DEVOLUTION.
If Merseyside councils outside Liverpool are recognising the power of George Osborne, they won’t be alone. The concerns of Wirral, St Helens, Sefton and other councils that an elected sub regional mayor will mean domination by Liverpool are valid and need to be addressed. But the Chancellor restated in the Summer Budget that the only way to substantial devolution for city regions is by accepting the new role.
The Tories and George Osborne are at the zenith of their power. The Chancellor gave a confident performance as he set out his vision for a higher wage, lower welfare economy. It was more than the annual stock keeping on the country’s economy. It was a statement of the Tory vision, the like of which we have not seen since Chancellor Geoffrey Howe began implementing Mrs Thatcher’s economic architecture in the eighties.
Leaderless Labour see their policy of a living wage shamelessly pillaged by a Tory government that now seems to believe it’s the government’s job to meddle in what private firms pay their employees. The Scottish Nationalists are challenged by Osborne to use their powers instead of bellyaching for more and the Lib Dems, who used to have Danny Alexander at Osborne’s side as Chief Secretary to the Treasury have become an irrelevance.
In these circumstances it is unlikely that concerns about the governance of the Mersey City Region are going to get much of a hearing. The chair of the Combined Authority, Phil Davies, says they will be setting out their demands next week. However Treasury Minister Jim O’Neill tells us the councils have agreed on an elected city region mayor in principle and the talks will be about the timetable and powers.
George Osborne also made clear that similar talks are under way in South and West Yorkshire so there is a real prospect that in 2017 elections will be held for powerful city region mayors across the North.
So it is full steam ahead for the Northern Powerhouse? By no means. A government that reneges on a promise to electrify the Leeds- Manchester rail line can’t be trusted. Liverpool Mayor Joe Anderson complained that the Budget contained no commitment to HS3 connecting Hull to Liverpool, “we could end up with a house without power.” Indeed we could. By their deeds we will know them.
WAR ON THE YOUNG.
The Chancellor wants to cut drastically the welfare state and abolish tax credits but he was careful to avoid the criticism that his measures were totally unbalanced in favour of the rich. So whilst we had a four year freeze on benefits and a 1% public sector pay rise over the same period we also had measures against Non Doms, tax evaders and wealthy car owners.
But Osborne has not taken a balanced approach to the young. They will be losing housing benefit and tax relief on pensions, not getting the £7.20 living wage, and maintenance grants for the poorest students are being turned into loans. A dangerous gap is opening up between how poor young people and wealthy pensioners are being treated.
WAGE INTERVENTION.
Tax credits were allowing some firms that could afford to pay better wages to get state subsidies but the planned increase of the living wage by 10% next year and up to £9 by 2020 is going to put a strain on some smaller businesses that genuinely can’t afford it.
It is a big increase at a time when inflation is at 1%. Politically it is an extraordinary move by a Tory government. In the seventies Harold Wilson’s government loved its Prices and Incomes Board. The state meddled in companies’ affairs for a pastime. Margaret Thatcher wanted the market to decide these things. But George knows best.