The Government Tax and the Wealthy
Another of Labour's misleading comments about tax relates to the government and tax cuts for the rich. It is true that the government cut the top rate of tax to 45% from 50%. It is worth noting, however, that it was only at 50% for one month of the Labour Government from 1997-2010. However, if you want to look at how fair policies are then you need to take into account more than just income tax.
Unusually this government has done "distributional analyses" for policies. There is a distributional analysis that relates to the 2015 budget. That can be found:
This chart from it looks at the effects from June 2010 through to March 2015 by expenditure decile.
I prefer the expenditure analysis to look at the spending power of households which in many ways is a better indication of economic power than the formal income. You should note from this that the top 10% (the richer households) are paying a lot more in terms of tax than those lower down the expenditure analysis. Chart 2D in the document (which I have not extracted) does the same calculation by income decile and comes with the same conclusion (the rich are paying more tax as a percentage of income - notwithstanding the change in headline rate).
posted by John Hemming
¶ 9:39 am0 comments
Monday, March 30, 2015
Parliamentary Expenses 2005-2010
Labour seem to be concentrating on issues relating to parliamentary expenses from 2005-2010. I am not really surprised that they are trying to mislead constituents about what happened. At the moment Jess Phillips is avoiding questions as to what she is alleging. It remains that an inquiry was done into those expenses for all MPs. I copy the response letter from the enquiry below:
I have been working with Mike Thornton on the issue of ensuring that the government's commitment to firefighters in terms of their pension (in the case of natural unfitness) is adhered to.
He has put a statement on his website (see above for link) which confirms that we continue to press for a letter of comfort for firefighters.
posted by John Hemming
¶ 8:45 am0 comments
Sunday, March 29, 2015
Nailing the Labour Lie
Labour have just started delivering a dishonest newspaper in the Yardley Constituency.
There are a number of false and misleading items in that newspaper, but one is so spectacularly false that it warrants an immediate response.
The claim is that "while people here are forced to foodbanks". I made an expenses claim for subsistance or food. They then say "Why were you paying for his dinner."
The facts are easy to find. Firstly there are two foodbanks that serve people living in Yardley. The only one actually in Yardley is in Stechford and opened on Friday February 28th 2014. The other one is in Sparkhill and was I believe created some time in 2011.
It is slightly more complicated finding out what I have claimed for dinner. The new rules came in at the start of the 2010 financial year (just before the new parliament).
So to conclude. In this parliament I have not claimed once for dinner on the taxpayer. In theory Labour's leaflet only covers since 2011 when the foodbank in Sparkhill Started, but in fact I have not claimed for dinner at all in the 2010-2015 parliament. On the other hand two neighbouring Labour MPs have claimed for dinner "while local people are forced to foodbanks".
The rules changed in 2010. It is possible to see my claims before 2010. I took a decision in April 2009 to stop claiming second home and subsistance expenses (it was not lumped in with travel then).
The 2009-10/11 figures can be found here. You will find a single claim for 651.43 which is the half yearly service charge. I could, in that year, have claimed £4,800 for subsistance (food) as well as an additional over £15,000 for other second home expenses. However, I decided as my contribution to the cuts necessary to resolve the country's financial problems to stop claiming the second home expenses. I could have claimed £4,800 just for dinner and did not claim a penny of that - although obviously I still had heavy costs. (The budget was an annual one not a monthly one) Prior to that I had claimed second home expenses (including subsistance) In May 2009 I did an analysis of the second home (including subsistance/food) costs of all the Birmingham MPs and the figures were as follows:
John Hemming 59601
Lynne Jones 60163
Steve McCabe 61803
Gisela Stuart 73079
Clare Short 74500
Liam Byrne 84978
Richard Burden 86324
Roger Godsiff 90956
Andrew Mitchell 92822
Sion Simon 103259
Khalid Mahmood 104676
Hence not only am I the most cost effective MP in Birmingham in the 2010-15 parliament, but also I was the most cost effective MP in Birmingham in the 2005-2010 parliament. I have not claimed for dinner/food/subsistance in this parliament even once - notwithstanding Labour's clearly dishonest allegation that I have. Therefore I have obviously not claimed for dinner "while people here are forced to foodbanks" (which can only be from 2011 because there were no foodbanks dealing with Yardley before then). In fact I did not even claim for subsistance in the 2009-10 financial year. The situation before the financial crisis is, of course, different, but even then I was the most cost effective MP in Birmingham for second home costs.
Birmingham St Patrick's Parade Tipperary Association 2015
So many people take photographs of the parade these days that I don't take a lot of my own and concentrate on playing the guitar instead. Here is the Tipperary County Association's end of parade rendition of "a long way to tipperary". posted by John Hemming
¶ 2:53 pm0 comments
Monday, March 09, 2015
Attending today's e-conference
Today's e-conference is about Parents Want a Say. That is about the issues of policy on term time absence at the request of parents and the new rules.
If someone wants to watch the e-conference it will be on Youtube. When the conference starts (or re-starts) the link will appear on my twitter feed. Others may copy it elsewhere. If you wish to watch then simply click on that link.
I am likely to stop and re-start the conference one or more times (depending in part on how hot the central processor on my laptop gets).
If you wish to ask questions then you need to have skype working on your computer.
Someone will act as chair's aide. This person will handle requests to ask questions. I will update this blog post with the skype account name of the person dealing with this. If you want to ask a question you will need to send a skype text message to the chair's aide. At the right time the chair's aide will give you a skype account number to contact.
Please don't try to contact the e-conference skype accounts unless you have been asked to. This interrupts the computer system and warms up the central processor. It is likely that people who try to contact the e-conference out of sequence will be blocked to stop the computer overheating.
Greece and AusterityThis is an interesting article that looks at the question as to what extent Greece was inherently a financial disaster waiting to happen.
It summarises as: "Greece never had the productive structure to be as rich as it was: its income was inflated by borrowings that weren’t used to upgrade its productive capacity."
There is a difficulty with macroeconomic theories that ignore the nature of the economy and the extent to which it is shored up by unsustainable public spending.
Once you take out that which is unsustainable you then see that which left is far less substantial. Another useful extract is: "Until 2014, the country did not pay, in net terms, a single euro in interest: it borrowed enough from official sources at subsidized rates to pay 100% of its interest bill and then some. "
It is, however, only a question as to how big the problem has become by the time that the nature of the new clothes of the emperor has been finally determined
What I find sad is how little use is made of quantitative models when debating potential economic approaches. The models may not be perfect, but they at least give some indication of potential consequences.
Affordable Housing and Housing Benefit
There was a debate in Parliament yesterday which was interesting because Labour admitted that the Labour government was planning to bring in a flat rate housing benefit payment in the Social Housing Sector. In Labour's current Phraseology "Labour planned a Bedroom Tax for Social Housing".
More importantly, however, I asked a question of the Shadow Minister:
John Hemming: I am aware of the proposal to transfer housing benefit money to local authorities with a view to building more properties. Let me ask this: what pays the rent of the people who are already in tenanted accommodation while the new properties are being built with that money?
Helen Goodman: That, of course, is the great conundrum. [... where she does not answer this question ...]
The Shadow minister did not answer this. If Labour bring in such a policy it will only work by top-slicing the housing benefit in some way from tenants. Hence tenants on means tested benefits would have to pay towards their rent, not only those who have spare rooms. In Labour's parlance a "whole home tax" rather than a "(spare) bedroom tax".
If Housing Benefit is cash limited that creates a similar problem. Alternatively some tenants would not be able to get Housing Benefit. However, somehow there is a cash problem.
Some other highlights:
John Hemming: I refer the hon. Lady to the answer that the then housing Minister, the late Malcolm Wicks, gave to a question from the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) in Hansard in 2004:
“We hope to implement a flat rate housing benefit system in the social sector, similar to that anticipated in the private rented sector to enable people in that sector to benefit from the choice and flexibility that the reforms can provide.”—[Official Report, 19 January 2004; Vol. 416, c. 1075W.]
If he said that then, why is it now such a bad idea?
Sheila Gilmore: It is interesting that the flat-rate housing allowance for the private rented sector should be raised. What the hon. Gentleman mentions was discussed as a possibility during the Labour Government.
John Hemming: I tried to intervene on the hon. Member for Bishop Auckland (Helen Goodman) to ask her whether Labour would reduce under-occupation by adopting a policy that involved evicting people living in under-occupied accommodation. Does the Minister accept that if we do not remove the spare room subsidy, the only alternative open to Labour if it wanted to reduce under-occupation would be to go round evicting people from under-occupied properties, which does happen in certain tenancies?
Mr Harper: The Opposition clearly do not have a sensible policy.
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