Reform benefits millions
This week the Government announced a reform of the state pension which will result in a single pension of £144 a week at today’s prices. (The current pension is £107.45 a week). The idea is the brainchild of Liberal Democrat Pensions Minister Steve Webb and is further example of the fair and progressive reforms being introduced as a result of Lib Dem participation in the Coalition.
Since Beveridge the state pension has become fiendishly complicated –with a basic state payment and earnings related top ups. Because the Government recognises the state pension is not enough to live on, millions of people are eligible to claim pension top-up to a total of £142.70 although not everyone does. It will halve the number of people requiring pension credit.
This simplification and reform comes on top of automatic enrolment which helps between 6 and 9 million people benefit from a workplace pension. It also is after the government have delivered the biggest ever increase in the state pension and guaranteed that pensions will rise at the highest of earnings, prices or 2.5 per cent. The state pension is at its highest share of average earnings since 1992 – delivered at a time of austerity.
Particular beneficiaries are women, the self employed and low earners.
Benefits cap difficult but fair
The decision to restrict the increase in work related benefits to 1% is a difficult decisions the Government has to face if we are to have any chance of getting public finances into balance. Neither I nor my Liberal Democrat colleagues approached this with any degree of equanimity. However, I think it is right to put it in context.
The benefits bill amounts to one third of public spending which means if we cannot restrict the rate of increase it will be impossible to eliminate the deficit. Benefits were increased last year by 5.2%, well ahead of the increase in earnings. Since the economic crash benefits have risen by 20% while earnings have risen by 10%. Other benefits, including pensions, continue to rise with inflation. As wages and salaries in the public sector have been frozen for all but the lowest paid and are to be restricted to a 1% increase it is only fair that benefits should be treated in the same way.
In addition, thanks to the Liberal Democrats, the level at which people start paying tax has risen by record amounts to £9440 next April putting £600 back into their pockets. People working full time on the minimum wage will see their take home pay increase by more than inflation.
The Government are giving priority to helping people into work so that those on work related benefits or in part time work, who want to work longer can benefit.
I understand the concerns of those living partly or wholly on benefits and have given a commitment to help constituents who are adversely affected, and indeed have already intervened in a number of cases.
The total cost of benefits continues to rise underlining the scale of the challenge. Criticism is easy but those who choose to do so have an obligation to explain what they would do differently. My response to one easy challenge is to point out that the richest section of the community will pay more under this government than they did under Labour (who cut Capital Gains Tax to 18%).
Cutting ourselves off from vital Unions diminishes us
Europe is an issue that obsesses the Tory party and distracts them from almost everything else. David Cameron has postponed his keynote speech on the topic several times because he cannot find the right pitch.
The EU is far from perfect and there are allies for reform – but constantly threatening to leave weakens rather than strengthens the UK’s position.
The US has suggested that the UK would not be its first port of call if we left the EU. British business is increasingly alarmed at the implications of the UK being left outside. We need to develop the single market from the inside.
I find the debate about the EU remarkably similar to the debate about Scotland’s place in the UK.
Our current international institutions are far from perfectly functional but I fail to see how fragmenting them into even more entities will make agreement simpler or even possible.
For Scotland to be in the EU and outside the UK seems perverse to me. The language of UKIP and the language of the SNP and the Tory sceptics is remarkably similar. I strongly support reform of the UK and the EU but I believe it will be done more credibly by staying inside.
I have been told on many occasions that international organisations and businesses would find the UK and Scotland less attractive as a base for their international activities if we ruled ourselves out of the mainstream, while being on the inside makes us more congenial.
Broadband holds key to rural development
I was glad to have the opportunity to raise the development of broadband at Scottish Questions recently. Aberdeen successfully bid for the UK Smaller Cities fund for high speed broadband. I supported the bid from the day the Government announced the fund and am delighted at the outcome.
I also welcome additional funds for broadband from the UK Government, the Scottish Government, Aberdeenshire and City and the telecommunications companies. I believe it adds up to over £100 million for the North East.
I was also anxious to point out that rural communities need broadband at reasonable speeds – not least to support small businesses and stop them having to relocate.
I was pleased that the Minister said he was already in discussions with Aberdeenshire on this issue. The priority must be to provide access where it doesn’t exist and to increase the speeds where it does. Broadband can be the lifeblood of rural communities but it will take investment to realise the full potential.