Leicestershire County Council Lib Dems

Having seen the Prebudget report i thought i would post some helpful analysis of the situation. This is just an initial reaction - but basically it looks like Labour is going back to the 80’s with another suicide note - using limited unfunded solutions to long lasting problems. 

• Government borrowing and the fiscal rules – The entire basis of this Pre-Budget Report is that the Government can offer a fiscal stimulus funded by massive borrowing in this year and the next and that they will be able to start repaying this by 2010.  However, the Chancellor’s (and the Tories’) blithe assumption that, after a nasty recession next year, the economy will bounce back in 2010 is very worrying.  The Government’s assumptions on balancing the budget and returning to the fiscal rules are based on this flawed assumption.  Unlike previous recessions we have a profound banking crisis on top of a collapsing housing market, falling output and unemployment.  There is a serious risk of a prolonged slump in which the Government’s unfunded tax cuts, plus drastically reduced existing tax revenues, could leave us with a massive fiscal black hole further down the line. 
• National Insurance – The Government has announced that it will increase National Insurance for both employers and employees by 0.5% from 2011. This will raise an additional £5bn and mean that somebody earning £25,000 will be £30 worse off a year. Despite the Chancellor’s rhetoric that additional taxes should be raised from “those who have done best out of the growth of the last decade”. The majority of tax which will be raised will come from National Insurance which will affect the vast majority of people and all employers. 
• New top rate of tax -   The new top rate of tax of 45p on incomes over £150,000 is nothing more than a fig leaf to cover the regressive rise in NICs. It raises a mere £670m compared to the £5bn raised in National Insurance. If the Government actually wanted to make the tax system fairer they would have cut income taxes for those on low and middle incomes paid for by closing the tax loopholes which benefit the wealthy. The Liberal Democrats would, for example, tax capital gains as income and restrict tax relief on pensions to the basic rate. 
• VAT rate cut – Cutting VAT by 2.5% will cost the exchequer £12.4bn.  As VAT is not payable on essentials such as food and children’s clothes this measure is unlikely to benefit those struggling to keep their heads above water.  Instead this tax cut will help big spenders.  With a 2.5% cut in VAT amounting to £5 off a £200 TV or 60p off a £25 restaurant bill it is highly unlikely that this cut will offer the economy the stimulus it needs.  To make matters worse the Government admits that the re-pricing cost of the VAT reduction which will fall on already struggling businesses will be £50m.  The Government should be using borrowing to invest in capital projects such as building social housing, increasing building energy efficiency and improving public transport which will not only benefit our economy today but in the future as well. 
• Pensions - The Chancellor’s pledge to increase the Pension Credit to £130 is not a new measure as it was first announced in March 2007.  Equally the Government’s announcement that it would increase the Basic State Pension by inflation merely honours the commitment it made in 2004. 
• Small businesses - Instead of simply deferring increases in the small firms’ rate of Corporation Tax, the Chancellor should decrease Corporation Tax for the thousands of struggling small businesses. To make matters worse, from 2011 with the Government’s NICs increase businesses of all sizes will face a massive hike in their wage bills, at a time when they are struggling to meet their current pay-rolls.  
•  Housing – The Government’s measures to reduce repossessions are welcome as they where our ideas in the first place; however it has still failed to ensure that homes are only ever taken as a last resort. The three month deferral will do nothing to reduce repossessions of those who borrowed from smaller lenders, while the code of practice for lenders that came into force last week leaves the courts powerless to enforce it.  The Government must also ensure that any additional investment in social housing is available to local authorities as well as housing associations. With private building at a standstill, new social housing will stall unless the gap left by private funding is filled. Unless local authorities are freed from the constraints on housing finance, the Government will fail to rebuild the social housing safety net. 

Questions? Comments? Get in touch!

Reacting to announcements about the Prebudget Report, Simon Galton, Leader of the Lib Dem Group at County Hall has highlighted the situation local people in Leicestershire have endured this year with rocketting fuel, transport and food prices and many were still out of pocket following the government’s decision to double the starting rate of income tax. 

“Today, the Chancellor presents his Prebudget Report to Parliament,” said Simon Galton. “Liberal Democrats in the House of Commons will be pressing for permanent tax cuts for people on low and middle incomes. We will be looking for radical changes in the tax system which lock in lower rates of income tax for good. 

To make these tax cuts lasting, they have to be funded. That means shifting the tax burden onto pollution and ending the tax perks and loopholes enjoyed by the highest earners. We are worried that the Government will simply introduce temporary tax cuts, paid for by borrowing, that will disappear once we start to come out of recession. Now is the time for a genuine and radical change to the tax system. Liberal Democrats will be pressing for that and, having spoken to many residents, I know it is what people here want. 

I believe, however, that an area where borrowing should be allowed is investment in new buildings and facilities that are needed locally. I am very keen to see people’s homes properly insulated and more affordable homes built for people who need them. And the government should ensure that some of this money is given to local councils to help local people directly now.”

I have just learnt that the train fairs are going to go up by a massive increase (see below) your local Liberal Democrats will campaign hard on this issue as we believe that a better rail way system is needed but shouldn’t be limited to the rich. We believe that the government should ensure that people are able to get to work, thus allowing recovery from the recession. These increases hurt people who leave the car at home, they should be punished for doing the right thing for the environment and lower our countries dependance on Oil.

The Association of Train Operating Companies announced on 21^st November that regulated fares would increase by 6% from January 2009. The Liberal Democrats have demanded the increases be abandoned and rail fares frozen.

The increase in regulated fares, season tickets and saver tickets, takes place under a government regulation allowing rises up to inflation+1% (one per cent above the retail price index) and up to Inflation+3% on Southeastern and some Northern Rail trains. Unregulated fares will rise by a greater amount.  Individual train company fare increases are: 

COMPANY                            REGULATED                        UNREGULATED 

Cross Country                             6%                                                11% 

East Midlands Trains                6%                                                  7.%

Virgin Trains                               6%                                                  7%  

Just thought i would post a few facts about the Lib Dems work trying to salvage our economy after successive Conservative and Labour governments.  Let me know what you think.

Simon

The Liberal Democrats have consistently been ahead of the game on economic issues. Here is a list of ten things we called for first, and which have now either been implemented or taken on board by at least one of the other two main parties. 

Northern Rock nationalisation - it was clear to us that this was unavoidable in November last year. It took the Government until February to act. 

Independence of the Bank of England - longstanding Lib Dem policy. First Labour implemented it, over Tory opposition. Now even the Tories support it. 

Recapitalisation of the banks - Vince Cable was the first politician to call for this. Three days later the Chancellor announced that this would be going ahead. 

Tackling the bonus culture - in May we were the first party to put forward proposals for tackling the harmful bonus culture in the financial sector. By the autumn, ministers and the Tory leadership had realised the situation was indefensible and changed their tune.. 

Regulation of ’sale and rent back’ agreements - this was part of our ‘7 point plan’ for dealing with personal debt, launched in September 2003. The Government announced on 22nd October this year that they were finally looking into this. 

New court guidance to make repossession a ‘last resort’, obliging lenders to exhaust all alternatives first - another measure in the Government’s 22^ndOctober announcement that the Lib Dems had been calling for for more than six months. 

Changes to capital adequacy laws to require banks to hold more capital in periods of boom and less in recession - we called for this back in January 2003. Now the Conservatives back it too. 

Ban on short selling of financial stocks - Vince Cable urged this on September 16th (having also raised the issue in July). The Government did not act until three days later, once the Americans had announced restrictions. 

National network of financial advice centres - since 2003 we have been calling for a network of local and generic financial advice, particularly for those on lower incomes, funded by a levy on the financial services industry. Earlier this year the Tories announced their support for this too, using almost exactly the same language. 

Curbs on irresponsible lending - a commonplace sentiment now, but we called for “the publication by the Government of strict measures for responsible lending, which lenders must be required to observe” back in September 2003. 

Due to the amount of things going on with the Eco-town i have just updated the page.

The latest information and chagnes are online.

The Liberal Democrat Group at county hall has come out in support of the County Council’s plans to challenge the Local Development Framework currently going through consultation by Charnwood Borough Council.

The Liberal Democrat group has been conducting its own research into housing with the recent turmoil in the housing markets and has enlisted the support of Loughborough Councillor

The regional assembly (a unelected body that i am a member off - as it has so much influence over key areas) has been told to conduct a review of the Regional Spatial Strategy (RSS). I am lead to believe that the government wants to increase the housing target number again.  

As a group we oppose the idea that the government can simply increase the targets before the ink is even dry on the previously agreed targets. We already have major concerns about the current target of 97,000 homes for Leicester and Leicestershire which will present the districts with huge challenges. Any further increase to these figures seems blind to the realities around us. I will be responding to the Regional Assemblies consultation on this review and as always i am willing to accept comments from readers on the matter.

Housing is a complex business, and targets simply don’t do anything without the means to see it through. The current turmoil in the economy has already caused a decline in land values and construction companies are simply not building. It seems crazy to me to have a target that risks allocating huge tracks of greenfield land for development when the future is so uncertain. What the government should be seeking is local solutions to the housing crisis – trying to find ways we can build more social houses and bring the huge numbers of empty homes in the City back into use. Targets and numbers don’t put roofs over people’s heads – we need action not further reviews.

Simon

Councillor Roger Wilson (Birstall) has just issued the following press release expressing his concner about the impacts of the credit crisis on the County Council’s capital investment programme. I think he raises a good point or two:

He Said: “I am concerned that the County Council’s capital programme is in a precarious state. People may not realize it but the capital program is essential as it provides the dedicated money to support construction. There is already concern being expressed that the Birstall Park & Ride is in trouble – I would guess because the developer has been unable to accumulate the necessary finance to meet planning requirements. The park & ride is something that I have supported, as I feel it will help limit the traffic through Birstall and this could alleviate congestion and improve the air quality. I hope that this situation can be resolved.   

But more widely if an established project like this is in danger, I am troubled about the possibility of other capital projects being delayed or stopped altogether. Although I accept that the delay could be due to the developers themselves I feel we need to clarify the impact of the current credit crisis on the capital program and I will be writing to the Director of Finance at County Hall for clarification.

Of further concern is that the county council will be unable to assist current projects being undertaken that could be suitable for investment as they benefit the local community. I fear that the Palmer Tomkinson Centre, in Birstall could miss out on valuable support from the county council if they have to focus priorities on a shortfall or lack of resources in other areas.”

I have just found out that the Leicester City Council Labour group has created a resolution to support the Ecotown for Pennbury.  

I just can’t quite bring myself to believe that they could undermine the collective actions of local councils like this. A process was agreed to develop a strategic assessment that is due to report on the 12^th December, the city council supported this and even contributed £20,000 of tax payers money. I just don’t understand how the city cabinet could undermine an independent process like this – especially when Pennbury has little to do with the City authority.  In a way I feel the Labour administration have let down those communities that will directly affected by Pennbury, but I think they have failed to appreciate just how much the communities in the city will be changed by this. Labour has put partisan political ideals ahead of the best interests of people. They have been bought off by the Coop’s flashy presentations and thinly developed ideas of a ‘tram’ and regeneration support. And I think they have raised questions about their independence firstly from the Labour government but also from the Co-operative party.

May i take this opportunity to wish a very happy Diwali to Leicestershire’s Hindu, Sikh and Jain communities on this very special day.

Hope you all have a fantastic day! Enjoy the fireworks!

Yours,

The Liberal Democrat County Councillors