Melton Consults as Economy Gets Weaker

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Aug 012012

Melton Needs an Economic Boost Now

Melton Council has today launched a consultation on economic strategy for the borough. According to the Melton Times “A DRAFT blueprint aiming to boost economic development and prosperity” is going out to the public for consultation. The consultation comes at the same time that the UK economy is struggling to get out of recession. Figures reported today tell a grim picture in which factory output has dropped significantly. The Telegraph reported “Manufacturing PMI fell from 48.4 in June to 45.4, where anything below 50 indicates contraction. The result was far weaker than analysts’ expectations of 48.6.”

As reported in the Melton Times “The strategy, which will eventually be adopted by Melton Council, highlights numerous key goals including building on Melton’s standing as the ‘rural capital of food’, increasing the number of knowledge-based/hi-tech businesses in the borough, improving links between businesses and education providers to ensure young people have the qualifications and skills the future economy needs, and supporting the Melton BID Company in its efforts to revitalise the town’s economy.”

Rutland & Melton Labour’s online organiser, Rob Watson, said in response to the consultation “It’s really important that Melton Borough Council adopts a sense of urgency and starts to use all the powers of the Borough Council to stimulate economic growth now. The focus on austerity and cuts is failing, with businesses really struggling. Melton has a lot to be proud of and there is much more that the Borough Council can do now to ensure that business are given a boost and jobs are created.”

The report can be download from the Melton Borough Council website.

Melton Trials Untested Universal Benefits System

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Jul 222012

Part-Time Workers Looking for Full-Time Work

The Department of Work and Pensions has announced that Melton will be one of fifteen local authorities who will trial the Universal Credit. In the press release the Minister for Welfare Reform Lord Freud said “Local authority led pilots will provide a unique opportunity for councils to shape the development of Universal Credit.” And that “all the recommended local authorities offer very exciting ideas on how they might help people with their claims for Universal Credit and progress into work.”

The aim of the Universal Credit is to reduce the complexity and cost of administering a range of different social benefits between national and local government agencies. At present benefits are claimed from government for Job Seekers Allowance, but Housing Benefit from the local council.

However, critics argue that the introduction of a national IT system to administer all benefits will drive up costs and become much more complex. John Seddon started a petition in August 2011 calling for “Iain Duncan Smith to ‘rethink the centralised, IT- dominated service design for the delivery of Universal Credit. Evidence from a significant number of housing benefit offices demonstrates that local, face-to-face processing of benefits is cheaper and faster than distant automated telephone and online processing.”

The new system means that local councils will have to administer the benefits systems from their own budgets, based on local rules they set themselves. Tom Clark, writing in The Guardian, points out that “ministers came up with a cost-cutting wheeze to lump council tax rebates outside the new system, and ask every town hall to devise their own rules.”

The Telegraph reported as recently as 13th July 2012 that the “technology underpinning the Universal Credit – the Government’s answer to simplifying the benefits system – has been rushed through in an attempt unveil the new welfare plans by 2013.” According to the report “the All Party Group on Taxation found that the Universal Credit, a single payment intended to replace several different benefits, is reliant on a new HMRC up-to-date “real time” information to track earnings.”

Little is known about how this trial will be conducted in Melton, what will happen to people who are affected by the changes it brings, and what difference it will make to the overall budget of Melton Borough Council.

Rob Watson, Rutland & Melton Labour’s on-line campaign spokesman said “While it is agreed that changes to the benefits systems are easier to bring in when unemployment is falling, the trend in long-term unemployment is continuing to rise. Little is known about how the Universal Credit system will impact on families and households who have a mixture of benefits and low-paid work. The lack of social housing has driven-up the housing benefit bill, with money going direct to private landlords. It is unclear how this system will work and why Melton has been selected as a test-bed.”

Osborne Gets to Keep His Job As Millions Lose Theirs!

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Jul 212012

Lawson – Worst of the 1980s

It’s a bit rich that former chancellor Lord Lawson is telling the BBC that George Osborne should focus on the economy and jobs. But then again he knows a lot about mass unemployment, financial deregulation and the sell-off of state assets. Having caused the bust of the early 1990’s with his give-away budgets and interest rate policy that over-valued the pound – ultimately leading to the ERM fiasco. The Guardian reports Lord Lawson saying “I do think it might be sensible to give up the formal role and focus exclusively on his job as chancellor of the exchequer, which is a tremendously important job.” Now that is an understatement!

Osborne’s Borrowing More to Pay for Failure

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Jul 202012

The graph shows net debt and net borrowing over the past 35 years. It spikes suddenly after 2007

Today’s news from the Office for National Statistics that George Osborne is borrowing half a billion pounds more for June 2012 than in June 2011 shows that his plan of fiscal tightening, or austerity, isn’t working. As reported in the Daily Mail “the Chancellor came under fresh pressure today as figures revealed that Government borrowing surged in June to £14.4billion.” Acording to the Mail “economists had predicted that the deficit – the difference between tax receipts and spending – would be £13.9billion. But revised figures show that in June total Government spending stood at £52.4 billion with tax revenues of £40.9 billion. Spending had only dipped by one per cent and tax returns had increased by 3.6 per cent.”

The Telegraph reports comments from James Knightly, an economist at ING, who said: “It is clear that the recession is leading to a worsening of the UK’s underlying fiscal position and raises more question marks over the effectiveness of the government’s austerity measures.”

David Blanchflower, former member of the Monetary Policy Committee of the Bank of England has been a constant critic of Cameron and Osborne’s lack of economic understanding, said on Twitter today “The reality now is that Osborne politically can’t change the economics because he then has to admit Ed Balls called it right we all lose.” Speaking to Sky News, Labour’s shadow chief secretary to the Treasury, Rachel Reeves, described the figures as “another damaging blow” and accused the coalition of “choking off the recovery”. Reeve”s points out that unless the Chancellor takes urgent action to boost the economy now he will end up borrowing billions more to pay for economic failure and cause long-term damage too,” she said.

And the reason that the IMF thinks that the growth stall is significant? Jonathan Portes, writing in The Guardian points out that the “IMF estimates that for every 1% growth shortfall now, structural unemployment – the unemployment that won’t go away when the economy recovers – increases by about 40,000 people.” Portes points out that
“A non-technical summary of Thursday’s International Monetary Fund report on the UK economy would be that we are up the creek – “recovery has stalled” – and that we should use any available paddle to head as fast as possible in the opposite direction. “Demand support is needed. Additional monetary stimulus … credit easing measures … increased government spending on public investment.” Stop pretending we’re on track, and throw the kitchen sink at the economy.”

It’s clear that Osborne’s plan is failing day by day, and that it is communities up and down the country who are going to be paying the long-term price for a blinkered and discredited Chancellor who confuses ideology with pragmatic, practical reality.