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It has just come out that George Osborne’s plans to take away Child Tax Credits from households earning over £50,000 has fallen apart. It looks like the Tories are going to take tax credits away from families with a combined income of £31,000. We think 1.3 million families are going to be on the receiving end of this kick in the teeth. Im trying to work out what will mean for the over 10,000 families in Hodge Hill getting this vital support so I’ve written to Gorge Osborne urgently demanding answers, and here is the letter below.

Letter to George Osborne

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Today’s growth

January 26, 2010

in Blog

As Alistair Darling predicted, we got the news today that the UK exited recession at the end of last year.

But, what today’s figures also show is that we were right to be cautious about the pace of growth – and that now is absolutely the wrong time to slam on the brakes as the Tories propose.

Two points stood out for me.

First it looks like new growth is broad-based; the two main aggregate components, services and production, both recorded an increase of +0.1%. Manufacturing also saw positive growth, growing by 0.4% and growth in services was led by a 0.4 per cent increase in ‘distribution, hotels & restaurants’. This sub-sector includes retail trade (grown in line with retail sales) and motor trades which both grew on the quarter.

Second, government’s ‘real help now’ made the world of difference. Employment has fallen by 1.7 million less than it would have had the experience of the 1990s been repeated. The Council for Mortgage lenders has twice revised down their forecast for repossessions in 2009, from 75,000 to 50,000, and the corporate insolvency rate has also been much lower than in previous recessions, as initiatives like the Government’s Time to Pay scheme which has helped over 150,000 businesses spread over £4.5bn of tax payments reduce the cash flow pressures on business.

So, now is not the times for immediate cuts to government help. As the Head of the IMF said last week “if you exit too early (from the stimulus steps), then you’ll have the risk of going back into recession,” (Dominique Strauss-Kahn, 18 January 2010, Wall Street Journal).

By the way, on international comparisons it is not surprising that the UK has taken longer to emerge from recession. We have an open economy and a large financial sector. Today’s figures show, again not surprisingly, that the financial services have still not begun to contribute positively to growth.

Plus unemployment remains below 8%. Although we’ve seen other countries experience growth earlier in 2009, unemployment in the US continued to rise in December and the unemployment rate in both the US and the Euro area is at 10%.

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The Tories marriage tax con

January 25, 2010

in Blog

So there’s been a bit of interest in the Tories’ latest marriage tax plan (version 6? I’m losing count).

The idea is for a Transferable allowance for all married couples with kids aged 0-3.

On closer inspection however it turns out that the policy would cost £0.8bn in 2009-10 prices – and wait for it – would benefit just 6 per cent of married couples, 2 per cent of all family units (single people or couples and their dependents) and 3 per cent of adults.

So everyone would pay for a tax break that wouldn’t even help the majority of parents with the hardest job they do; bring up kids well.

It’s now clear Mr Osborne couldn’t organise a party in a brewery never mind a budget in the Treasury.

(Estimates have been derived from HM Treasury’s tax and benefit model using Family Resources Survey 2007-08 data uprated to 2009-10 levels of prices and earnings)

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Question Time and marriage tax

January 23, 2010

in Blog

I was out and about in Hodge Hill yesterday, so didn’t get time to blog about Question Time, broadcast from the Milton Keynes shopping centre (where the centre manager was telling me they had an absolutely bumper Christmas). Here’s the link if you want to watch it. You’ll forgive for me saying this, but I thought the most interesting debate was about the Tory marriage tax.

Now, I happen to believe that marriage is the absolute bedrock of society. But I believe when it comes to public money we should use it to help parents do the toughest job in the world; bringing up children well, especially, I might add because I think people get married for love not tax allowances.

Some estimates of the Tory plan – the transferable tax allowance for married couples where one partner is working, as proposed by Ian Duncan Smith, cost an incredible £5 billion – yet the Tories plan to cut Child Trust Fund from families on over £16,000, cut childrens’ tax credit from families on over £31,000 and cut Sure Start provision from middle income families.

The Tories have of course not said where the money would come from, and yesterday senior Tory backbenchers were suggesting the money would come from ‘green taxes’ ie petrol duty.

I’m afraid this sounds like the triumph of slogans over solid policy. And I thought the Question Time audience spotted it mile away. More on this to follow….below is what David Cameron has said about marriage tax, and the costs of the proposal set out by Ian Duncan Smith [click to continue…]

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Cadbury

January 20, 2010

in Blog

Gutted. That sums up the way I feel about Kraft’s takeover of Cadbury. So many of my friends, constituents and party members work there that today could never be anything other than a very, very sad day.

Today I spoke Todd Stitzer, Cadbury’s chief executive about Kraft – and, crucially, the future. I wanted to know how do we turn today into a new future, with new jobs and a stronger life for the years to come.

Todd, I have to say, is as gutted as everyone else. But there are three rays of hope. First, there’s a big chance that the change will mean new sales especially in India, China and Russia; in fact Kraft think 5pc a year in growth is doable. Second, Todd thinks most cost savings will come from abroad, where the two businesses overlap most – while there’s some administrative crossover in the UK, there just isn’t much manufacturing crossover.

Third, and most important, Todd feels Cadbury’s Birmingham manufacturing base is the last place on earth Kraft would look for savings. Not only has Cadbury’s spent £300-400 million on Bournville in the last few years, but it’s physically impossible for anyone to make the amount of chocolate made in Bournville anywhere else in the world without spending hundreds of millions of pounds.

That means Kraft could be a net importer of jobs. Finally, I asked whether Kraft was going to be true to Cadbury’s traditions; he said he thought so, but it was too early to really guarantee it. Kraft’s chief executive is here next week. That’ll be our first chance to cross-examine her.

So, a very sad day. But our job now is to push hard to make sure Cadbury’s goes from strength to new strength, wins in new markets and grows jobs here in Birmingham. That’s the way we’ll seize a silver lining in Cadbury’s iconic purple wrappers.

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Mr Osborne in the FT

January 16, 2010

in Blog

Another extraordinary intervention from George Osborne this morning. He claimed in a newspaper interview that while he wanted precision to the last pound and penny about the Government’s spending plans for 4 years time, he himself was unable to say which cuts he’ll make in 4 months time.

Perhaps he thinks there’s too much uncertainty?

Never again can he accuse Labour of electioneering when his new position is so cynical.

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NIESR

Blog January 15, 2010

NIESR (National Institute for Economic and Social Research) has published its monthly estimate of GDP for December. NIESR’s release provides an unofficial first estimate of the UK’s Q4 GDP. The report suggests that GDP grew by 0.3 per cent  in the fourth quarter of 2009. The ONS’ preliminary estimate for Q4 GDP will be released on January 26th.
The Chancellor has [...]

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Mr Cameron on Marr

Blog January 10, 2010

This was a very slippery performance from David Cameron that will set alarm bells ringing up and down Britain.
He said he wants deeper, faster cuts than Labour but then deepened the mystery about where the cash would come from.
Again he said he wants to cut the deficit faster but yet again he says nothing about [...]

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Out doorknocking in a very snowy Glebe Farm!

Uncategorized January 9, 2010

My weekly street surgery was out in the snow today, in Glebe Farm. I would say the local priorites people talked about were policing, followed by the need for more things for youngsters to do, followed by health. Nationally, people said jobs and Afghanistan were top of their mind. Thanks to all who gave us [...]

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The Lib Dems and the deficit debate

Blog January 9, 2010

Patrick Wintour today makes an interesting points about Vince Cable and the deficit debate. In a very well argued contribution this week, Mr Cable set out his views about just how we should set about the immediate task of halving the deficit. Here is the exchange in Hansard
Mr. Byrne:
The hon. Gentleman is making an excellent [...]

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Guardian interview

Blog December 5, 2009

My interview with the Guardian is now online. Ahead of the pre-budget report I wanted to give a bit of flavour of some of the thinking involved in our policy for re-organising Government for new times. The message is simple. We need a plan that drives standards in public services up, and the deficit down. [...]

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The Westminster Hour

Blog December 5, 2009

I spent a very enjoyable half hour or so this week in the company of Demos director Richard Reeves, who interviewed me for a slot on Radio 4’s The Westminster Hour, called Political Roots.
We talked about why I joined the Labour Party, my political beliefs and the different philosophical and political strands which make up [...]

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Smarter government

Blog December 7, 2009

So, we launched our command paper today, on re-organising government to protect the frontline. The basic message is simple; its a plan for driving public service standards up, and national debt down. Our starting point is higher standards. We want to give people guaranteed rights to high quality public services – like the right to [...]

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Pre-Budget Report

Blog December 9, 2009

So Alistair Darling launched the pre-Budget report today. Helping prepare the report has consumed almost all my time here at the Treasury over the last few months. Its argument is simple. This is a very careful balance; but if we make the right decisions now, we can lock in the recovery – with extra help [...]

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Allowances

Blog December 10, 2009

The Commons published some more details of MPs expenses and allowances today, relating to 2008/09 and the start of the 2009/10 period. This relates to claims for things which enable me to live in London while doing my job as MP for Hodge Hill.
I claimed for some lamps, a bookcase, a table and a desk [...]

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This week’s media

Blog December 12, 2009

Two links to quite different media appearances this week. Here’s the link to my Newsnight interview on the Pre-Budget Report. And here’s the link to my Westminster Hour interview about some of my political inspirations.

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The Tories and the PBR

Uncategorized December 13, 2009

Here’s the text of my article in today’s Independent.
George Osborne admits that he devotes more time to politics than to economics, and on Wednesday we saw the proof.
In a serious debate on the pre-Budget report, he fired cheap shots when what was needed was a big judgement call. Alistair Darling set out the most detailed [...]

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Thank you

Uncategorized December 19, 2009

I got to say a huge thank you yesterday, to Marie Curie and the West Midlands Police Benevolent Fund. A few months ago I set off to raise some cash for these two great causes by running the Birmingham half marathon and yesterday at Stechford police station I was priviliged to be able to hand [...]

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This week’s economics news

Economics December 20, 2009

Look out for new GDP revisions from the Office of National Statistics this week. In the meantime, the key news last week was the first fall for 20 months, in the number of people claiming unemployment benefit, plus an increase in the number of people in work up by 53,000 on the quarter, to reach [...]

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The real cost of the Tories plans revealed

Uncategorized January 4, 2010

Today we set out some of the work we’ve been doing over the Christmas break, putting a price-tag on Mr Cameron’s effort to be all things to all people.
It’s an extraordinary picture.
Its looks as if there is an incredible £34 billion gap in what the Tories are saying they want to do – and the [...]

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Today in Westminster

Blog January 6, 2010

I’m in my office in the Treasury, looking out over a wintry Westminster and preparing for tomorrow’s Commons debate on the Pre-Budget Report, where I’ll be leading for the Government.
But I thought I’d take a couple of minutes to comment on this afternoon’s events. I see that a couple of my Parliamentary colleagues think that [...]

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The deficit debate

Blog January 9, 2010

I thought it might be worth posting in full my opening of the debate on the pre-budget report in the House of Commons this week.
Here I set out the argument for precisely how we halve the decifit over the next four years – and how the sums add up – and second, gently make the [...]

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