Stephen Hodgson

Archive for the ‘Economy’ Category

On Tuesday evening (20 April 2010) I was involved in running a careers workshop at Hind Leys College in Shepshed organised by Loughborough’s Conservative candidate Nicky Morgan. The workshop was a great success with a number of people, mostly aged 14-16, attending the two-hour event to learn more about CVs, covering letters, confidence and interview technique – all essential elements of finding a job and especially important in the current economic climate. Attendees also learned about starting a business.

The day after the workshop (21 April 2010) the Office for National Statistics (ONS) released the latest unemployment figures. The latest information shows that in the three months to February 2010 unemployment rose to 2.5 million people. The two worst hit regions in the UK were Yorkshire and the Humber and the East Midlands (see this article from BBC News).

The number of ‘economically inactive’ people (those not in work and not seeking work) in the UK is now a record 8.16 million people, or 21.5 percent of the population! We can’t go on like this. We need government policies that will encourage job creation and get people back into work such as Conservative plans to increase training opportunities, to encourage new business start-ups through Business Clubs, to help equip people with skills through Work Clubs and to make it easier for employers to take on new staff by cutting red tape and scrapping Labour’s National Insurance jobs tax.

I am delighted that in Loughborough and surrounding areas Conservatives are already working to try to help people into work. Conservative candidate Nicky Morgan has launched a Business Club to help small businesses and in the last six months she has organised two highly successful careers workshops, including the workshop in Shepshed last Tuesday. But there is much more to do – we now need to elect a strong Conservative government to embed Conservative support for job creation in national policies and to get Britain on a jobs-driven path to economic recovery.

Today is Budget day and a key milestone before the General Election.

Yesterday Conservative Party chairman Eric Pickles announced that he wants the public to help wade through the detail of the Budget in a “crowdsourcing” initiative – a ‘many hands make light work’ approach via the Internet.

Eric Pickles writes:

Tomorrow we have what will hopefully be this Government’s last ever Budget. We all know what Labour’s Budgets are like by now – they’ll go for the headlines with a giveaway of glittering goodies, whilst stashing away all the nasty stuff into the small print.

Wading through all this small print ourselves is a huge job. This year we’ve decided to do something a bit different – we’re going to crowdsource our response to the Budget. Once the Budget’s out, we’ll publish it in a simple format as soon as possible so you can have a good dig into it. The Treasury has hundreds of civil servants working on all this and there’s no way we can match their resources – so it’s important for as many of you as possible to lend a hand in analysing the detail.

All you have to do is log on to Conservatives.com tomorrow afternoon, have a look, and start picking out anything that might be misleading or hidden away. Together, we can make sure we hold this Government to account over its economic incompetence.

As someone who works in both politics and in tax, Budget day is always an event for me and this initiative will make today even more interesting than usual, as well as speeding up the process of spotting the small print and hidden tax rises.

The BBC reports that the EU’s European Commission is now warning about the size of the UK’s budget deficit:

The government’s plans for reducing the budget deficit are not ambitious enough – according to a European Commission report to be published on Wednesday.

The report warns that the UK is not on course to cut its deficit in line with EU rules by a deadline of 2015.

Those rules say deficits must be below 3% of GDP, but the UK’s is expected to hit £178bn – 12.6% of GDP – this year.

In a separate article the BBC says the Conservatives are poised to reveal what cuts they will make if elected:

The Conservatives are preparing to outline spending cuts they would make in this financial year if they are elected, the BBC has been told.

BBC political editor Nick Robinson said the party was waiting for next week’s Budget before unveiling more details.

Earlier shadow chancellor George Osborne called the PM “dishonest” over the need for urgent spending cuts.

…

Mr Osborne added: “I think the central point we have to understand here is that the debt is holding back the British recovery, and unless we get confidence into the British recovery – and that comes from dealing with our debts – then we will not be creating the jobs that we all want to see.”

The UK national debt and the annual overspend (the deficit) are at record levels – dangerous levels. The UK is edging closer to losing its AAA rating on government debt. The unsustainable public debt is now risking a double-dip recession and holding back the recovery of the UK economy. The UK was the last major economy to leave recession at the end of last year. If the current government approach of spend, spend, spend continues we will probably see the Bank of England printing more money, inflation shooting up (it’s already now at 3.5 – 3.7 percent – well above the government’s target of 2.0 percent) and ever higher interest rates.

Public sector union UNISON recently produced a scare-video saying that if spending cuts are made then 999 calls will go unanswered and bins will go uncollected. The truth is that the government routinely wastes money and it is quite feasible to cut spending and secure the recovery without affecting the quality or level of frontline services. The TaxPayers’ Alliance have produced a rebuttal of the UNISON scare-video:

It will be interesting to see what next week’s budget brings and I look forward to seeing George Osborne set out some of his plans for if the Conservatives win the General Election and he becomes the next chancellor.

Prospective Conservative MP Nicky Morgan appeared on the BBC East Midlands Politics Show yesterday (7 March 2010) to talk about the announced closure of the AstraZeneca Charnwood facility in Loughborough.

Locally various organisations and politicians are working hard to try to mitigate the effects of the closure and to help those directly affected. Let’s hope the AstraZeneca issue moves further up the national government agenda soon.

The local AstraZeneca action group convened by Charnwood Borough Council met for the first time yesterday. The action group includes representatives from Charnwood Borough Council, Leicestershire County Council, Loughborough Town Centre Partnership, Loughborough University, Loughborough Chamber of Trade and Commerce, Leicestershire Chamber of Commerce, Prospect Leicestershire and AstraZeneca.

Following the meeting the group issued a joint statement.

Joint Statement from the AstraZeneca Action Group

All parties were grateful for the opportunity to meet today at this early stage. We had a very constructive discussion. The meeting today has been an important step in the process of exploring future options for the Charnwood site and how best to support all those who are affected.

It is still early days and there is much to be done over the next 18 months but it is important that we put plans in place as a matter of urgency to help deal with the situation.

At the meeting today it was agreed that EMDA will establish a task force including AstraZeneca. The priority will be to put support in place to help the people affected to find new jobs or set up their own businesses. The other important aspects will be finding new uses for the site and creating new employment opportunities in the local economy.

One of the early actions will be to carry out an economic impact assessment which will help the task force decide where to focus its efforts.

We have agreed to meet again within the next month.

This is a positive first step and it’s pleasing to see how quickly local organisations have been able to get together to try to mitigate the effects of the AstraZeneca Charnwood closure.

Charnwood Borough Council has covened an action group which will meet for the first time this Friday to discuss the consequences of the decision to close the AstraZeneca Charnwood facilitiy in Loughborough and to agree ways to support the staff and plan for the future use of the AstraZeneca site. Local organisations involved in the action group include Leicestershire County Council, Loughborough Town Centre Partnership, Loughborough University, Loughborough Chamber of Trade and Commerce, Leicestershire Chamber of Commerce and Prospect Leicestershire. AstraZeneca has also been invited to join the action group.

The Leader of Charnwood Borough Council, Councillor Mike Preston, has said:

We are moving as quickly as we can to see what we can do in terms of reducing the impact of that blow as much as possible.

It is early days but I think it is important everyone works together to address this now.

Prospective Conservative MP for Loughborough Nicky Morgan has said:

This will be a huge shock for staff and their families and very difficult news to take on board. The company must do all it can to support them and to ensure staff are given the option of working for the company elsewhere in the UK and overseas, if they want to pursue that option.

It has always been important to Loughborough to have such a large company based locally and to lose the site now is extremely bad news for our town and local area. I hope to be discussing this matter with the company as soon as practicable.

Meanwhile Loughborough MP Andy Reed raised the issue in the House of Commons this afternoon:

Mr. Andy Reed (Loughborough) (Lab/Co-op): AstraZeneca in my constituency has decided to relocate its research and development facilities to Cheshire, which will cause 1,200 jobs to be lost to the local economy in 2011. Overall, pharmaceuticals are strong in the United Kingdom, and the Office for Life Sciences has ensured that many such jobs remain in the UK. However, that is no consolation to the 1,200 people who will have to relocate from my constituency, so will my right hon. and learned Friend assure me that the Government will give every assistance to the taskforce that we will set up this week to address the situation and ensure that there is economic and development help for the constituency of Loughborough and the people who will be affected?

Ms Harman: I can give my hon. Friend that assurance. We do not believe in standing by, letting people fend for themselves, letting recession take it course, or that unemployment is a price worth paying. We have an active interventionist policy to support industry, including in the regions, which would suffer if the regional development agencies were abolished, as proposed by the Conservatives.

Unfortunately people in Loughborough can take little assurance from Harriet Harman’s reply in the Commons. Instead of giving a serious answer to a serious question and offering an actual government commitment to help people in Loughborough, Ms Harman instead used the question as an opportunity to make partisan political comments about the Conservatives.

People in Loughborough want to know how the Labour government will help, not what Ms Harman thinks of Conservative Party policy on the economy. Perhaps Ms Harman doesn’t appreciate that there are 1,200 jobs at stake, 1,200 families directly affected and an entire town, borough and county that will feel the effects of the closure of AstraZeneca’s Loughborough site.

Loughborough MP Andy Reed should be furious that Harriet Harman used his question as a cheap opportunity to attack the Conservatives.

Hopefully the meeting of the action group this Friday will produce positive ideas and plans to help those directly affected by the closure of the AstraZeneca facility and to mitigate the effects of the closure on the local economy.

Loughborough’s second biggest employer and Britain’s second largest pharmaceutical company – AstraZeneca – has announced that its Loughborough site will close by the end of 2011. The site employs 1,200 people, around 800 of whom are thought to live in Charnwood.

As of January 2010, the official measure of unemployment in Loughborough (as a constituency) showed 2,043 people were unemployed. The loss of a further 1,200 jobs in Loughborough will push unemployment in the area to almost 3,250 people. There will be the inevitable knock-on effects for other parts of the Loughborough economy as spending in the town and surrounding areas falls.

This is devastating news for Loughborough and also for Charnwood and for Leicestershire.

In the wake of this announcement it is impossible to ignore the role of the present Labour government in hurting enterprise and jobs across the UK. The Labour government has created a tax and regulatory regime which has made it increasingly difficult for large businesses to operate competitively in the UK and the pharmaceuticals industry is particularly sensitive to tax and regulation. Just last week AstraZeneca agreed to pay £505m to HM Revenue & Customs to settle an on-going UK tax dispute – that’s five times more than the £100m that the company invested in its Loughborough site over the last 10 years. Most of that money will now be spent paying off the government’s record debt – or servicing the interest on that debt. We can’t go on like this.

On Saturday Conservative Shadow Chancellor George Osborne announced that, if elected, the Conservatives would unveil an emergency enterprise budget within 50 days of forming the new government. The top rate of corporation tax would be reduced from 28 percent to 25 percent and the lower rate of corporation tax would be reduced to 20 percent. These are tax cuts for businesses that would come within just weeks of a Conservative election victory and which would signal to businesses – both large and small – that the UK is enterprise-friendly and open for business.

It’s impossible to say that an emergency enterprise budget might reverse AstraZeneca’s decision but we can be confident that it would bolster both the financial position and the morale of employers and enterprises of all sizes – and the knock-on effect is likely to be that jobs are saved and new jobs are created across the UK.

At the evening’s Full Council meeting of Charnwood Borough Council members of the council voted to approve the local authority’s budget for the 2010/2011 financial year.

Some of the highlights of the budget are:

• * A 2.0 percent increase in council tax (against a current rate of inflation of 3.5 – 3.7 percent)
• * Sensible planning based on realistic savings across all areas
• * Consciously rebuilding council reserves
• * Significant progress towards building the housing revenue account (HRA) balance, which protects council housing
• * A strategic approach to reducing the cost of running the council whilst maintaing good quality services
• * Keeping costs down, keeping council tax down and delivering value for money, as demanded by people across Charnwood and as promised in the Conservative manifesto since the 2007 local elections

Charnwood Borough Council is now the best-performing district authoritiy in Leicestershire in terms of producing savings. The current Conservative administration has consistently delivered on its promises to run the council more efficiently, to identify cost savings whilst maintaing front-line services and to keep taxes down. All of these things are more important than ever in the current difficult and uncertain economic climate and the Conservative approach to finances locally reflects the national approach if the Conservatives are elected at the General Election: cutting down on waste, tackling the culture of debt and reducing taxes – all of which promote long-term growth and stability for individuals, businesses and the economy as a whole.

The full budget is available to read on the council’s website.

The BBC reports George Osborne’s announcement that the Conservatives plan to encourage saving and investment by allowing the public to buy shares in government-controlled banks such as Royal Bank of Scotland (RBS) and Lloyds Banking Group at discounted prices:

“The man who would be chancellor wants a new generation of mass share ownership,” said BBC business correspondent Joe Lynam.

“And he wants to create a new culture of saving rather than borrowing.”

Mr Osborne said the share offer would only be made when the banks were properly regulated and could not take the kinds of risks that preceded the recession.

The BBC explains the details as reported in an interview George Osborne gave to the Sunday Times:

It was expected people would be offered shares worth between a few hundred and few thousand pounds at a discount on the market price, the paper reported.

There could be extra discounts for young people, low-income families and parents saving for their children.

This strikes me as a creative way to encourage share-ownership and saving and at the same give ordinary people the opportunity to exercise control over the banks that their taxes helped to bail out.

This evening Loughborough Chamber of Trade and Commerce hosted a ‘business hustings’ event for Loughborough’s parliamentary candidates. The event took the format of 10-15 minute speeches by the candidates followed by an hour of questions and answers with local small business owners in the audience. Questions spanned subjects as wide as bankers’ bonuses and the work ethic of children leaving school.

In their speeches the candidates were asked to outline some of their national party policies affecting small businesses as well as their own vision for businesses in Loughborough. Lib Dem candidate Mike Willis, clearly a fan of Vince Cable, spoke mainly about macroeconomic policies and how the current economic situation and tax system affects businesses. Prospective Conservative MP Nicky Morgan split her speech equally between national Conservative policies affecting businesses and how, if she was elected, she would use her role as MP to support small businesses in Loughborough.

Loughborough’s incumbent Labour MP Andy Reed was not present at the hustings, having told the Chamber that he will not share a platform with the Conservative and Lib Dem candidates until after a General Election is called.

All-in-all the business hustings was a good event, with members of the Chamber commenting on how helpful it was to hear the candidates outline both their party’s policies and their personal views about business and enterprise.

Nicky Morgan recently launched a ’small shops’ campaign and people in Loughborough are being encouraged to nominate their favourite small shops by e-mailing the name of their favourite small shop (and the reason why it’s their favourite) to office@loughboroughconservatives.com. The winning shop will be presented with an award next month.

A report released today by the government’s National Equality Panel (NEP) finds that differences between income and life opportunities are as great today as they were 50 years ago. Put simply, social mobility – the ability of individuals and families to improve their lives through hard work and aspiration – has rapidly declined under Labour.

The National Equality Panel’s report was commissioned by government equalities minister Harriet Harman and the Government will no doubt use the report to try to justify greater redistribution of wealth or other forms of government intervention that the present Government so loves.

In a free economy and a free society some people will always be relatively better off than others and that inequality in itself is not inherently a bad thing but Labour’s policies have devastated social mobility in this country – the most obvious evidence being the huge growth in welfare dependency over the last 13 years. The present welfare and tax system pays people to be poor. Those who try to earn a living and improve their situation find themselves taxed heavily if they earn as little as £6,000 a year.

We cannot go on like this with government policies that discourage hard work and aspiration. We need a change of government – a Conservative government – one that recognises the importance of promoting social mobility, encouraging aspiration and tackling the barriers in the education, welfare and tax systems that keep people poor.