A New Addition…

Sorry if I haven’t blogged for a few days, but as you can see below I’ve been a little busy and sometimes we have to realise that although politics is very important, there are other things that are infinitely more important to us.

My wife Kashmir gave birth to our 7lb 7oz baby daughter on Friday 20th April and mother & daughter are fine, as you can see, my children are happy to see their new sister too!

Both Kashmir and I are incredibly happy at the moment and would like to thank all of our friends and colleagues for their kind words - we’ll decide on a new name for our latest addition very soon - we promise!

Labour’s legacy for the poor

Statistics from the DWP reveal that the income of the bottom 10% of the population fell from £ 91 per week in 2004 -2005 to £ 89 per week in 2005-2006, a 2.2% drop. These figures also show that the incomes of the poorest 10% are actually lower today than they were in 2001-2002 when they also stood at £ 91 per week. All these figures are contained in Table A2 on page 100 of Households Below Average Incomes 2005-2006, an annual publication by the DWP. In contrast to this the chancellor points out that the economy has preformed relatively strongly in the last few years, but the reality now accepted by almost all economists is that the UK has actually unperformed in the global economic climate of the last ten years in comparison to the English speaking countries of the USA, Ireland and Australia. These findings will cause unease amongst left-wing backbenchers and the trade unions.

They will also be disappointing for the Prime Minister. He has always been anxious to quote the rise in the minimum wage from £ 4.10 to     £ 5.35 an hour over the last five years. The reality again is that these figures are a red herring. The poorest aren’t working, so a rise in the minimum wage is not going to help them. The poorest 20% of the population now relies on benefits and tax credits for 53% of their income. Data from the DWP shows that nearly 5.5 million adults of working age are recipients of one of many different kinds of out-of-work benefits, equivalent to one in six of the workforce. As well as being morally corrosive for the recipients, this way of life is expensive for the taxpayer. Politically there will be little impetus for change as there is a direct link between those dependent on the government and Labour votes. Mr Brown’s policies might not be doing much for the well being of the poor but they are useful for buying up and locking in Labour votes.

To illustrate this point perfectly you only have to look the last budget. The Chancellor chose not to raise the personal allowance to take the working poor out of the income tax band but to double the tax rate on low income families by claiming that he was abolishing the starting rate of tax. Anybody who knows the personal history of Gordon Brown will be aware that he came into politics from a noble and principled background. However, the reality and his legacy would not have been what he would have chosen when he was first elected to Westminster.

Paul

Gordon Brown, our next Prime Minister?

Blogs come in all shapes and sizes. Some are entirely personal and almost non political. However, yesterday I was invited to speak at an annual political luncheon and the almost all the talk revolved around Gordon Brown, who in all probability will be our next Prime Minister and so the day job does require a PPC to be occasionally political and get off the fence.

Gordon Brown has cost pensioners £ 100 billion through his stealth tax raid on their pension funds. He did this and ignored advice from the Civil Service, which has undemined confidence in our pension system. In 1997 he imposed a stealth tax on pension funds by abolishing tax credits on dividends, costing occupational pension schemes £ 5 billion a year. Over the long term actuaries have predicted that this move will reduce the value of pension funds by at least £ 100 billion. All this was done, despite the fact that he was warned by Civil servants that such a move would cause a massive shortfall in pension funds and that the poorest pensioners would be hit the hardest.

To balance the argument out, some commentators point out that many employers took contributions holidays, that equities markets went into a sharp decline at the beginning of the century and that we are all living much longer. All of this is true, but what is inescapable is that the Chancellor’s decision helped undermined confidence in pensions and led to people moving capital into bricks and mortar. As a society we are constantly told that we need to save more for our old age but having spoken to nearly forty people yesterday, everybody agreed that they were more likely to invest in property rather than a personal pension (which is hardly surprising). In turn these investment perceptions have helped to create a price bubble in the real estate market. This story has affected almost all of us. Be you a first time buyer, even if you’re on the property ladder and especially if you’re coming up to retirement, the decision taken by Gordon Brown in 1997 which seemed fairly innocuous to the media at the time has had significant negative consequences on the British public and our obssession with house prices. This story may have some way to go.

Paul     

Wolverhampton Sikhs Visit Westminster (video)