Throughout our time in government Liberal Democrats have been committed to supporting our elderly population. Lib Dem policies that have been delivered since 2010 provide stability for pensioners, as well as those coming up to retirement .They will be able to better plan their futures knowing that they will no longer be faced with the insecurity of unpredictable state pension rises.
Thanks to our flagship “triple lock” guarantee policy, the basic state pension has risen in each year of this parliament. The rise has been by the higher factor out of price inflation, wage inflation or 2.5%. This has meant that the state pension will be £440 higher per year in 2014-15 than if it had increased in line with earnings from the start of this Parliament, with the actual cash increase worth £800 a year more in total.
The triple lock was one of our key demands in Coalition negotiations. I am delighted that my fellow Greater Bristol MP and Lib Dem Pensions Minister Steve Webb has ensured that the Government is giving today’s pensioners a fair deal.
The Coalition has also given people greater choice about how to access their workplace pension savings that have been paid into defined contribution pension pots. From April 2015, individuals aged 55 or over will be able to withdraw these savings as they wish, subject to their marginal rate of income tax and their scheme rules. Instead of being forced to buy an annuity, they will be able to invest their savings in another financial product, property, or even in short term assets and spending, if that is the judgement they make about their savings. We have given pensioners more control over how they use their own money accumulated while in work. This is a classic liberal measure, trusting people to make the right decisions.
Finally, a new Single-tier State Pension will combine the Basic State Pension and the State Second Pension. This pension will be set above the basic level of means-tested support (£145.40 per week for a single pensioner in 2013/14). The new Single-tier pension will also support the introduction of auto-enrolment into workplace pensions which we introduced in October 2012. Auto-enrolment helps people save for their retirement by matching contributions (4% employee contribution, matched by 3% from the employer and 1% from government).
The Single-tier pension is an important development, as when we entered government 11 million people were simply not saving enough for their private pensions. The existing system relied heavily on means-testing, which discouraged saving because people who saved could end up with just a few pounds a week more than someone who saved nothing. Our reforms will reduce means-testing and promote private pension saving.
Alongside these changes, we are taking measures to ensure that by April 2015 everyone approaching retirement receives free and impartial face-to-face guidance on their available choices. Pensions are not always straight forward and we want to ensure that people are making informed decisions about their future.
Looking forwards, Liberal Democrats announced earlier this year that pensioners would be guaranteed to earn at least an extra £790 per year by the end of the next parliament under our manifesto plans. These changes mean the state pension will be worth at least £131-a-week by 2020, up from just £97.65 four years ago. In total, pensioners who receive the full state pension would get at least £6,800 in 2020: the plans are expected to benefit 55, 872 pensioners in Bristol alone.
While in government the Liberal Democrats have boosted pensioner incomes – a stark contrast to the increases linked to prices that led Gordon Brown to award a 75 pence increase in Labour’s first term! We’ve also protected the winter fuel payments, free TV licences and the bus pass. I am particularly proud of the free bus pass, I’ve seen what a big difference it makes to my own mother, enabling her to go out every day. The bus pass is good for the environment and also for the mental and physical well being of older people.
I have always believed that how a society treats its elderly people is a measure of its decency. I and my Lib Dem colleagues in government, have undoubtedly held true to this principle and put policy into practice for the benefit of millions of elderly people.
This morning I unveiled a memorial stone to Captain Douglas Reynolds, on the hundredth anniversary of the action that led to him being awarded Britain’s highest military honour, the Victoria Cross.
In this centenary year of the outbreak of the First World War there will be many events around Britain and the rest of Europe. There will be further anniversaries to mark down to 11 Novemeber 2018, a hundred years after the Armistice on the western front that now sets the date for our annual Remembrance Sunday event for all conflicts.
The government is supporting a wide ranging programme of events over the next four years. These include battlefield tours for schools, where children will also be learning to play the “Last Post”. The Communities Department is providing memorial paving stones to be laid in the communities of origin of the recipients of the Victoria Cross.
There were 628 Victoria Crosses awarded to 627 individuals, as Noel Chavasse was the only man to be awarded twice. Over the next four years memorial stones will be laid across the British Isles, 361 in England, 16 in Wales, 70 in Scotland and 35 in Ireland, which at that time was all within the United Kingdom. The remaining 145 memorials will all be laid at the National Memorial Arboretum on 9 March 2015, Commonwealth Day.
This Commonwealth group reminds us of the fact that the war was the first truly global conflict. It was a clash of European empires, drawing in colonial soldiers from around the world. I have visited the memorials in Ypres in Flanders, where the name Singh is more common than Smith or Williams. There was also combat at sea and on land around the world.
Some people may ask why are we commemorating a war that is now outside the life memory of everyone. I think it is right that we do so. The First World War touched the lives of every community and family in a way not seen before. The wars of the nineteenth century and before were fought in the main by regular soldiers and sailors. The war from 1914 – 18 was a total war, particularly after conscription was introduced in 1916. As so many men were in uniform, the role of women was also changed profoundly, working in the fields and munitions factories. After the end of the war, the British social order was never the same, with the ‘ruling class’ weakened by taxes, the end of deference and the universal franchise.
I hope the paving stones and various events will rekindle an interest in the war in every community. There are war memorials in every town and many workplaces and schools, listing the names that could be brought to life by research. I hope to discover more about my great-grandfather Stephen Davies, who served and survived physically but died in a mental hospital years later.
Today’s event in Castle Park, Bristol, was to commemorate the sixth winner of the VC, the first from Bristol. Captain Reynolds was awarded his VC for an action on 26 August 1914, just three weeks after the war started. He led his men to recapture a gun at Le Cateau, Belgium Mons. He survived this episode but was killed by gas poisoning in February 1916 and is buried at Etaples. His VC is on display at the Royal Artillery Museum in Woolwich.
The next Bristol memorial stone will be laid on 20th November, the centenary of the VC being awarded to Thomas Rendle. The other six Bristol VCs are Frederick Room (1917), Hardy Falconer Parsons (1917), Daniel Burges (1918), Harry Blansard Wood (1918), Manley Angell James (1918) and Claude Congreve Dobson (1919).
Bristol has one of the very best commemorative programmes in the country over the next four years. See http://www.bristol2014.com for more details.
I had a few hours free yesterday afternoon so visited Berkeley Castle. It’s just one of the many places I could have visited that are within about half hours drive of my home in Bristol. I could have gone to Tyntesfield or Clevedon Court. All would be free to visit as I am a member of all the major heritage groups. Chepstow Castle, Tintern Abbey or Tredegar House would also have been free…..except for the fact that they are in South Wales, so I would have to have paid £6.40 just to cross the river Severn.
I wonder how often Bristolians dismiss a short trip to Wales, just because of the toll? Or for that matter, how many people from Newport and Monmouthshire who decide not to come to SS Great Britain or Bristol Zoo for an afternoon. The tolls are a major barrier to cross border tourism.
The tolls are also a barrier to the development of the general Seversnside economy. The last “proper job” I had before being elected Bristol West MP in 2005 was the Tax Accountant for the RAC, based at the Aztec West business park. Hundreds of people who work at the RAC or Orange (where I’ve also worked) commute over from South Wales. Similarly, hundreds of people from Bristol commute to Cardiff to work in the film and televesion industries based there. The £6.40 a day toll represents a tax on jobs of over £1,500 a year.
For small businesses it is even worse. The toll for a small van is £12.80. So even if a business limited its calls and deliveries to just one per day then the toll would take about £4,500 out of profit, just for delivering to Chepstow as opposed to Bath.
The two bridges are owned currently by a French company, under a concession granted by the Major government for the building of the second crossing, twenty years ago. They will collect all tolls until the second bridge is paid for, expected to be from about 2017. At that point the bridges return to state ownership. So the next UK government (the 1966 suspension bridge is wholly in Gloucestershire) will get to decide future toll levels. The Liberal Democrats believe that the fairest decision would be to scrap the tolls altogether. Scrapping the tolls would not cost much, as the only future costs will be maintenance. The cost of actually collecting the tolls would also be saved.
Scrapping the Severn Bridge tolls will be in the 2015 Liberal Democrat manifesto and will therefore be included in the negotiations for the next coalition government. The campaign was launched last week by the Leader of the Welsh Liberal Democrats, Kirsty Williams AM, the Cardiff Central MP Jenny Willott and myself.
You can register your support at http://www.monmouthlibdems.org.uk/severn_tolls
The recession of 2008 and the years that followed had a devastating effect on people’s finances. Unemployment soared and many factories reduced hours, preserving jobs but depressing pay. This was the situation I and my Lib Dem colleagues found ourselves in, when we entered government in 2010. These days Labour make it a habit to mention the “cost of living crisis” whenever possible and of course also have a habit of not mentioning any of the improvements this government has made in cleaning up the mess left by their previous administration.
In the last four years the economy first stabalised and then set off on an upward trajactory of growth – the strongest of any major European economy. Lib Dems in government have ensured that the benefits of the economic recovery are shared fairly.
For us, the best way to tackle a cost of living crisis is to get people back into work. Unemployment has been falling steadily for the last two years and both in Bristol and around the country is now well below the levels we inherited in 2010. Liberal Democrats have boosted pay packets by allowing people to keep more of the money they earn, by raising the income tax threshold to £10,000. With over 1.5million private sector jobs created and an average £700 tax cut for ordinary working people, we have delivered on both jobs and net pay. In April 2015 the income tax threshold will be raised again, allowing people to keep £10,500 free from tax. This is a tax cut of £800 compared to 2010 levels, an extra £15.40 a week for people to spend how they choose.
In addition to stabalising the economy so businesses can create jobs, we have been championing our key manifesto policies regarding apprenticeships and so far more than 1.6 million new apprenticeships have been created.. Providing this valuable training and work experience for young people is essential to helping them get a good start in life after full-time education.
Figures released on July 16th show that unemployment in Bristol West is now down 22.56% since the election in May 2010, which is in stark contrast to the 55.6% increase in unemployment we saw during the last Labour government. This is in addition to the 173,000 people who have received a cut in income tax, with 17,500 people being taken out of income tax altogether in Bristol. It is our long term goal to increase the threshold to the point where anyone earning minimum wage will pay no income tax at all – a minimum wage that we are raising again in October this year. A young person on the minimum wage is already receiving all pay free from income tax.
However, this is not all we are doing to help households. Since 2010, an average family has paid £600 less in Council Tax thanks to Lib Dems giving councils the ability to freeze Council Tax for up to 6 years. We are also cutting, and then freezing,fuel duty and this is to save motorists 20p per litre compared to the previous government’s plan. By the end of this parliament, fuel duty would have been frozen for nearly four and half and half years, the longest fuel duty freeze in more than two decades.
Energy prices are, of course, also a major concerns for many people so we have been active in tackling the squeeze felt by people’s finances due to energy bills. We have already cut £50 a year from bills while maintaining our commitment to green policies and support for millions of low-income and vulnerable households through the new Energy Company Obligation, the Warm Home Discount scheme, and our support for Winter Fuel and Cold Weather Payments.
Finally, I would like to outline how we are helping the cost of living for those with children. Under plans announced in March by Nick Clegg, working parents struggling with the cost of childcare will be able to claim back 20% of that cost – up to £2000 per child. This will support the self-employed and will ensure that those working part-time, earning £50 a week and above, those on maternity, paternity or adoption leave and those starting their own businesses will get help with childcare costs for the first time. For those on Universal Credit, the Government will cover 85% of childcare costs, up from the previous 70%. This will mean that in Bristol over 12,600 families will be able to benefit from our changes to tax-free childcare.
This is on top of the fact that we have already increased free entitlement to childcare and early years education for all 3 and 4 year olds from 12.5 hours to 15 hours a week. From September this will also be extended to the most disadvantaged 40% of 2 year olds while more help for families will be provided through the key Lib Dem policy of free school meals. Free school meals for all infant age pupils will help save families around £400 per year per child.
I believe that whilst the Labour party’s ‘cost of living’ agenda raises some important questions, it ignores the significant progress that has been made by Liberal Democrats not only to rebuild our economy but also to support the most vulnerable in society. Of course, we cannot be complacent and there is much more to be done to rebalance social and economic inequalities. However, I am proud that we have been able to dramatically reduce unemployment. I am proud that we have put the most vulnerable at the heart of our economic policies. And I am proud that, as part of the Coalition, the Lib Dems have been central to improving the cost of living for millions of people – whether through less tax, a higher minimum wage, help with energy bills or help with childcare costs.
Today I helped start work on the new bridge that will unlock the bend in the River Avon earmarked for Bristol’s new arena. As Communities Minister I also announced £6million for further works and site acquisitions in the Bristol Temple Quarter Enterprise Zone.
Many blokes think it would be fun to drive a bulldozer or crane, well today I got in the cab of a huge excavator, ready to dig out the foundations for the new bridge opposite Temple Meads station. Tempting as it was to pull a lever and cover assembled journalists with mud, I let the professional digger driver make the actual hole. But I’m delighted that work has at last started on this huge site. Seven years ago I took to the airwaves to criticise the South West Regional Development Agency (a Labour govt quango) for pulling the plug on arena plans. The Coalition government is funding the new bridge to the tune of £11.5million. It will be unlike any other bridge over the Avon or the the harbour. It will be Bristol’s first Garden Bridge, tree lined and with places to sit. As well as space for motor vehicles it will have provision for pedestrians and cyclists.
Once the Mayor secures an operator for the Arena work will start on the “island” itself. But the arena will occupy just over a third of the site. There will also be other businesses and hundreds of new homes.
As well as supervising the digging of a big hole, I also announced an additional £6m government support for the Temple Quarter Enterprise Zone. This was part of £23m of funds from my department announced today for four enterprise zones. The Bristol money will help unlock further land and buildings for development in the Cattle Market area of the zone, which will become the new centre of Bristol’s burgeoning creative and media industries.
So two sets of good news for Bristol and further evidence that the Coalition Government is investing in building a stronger economy for Bristol and the country.
After four years of the Liberal Democrats in Coalition Government, there are many positive things to see in Bristol. The economy is stronger, schools have extra resources for children from poorer backgrounds and various initiatives are underway to build a more sustainable future. In this blog I’ll consider the economy.
The Bristol city region (the city council area plus South Gloucestershire) has long been the most prosperous city in the country after London and Edinburgh. But the recsession and credit crunch from 2007 -2009 still hit the city hard. Many housing schemes with planning permission froze with builders and apprentices being laid off. By May 2010 unemployment had climbed to 14,023 with both Bristol West and Bristol South constituencies reaching a rate of 5%, below the national average but still devastating for the individuals out of work.
Now four years later, the city economy is growing again. The government’s investment in apprentices has led to thousands of new opportunities for young people. I have met many of them on visits to Airbus, Rolls Royce and numerous construction sites. It’s the latter that is most pleasing as construction shrank the most in Labour’s recession years.
House building is gathering pace, good for local jobs but also essential to expand the housing stock to give more people homes and to stem spiralling prices and rents. A good example is the Wapping Wharf development near the MShed city museum. This site was frozen, with the developer finding it hard to raise the money needed to get site works underway. I told them about the government’s Get Britain Building fund and they were eventually loaned about £12million. The site is a great example of mixed tenure, with homes for sale, private rent and affordable rent. Over the next year or so the site will be transformed with over 600 new homes.
The government is also backing Bristol with the new Local Enterprise Partnership, focused on the city region economy of Bristol and Bath. In Bristol West we have the Enterprise Zone, centered on Temple Meads. The zone is becoming the focal point for Bristol’s world renowned creative and digital media industry. It will also become home to the long awaited Bristol Arena, which the government is helping on its way with a £10million new bridge over the Avon, with construction starting this month.
The government has also invested in Bristol’s green and sustainable economy. The Green Deal house retrofitting scheme was piloted in Bristol. Private rental sector properties are being made more energy efficient in Easton and Horfield. Last month Danny Alexander came to to Bristol to announce £7million government support that I secured for Bristol Green Capital 2015.
Like the rest of Britain, the Bristol economy has returned to strong growth. Unemployment has been falling for over a year and is now 11,015 – still too many but a lot better than four years ago. As I’m writing this the day before the local and European Parliament elections it’s worth pointing out that Bristol’s economy has always depended on trade with Europe. Our international businesses, particularly in aviation, benefit from being in the world’s largest single market. The Liberal Democrats are the only mainstream party to have the guts to argue the case for Britain’s membership of the EU. It’s in Bristol’s interests that we stay in.
The first week of May always brings a succession of political anniversaries. Yesterday was the ninth anniversary of the 2005 general election,of personal interest to me as my first successful attempt to get into Parliament. The 1st of May was the anniversary of Tony Blair’s first landslide in 1997. Today is the anniversary of the 2010 general election, leading to Britain’s first coalition government in living memory.
On Twitter and elsewhere in the media the Labour victories in 1997 and 2005 are described as leading to “majorities” in Parliament of 179 and 66. O f course, in terms of how people voted they should have been nothing of the sort. In 1997 Labour’s vote share was 43.2% , hardly meriting a landslide of seats. A comparison between the 2005 and 2010 general elections is telling. The Conservatives obtained 36.1% of the vote in 2010 but fell short of a majority of seats. In 2005 Labour secured just 35.2% of the vote but won 355 seats and a comfortable Commons majority.
But the purpose of this article is not to highlight the fraud on the electorate that is our First Past the Post voting system. Rather, it is argue that a Coalition government has more electoral legitimacy and based on the last four years, can be more radical than single party government.
It’s been put to me several times over the last four years that “nobody voted for the Coalition” or that “this government has no mandate for…” Yet it was fairly clear in 2010 that people wished to see Labour ejected from power. They had dropped from 43% to 29% public support over their thirteen years in power. The parties that formed the Coalition Government between them commanded 59% of the vote. So the current government had more support, at least at the outset, than any “majority” single party government since 1945.
The Coalition has also been a radical reforming government, rivalling the 1945 and 1979 governments of Attlee and Thatcher. The Lib-Con Coalition has reformed the personal tax system, schools funding, energy policy and has even achieved some constitutional reform, though not enough to satisfy Liberal Democrats. The current coalition will have a stronger legacy after five years than the last “majority” government after thirteen.
Let’s compare the records of the Cameron-Clegg and Blair-Brown governments.
First the political and economic backdrop. Blair came to power in 1997 with an enormous Commons majority, a growing economy and a budget surplus. A dream scenario for a progressive government, you might think. The Coalition also has a Commons majority but has to negotiate each policy. The economy was practically crippled, having collapsed by over 7% in 2008, the biggest contraction of any major country. The government’s finances were also hobbled, with one pound in every four being spent coming from borrowing rather than taxes. The deficit was worth over 11% of the entire value of the economy. Any government’s nightmare scenario, you might think.
On personal taxation and the gap between rich and poor the Labour government has a dreadful record, if you are a progressive like me. To help the low paid Chancellor Brown introduced a lower rate of income tax of 10% and then in his last Budget in 2007 abolished it, to finance a general cut in the basic rate of income tax. He no doubt thought it would be popular ahead of an anticipated Autumn election, once he had succeeded Blair. I still recall the cheers from Labour MPs. Only the Liberal Democrats criticised it at the time, though some Labour MPs later spotted the what had happened. Ed Balls and Ed Miliband, Brown’s closest colleagues, now admit it was a bad decision. At the other end of the income scale Labour kept the top rate of tax at 40% for all bar the last month of their 13 years. They also allowed the very wealthy to claim top rate tax relief on £255,000 each year for personal pension contributions. They slashed capital gains tax from 40% to 18%. Not very progressive…
The Coalition has implemented the biggest change in the income tax burden since Lawson in 1988, who slashed the top rate of tax. But the Coalition’s increase in the personal allowance of tax free income from £6,500 to £10,000 will give each tax payer a £700 tax cut in this tax year. This tax change disproportionally helps the low paid and part time workers. Adults on the minimum wage have had their tax halved. A young person has been lifted out of tax altogether. This policy of course, comes from the Lib Dem side of the coalition. The top rate of tax was 50% for the first three years and will be 45% for the remainder of the five year term. The amount of pension relief has been slashed from £255,000 to £40,000 and CGT has gone up to 28%. There’s been a huge effort to combat tax avoidance, with the government leading the world in a concerted effort, as well as tightening rules at home. The most progressive tax regime ever, unless you believe in punitive 1970s higher rates of tax, in some gesture politics emotional spasm.
Allowing most people to keep more of their own money, while asking the richest to pay more is the most immediately apparent change the Coalition has introduced, despite the difficult economic backdrop. But there have been other changes that may have a long enduring positive legacy. The pupil premium gives schools extra money for each child on free school meals. Children from poorer families do less well in school and the extra money will help bridge the attainment gap as much of it is spent on personalised support in literacy and numeracy. In my Bristol West constituency some schools have over half the pupils on FSM. The premium has also been used to enable every child to learn a musical instrument of their choice and for everyone in class to go on school trips. In a decade I think we could point to the pupil premium doing more for social mobility than any education policy since 1944.
The Coalition has also attempted tackling another long term challenge, man made climate change. It has set up the world’s first Green Investment Bank. It is diversifying the electricity supply away from fossil fuels, though wind farms are unpopular with the Conservatives. The contribution of our homes to carbon emissions is being cut by tougher building regulations for new houses. Legislation is in place to retro-fit existing houses to reduce energy demand, though the “green deal” is yet to take off.
And what of the economic and fiscal backdrop? The last Labour government turned a budget surplus into a yawning deficit. The economy grew and then tanked; Brown did not abolish “boom and bust”. The Coalition has reduced the deficit from about 11% to 6%. Despite predictions by Labour of a “double dip” recession and 3 million unemployed the economy has grown, at first falteringly (against a worsening Euro Zone situation) and now strongly, the best in the OECD. Unemployment has fallen for over a year, is now below 7% and in Bristol is below its rate in 2010.
In the 2010 general election both the Tories and Labour said that coalition would lead to weak government. This government has been anything but weak or indecisive. It has taken the tough measures to set the economy back on top stable growth and to rescue the public finances. On tax, education and energy it has been radical. I could make similar claims for welfare reform, especially in pensions, or in public health and mental health. Even a fixed term parliament, a seemingly minor constitutional reform, gives any government the time and space to enact a programme and is unlikely to be repealed.
Coalitions have more electoral legitimacy than single party governments. And thus far, in this novel for Britain experience of coalition government, they can be far more radical and progressive than Labour governing on its own.