With a highly predictable result many would expect the political analysis of GE2017 to have already run dry, so the political commentators would have been relieved to have so much material from the local elections to chew over.
The story was of course of a comprehensive Conservative victory. They took control of 11 more councils across the country, gained 563 councillors, won four of the six mayoral contests and all but wiped out UKIP. The Liberal Democrats fightback proved to be limited and, as expected by many, Labour felt the ricochet of the national opinion polls losing 382 councillors.
The big question is what do they tell us about what to expect on 8th June?
First comes the caveat that the turnout was much lower than it should be for the General Election. Turnout for the council elections was about average across the board at around 30%. The mayoral elections don’t seem to have inspired people to come out in huge numbers with the turnout varying from 21% in Tees Valley to 33% in Cambridgeshire and Peterborough. There were reports from canvassers of a lack of awareness but also of some not seeing the point of the whole institution. There were even some who, when pressed to go and vote on polling day, thought that the election was on 8th June.
This could presage a low turnout at the general election if people consider the outcome is a forgone conclusion combined with disillusioned Labour voters possibly choosing to stay at home.
Overall the total vote share diminished Theresa May’s poll lead of around 19 points to 11, although still enough for a very comfortable majority.
Delve a little deeper and there are some interesting results across the key battlegrounds of the North which indicate a mixed picture for the General Election.
In terms of individual results, the Conservatives took control of Derbyshire County Council with 37 seats to Labours 24. At first glance this may not seem significant as the Conservatives held control up until 2013 and in the 11 constituencies that make up Derbyshire, 7 are Conservative. In one of the remaining Labour seats, NE Derbyshire which the Party has represented at Westminster since 1935, though, more people voted Tory (44%) than Labour (40%). Given the majority in 2015 had fallen to 1,883, it looks like Derby South, Chesterfield and Dennis Skinner’s seat may be the only red ones left in the county.
Across the border in Nottinghamshire, Tories won control of the county council with a vote share of 38.1% compared with Labour’s 34.5%.
In the County’s most marginal Labour seat of Gedling, Labour won a very slim majority of the vote share with 43.9% compared to 42.4% for the Conservatives, which represented a large 13.7 points increase for them. With a majority of 2,986, the former MP, Vernon Coaker, will be hoping that this momentum can be halted.
There was little joy for the Tories in the mayoral results in Greater Manchester and Liverpool City Region. On a day when the Tories seemed to be challenging Labour’s hegemony in the North, Manchester held firm as a Labour redoubt with no sign of a Tory revival with them winning only 6 out of the 215 wards. Even in Bury North, won by the Tories in 2015 by 378 votes, Labour secured a 23 points lead and in Bolton North East, also won by the Conservatives in 2015 with a 4,377 majority, there was a 29 points lead for Andy Burnham.
The low turnout and the fact that people were voting for a high profile individual will have skewed the results to the extent that to take them as an indicator of Labour’s potential success on June 8th would be misleading and overly optimistic.
In Tees Valley, Ben Houchen’s win is a different story. A councillor rather than an MP and a Conservative, rather than Labour in a Combined Authority dominated by Labour politicians, Houchen’s win will without doubt raise concerns amongst Labour candidates across the region. This will especially be the case in Labour held Darlington where more people voted Conservative than Labour (42% to 33%) leaving Jenny Chapman on a 3,158 majority with a reason to feel nervous.
Just from these snapshots it is apparent that although there is definitely a tide which is sweeping UKIP away to the benefit of the Conservatives and encouraging former traditional Labour voters to switch to support Theresa May, it is not everywhere. There will likely be some dramatic results on 8th June but it is unlikely to be the wholesale conversion of all traditional Labour areas to the Tories. There are still enough people in the North for whom voting Tory is anathema.
Whatever the outcome, something can be guaranteed, the media coverage will be constant, the campaigners will be at our doors and David Dimbleby will have bought a new suit.
Amidst all the frenzy of the General Election campaign starting, it is easy to forget that in many parts of the country voters will go to the polls on 4th May.
Almost 5,000 council seats will be up for grabs across England, Wales and Scotland, along with 6 new directly elected metro mayors with enhanced powers.
It is more usual for local elections and a general election to be held on the same day. Having the local elections a month before polling day is likely to have two impacts. One will be that with so much focus on the national scene, people are less likely to vote on local issues and will vote the same way as they intend to in the General Election. The second will be to act as a very direct test of political opinion, more effective than the polls, and may affect the way people vote at the general.
For Labour, the predictions look grim with suggestions that across Britain they could lose up to 200 council seats including around 100 seats in the once electorally safe Wales. To add to the misery, John Curtice of Strathclyde University has suggested Labour might lose control of the four councils it currently holds in Scotland as well.
Council defeats on the scale predicted would sap morale still further from a party in a weaker position than it was even under Michael Foot. It could dispirit some Labour voters to the extent that they do not bother to turn out to vote on 8th June.
Although the results may confirm what the polls indicate, that Jeremy Corbyn is a liability who needs to go, for many in the party the tactic is to sit and wait so that Corbyn is firmly able to ‘own’ any potential defeat.
For the Conservatives, increases in the number of council seats on a significant scale would undoubtedly prove a boost to the General Election campaign for members and candidates across the country. But don’t expect huge celebrations from Theresa May, who will want to dampen any suggestion that her path back to Downing Street is signed, sealed and practically delivered already. She will want to avoid giving any impression of complacency.
For the Lib Dems, who have made steady progress in council by-elections since 2015, it is not necessarily how many council seats they win on 4th May but where they win them. Eyes therefore should be turned to counties such as Devon, Somerset and Cornwall to establish if the party can realistically expect to regain Parliamentary seats in what was once its heartland.
UKIP meanwhile now battles for relevance. The last time these seats were contested the party increased the number of council seats it held by 139. This time they are fielding fewer candidates (contesting just 48% of council seats this compared to the 73% of seats they stood in four years ago) and the fear for them will be that a bad result will only encourage supporters to desert the party at the general and switch, probably predominantly to the Conservatives, or revert, where applicable, to being non-voters.
Whatever happens, expect much more media commentary on the local elections than ever before and possibly a high turnout with the possibility that some people think this is the General Election.
With just weeks to go before the notification to trigger Article 50 is expected, the official line from the EU institutions is that plans and staff are in place and Brussels and the EU27 are prepared. The EU Commission has a set of negotiation scenarios primed and believes that the EU will enjoy a home-field advantage as talks commence in Brussels. Publicly, all three institutions, the Commission, Council and Parliament, as well as the 27 other member states are firm that they have a joint position on how Brexit should unfold and what could be offered to the UK.
Yet, how long this line will hold remains to be seen. The novelty and multitude of actors on the EU side leaves much uncertainty remaining about how exactly the Article 50 process will unfold, and national political leaders at times, perhaps understandably considering major forthcoming elections in the Netherlands, France Germany, appear more focused on pleasing domestic audiences than reaching a European agreement.
Michel Barnier, heading up the technical negotiations from the Commission, will face additional hurdles as he tries to lead the EU in the divorce proceedings compared with his opposite number, the Brexit Secretary David Davis. Mr Barnier’s mandate from the EU Heads of States, to be received during a special summit in April 2017, won’t prevent him having to regularly report back to ministers and political leaders for guidance and coordination whilst navigating the mine-field of 27 national interests.
From informal meetings and sources, we know that much of Mr Barnier’s initial focus will rest on agreeing the UK’s financial commitments and securing citizens’ rights. On the former, Mrs May’s spokesperson has confirmed that the final number will be up for discussion in formal talks, whilst on the latter issue, the British have similarly made clear their desire to secure reciprocal status. Failure to date on this front could hint at differences already beginning to show, not between Britain and the EU Commission, but among the Commission and some Member States.
What also appears clear from statements made already is that the priority in Brussels after the notification of Article 50 will be on securing key terms of the divorce before any talks on a future trade deal take place. Here, though, London’s approach to date seems to be to ignore this. Similarly, on timeframes, Mr Barnier perceives Mrs May’s 2 year deadline to be unrealistic, whilst Jean-Claude Juncker has said: “I do not think…we will succeed within 24 months to clear up the arrangements for Britain’s exit from the EU and to (forge) the whole relationship between Britain and the European continent”. Both the UK government and UK companies might do well to prepare for the talks to take longer before any future trade relationships are agreed.
The difficult relation
And then there is also the EU Parliament, which while nominally only having a final yes-or-no vote on the deal, will be closely involved in the process to ensure that a final agreement is passed with MEPs. The Parliament has designated the extreme pro-Europe, Belgium Liberal Guy Verhofstadt as its lead negotiator. He will be supported by a group of experienced MEPs to provide the views of their respective political groups, and political group chairs and Committees will have input to ensure that the Parliament’s view is reflected in the EU Commission’s negotiation approach. This leaves plenty of room for misunderstandings, political maneuvering and general dissent within the EU, and one does not have to look far to find it. Perhaps the words of the influential German MEP Manfred Weber most clearly demonstrate that the EU’s biggest challenge in this divorce may just come from within:
“Frankly speaking there is a mandate from the European Commission for Michel Barnier, but not a mandate from the European Parliament … When I have a look on the content and at the topics on the table, for me it is still a mission impossible ahead of us that we can manage this. This will create a lot of damage, especially for the Brits for sure”.
With the prime political focus on triggering Article 50 it might be easy to forget that there are other important events in 2017 that could shape British politics. Here are PAC’s early ‘ones to watch’:
- Copeland by-election, date not yet known.
After the announced resignation of Jamie Reed MP (Labour), Copeland is the focus of the first by-election to be fought in a Labour/Conservative marginal since Jeremy Corbyn became Leader.
In normal times, this contest would not arouse much interest. An easy win would be expected for the Opposition with it being a generally working-class constituency, six hours away from London that has been held by Labour for nearly a century. The NHS, a ‘Labour issue’, is also set to be a focal point due to the row in the constituency about plans to downgrade maternity services at the West Cumberland hospital. Not to mention, no government has gained a seat in a by-election since 1982.
These are not normal times and it is quite possible the Conservatives might win. Why? Well, beyond the facts that Mr Reed’s 2015 majority was small (2,564) and 62% of voters in the constituency voted to leave the EU, the Labour Party’s recent performances in by-elections in December 2016 laid bare the electoral weaknesses that polls have been reporting.
In Richmond Park its share of the vote fell from 12.3% in 2015 to 3.7%, and in Sleaford they slipped from second in 2015 to fourth. Jeremy Corbyn’s previously stated opposition to nuclear power, a key industry in Copeland, might also influence the result and the Tories are already milking this for all its worth.
Not to forget that UKIP’s new leader, Paul Nuttall, will be seeking an early demonstration of his plan to grab northern Labour heartlands which could further weaken Labour’s chances of retaining the seat. Certainly if they do lose it, there will once again be serious recriminations within the Labour Party.
- Local Government Elections in May.
These elections, which will predominantly taking place for county councils, will be considered for what they can further tell us about the ongoing state of the parties, especially given the ever present speculation about a ‘snap’ early election. They will be the first widespread test of Theresa May and Paul Nuttall’s leaderships, as well as Corbyn mark 2, and will provide insight into whether the current dire polling for Labour is reflected by voting intention. Claims about (1) a Lib Dem resurgence and, (2) the threat UKIP poses to Labour’s vote in the North, will also be put to the test. However, keep in mind the expected, traditional anti-Government swing in local elections.
- Mayoral Elections in May.
The first ‘metro mayors’ will be elected across 6 combined local authorities as part of devolution deals. In most of these contests, such as in Greater Manchester where Andy Burnham MP is the Labour candidate and the Party control most of the councils and Liverpool City Region where Steve Rotherham MP is standing, positive results for the Labour Party are expected. Probably the most interesting result will be in the West Midlands where the former Chief Executive of John Lewis will be hoping to win for the Tories in a more marginal contest.
Though, considering Sadiq Khan’s victory in the London mayoral election in 2016, equating Labour victories in these more cosmopolitan areas with support for the national party may be a mistake.
- Election of the UNITE Leader on 28th April.
Triggered by the resignation of the current leader Len McClusky, this election is being billed as having wider significance in the ongoing ideological battle for control of the Labour Party.
Mr McClusky is aiming to win a third term as General Secretary to keep him in post for the 2020 election. He is a close personal friend of Mr Corbyn and has offered ongoing and financial support. Gerard Coyne is the more moderate/centrist candidate. Those supporting him from within the Parliamentary Labour Party have been accused by Mr McClusky of desiring a return to a Blairite doctrine.
The contest is being considered a potential ‘game changer’ and a fight for the future of the Labour Party. Unite’s significant political and financial involvement, (their executives vote on Labour’s national executive committee and they are the Party’s biggest donor), means the result of the election could serve to either entrench Corbyn as Labour’s Leader for the 2020 election or increase his vulnerability to further attempted coups.
Date for the diary: 8th March, Philip Hammond’s first, and last, spring Budget.
1. Accept that Brexit is a reality
The Prime Minister has committed to it and charged three Brexit supporting MPs to deliver it. The European Commission, European Parliament and European Council have all said there is no going back. The people were given their say and the majority voted to leave. There are those that will try and throw a spanner in the works, but momentum is growing – even if departure is still a little way off. Anger is subsiding (a little) and a few rays of optimism and acceptance among many people about new trade deals are starting to appear.
2. Know your business and how it depends on the EU (or doesn’t)
The regulatory environment in which you operate might fundamentally change. It also may not. While you may be surrounded by uncertainty, you can at least be certain of your own business and where you are exposed to risk.
3. Have a strategy and be prepared
What is your overall strategic aim? Where do you want to be in 5 – 10 – 15 years’ time? Do you need the EU to deliver this or can you survive without? What are all the possible Brexit scenarios and how will they impact your strategy. With politics as it is right now, nothing should be discounted.
4. Do something about it
Negotiations have already started. UK, EU and Member State negotiators from all sides of the table are deciding what their priorities are, which key industries to protect or punish and what can be left to the bottom of the list to be horse-traded away. If your Company or sector relies on the EU regulations or markets as part of your business model, you will need to fight to make sure your industry is not left until last. There are opportunities as well as threats. Now is the time for first mover advantage.
This was written by our Brussels and Berlin based associates, IDA Group. Working with them we can identify your business needs and develop and deliver a strategy to ensure you are fully aware of all developments with Brexit and have input to the Government’s plans as well as to EU institutions and member governments.
“What is going on?” was the question from overseas governments of their diplomatic representatives observing the Conservative Party conference. The country that is seen to epitomise openness, tolerance and being outward looking suddenly seemed to be sending out messages through senior ministers that it was becoming inward looking, unwelcoming and intolerant.
Just as confusing were the messages coming out about the Conservative Party’s approach to business and the role of the state. The Party of small government and pro-business seemed to be having not so much a mid-life crisis but a complete change of positioning.
It is not surprising that foreign observers were left bemused.
There were two factors at play. One was a new leadership excerting its own brand of conservatism, something every party leader does when they first come to office. Although the type of conservatism practised often turns out to be different than that first espoused by a new leader. For example, David Cameron’s emphasis on the environment early in his tenure later became that “green crap”.
Second, is political gamesmanship. There is a huge opportunity for the Conservative Party to move in on the thousands of former Labour voters who feel completely alienated from the Party’s leadership. These political refugees come in two main groups, the liberal minded voter who sees the Tory party as reactionary, divisive and uncaring and those who have traditionally supported Labour as the party of the working man and woman, although on many issues they are well to the right of the party. Many of these have already been lost to UKIP but as that party also seems to be self-imploding and has lost its main raison d’etre, possibly this support is now also footloose.
The Conservatives might win over some of the first group with its promises of a fairer economy, social justice and more state intervention to bring this about. It will, however alienate them with strident language about immigration and pursuing a more closed Brexit.
It is the strident language about immigration on the other hand that will appeal to the second group of Labour voters, especially those that have already crossed the rubicon and made the break from Labour by voting UKIP. If on top of firm action to reduce immigration the Tories are seen to be genuinely helping those struggling to cope, maybe they could finally break away from the decades long perception that they just look after their own as the party of the rich.
Can the Tories ride two horses at once and appeal to both groups? Certainly the Conference was a good try.
The fallout from Brexit has caused shockwaves across the UK political parties with as many as four having leadership elections. Beneath this however, what has been the impact in terms of party support?
One of the most immediate impacts has been a surge in membership of the three oldest parties.
Labour’s increase has been the most dramatic. Even before the 48 hours window that was created to allow people to register to vote in the leadership election, the party had been enjoying an increase in membership as Momentum got to work to sign people up to protect Corbyn from a possible challenge and the new Save Labour organisation did likewise to get Corbyn out.
During the 48 hour registration period, 180,000 people registered as official supporters, more than the combined memberships of the Conservative and Liberal Democrat parties. This brings Labour Party membership to 540,000.
The Conservatives have also seen an increase of about 10% on their 150,000 members since the referendum. Most joined to get a vote in their leadership election; anecdotal evidence is that many were revengeful remainers who wanted to stop Boris Johnson becoming Leader. Unfortunately for them, they hadn’t researched Conservative Party rules which require six months’ membership before being eligible to vote to prevent such manipulation. What is striking is that most are not, as might be imagined, former Tories who having left to join UKIP were returning to the fold now that they have their objective, but people who have not been a member of any party.
For the Liberal Democrats the Brexit vote has been a lifeline. The membership of the party has increased by 10,000 (17%) probably encouraged by the stance taken by Tim Farron that the Party would remain pro-EU membership despite the verdict of the people. This surge in membership has been credited to young people. unhappy with the referendum result, joining a political party for the first time. More unusually, the Lib Dems have also claimed that a number of the new members are regretful leave voters who didn’t believe a Brexit vote would actually occur and were shocked by the immediate ramifications on business.
Although the opinion polls have fluctuated and been fairly meaningless since the referendum, now that there is a new Prime Minister and with Labour still in turmoil the latest poll giving the Conservatives 43% against 27% for Labour is not a surprise. The polling, if translated into seats at an election, would see Labour lose 46 seats and be its worst result since the SDP spilt vote in the 1983 election.
Since the election last year, for the smaller parties there has been no change with UKIP on 13% (12.6% at the election) and the Lib Dems on 8% (7.9%) whilst the Greens and SNP remain stable at 4% (taken across the UK).
An often neglected marker of party fortunes is the regular stream of council by-elections. Prior to the referendum most parties were holding steady including, surprisingly for a Government, the Conservatives. Since Brexit there has been more change with the main beneficiaries being the Lib Dems. They have totted up several victories taking seats from the Conservatives in Norfolk and Cornwall and also from Labour in London. It has recorded up to 33 percentage point increases in their share of the vote.
Graph by Britainelects
After the most energetic game of ‘ping –pong’ of all Bills in the parliamentary session that has just ended, the Housing and Planning Act is finally on statute book with a number of changes from the original Bill.
PAC’s housing clients have led the way in achieving some of these concessions.
Securing Replacement Council Homes
Many were concerned that the Government’s flagship policy to extend the Right to Buy to Housing Association tenants, paid for by the sell-off of high value council homes, would deprive local authorities of much needed homes.
From the outset, the National Federation of ALMOs representing around half a million council homes met with DCLG officials, lobbied MPs and Peers and supported amendments to ensure that the Government would deliver one new ‘affordable’ home for each sold to fund Right to Buy.
The Government conceded an amendment incorporating this change during the Bill’s passage in the Lords.
Access to Information for ALMOs
With the Government proposing that those in social housing on high incomes should pay the full market rent on their properties, the National Federation of ALMOs raised concerns that ALMOs would not be able to access the relevant information from HM Revenue and Customs to enable them to properly enforce the policy.
Via an amendment to the Bill, the Minister in the House of Lords, Baroness Williams, put on record the Government’s assurance that ALMOs could access the information needed from HMRC.
Identifying Criminal Landlords In The Private Rented Sector
The Residential Landlords Association (RLA) called in its manifesto for the 2015 General Election for action to enable tenants to identify their landlords on council tax registration forms. This is the RLA’s proposal as a more effective way for local authorities to identify landlords than through costly licensing or registration schemes.
The RLA worked with Dame Angela Watkinson MP on a Private Members Bill to incorporate this change which she proposed as an amendment to the Bill, along with Lord Flight in the House of Lords.
After gaining momentum and support, the Government agreed to establish a working group, chaired by Dame Angela, to look at the proposal.
Simplifying Tenancy Deposit Scheme Rules
Every tenant moving into rented housing, and those who may have paid the deposit such as parents, are duty bound to be provided with hard copies of information about the scheme where their deposit is saved. With many landlords in Houses of Multiple Occupation often having to print reams of paper, the RLA worked with Peers to suggest that the Act would allow landlords to provide this information electronically where the tenant agreed.
Responding to the proposal, Baroness Williams confirmed that officials will look at preparing regulations to enable this to happen.
Supporting First-Time Buyers Through Affordable Rent to Buy
With the difficulty of saving for a deposit whilst paying rent preventing many aspiring home owners from getting on the property ladder, Rentplus has been working hard to raise the profile of affordable rent to buy as an innovative solution.
Affordable rent to buy homes are built with private funding and let at a typical 20% discount to the market rent enabling tenants to save for a deposit. At the point of purchase they are given a 10% lump sum gifted deposit to top up their savings.
Since working to raise awareness of this new model the tenure has received cross-party support, including from the Housing Minister, and Rentplus was mentioned by name during the Housing Bill debates as a valuable product to address the decline in home ownership.
The Housing Minister said in response that the Government would consult on including affordable rent to buy in its definition of affordable housing in the NPPF which would mean that it can be more easily approved by local authorities.
With most of political debate focused on the EU referendum or most recently, the Panama papers, it’s easy to have missed some of the significant events or trends that have happened in politics over recent months. To help, PAC has picked out five things that you might not have noted…
A Tory Resurgence in Scotland
With only one MP in the whole of Scotland, you probably wouldn’t have given the Conservatives much hope going into this May’s Holyrood elections.
The chaos in the Scottish Labour Party has left a political vacuum that the Scottish Conservative leader, Ruth Davidson, appears to be filling. For one thing, she’s not your typical Tory: openly gay and straight talking, she has challenged the Westminster Government on a number of occasions, most notably over tax credits.
A recent poll for the Times asking voters who would be the most effective leader of the Opposition in the Scottish Parliament gave Ms Davidson 33% a significant lead over Labour’s Kezia Dugdale at 18%. Recent polls ahead of May’s election have shown that the Conservatives are projected to have more seats than Labour. If that were to be the case it would be an amazing turn around in the Party’s fortunes North of the border since the dramatic decline in support that started under Margaret Thatcher.
Race for London Gets Personal
In London, the Mayoral election has become a real street fight.
The language has started to get very personal with Team Goldsmith accusing his opponent of having links to extremists. Team Khan, and in particular Yvette Cooper, have hit back claiming that such accusations are a “full-blown racist scream.”
The launch of Goldsmith’s manifesto was somewhat side-tracked as he was forced to deny claims that he is a racist. He turned the tables arguing that Khan is “a man who has given platforms, oxygen and even cover — over and over and over again — to those who seek to do our police and capital harm.”
Polls show that Khan has a comfortable lead over Goldsmith, and in a left leaning city the smart money would be on him to win in May.
The Resurrection of Michael Gove
Disliked by teachers and side-lined to the role of Chief Whip before going to the MoJ after the election, Michael Gove’s political career might have been perceived as having peaked.
Instead, according to a recent survey by Conservative Home, he is the person that Conservative members most want to be their next leader. He has over taken both the previous front runners, George Osborne and Boris Johnson, and his position may be further strengthened if calls for him to be made Deputy Prime Minster are successful.
Whatever the outcome of the EU Referendum there will be much healing required in the Conservative Party and it is suggested that making Brexiteer Gove Deputy PM would make a major contribution to the process.
UKIP in Chaos
You would think that an imminent referendum on EU membership would unite UKIP behind the one issue in which they all unanimously agree. Think again.
Key figures such as Douglas Carswell and Suzanne Evans have joined the more mainstream campaign to leave the EU, Vote Leave, while the UKIP leader Nigel Farage has shared a platform with George Galloway by campaigning for the rival group Grassroots Out.
The fallout in UKIP has been made even more public as Suzanne Evans was given a six-month suspension for bringing the party into disrepute. One of the more capable and articulate of the party’s members, she claims to have been bullied.
It now appears quite possible that post-referendum, UKIP’s only MP, Carswell, will leave the party and sit as an Independent.
Corbyn More Popular Than Cameron
Just as the backbench sharks were getting ever more frenetic with their circling of the Labour Leader, saying that there will definitely be moves against him before the party conference in September, the latest opinion polls show that Jeremy Corbyn is now more popular than David Cameron and Labour is ahead of the Conservatives in voting intention.
This is a surprising turnaround for Corbyn, who only a few months ago had the worst satisfaction ratings of any new Labour leader and was the first to score a net negative satisfaction rating.
Whether this is enough to dampen down criticism of his leadership in the longer term will depend on Labour’s performance at the local, Mayoral and devolved elections, but recent events can only be helpful to the Party.
The Chancellor has delivered his annual Budget to Parliament. The main points of the statement were:
Osborne confirms that English schools will be “freed” from local authority control, and turned into an academy.
As London schools have been turned around, there will be a focus on turning around schools in the north.
- All pupils up to 18 may have to learn maths.
- A fairer schools funding formula will be introduced.
- Extra funding will be released to keep schools open longer.
- Every primary and secondary school is to be in the process of becoming an academy by 2020.
- An education white paper will be published tomorrow with more details.
- £115m to support homelessness.
The Chancellor confirmed plans to go ahead with HS3 from Manchester to Leeds, in addition to the announcement yesterday that Crossrail 2 will go ahead as part of the £27 billion rail upgrade which will create a link through the capital from north to south.
- Upgrades will be made to the A66 and the A69 in the North Pennines, and the M62 will be made into a four lane motorway. There will be a new tunnel road from Manchester to Sheffield.
- There will be a £13m contribution Hull City of Culture next year.
- An extra £700m for resilience and flood defences to be raised through a 0.5% increase in insurance premium tax.
- Go-ahead for flood schemes in York and Leeds amongst others.
- The Cathedral repairs fund extended by £20m and there will be a tax break for museums.
- 100% of local government resources will come from their own area by the end of the Parliament.
- Greater Manchester to get new powers over criminal justice.
- New devolution agreement with a mayor for East Anglia, the West of England and Greater Lincolnshire.
- Negotiations will be opened on city deals with Edinburgh and Swansea and there is a new £1bn deal for Cardiff city region.
- A Thames estuary commission will be established, to be led by Michael Heseltine.
Disability budget will rise by more than £1billion.
Energy and Climate Change
- Climate change levy will rise from 2019
- £730m in auctions to back renewable technologies
Savings and Pensions
- Public sector employer pension contributions to rise.
- New state-backed savings scheme for low-paid workers, worth up to £1,200 over four years.
- The Money Advice Service, which has provided financial advice to consumers since 2010, is to be abolished.
- ISA limit increased from just over £15,000 to £20,000 from April 2017.
- New Lifetime ISA for under-40s from April 2017. Can save up to £4,000 a year; government puts in £1 for every £4 saved and no tax paid when money withdrawn.
- New sugar levy on soft drinks to be introduced in 2018. There will be a consultation on its implementation.
- This sugar levy to raise £520m and the money will help to fund extending school days for wider activities that will be voluntary for schools but compulsory for pupils.
- Will raise £12bn over this Parliament through taking further steps to tackle tax avoidance and evasion, including moves to end the use of “personal services companies” by public sector employees to minimise their tax liabilities.
- Corporation tax –currently 20% – to be lowered to 17% by 2020.
- Tax reforms to close corporate tax loopholes and profit diversion schemes will raise £9bn from large firms.
- Threshold for small business rate relief will rise from £6,000 to £15,000 from April 2017.
- Threshold for higher rate of business rates will rise from £18,000 to £51,000.
- Supplementary Charge for oil and gas producers to be halved from 20% to 10%.
- Petroleum revenue tax to be “effectively abolished”.
- Greater London Authority (GLA) to retain all business rates from April 2017.
- ‘Tax break for the digital age’ – new £1,000 tax free allowance ‘to help micro-entrepreneurs’ selling services or renting their home online.
- Commercial stamp duty reform to come into effect from midnight; 0% rate on purchases up to £150,000, 2% on next £100,000 and 5% top rate above £250,000. New 2% rate for high-value leases with net present value above £5m.
- Class 2 National Insurance contributions scrapped for self-employed workers from April 2018.
- Capital Gains Tax basic rate cut from 18% to 10%. Higher rate cut from 28% to 20%.
- Entrepreneurs’ relief of 10% to be extended to long term external investment in unlisted companies.
- Tax free allowances employers and employees use for pensions advice increased to £500.
- Tax-free personal allowance to rise to £11,500 from April 2017.
- Higher rate of tax threshold to rise to £45,000 from April 2017.
- Fuel duty continues to be frozen.
- Beer and city duty frozen.
- Duty on whisky frozen.
- All other alcohol duties will rise by inflation at planned.
National debt as a share of GDP
In cash terms the national debt is lower than it was forecast to be, but so is the nominal size of the economy. This means that debt as a percentage of the GDP is higher. “When I became Chancellor we borrowed £1 in every £4 we spent – now it’s £1 in every £14”.
The new debt/GDP forecast means that the Chancellor has missed his target of starting to cut the national debt, as a percentage of output, this financial year. That now won’t happen until 2017-2018.
Public Sector Borrowing
- Public spending is due to hit 36.9% of GDP by end of the decade – the same as the government raises through taxation.
- Further spending cuts of £3.5bn by 2019/2020.
- The Chancellor promises that with his cuts “the country will be spending no more than the country raises in taxes” and he will do this whilst investing in services like the NHS.
- Figures out today from the Office for National Statistics show that employment is at the highest level ever. The proportion of people on out of work benefits is also at its lowest rate since November 1974.
- 2 million jobs were created during the course of the last Parliament with a further 1 million to be created over the course of this Parliament.
- 90% of the new jobs created since 2010 have been in skilled occupations, with three quarters being full time.