Sunday, 30 November 2008

Hundred million pound boost for pensioners

I received confirmation this week that a long-running campaign to get women the pension that they are entitled to is likely to yield over £100 million in enhanced pensions, as the Telegraph report here. The back story is that I was contacted by the Times newspaper about 18 months ago about cases of women who had spent time at home with children which should have been reflected in their pension rights but for which they had received no credit. I did some very rough estimates at the time which suggested we could be talking anything up to half a million women missing out. The pensions minister at the time (now Secretary of State James Purnell) went on the radio saying I was talking nonsense and that there was nothing more than the odd case.

I persisted, and worked with the subsequent pensions minister Mike O'Brien to convince the Department that this was more than a few isolated cases. HM Revenue and Customs in due course agreed to trawl their records to see what they could find, and a written answer to me this week said that they reckon between 100,000 and 150,000 women may be missing out. In my experience the amount they miss out on is well in excess of an average of £1,000 of backdated pension (often much more). Doing the maths suggests that this exercise could easily produce backdated payments of £100 - £150 million for the women concerned.

If only I'd remembered to ask for one per cent commission.....

Monday, 24 November 2008

Getting it wrong

It takes a special sort of genius to mess up both the politics and the economics of a Budget statement, but I reckon the Chancellor managed both today in his 'pre-Budget report'.

First, the politics. You would think that announcing a £12 billion tax cut (VAT down to 15%) would be the sort of thing most Chancellors would dream about. Yet this was leaked over the weekend, so when he announced it in the middle of a long and dull statement (lasting nearly an hour) Alistair Darling barely raised a cheer. Likewise the 45p income tax rate on the highest earners would have been red meat to many on the Labour benches, but they had heard about it on the news the night before. The only new stuff was fiddly things like bringing forward the April child benefit rise to January, a one off increase in the £10 Xmas Bonus, and then unexpected bad news like National Insurance increases. By the end, the Labour benches looked pretty demoralised.

Second, the economics. This was a one-off chance to do something bold to stimulate the economy. But if people know tax rises are coming, then will they spend? And are people going to spend, spend, spend because shop prices have been cut by about 2%? Marks & Spencer know a thing or two about sales, and they reckoned a 20% discount would attract custom last week. The VAT cut - though costing a fortune - just looks like small beer.

What should have been done was a massive programme of investment in the things we need for the present and the future. The Chancellor says he will insulate an extra 60,000 homes, but there are over 3 million in fuel poverty. A huge programme of home energy efficiency would create jobs, save fuel bills for hard-pressed pensioners and other householders, and benefit the planet. Likewise we could have insulated our schools and hospitals to decent standards, creating jobs, freeing up money for education and health and benefiting the planet. We could also have done more to upgrade the National Grid - onshore and offshore - to be fit for the low-carbon economy that we need to move towards.

Today was a once-in-a-lifetime chance to do something for the long term. Instead all we got was a temporary tax cut that probably won't deliver.

Saturday, 15 November 2008

The mysterious case of the Post Office Card Account

It's not often that you are genuinely suprised in Parliament these days, but I think most people were astonished when the Government announced on Thursday that it was going to keep the Post Office Card Account (POCA) with the post office - or at least when they read it in that morning's Guardian. Rumours were rife that the account was going to go to commercial rival Paypoint, with the possible loss of thousands more sub post offices.

So what changed?

The minister said in his statement that the legal advice in 2006 was that they had to put the contract out to tender. But on Thursday he didn't announce that the Post Office had won the tender, he announced that he was scrapping the competition altogether! When I asked if this mean the original legal advice was wrong or that the law had changed, he simply said that when 'the facts' changed, he changed his mind - and implied that this was about the current financial crisis. My best guess is that the fact that the Irish Government survived a court challenge over not putting a similar process out to tender made the British Government think they could get away with it too. Though I bet Paypoint were given generous compensation for their wasted time and effort - and perhaps a sweetener to encourage them not to sue?

You might assume that as an MP I could find out this information - but every time we ask questions, including how much the whole abortive tender process cost the taxpayer, we are told it is a secret - 'commercially confidential'. Quite how the amount a Government department spends of public money on something that isn't going to happen can be a secret I don't quite know.

Some people see the shadow of Peter Mandelson in all of this. But as Malcolm Bruce said on Thursday, that assumes he has a shadow....

Wednesday, 5 November 2008

The world's most powerful man - for now?

Could Barack Obama be the last person to be elected American President who was also the 'most powerful person in the world'? At the moment it's hard to see anyone more powerful, but in 4 or 8 years' time, the US is unlikely to be the world's largest economy, may not control the world's most precious resources, and will be even more at the mercy of global forces than it is at present.

The good news, I believe, is that we now have a US president who is able to engage with the wider world and who seems to have some understanding of it. I often reflect that, of the world's biggest challenges - think of climate change, economic downturn, international migration, terrorism, global poverty - these are all issues that need the countries of the world to work together to tackle them. Not only can one nation on its own not crack these problems, but unless we work together we end up with beggar-my-neighbour policies which actually make matters worse.

Instinctively I think we all like to feel that we control our own destiny, and no-one likes to share control with anyone else. But in the inter-connected world that we now live in, effective governments and parliamentarians have to work together and realise that the solutions to problems lie only partially within their own national boundaries. Against that backdrop I am hopeful this morning that Barack Obama's election makes the world a better place.