among the 18 countries who boast a better-qualified populace than the UK.
Even more worrying is the very real possibility that we will slide further down the table as people find it harder to access education following price hikes and restrictions on places.
In his recent State of the Union address, President Obama made the case for greater investment in education and warned that higher education must not become a luxury. He warned that if the US did not sustain investment then other countries would ‘win the race for the future.’
Worryingly, the things President Obama warned against – higher fees, loan repayments going up and cuts to research funding – have formed the plank of this government’s education policy.
If we want to enter, let alone win, any race for the future we need to urgently rethink our approach to further and higher education.
The government unveiled plans last month to axe the number of university places by 15,000 and has increased the cost of studying a degree to as much as £9,000 a year. Worryingly, it was revealed last week that 43,881 fewer people in the UK applied for a place at university than last year.
In further education the news is similarly bleak. People over the age of 24 wishing to study a level 3 qualification and above will now have to pay fees of up to £4,000 a year.
However, these charges come against a backdrop of decreasing numbers of people studying. The total number of learners participating in government-funded further education fell by 8.0 per cent to 4,264,900 in 2010/11.
We are already starting from mid-table and we cannot afford the government to push ahead with reforms to both further and higher education that risk us sliding further down the table.
See also:
• Coalition should heed Obama’s advice on higher education – not slash teaching grants – Sally Hunt, January 25th 2012
• Will 2012 see the first university bankruptcy? – Alex Hern, January 8th 2012
• A small mercy for the marching students of tomorrow – Laura McInerney, November 9th 2011
• University applications down 9 per cent on 2011 – Sally Hunt, October 24th 2011
• Rich kids will pay less student debt than middle classes – Sally Hunt, September 20th
The shocking effect of Gove’s EMA axe: Youngsters skipping food to get to college
Sally Hunt is the general secretary of the University and College Union (UCU)
Young people are having to choose whether to eat or travel to college thanks to the government’s “disastrous” decision to axe the education maintenance allowance, according to a report (pdf) released today by the children’s charity Barnardo’s.
The report not only criticises the government’s decision to axe the weekly grant – worth around £30 a week to the poorest students – but also describes the EMA’s replacement as insufficient to meet students’ needs.
It is shocking that youngsters have to skip meals to get to college. Lecturers want to be encouraging students to maximise their potential and they need to at least be fed when they turn up for class.
Sadly, the findings of today’s report do not come as much of a shock to those of us who led the vociferous campaign against the removal of EMA. We have argued from the start the government’s drive to cut EMA was an ideological move backed up by spurious evidence with absolutely no regard for the policy’s likely impact.
We produced a number of reports at the time that highlighted just how vital the money was for students. However, the government opted to cherry-pick its evidence from a survey that included hardly any students who actually depended on the EMA.
While we questioned how a cabinet of millionaires could have any understanding of the difference a few pounds a week makes to the poorest in society, the education secretary, Michael Gove, axed the grant, despite not having visited a single further education college.
Embarrassingly, but not surprisingly, the government’s evidence was later discredited by the man the government frequently cited to call the EMA a “deadweight cost”. Giving evidence to the education select committee in the summer, Mr Spielhofer said he was not happy with the concept that EMA had a deadweight cost of 88%.
He was also unhappy the axing of EMA had been based on his research and said ministers should have paid closer attention to other evidence, including work by the Institute for Fiscal Studies which showed that EMA paid for itself. The select committee described the axing of the EMA as rushed and ill-though through.
After failing to listen to the evidence when axing EMA, the least the government can do now is take note of today’s findings and provide the financial support required to give the poorest teenagers a fair crack at an education. There is no benefit in consigning them to the ever-increasing number of young people on the dole queue.
See also:
• Five reasons Clegg can’t stand on his social mobility record – Alex Hern, January 12th 2012
• The devastating crisis hitting Britain’s young people – Rory Weal, November 9th 2011
• Fees, cuts… Is this what Cameron means by “giving young people back their future”? – Shamik Das, September 14th 2011
• It’s now official: The government lied when scrapping EMA – James Mills, June 9th 2011
• EMA replacement could breach equality law according to government – James Mills, May 5th 2011
• EMA replacement doesn’t make the grade – James Mills, March 31st 2011
• Gove’s justification for axing EMA doesn’t add up – Jonathan Clifton, March 30th 2011
Sally Hunt is the general secretary of the University and College Union (UCU)
Young people are having to choose whether to eat or travel to college thanks to the government’s “disastrous” decision to axe the education maintenance allowance, according to a report (pdf) released today by the children’s charity Barnardo’s.
The report not only criticises the government’s decision to axe the weekly grant – worth around £30 a week to the poorest students – but also describes the EMA’s replacement as insufficient to meet students’ needs.
It is shocking that youngsters have to skip meals to get to college. Lecturers want to be encouraging students to maximise their potential and they need to at least be fed when they turn up for class.
Sadly, the findings of today’s report do not come as much of a shock to those of us who led the vociferous campaign against the removal of EMA. We have argued from the start the government’s drive to cut EMA was an ideological move backed up by spurious evidence with absolutely no regard for the policy’s likely impact.
We produced a number of reports at the time that highlighted just how vital the money was for students. However, the government opted to cherry-pick its evidence from a survey that included hardly any students who actually depended on the EMA.
While we questioned how a cabinet of millionaires could have any understanding of the difference a few pounds a week makes to the poorest in society, the education secretary, Michael Gove, axed the grant, despite not having visited a single further education college.
Embarrassingly, but not surprisingly, the government’s evidence was later discredited by the man the government frequently cited to call the EMA a “deadweight cost”. Giving evidence to the education select committee in the summer, Mr Spielhofer said he was not happy with the concept that EMA had a deadweight cost of 88%.
He was also unhappy the axing of EMA had been based on his research and said ministers should have paid closer attention to other evidence, including work by the Institute for Fiscal Studies which showed that EMA paid for itself. The select committee described the axing of the EMA as rushed and ill-though through.
After failing to listen to the evidence when axing EMA, the least the government can do now is take note of today’s findings and provide the financial support required to give the poorest teenagers a fair crack at an education. There is no benefit in consigning them to the ever-increasing number of young people on the dole queue.
See also:
• Five reasons Clegg can’t stand on his social mobility record – Alex Hern, January 12th 2012
• The devastating crisis hitting Britain’s young people – Rory Weal, November 9th 2011
• Fees, cuts… Is this what Cameron means by “giving young people back their future”? – Shamik Das, September 14th 2011
• It’s now official: The government lied when scrapping EMA – James Mills, June 9th 2011
• EMA replacement could breach equality law according to government – James Mills, May 5th 2011
• EMA replacement doesn’t make the grade – James Mills, March 31st 2011
• Gove’s justification for axing EMA doesn’t add up – Jonathan Clifton, March 30th 2011
Network Rail must be mutualised to ensure good governance for the future
By Joe Fortune, parliamentary officer of the Co-operative Party and SERA executive member
Pleasing though it may be, the pressure mounted by politicians and the public over Network Rail’s overly generous bonus allocation is not a long term fix. If the governance of this organisation is left alone the next bonus allocation will be banked and many taxpayer pounds will find their way into high flying managers’ bank accounts.
The reason senior rail managers continue to get away with such sky-high remuneration is that Network Rail is not properly accountable to the travelling public.
We will not be able to lessen the amount of spending Network Rail gets through for the foreseeable future. Oddly, the McNulty Review into the cost of the rail industry focused in on increasing costs, but suggested higher ticket prices and a cut to terms and conditions was the answer rather than looking further and needed changes to the infrastructure manager.
The Labour government did well to construct Network Rail from the ashes of Railtrack. However, over time the company itself has shown that its corporate governance structure has not been good enough and is in need of reform.
It is not accountable enough to the public, which will continue to fund the organisation and has funded it through the last few years even while it carried the tag, given to it by its regulator, as being 30 per cent inefficient.
Not only has the current management structure presided over this inefficiency, but it has happened alongside high profile and harrowing preventable deaths and serious misconduct issues within senior staff.
By Joe Fortune, parliamentary officer of the Co-operative Party and SERA executive member
Pleasing though it may be, the pressure mounted by politicians and the public over Network Rail’s overly generous bonus allocation is not a long term fix. If the governance of this organisation is left alone the next bonus allocation will be banked and many taxpayer pounds will find their way into high flying managers’ bank accounts.
The reason senior rail managers continue to get away with such sky-high remuneration is that Network Rail is not properly accountable to the travelling public.
We will not be able to lessen the amount of spending Network Rail gets through for the foreseeable future. Oddly, the McNulty Review into the cost of the rail industry focused in on increasing costs, but suggested higher ticket prices and a cut to terms and conditions was the answer rather than looking further and needed changes to the infrastructure manager.
The Labour government did well to construct Network Rail from the ashes of Railtrack. However, over time the company itself has shown that its corporate governance structure has not been good enough and is in need of reform.
It is not accountable enough to the public, which will continue to fund the organisation and has funded it through the last few years even while it carried the tag, given to it by its regulator, as being 30 per cent inefficient.
Not only has the current management structure presided over this inefficiency, but it has happened alongside high profile and harrowing preventable deaths and serious misconduct issues within senior staff.
Many politicians, whether it be parish councillors or Secretaries of State, utter sentences along the lines of ‘I just can’t get Network Rail to listen’ or ‘I have tried Network Rail but haven’t had much of a response’, and this needs to change.
The transport select committee, the coalition government, the opposition, trades unions, PwC, the Department for Transport and Network Rail all understand this need for change. It is the paucity of the radical, ultimately democratic and transformative proposals that hold us back.
Indeed both the chair of the transport select committee and the Labour Party’s shadow transport minister with responsibility for infrastructure called upon the government to look again at the Co-operative Party’s people’s rail proposal in Westminster last Thursday.
One aspect of the campaign calls for all citizens to be given the right to become individual members of a mutual Network Rail. This would allow rail passengers to have a say in how our rail system is run and hold the Network Rail leadership to account.
The mutual model we have advocated is one which recognises that we, the public, own the asset (in this case the rail infrastructure). Members of the public therefore put themselves forward for election; the elected members (who are currently selected by Network Rail management) then in turn elect the non-executive directors, who then elect the directors.
This allows true accountability to flow right through the organisation.
Good governance means that organisations are being managed effectively, goals are being met and decisions are being taken in the interests of those who matter – in this case, passengers.
While organisations with good management and poor governance may succeed in the short term, in the long run they remain vulnerable to poor performance, decision making in hock to managerial interests and possible collapse.
Network Rail is too important to be unaccountable and badly managed. We need a new mutual approach that puts passengers before bonuses. We need a People’s Rail.
See also:
• All signals are go for HS2 – Alex Hern, January 10th 2012
• Rip-off Britain: Our train fares are triple those on the continent – Sophie Allain, January 3rd 2012
• Serious concerns over transport commissioning – how will Greening respond? – Matt Dykes, December 16th 2011
• Scotland needs to get its transport infrastructure in order – Ken Macintosh MSP, October 27th 2011
• Train journeys from Hell: What is to be done? – Alexandra Woodsworth, March 23rd 2011
Miliband goes on attack as fight to save the NHS stepped up
Ed Miliband will step up the war of words over the coalition’s health reforms today, warning 6,000 nursing jobs are at risk unless the health bill is defeated.
The number of full-time qualified nurses fell 3,516 from 281,431 at the election to 277,915 in October, according to data from the NHS Information Centre, while the Royal College of Nursing has identified 5,000 nursing posts at risk, comprising both qualified nurses and healthcare assistants.
In a visit to the Princess Royal University Hospital in Orpington, Kent, this morning, he will say:
“In tough times and with little money around, the very first priority should be to protect the frontline NHS.
“Instead, we have a government blowing a vast amount of money on a damaging back-office reorganisation at the same time as it is cutting thousands of nurses, with more than 3,000 already gone. Labour’s priority is protecting the frontline, not a pointless and damaging reorganisation of the NHS.
“We’re calling for the bill to be scrapped, and for some of the money set aside to fund this reorganisation to instead be made available to the NHS to protect the thousands of nursing posts either already cut or set to be cut in the coming years.
“It is a clear and simple choice for the government: by stopping this damaging reorganisation we can fund 6,000 nurses.”
Miliband’s speech today follows his warning in yesterday’s Observer that there are “just three months to save the NHS”, describing the health and social care bill as a “misguided bid to impose a free-for-all market on our health service” that “must be stopped”.
Ed Miliband will step up the war of words over the coalition’s health reforms today, warning 6,000 nursing jobs are at risk unless the health bill is defeated.
The number of full-time qualified nurses fell 3,516 from 281,431 at the election to 277,915 in October, according to data from the NHS Information Centre, while the Royal College of Nursing has identified 5,000 nursing posts at risk, comprising both qualified nurses and healthcare assistants.
In a visit to the Princess Royal University Hospital in Orpington, Kent, this morning, he will say:
“In tough times and with little money around, the very first priority should be to protect the frontline NHS.
“Instead, we have a government blowing a vast amount of money on a damaging back-office reorganisation at the same time as it is cutting thousands of nurses, with more than 3,000 already gone. Labour’s priority is protecting the frontline, not a pointless and damaging reorganisation of the NHS.
“We’re calling for the bill to be scrapped, and for some of the money set aside to fund this reorganisation to instead be made available to the NHS to protect the thousands of nursing posts either already cut or set to be cut in the coming years.
“It is a clear and simple choice for the government: by stopping this damaging reorganisation we can fund 6,000 nurses.”
Miliband’s speech today follows his warning in yesterday’s Observer that there are “just three months to save the NHS”, describing the health and social care bill as a “misguided bid to impose a free-for-all market on our health service” that “must be stopped”.
Calling on “everyone who loves the NHS” to “fight to defeat this health bill”, he wrote:
“The NHS is getting worse on this government’s watch. More people have had to wait longer than 18 weeks for treatment. More people are experiencing long waits in A&E and there are more cancelled operations.
“That is the backdrop to the return of the government’s botched health bill to parliament next week. But it will do nothing to address these problems…
“We have already heard the arguments that will be played back against us by the government. None of them holds water. First, the government will say opposition to the bill from health professionals is just from trade-union “vested interests” - as David Cameron implied at prime minister’s questions recently. I disagree. That opposition includes hundreds of thousands of doctors, nurses, midwives and others.
“They are people who have devoted their lives to working in the NHS. They can see how the bill will undermine the guiding principles of our health service, and how this mangled reorganisation is already causing chaos that damages patient care. That is why the people who know the NHS best like this bill least…
“People at the heart of the NHS, staff and patients, would breathe a sigh of relief if the bill was dropped. Doctors and nurses could get back to their real job – of patient care.
“At the last election, David Cameron cited his commitment to the NHS to show he was a different type of Conservative. And he promised no more top-down reorganisations.
“But all he has done is betray his promises and let people down. It is not too late to stop this bill. We have three months to prevent great harm being done to the NHS. Now is the time for people of all parties and of none, the professions, the patients and now peers in the House of Lords to work together to try to stop this bill.”
As today’s Guardian’s editorial says:
No one, but no one, thinks that the health and social care bill returning to parliament this week is any good [see chart 1].
Chart 1:

Concluding:
Nurses and doctors have lined up to denounce it – even GPs, whom the legislation claims to put in charge. Professional resistance can be dismissed as “producer interest”, but not so the joint editorial published by three specialist periodicals, including the Health Service Journal.
The journal is generally supportive of exposing medicine to competition, yet it damns the particular market-based reforms on offer as “unnecessary, poorly conceived, badly communicated” and “a dangerous distraction”. Meanwhile, a committee dominated by coalition MPs has just concluded that the current upheaval “complicates” necessary cost-cutting, and displaces “truly effective” reforms…
It is hard to think of a starker failure in domestic government since the poll tax.
See also:
• GP in Cameron’s constituency: “Nobody supports the NHS changes” – Shamik Das, February 1st 2012
• Sign my petition to drop Lansley’s monster – Dr Kailash Chand OBE, November 24th 2011
• Cameron’s fantasy list of NHS reform backers – Shamik Das, September 7th 2011
• Doctors still fear coalition health reforms – Daniel Elton, June 27th 2011
• So who backs Lansley’s health reforms then? – Dominic Browne, June 1st 2011
• Doctors tell Lansley: “Stop this bill” – Dominic Browne, March 15th 2011
• So, Mr Cameron, who backs your NHS reforms? Erm… – Shamik Das, February 2nd 2011
GP in Cameron’s constituency: “Nobody supports the NHS changes”
A week ago, David Cameron tried to embarrass Ed Miliband by claiming a doctor in his Doncaster constituency supported the health reforms – a doctor, that is, who has quit his commissioning group and doesn’t even live in Doncaster – yet today, a real doctor in his own Witney constituency has said “things are going to fail, hospitals will close” as a result of the health and social care bill.
The senior GP has told the New Statesman:
“I would say very few GPs are happy with [the NHS reform] at all… [It's] not a question of supporting it, it’s a question of going along with it… In my practice, nobody supports the changes…
“People think there should be more clinical involvement in commissioning. But I don’t think many people think that GPs are the right people to commission. They need input into it – but if we wanted to be managers we would have trained to be managers, not doctors.”
Adding:
“Most GPs are incredibly worried about conflict of interest. How can you be a patient’s advocate and look after the money?
“A lot of people think the whole thing’s designed to fail so they can bring private providers in. It’s the one big bit of the economy that hasn’t got private money in it.”
And of the effects to patients from the health service overhaul, the Witney GP warns:
“The public have just got no idea what’s hitting them… Things are going to fail, hospitals will close, because the money’s not going to be there. Things will get taken over. And if you’re going to have to make a profit out of it, you’re not going to have the same service.”
This lunchtime, the prime minister was again quizzed over the NHS reforms at PMQs, with Miliband again telling him to drop the bill.
As Left Foot Forward has reported many times before, as the links below show, next to nobody in the NHS supports the changes; now that even a senior GP in his own constituency has articulated that opposition, will David Cameron finally listen?
See also:
• Sign my petition to drop Lansley’s monster – Dr Kailash Chand OBE, November 24th 2011
• Lansley told to his face why his NHS reforms are wrong, wrong, wrong – Shamik Das, October 14th 2011
• Cameron’s fantasy list of NHS reform backers – Shamik Das, September 7th 2011
• Doctors still fear coalition health reforms – Daniel Elton, June 27th 2011
• So who backs Lansley’s health reforms then? – Dominic Browne, June 1st 2011
• Doctors tell Lansley: “Stop this bill” – Dominic Browne, March 15th 2011
• So, Mr Cameron, who backs your NHS reforms? Erm… – Shamik Das, February 2nd 2011
A week ago, David Cameron tried to embarrass Ed Miliband by claiming a doctor in his Doncaster constituency supported the health reforms – a doctor, that is, who has quit his commissioning group and doesn’t even live in Doncaster – yet today, a real doctor in his own Witney constituency has said “things are going to fail, hospitals will close” as a result of the health and social care bill.
The senior GP has told the New Statesman:
“I would say very few GPs are happy with [the NHS reform] at all… [It's] not a question of supporting it, it’s a question of going along with it… In my practice, nobody supports the changes…
“People think there should be more clinical involvement in commissioning. But I don’t think many people think that GPs are the right people to commission. They need input into it – but if we wanted to be managers we would have trained to be managers, not doctors.”
Adding:
“Most GPs are incredibly worried about conflict of interest. How can you be a patient’s advocate and look after the money?
“A lot of people think the whole thing’s designed to fail so they can bring private providers in. It’s the one big bit of the economy that hasn’t got private money in it.”
And of the effects to patients from the health service overhaul, the Witney GP warns:
“The public have just got no idea what’s hitting them… Things are going to fail, hospitals will close, because the money’s not going to be there. Things will get taken over. And if you’re going to have to make a profit out of it, you’re not going to have the same service.”
This lunchtime, the prime minister was again quizzed over the NHS reforms at PMQs, with Miliband again telling him to drop the bill.
As Left Foot Forward has reported many times before, as the links below show, next to nobody in the NHS supports the changes; now that even a senior GP in his own constituency has articulated that opposition, will David Cameron finally listen?
See also:
• Sign my petition to drop Lansley’s monster – Dr Kailash Chand OBE, November 24th 2011
• Lansley told to his face why his NHS reforms are wrong, wrong, wrong – Shamik Das, October 14th 2011
• Cameron’s fantasy list of NHS reform backers – Shamik Das, September 7th 2011
• Doctors still fear coalition health reforms – Daniel Elton, June 27th 2011
• So who backs Lansley’s health reforms then? – Dominic Browne, June 1st 2011
• Doctors tell Lansley: “Stop this bill” – Dominic Browne, March 15th 2011
• So, Mr Cameron, who backs your NHS reforms? Erm… – Shamik Das, February 2nd 2011
As National Libraries Day nears, our libraries remain under threat
It may be overshadowed by the attacks on the NHS, the disabled, and the poor, but the coalition’s attacks on Britain’s library system continue apace.
Speaking ahead of National Libraries Day this Saturday, shadow culture minister Dan Jarvis said:
“This Tory-led government have reneged, countless times, on their full responsibilities and have left it up to the courts to decide cases that Jeremy Hunt had the power to intervene in.
“Cuts to local library services are extremely short-sighted. The Literacy Trust recently published statistics that suggest illiteracy costs the UK economy up to £81 billion a year.
“There are also over four million children that don’t even own a book and six million adults that cannot read job application forms. Therefore it is irresponsible and economically naive, for any government to allow 600 libraries to potentially close.
Left Foot Forward reported almost a year ago on the government’s attempt to force protestors to take court action over library cuts:
Campaign groups are looking to take legal action against the culture secretary, Jeremy Hunt, and his minister Ed Vaizey, for breaking their duty to “superintend and promote the improvement of, the public library service provided by local authorities”. On Tuesday, Ed Vaizey said that “the death of libraries had been greatly exaggerated”.
And Liberal Democrat minister Sarah Teather recently shocked a meeting of concerned constituents when she ‘suggested’ direct action as a last resort to library closures.
The fight to keep libraries open is often overshadowed by other, admittedly crucial, causes, and so the shadow minister is launching the third campaign this issue has seen in a year, following the We Love Libraries and Love Your Libraries campaigns.
Jarvis added:
“I am deeply concerned about this which is why I launched a report into a ”Vision for a 21st-Century Library”. I am actively working with local authorities, with dedicated library campaign groups such as CILIP, and with Labour colleagues in Parliament, to ensure that we are doing all that we can, right across the country .
“I recognise that libraries must modernise and I have been impressed with the range of services being offered by different libraries that I have visited in the early stage of my national library tour. It is imperative that we keep the pressure on the government to act faster and smarter to save these vital pillars of our communities.”
See also:
• Exposed: The six myths of IDS’s benefits cap - Shamik Das, January 23rd 2012
• The five reasons why the NHS bill is still being opposed - Alex Hern, January 19th 2012
• Employment minister Chris Grayling does not appear to understand his own disability reforms - Daniel Elton, January 13th 2012
• Ladies of the WI join the ranks of the bolshy book borrowers - Kevin Meagher, July 1st 2011
• Campaign to save libraries steps up a gear - Claire French, February 1st 2011
It may be overshadowed by the attacks on the NHS, the disabled, and the poor, but the coalition’s attacks on Britain’s library system continue apace.
Speaking ahead of National Libraries Day this Saturday, shadow culture minister Dan Jarvis said:
“This Tory-led government have reneged, countless times, on their full responsibilities and have left it up to the courts to decide cases that Jeremy Hunt had the power to intervene in.
“Cuts to local library services are extremely short-sighted. The Literacy Trust recently published statistics that suggest illiteracy costs the UK economy up to £81 billion a year.
“There are also over four million children that don’t even own a book and six million adults that cannot read job application forms. Therefore it is irresponsible and economically naive, for any government to allow 600 libraries to potentially close.
Left Foot Forward reported almost a year ago on the government’s attempt to force protestors to take court action over library cuts:
Campaign groups are looking to take legal action against the culture secretary, Jeremy Hunt, and his minister Ed Vaizey, for breaking their duty to “superintend and promote the improvement of, the public library service provided by local authorities”. On Tuesday, Ed Vaizey said that “the death of libraries had been greatly exaggerated”.
And Liberal Democrat minister Sarah Teather recently shocked a meeting of concerned constituents when she ‘suggested’ direct action as a last resort to library closures.
The fight to keep libraries open is often overshadowed by other, admittedly crucial, causes, and so the shadow minister is launching the third campaign this issue has seen in a year, following the We Love Libraries and Love Your Libraries campaigns.
Jarvis added:
“I am deeply concerned about this which is why I launched a report into a ”Vision for a 21st-Century Library”. I am actively working with local authorities, with dedicated library campaign groups such as CILIP, and with Labour colleagues in Parliament, to ensure that we are doing all that we can, right across the country .
“I recognise that libraries must modernise and I have been impressed with the range of services being offered by different libraries that I have visited in the early stage of my national library tour. It is imperative that we keep the pressure on the government to act faster and smarter to save these vital pillars of our communities.”
See also:
• Exposed: The six myths of IDS’s benefits cap - Shamik Das, January 23rd 2012
• The five reasons why the NHS bill is still being opposed - Alex Hern, January 19th 2012
• Employment minister Chris Grayling does not appear to understand his own disability reforms - Daniel Elton, January 13th 2012
• Ladies of the WI join the ranks of the bolshy book borrowers - Kevin Meagher, July 1st 2011
• Campaign to save libraries steps up a gear - Claire French, February 1st 2011
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