Government ripping us off – again

From The Times (pay wall). It’s going to make commuting by rail to Exeter from Axminster, Honiton, Feniton, Whimple and Cranbrook a very expensive way of getting there – so more cars will be clogging up more roads in “Greater Exeter”.

“Nobody likes being ripped off. And there is something particularly distasteful about being fleeced by your own government.

But that is precisely what is happening. Rail fares are set to rise at a much faster rate than employee earnings, with annual season tickets of over £5,000 an increasingly common sight. And interest charges on student loans in England will rise to 6.1 per cent from the autumn.

From students to commuters, the cost of living in the UK is on the rise. And some of the biggest cost increases are in areas where the government sets the terms.

Both rail fares and student loans are linked, under government policy, to the retail price index measure of inflation, long ago discarded by economists as a flawed measure of price growth. It is widely known that RPI consistently overstates inflation in the UK, and that the alternative measures of inflation, consumer prices index (CPI) and CPIH (which includes owner-occupiers’ housing costs) are a far better reflection of what is actually going on.

Indeed, in the June 2010 budget George Osborne announced that, partly for these reasons, the government would start using CPI for the uprating of benefits and public sector pensions. The same budget mentioned “reviewing how CPI can be used for the indexation of taxes and duties while protecting revenues”, yet there has been near-silence on this issue ever since.”

“Inclusive growth” or exclusive growth in East Devon (soon to be Greater Exeter?)

Greater Exeter or Greater East Devon?

A follow-on from the previous post.

“Inclusive growth is emerging as a key agenda in the UK. The general election was fought from both sides with a promise to create an economy that works for everyone.

City leaders across the country are pursuing inclusive growth as a means for addressing some of the big challenges facing their communities, from poor health and economic exclusion to high demand for services and spiralling financial pressures. Our report, Citizens and Inclusive Growth

explores how we can build on this agenda and support impactful next steps by engaging citizens as part of our strategy for inclusive growth.

The RSA Inclusive Growth Commission set out a bold vision for a new model of growth that truly moves on from the failed trickle down economics of the past. But it also identified a critical gap in current thinking and practice around alternative economic models: the role that citizens should play in shaping them. A “place based” economy is unlikely to succeed without active citizen and community participation. The RSA’s Citizens’ Economic Council has underlined the real value created by getting citizens involved in shaping economic thinking and policy, both in terms of the quality of decision making and the positive effect it has on people’s skills, as well as their sense of agency, self-efficacy and belonging to their place. …

So how can we take the agenda forward in the UK? It’s clear that citizens aren’t featuring enough in conversations and decisions about devolution and strategies for economic growth and development. The parameters of inclusive growth are largely being set by officials, which has meant that too often we are tinkering at the edges of existing growth models rather than transforming them. Evidence from the report suggests greater involvement of a broad range of citizens (especially those with lived experience of hardship and poverty) may have a transformative effect on priorities and policies for growth, encouraging greater equity and sustainability.

There are ways that government and cities could demonstrate their commitment to citizen engagement in pursuit of inclusive growth. One of our suggestions is that in future phases of devolution, localities should negotiate significant devolved funds that are controlled by their citizens through participatory budgeting. The same could apply to the programmes that ultimately replace EU structural and social funds after Brexit.

Inclusive growth should go hand in hand with an inclusive form of decision making. Towns and cities in the UK have a real opportunity to make this happen. “

Why “growth” is almost impossible in East Devon

Our Local Enterprise Partnership trumpets “growth, growth, we must have growth to prosper” and EDDC chose the highest growth figures to ensure its Local Plan got LOTS of housing. But they both seem to have forgotten something that their bible, the Daily Telegraph, now points out:

Britain’s productivity crisis risks getting worse because the population is ageing steadily, leaving relatively fewer younger, more dynamic workers who typically innovate more.

Unless drastic action is taken to boost skills and creativity, or to increase the number of young workers, then growth will struggle to pick up, according to new economic research published in the journal of the National Institute of Economic and Social Research.

“The share of young workers impacts the innovation process positively and, as a result, a change in the demographic profile that skews the distribution of the population to the right [older], leads to a decline in innovation activity,” said the paper, written by Yunus Aksoy, Henrique Basso and Ron Smith. …

To avert a sustained slowdown they recommend that governments should look at ways to make the dwindling proportion of young people more productive.

“Unless there are drastic changes most OECD countries will need to devise new policies to foster medium-run economic growth in an environment with ageing population, perhaps by increasing investment in human capital,” the researchers believe.

Alternative options are also available, but some may be less politically palatable – for instance, encouraging greater flows of migrants of working age into the country.

“Demographics are not destiny and our conclusions assume that there will not be major changes in rates of immigration, labour force participation, fertility or longevity,” the economists said.”

UK – tax avoidance hot spot

Almost 40% of corporate investments channelled away from authorities and into tax havens travel through the UK or the Netherlands, according to a study of the ownership structures of 98m firms.

The two EU states are way ahead of the rest of the world in terms of being a preferred option for corporations who want to exploit tax havens to protect their investments.

The Netherlands was a conduit for 23% of corporate investments that ended in a tax haven, a team of researchers at the University of Amsterdam concluded. The UK accounted for 14%, ahead of Switzerland (6%), Singapore (2%) and Ireland (1%).

Every year multinationals avoid paying £38bn-£158bn in taxes in the EU using tax havens. In the US, tax evasion by multinational corporations via offshore jurisdictions is estimated to be at least $130bn (£99bn) a year. …”

“Countryside in crisis”

“In a pointed letter to the Times, the [Rural] coalition declared that: “More than nine million people live and work in rural England, yet their concerns are in danger of being squeezed out if Brexit discussions focus only on agriculture and the environment.”

The effects of austerity and corporate cost-cutting had already decimated vital rural services, it argued, “risking rural communities becoming enclaves only for the wealthy”.

Talking to various members of that group, you get a feel for the range of different perspectives, but also of the shared insistence that Brexit will not just affect the countryside in terms of a withdrawal from the Common Agricultural Policy and related regulation and subsidy, but is also likely to bring to a head issues concerning the fabric of rural life that have long been unravelling.

…“Do we want the countryside just to be a national park and import our food from elsewhere or do we want it to be full of thriving communities that can be a productive part of the economy?”

… The Rural Coalition wants at least 7,500 affordable houses for young families to be built per year to reverse this trend. Paul Miner of Campaign to Protect Rural England argues that, with concerted policy action, “a commonplace sight in the countryside could be thriving communities boosted by new affordable homes”.

… There is a very big if there, of course, to go alongside the multiple other ifs on the horizon. At the heart of this one is the question of what we collectively understand rural Britain to be about. Whether it is a green and pleasant backdrop to insistently urban priorities, or whether it can re-establish a community that works for all generations and income groups. Hudswell suggests perhaps part of that solution can be created by the communities themselves.

“The story really is,” Lightfoot says, “if you sit back, nothing happens.”

“Or,” Cullen says, “you look around one day and think, hey, Christ, we have lost everything.”