After a lot of leaks, the independent report into the rules for MP expenses by Sir Christopher Kelly has finally been published. The BBC write-up is here, together with a link to the full report.
Before the report was published I said that I thought the report should be implemented in full and I stand by that position. After all that has gone on, I really don't think that MPs can now be seen to be quibbling about this report. One of the more positive suggestions is that there should be some central provision of rented accommodation. This makes a lot of sense, and to be honest if there had been somewhere available to rent as soon as I was elected in 1997 I would have immediately opted for that. I've already said that when my current one-bed flat is sold the full gain (after capital gains tax) will go back to the taxpayer, so (if re-elected!) I will sell up by the end of the next Parliament and switch to rented accommodation.
What happens next is that a new body - the Independent Parliamentary Standards Authority - will be asked to receive this report and comments on it and propose final arrangements to come into force after the Election. I hope that this process is not too drawn out and that we can get on with concentrating on the real work we are paid to do.
Wednesday, 4 November 2009
Friday, 16 October 2009
Challenging your council tax banding
Very useful conversation this morning with the Valuation Office Agency about what to do if you think your house is in the wrong Council Tax band. Until now I've been quite confused because I've been told that you can only appeal against your valuation within 6 months - but have then heard of other people who have managed to get re-banded. So, this is how it works:
* key point to remember is that Council Tax banding is based on the value of your property in April 1991; although the sale price since then is relevant evidence, the key question is not what it subsequently sold for, but what it would have been worth in April 1991;
* again, although you can get a very rough idea of a property's 1991 value by applying a general house price index (eg the Nationwide house price index for the South West) to a later sale price, these indices are very rough and ready; the VOA pointed out that you can get different housing market trends between different roads in the same town, so regional averages are likely to be very rough and ready indeed;
* whilst you can only appeal against your banding within six months of moving in, you can make an 'inquiry' if you think your banding is wrong; the VOA will look at your case and if you can convince them that a mistake has been made then they will re-band you; you don't have statutory "appeal rights" as such, but in some cases they can and do re-band people; if the banding was wrong right back to when the tax was introduced in 1993 then you should be able to get the change backdated;
* one thing which can affect banding is a 'material change of circumstances'; for example, if you were banded from April 1991 on the basis of an open country view and then a few years later a factory is built over the road, you may be able to argue that your value has now gone down;
There are two interesting websites to look at if you want to take things further. One is the VOA website where you can see the council tax banding of every house in your neighbourhood and another is (for example) here which gives information on the sale prices of houses in your area. The Martin Lewis 'MoneySavingExpert' website has some helpful advice, though again bear in mind the caveat that using *average* house price indices is a very rough-and-ready approach.
Given that the whole country's valuations were done in such a hurry in 1991, it would not be surprising if a significant minority were only relatively approximate. Whilst that may not matter too much if you are in any case around the middle of a council tax band, if you would have been on the cusp between two bands and ended up in the higher one it might be worth looking at.
* key point to remember is that Council Tax banding is based on the value of your property in April 1991; although the sale price since then is relevant evidence, the key question is not what it subsequently sold for, but what it would have been worth in April 1991;
* again, although you can get a very rough idea of a property's 1991 value by applying a general house price index (eg the Nationwide house price index for the South West) to a later sale price, these indices are very rough and ready; the VOA pointed out that you can get different housing market trends between different roads in the same town, so regional averages are likely to be very rough and ready indeed;
* whilst you can only appeal against your banding within six months of moving in, you can make an 'inquiry' if you think your banding is wrong; the VOA will look at your case and if you can convince them that a mistake has been made then they will re-band you; you don't have statutory "appeal rights" as such, but in some cases they can and do re-band people; if the banding was wrong right back to when the tax was introduced in 1993 then you should be able to get the change backdated;
* one thing which can affect banding is a 'material change of circumstances'; for example, if you were banded from April 1991 on the basis of an open country view and then a few years later a factory is built over the road, you may be able to argue that your value has now gone down;
There are two interesting websites to look at if you want to take things further. One is the VOA website where you can see the council tax banding of every house in your neighbourhood and another is (for example) here which gives information on the sale prices of houses in your area. The Martin Lewis 'MoneySavingExpert' website has some helpful advice, though again bear in mind the caveat that using *average* house price indices is a very rough-and-ready approach.
Given that the whole country's valuations were done in such a hurry in 1991, it would not be surprising if a significant minority were only relatively approximate. Whilst that may not matter too much if you are in any case around the middle of a council tax band, if you would have been on the cusp between two bands and ended up in the higher one it might be worth looking at.
Tuesday, 6 October 2009
Tory rise in state pension age - do the sums add up?
A very strange story appeared last night on the BBC news and reported here on the BBC website. Apparently George Osborne will announce today that the pension age for men is to be raised from 65 to 66 in 2016 - about a decade earlier than planned - and he 'hasn't ruled out' doing the same for women. 'Conservative sources' said this would raise around £13 billion, which is a very very large cut.
Leaving aside for a moment the fact that what they would do with women's pension ages appears to be something of an afterthought, how could you get such a huge figure?
If you were to make a wild guess at the saving from raising male state pension age to 66, you might say the following:
- each year, roughly 400,000 men have a 65th birthday;
- the full basic state pension is currently £95.25 per week; for the sake of round numbers and including a bit of additional state pension etc., let's say it's £100 per week (probably a bit of an underestimate);
- multiply the two together and you get £40m saving per week, and multiply by 52 and you get not much more than £2 billion; furthermore, as the state pension is taxable, if you don't pay out that £2 billion in pension then you lose a few million in tax, but we'll ignore that for now.
So, if the BBC are reporting the Tories as saying the saving is £13 billion, and my maths says not much more than £2 billion, what could be the difference?
One possibility is that the Tories are costing in raising women's ages to 66 in 2016 which really would be a drastic step, as women's pension age will only be around 63 at that stage on current plans.
There could be a few other bits and pieces to add in - eg savings on pension credit (if the age rules on pension credit etc. went up to 66 as well), but nothing on the scale needed to turn £2bn into £13 bn.
The only other explanation is that this is a figure for a whole Parliament - ie an annual saving times 5. Presumably in the 2016 to 2020 Parliament you could save over £10 billion from this measure, and then you are not far off the Tory figure. But the impression they seem to want to give is that this is a huge and specific cut, when, in the context of a Government deficit this year forecast to be in excess of £175 billion, £2 billion saving on pensions starts to look a lot more modest. Surely they can't be trying to mislead us??
UPDATE (07:50) - the mystery deepens! David Cameron has just been on BBC Breakfast saying that the saving is £13 billion each year and that it relates to men's pensions only because they haven't decided what to do with women! Talk about not thinking through your policy....
Leaving aside for a moment the fact that what they would do with women's pension ages appears to be something of an afterthought, how could you get such a huge figure?
If you were to make a wild guess at the saving from raising male state pension age to 66, you might say the following:
- each year, roughly 400,000 men have a 65th birthday;
- the full basic state pension is currently £95.25 per week; for the sake of round numbers and including a bit of additional state pension etc., let's say it's £100 per week (probably a bit of an underestimate);
- multiply the two together and you get £40m saving per week, and multiply by 52 and you get not much more than £2 billion; furthermore, as the state pension is taxable, if you don't pay out that £2 billion in pension then you lose a few million in tax, but we'll ignore that for now.
So, if the BBC are reporting the Tories as saying the saving is £13 billion, and my maths says not much more than £2 billion, what could be the difference?
One possibility is that the Tories are costing in raising women's ages to 66 in 2016 which really would be a drastic step, as women's pension age will only be around 63 at that stage on current plans.
There could be a few other bits and pieces to add in - eg savings on pension credit (if the age rules on pension credit etc. went up to 66 as well), but nothing on the scale needed to turn £2bn into £13 bn.
The only other explanation is that this is a figure for a whole Parliament - ie an annual saving times 5. Presumably in the 2016 to 2020 Parliament you could save over £10 billion from this measure, and then you are not far off the Tory figure. But the impression they seem to want to give is that this is a huge and specific cut, when, in the context of a Government deficit this year forecast to be in excess of £175 billion, £2 billion saving on pensions starts to look a lot more modest. Surely they can't be trying to mislead us??
UPDATE (07:50) - the mystery deepens! David Cameron has just been on BBC Breakfast saying that the saving is £13 billion each year and that it relates to men's pensions only because they haven't decided what to do with women! Talk about not thinking through your policy....
Wednesday, 9 September 2009
Behind the scenes in an MP's office
Over the Summer, several local young people have helped out in my constituency office and have had the opportunity to learn more about how politics works. Here, Emily Ashford, 18, from Thornbury, describes her experiences and reflections on her time in the constituency office - uncensored!:
“This week I have had the great opportunity to become part of Steve Webb’s fantastic and very lovely office team. I’ve been drafting letters, researching individual cases and just generally sticking my nose in; broadening my knowledge of government departments and organisations. I’m also aware that depending on when young people have done work experience here, they have been able to take part in a range of activities including going door to door, leafleting and talking to Yate and Thornbury residents about their views and problems. At least one of the ‘interns’ has also been to Westminster with Steve. The office itself is a relatively small room, upstairs at Poole Court, the home of Yate Town Council. There are 6 working desks, one is Steve’s and the other 5 are for each of his employees, who all work so hard in helping Steve to manage and deal with all of the inquiries he has in his inbox and postbox every day. I am hugely grateful to all of them and to Steve for letting me have this opportunity.
Tomorrow I return to sixth form with a new perspective on problem solving that can be applied to the responsibilities I have as a student in the community. I was especially led to think about this after hearing a lecture back at the offices last night, which was aimed to encourage everyone to get to grips with the politics going on in their area; to take an active role in talking to people at their level and to change the things you want to see changed.
This work experience has also helped me to form opinions about important issues and about the education decisions I have to make over the next few months and years. When I organised this work experience I was thinking about applying for a social policy degree, but as you might expect of a girl of my age, I’ve changed my mind; again. I am now planning to do a social work degree and though you may think that work experience with Steve Webb would now be redundant in its use, it has actually been hugely beneficial. Steve has been able to tell me about organisations that otherwise I would have been unaware of and has shown me individual cases he is dealing with that were of interest to me. It really is astonishing when you realise how so many jobs and organisations interlink with others to form a network that without, our communities would really struggle.
I’ve also rediscovered my love for tea and biscuits. :) ”
“This week I have had the great opportunity to become part of Steve Webb’s fantastic and very lovely office team. I’ve been drafting letters, researching individual cases and just generally sticking my nose in; broadening my knowledge of government departments and organisations. I’m also aware that depending on when young people have done work experience here, they have been able to take part in a range of activities including going door to door, leafleting and talking to Yate and Thornbury residents about their views and problems. At least one of the ‘interns’ has also been to Westminster with Steve. The office itself is a relatively small room, upstairs at Poole Court, the home of Yate Town Council. There are 6 working desks, one is Steve’s and the other 5 are for each of his employees, who all work so hard in helping Steve to manage and deal with all of the inquiries he has in his inbox and postbox every day. I am hugely grateful to all of them and to Steve for letting me have this opportunity.
Tomorrow I return to sixth form with a new perspective on problem solving that can be applied to the responsibilities I have as a student in the community. I was especially led to think about this after hearing a lecture back at the offices last night, which was aimed to encourage everyone to get to grips with the politics going on in their area; to take an active role in talking to people at their level and to change the things you want to see changed.
This work experience has also helped me to form opinions about important issues and about the education decisions I have to make over the next few months and years. When I organised this work experience I was thinking about applying for a social policy degree, but as you might expect of a girl of my age, I’ve changed my mind; again. I am now planning to do a social work degree and though you may think that work experience with Steve Webb would now be redundant in its use, it has actually been hugely beneficial. Steve has been able to tell me about organisations that otherwise I would have been unaware of and has shown me individual cases he is dealing with that were of interest to me. It really is astonishing when you realise how so many jobs and organisations interlink with others to form a network that without, our communities would really struggle.
I’ve also rediscovered my love for tea and biscuits. :) ”
Friday, 4 September 2009
Does the PM read every petition personally?
Was just looking at the Number 10 petition website and read the following rather startling message:
Notice: Submission of new petitions will be closed until 7th September while the Prime Minister is away from Number 10.
Does this mean that the PM personally approves every new petition before it goes on the website?? I think we should be told....
Notice: Submission of new petitions will be closed until 7th September while the Prime Minister is away from Number 10.
Does this mean that the PM personally approves every new petition before it goes on the website?? I think we should be told....
Monday, 13 July 2009
The politics of pendulums
Newton's Third Law of Motion ('to every action there is an equal and opposite reaction') applies equally to politics. Looked at over the long-term, it is easy to find examples of how policy has a tendency to swing from one extreme to the other rather than alighting at a happy medium. For example:
- in local government it is first decided that 'small is beautiful' and local authorities are created which relate to relatively close-knit geographical areas; but over time it is decided that these bodies are too small to be 'strategic', and therefore what is needed is larger authorities or regional bodies; then these are seen to be remote and unaccountable and we rediscover localism again; this has happened both in local government (witness the current drive to create more strategic 'unitary' authorities to replace smaller district councils) and also in health (where in my time as an MP I have seen PCTs and health authorities change their geographical boundaries on almost an annual basis);
- with regard to privatisation/nationalisation: post-War major strategic industries were taken into public ownership; decades later it was decided that state control brought no 'added value' and they should be privately owned and free to compete; more recently still some have failed commercially (eg some national rail franchises) and their strategic importance is such that they are now back in public ownership;
Today brings news of what looks suspiciously like another pendulum swinging too far. In the 1980s, with rapidly rising unemployment, it was widely known that unemployed people with health problems were reclassified onto invalidity/incapacity benefit in order to get them out of the headline jobless figures; however, over time this led to a big build-up in costs and numbers on IB as people got 'stuck' on these benefits; as a result there have been a series of clampdowns on sickness-related benefits culminating in the introduction of the 'Employment and Support Allowance' to replace IB last Autumn; the problem now seems to be that huge numbers of people are being turned down - up to 90% in some areas. I find it hard to believe that a system that signposts people to claiming and being assessed for sickness related benefits and then turns down up to 9 in 10 in some areas makes any sense - especially when many of these people end up being paid jobseekers allowance instead.
On this latter issue it would be nice to think that there was a sensible equilibrium - fair assessment of people with health problems - rooting out those who work the system but responding promptly and effectively to people who are struggling with poor health. But just as pendulums don't stop in the middle, benefit reform has a tendency to over-react to the last set of problems. It would be good to get a grip on this one before it swings out of control.
- in local government it is first decided that 'small is beautiful' and local authorities are created which relate to relatively close-knit geographical areas; but over time it is decided that these bodies are too small to be 'strategic', and therefore what is needed is larger authorities or regional bodies; then these are seen to be remote and unaccountable and we rediscover localism again; this has happened both in local government (witness the current drive to create more strategic 'unitary' authorities to replace smaller district councils) and also in health (where in my time as an MP I have seen PCTs and health authorities change their geographical boundaries on almost an annual basis);
- with regard to privatisation/nationalisation: post-War major strategic industries were taken into public ownership; decades later it was decided that state control brought no 'added value' and they should be privately owned and free to compete; more recently still some have failed commercially (eg some national rail franchises) and their strategic importance is such that they are now back in public ownership;
Today brings news of what looks suspiciously like another pendulum swinging too far. In the 1980s, with rapidly rising unemployment, it was widely known that unemployed people with health problems were reclassified onto invalidity/incapacity benefit in order to get them out of the headline jobless figures; however, over time this led to a big build-up in costs and numbers on IB as people got 'stuck' on these benefits; as a result there have been a series of clampdowns on sickness-related benefits culminating in the introduction of the 'Employment and Support Allowance' to replace IB last Autumn; the problem now seems to be that huge numbers of people are being turned down - up to 90% in some areas. I find it hard to believe that a system that signposts people to claiming and being assessed for sickness related benefits and then turns down up to 9 in 10 in some areas makes any sense - especially when many of these people end up being paid jobseekers allowance instead.
On this latter issue it would be nice to think that there was a sensible equilibrium - fair assessment of people with health problems - rooting out those who work the system but responding promptly and effectively to people who are struggling with poor health. But just as pendulums don't stop in the middle, benefit reform has a tendency to over-react to the last set of problems. It would be good to get a grip on this one before it swings out of control.
Wednesday, 8 July 2009
Getting your hands on your own money
Took part in a fascinating policy seminar this lunchtime organised by CentreForum around the issue of early access to Pension Fund cash. In particular, we were discussing the paper that I jointly wrote with Jo Holland about the part of your pension which you can currently take as a tax-free lump sum when you retire. Our basic proposal is that you should be able to access whatever you have built up as a potential tax free lump sum (ie typically one quarter of your fund) earlier if you wish. One use for the cash might be to tackle a mortgage arrears problem and thereby avoid repossession. After all, it's a bit daft if you have thousands of pounds in your name that you can't touch when you need it, especially if that cash would never have been taken as a pension in any case.
The discussants were Nikki Cleal of the Pension Policy Institute and Baroness Patricia Hollis, who first suggested the idea to me.
The PPI has done its own research on a variety of schemes for early access to pension funds and has highlighted the variety of similar schemes around the world. The effect on overall savings levels is ambiguous, though the lump sum option appears to have attractions compared with some schemes in other countries.
Patricia Hollis stresed the attractions of this sort of scheme for women. She said that many have poor pension rights and often do not save for a pension because it represents a risk to tie up your money when you may need cash to cover a career break or perhaps the costs of caring for a relative. She said that defined benefit pension schemes had clearly been 'devised for men by men', and that current pension arrangements were a very poor fit for the needs of many women, especially those in low-paid or part-time work. A more flexible product, where you can get at some of your cash when you need it, would be a better bet.
A lively discussion followed, including issues of how you would sell this idea, whether the Inland Revenue would be an obstacle, and whether you would create problems for schemes if large volumes of cash were withdrawn from pension funds at short notice.
I think this is an idea that clearly works not just in a Recession, but more generally as a vehicle to make pension saving more attractive, and I suspect it is something that we will hear more of from all parties in the coming months and years.
The discussants were Nikki Cleal of the Pension Policy Institute and Baroness Patricia Hollis, who first suggested the idea to me.
The PPI has done its own research on a variety of schemes for early access to pension funds and has highlighted the variety of similar schemes around the world. The effect on overall savings levels is ambiguous, though the lump sum option appears to have attractions compared with some schemes in other countries.
Patricia Hollis stresed the attractions of this sort of scheme for women. She said that many have poor pension rights and often do not save for a pension because it represents a risk to tie up your money when you may need cash to cover a career break or perhaps the costs of caring for a relative. She said that defined benefit pension schemes had clearly been 'devised for men by men', and that current pension arrangements were a very poor fit for the needs of many women, especially those in low-paid or part-time work. A more flexible product, where you can get at some of your cash when you need it, would be a better bet.
A lively discussion followed, including issues of how you would sell this idea, whether the Inland Revenue would be an obstacle, and whether you would create problems for schemes if large volumes of cash were withdrawn from pension funds at short notice.
I think this is an idea that clearly works not just in a Recession, but more generally as a vehicle to make pension saving more attractive, and I suspect it is something that we will hear more of from all parties in the coming months and years.
Subscribe to:
Posts (Atom)
