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RichardLayard.JPGRichard Layard on Treasury analysis that reveals some home truths about the deficit

If you think Labour caused the deficit, think again. The Treasury’s figures will amaze you. They show clearly that it was the fault of the global financial crisis. Up until then, Labour had much lower deficits than the Conservatives when John Major was Prime Minister. Labour’s average deficit was 1.2% of GDP, while under Major it was 5.1% - four times higher.  Similarly Gordon Brown reduced the ratio of debt to GDP, while the Major government increased it.

The graph below says it all. It really is time the British public was exposed to these basic facts. Let’s explode forever the narrative about the “mess which Labour made”.

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(Source: HMTreasury, Pocket Databank, 26 February 2015, Table 11a.)

But where do we go from here? In the upcoming general election the future of our public services are at stake. The Conservatives want to reduce them permanently as a share of our national income.

This makes no sense from the point of view of economics, nor from the point of view of common humanity. As people get richer, their demand for health services and education grows faster than their income. That is a standard finding, and of course the demand for food and material comfort grows more slowly. So unless we charge people for healthcare and schools, public expenditure on these services should consume a rising share of national income, not a falling one. Similarly, as we become more affluent, we surely should spend disproportionately more on elderly care, child protection, and the local environment.

So what of the argument that what people most want is money in the pocket?

Last year the German Chancellor, Angela Merkel held a seminar in her office on ‘What Matters to Us?’, where she heard the evidence on what makes people satisfied with their lives. The evidence was clear. Variation in household income explains less than 1% of the variation in life-satisfaction. But the variation in mental health explains at least three times as much, and the same goes for physical health. Moreover, money spent on evidence-based mental healthcare gives benefits ten time greater than the same sum left in household budgets. Our greatest problems – including dementia, alcoholism, domestic violence and suicide – can only be handled by much more spending on health.

But why should a politician care about all of this evidence? For one simple reason, that voting behaviour is influenced by how satisfied people are with their lives. In fact, the evidence shows that this matters even more than the economy.

Because of the recession, our debts have of course vastly increased, but we really do not need to destroy our public services on that account. Our ratio of debt to GDP is now stable at 80% - well below its average level over the last 200 years. And, in the short run, cutting our public services will reduce our GDP as much as it does our debt. It makes no sense.

The scale of expenditure cuts which the Chancellor is proposing is a disaster, made even more absurd by their reversal in the final pre-election year. The plan has been ridiculed by all responsible commentators. It is in fact hard to believe that George Osborne and David Cameron would ever do this if they remain in power. But let us hope we are spared their experiment.

Professor Lord Richard Layard is Director of the Well-Being Programme at the LSE and a Labour Peer in the House of Lords

Published 25th March 2015

 

The facts of the matter

Richard Layard on Treasury analysis that reveals some home truths about the deficit

MaggieJones2014.jpgMaggie Jones on the Coalition’s depressing legacy for young care leavers

Last year, in one of our famous victories in the House of Lords, the government caved in to an amendment that would allow young people in foster care to ‘stay put’ until the age of 21. A small but significant step that recognised how far the experience of care leavers differs from those in most biological families. It applied however, only to those in foster care whilst those in other forms of care continue to leave at 18 or even younger. Sadly, the overall experience of care leavers remains a shocking legacy of this government.

The failings are apparent well before the children are ready to leave care. Recent cases of sexual abuse of young girls in Rotherham and Oxfordshire, many of whom were in the care system, highlight just one element of neglect. But the failings go wider and deeper. It’s a real indictment of the care system that their young people have such poor educational outcomes. Of the 70,000 in care, only 15% get more than 5 A*-C grades at GCSE. And only 6% of care leavers study for degrees, compared to 33% of their peers.

They also struggle to live independently, and with little support, from a worryingly young age. The House of Commons Education Select Committee published a devastating report last year that found 16 or 17 year olds being placed in bed and breakfast accommodation – sometimes for extended periods of time. Their experience was described as threatening and frightening.

For others, the transfer to independent living takes the form of a hard to let council flat where they are all too often prey to exploitation. The Barnardo’s report On My Own highlights vulnerable young people struggling with the lack of life skills to manage living alone, and facing eviction, sofa surfing or sleeping rough after the breakdown of their accommodation.

So, perhaps it’s not surprising that the employment statistics for young care leavers are so depressing. 34% aged 19 or over are not in education, employment or training. Twice the average of their peers. What’s worse are the statistics that show, for example, 70% of sex workers and 24% of the adult prison population having been in care; and that over 20% of care leavers have problematic drug use.

At the heart of the problem has been our inability to respond effectively to the emotional and personal turmoil which many adolescents experience as they grow into adulthood; and which are magnified in young people in care who already struggle with the legacy of family break up. For these children, continuity and support from a trusted adult is crucial but often lacking. Schemes to provide personal advisors or independent advocates are failing to deliver consistently.

So all too often young people transitioning to independent living find themselves abruptly, and irreversibly, alone. Yet we wouldn’t expect our own children to fend for themselves at 16, and we wouldn’t refuse them the right to return home at 21 or even 25 when things go wrong.

The responsibilities for this damning picture are widespread and include national and local government as well as the care providers themselves. The political will, resources and professional skills all need to be improved. Ultimately however, it is clear that we are badly failing in our duty as a corporate parent – with all the consequent financial and social policy implications. There has never been a better example of the advantages of early, effective action saving money and heartache later on. It is a lesson we cannot afford to ignore.

Baroness Maggie Jones of Whitchurch is Shadow Education Minister in the House of Lords. She tweets @WhitchurchGirl

Published 12th March 2015

Abandoned and alone

Maggie Jones on the Coalition’s depressing legacy for young care leavers

GlenysThornton.jpgGlenys Thornton on what’s set to be a historic day in the Lords for equal pay campaigners

Transparency in pay rates cannot come a moment too soon. It is shocking that in the UK in 2015, women are still earning just 80p to every pound that men earn. And according to the new figures based on the Office of National Statistics Annual Survey of Hours and Incomes, the pay gap between men and women in their twenties has doubled since 2010 – up from 2.6% to 5.3%. It has also increased for women in their thirties, from 11.9% to 12%.

Take Heather, 27, who knows she is earning an average £6,000 less than her male colleagues. “I'm friends with the director's PA and when she was drunk she let slip the difference in pay. She was annoyed about the glaring inequality... and I'm absolutely furious. But what can I do when I'm not even meant to know.”

Heather’s not the only one. Shannon, 25, works in advertising and felt too insecure in her job to ask for a pay rise, despite knowing her male counterpart was earning more than her. To make matters worse, for an end of year bonus he was given £2,000 cash while she received a £100 Liberty's voucher.

Or Erin, 30, a lawyer who was asked to take a pay cut to avoid redundancy – only to find out none of her male colleagues had been asked to do the same. Meanwhile Amanda, 38, who works in media, was stunned with two of her male colleagues drunkenly boasted about their salaries, as she realised both were being paid an average £10,000 more despite having the same experience as her.

So say the readers of Grazia magazine who have been great in supporting a campaign on Equal Pay.

It is 46 years since the machinists walked out of Dagenham’s Ford plant in protest over the pay divide, which prompted the Equal Pay Act. Frankly, we can’t wait another 40 odd years for change.

Something that will push this issue along dramatically is transparency of pay rates by larger employers in the UK. We put the power to compel them to do this in the 2010 Equality Act, and said let’s monitor and bring into force if we don’t make enough progress. Under the Coalition, some small developments have occurred, but not nearly enough, and despite exhortation and encouragement a mere two companies actually publish their gender pay scales. So the amendment I’ve tabled to the Small Business, Enterprise and Employment Bill enacts Section 78 of the Equality Act within a year. 

Credit for our success must go to Gloria de Piero for her leadership in the Commons, Grazia, Unite, the TUC, the Fawcett Society, and both the cast of ‘Made in Dagenham’ and those who lives they portrayed for their relentless campaigning in recent months. The most exciting moment for me was meeting the Dagenham Women last December. I only wish we had had better news for them then then but after today’s business, let’s hope we can say we are absolutely on our way to delivering the equal pay they fought for all those years ago. 

Baroness Glenys Thornton is Shadow Equalities Minister in the House of Lords. She tweets @GlenysThornton

Published 11th March 2015

Dagenham to Westminster revisited

Glenys Thornton on what’s set to be a historic day in the Lords for equal pay campaigners

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