Revd. George Hargreaves,
Leader of the Christian Party

Christian Party welcomes PR Referendum
as major opportunity for electoral breakthrough

The Christian Party have welcomed the news that a referendum, on whether to adopt proportional representation for Parliamentary elections, will be held on 5 May 2011.
 
Holding a referendum on whether or not to use the Alternative Vote (AV) system was a part of the Conservative/Lib Dem coalition deal.
 
Revd George Hargreaves, leader of the Christian Party, commented “AV proportional representation could be the mechanism that the Christian Party need for electoral breakthrough.  Conventional wisdom, based largely on the experience of Australia, suggests that smaller parties see little benefit from AV.  However, I believe that the Christian Party provides a unique context that would produce a somewhat unexpected consequence in the UK.”
 
“The Christian Party has suffered from the fear of Christian voters that their vote will be wasted if they vote for us, despite sharing our beliefs and conviction that a specific Christian party presence is needed in Westminster.  The Alternative Vote system, if properly understood, provides an insurance policy that will deal with this problem."

The Unavoidable Budget:

Reflections and Analysis on the Budget from
Revd George Hargreaves - Leader of the Christian Party

The fearful build up to what George Osbourne called “The Unavoidable Budget”, meant that something of a sigh of relief was almost inevitable when it was finally unveiled.  Like all the best suspense thrillers the ‘reveal’ is never quite as gruesome as the wild imaginings beforehand.  However, after the relief comes the analysis.

The most headline grabbing aspect of the budget was of course the increase in VAT to 20%. The Christian Party were the only party to suggest a rise to 20% VAT in its election manifesto, but this was cemented to an absolute commitment to exempting individuals earning £12,000 per annum or less and married couples whose combined income was £24,000 or less from both Income Tax and National Insurance contributions within a 20% flat tax regime. 
 
The derisory increase of tax allowance, of just £1,000, calls into question the equity of what should have been a positive move, regarding VAT that would have helped to make the societal shift from our current excessive consumerism to the ‘thrift and enterprise’ economy, which the UK desperately needs. 
 
Less than a million people will benefit from Mr Osbourne’s rise in the tax allowance threshold. Yet all will be affected by the VAT indirect tax hike that has not been properly counter-balanced by the requisite change in the direct taxation as proposed by the Christian Party.
 
As Christian politicians our concern for the poor must never be overshadowed by our concern for structural matters.  Getting fiscal policy right must intrinsically include provision for the poor.  We must aim for the “weak to say that they are strong, and the poor say they are rich, because of what the Lord has done” through us, Christian politicians, as weapons of righteousness in His hands.  We therefore applaud, for instance, George Osbourne re-establishing the index-linked state pension, which will have a guaranteed increase of no less than 2.5% per annum.   However, we do register the fact that the state pension age will rise to 66 years old sooner than originally suggested by the Government.
 
Notwithstanding the fact that the Government have not grasped the nettle of really radical change in the tax system to a Flat Tax regime, handing £2bn back to the poorest in Tax Credits is also welcomed.  Indeed, next year low income families will see an increase in Child Tax Credit of £150 per child above the rate of inflation.
 
Furthermore, limiting tax credit to those earning less than £40k per annum must also be welcomed. Although to do so may seem counter-intuitive to some.  I welcome it because we, as a nation, must break the cycle of dependency on Government handouts.  It is better that we keep more of what we earn through lower taxes. Rather than earn it, pay it in taxes, only to receive it back as a tax credit.  That is simply creating administrative work we could never afford and can no longer tolerate.
 
The freezing of Child Benefit for the next three years is another measure that should not cause alarm.  Rather it should be seen as a necessary weaning off of a universal benefit that needs to be reserved for those who really need it.

The shake-up for welfare payment announced in the budget will save £11bn a year by 2014/15 through a number of commonsense measures, including a saving of over £6bn a year by 2015 from rises in benefits, tax credits and public service pensions being linked to the Consumer Price Index, rather than the Retail Price Index.

Who can argue against a saving of £1.8bn by placing a cap on housing benefit of £400 per week?  Again this is an issue that the Christian Party have been addressing since the 2006 local authority elections in London.  At that time we highlighted the inordinate and insane amount of money being spent through the Housing Benefit system for housing claimants in Bed and Breakfast hotels.
 
Is it unreasonable that a medical assessment for Disability Living Allowance should be made by a doctor, as will have to be the case from 2013 for new and existing claimants? I do not think so.
 
Lone parents being expected to look for work when their youngest child goes to school is surely something of a ‘no-brainer’.
 
The Unavoidable Budget is far from perfect.  Whilst there is much in the budget that is good and noteworthy; like the ‘curate’s egg’ the bad bits may well spoil the whole meal.  For example, the Health in Pregnancy Grant is to be abolished from April 2011, and the Sure Start maternity grant will be restricted to the first child.   This is hard to reconcile with the lack of tax increases on alcohol and cigarettes - two major causes of ill health.  We should be supporting parents and discouraging the binge drinking culture that is currently blighting our inner cities and the alcoholism that is quietly eating away our suburbs. As for the cost of dealing with illnesses related to smoking, in a ‘tax and axe’ budget of deep spending cuts and tax hikes it is hard to fathom the reason for excluding cigarettes from the an increase in duty.
 
Whilst such pain as the end of the Health and Pregnancy Grant is hard to justify, the pain that will be felt in the Public Sector cannot be avoided and to attempt to do so would be folly.  Mr Osbourne declared that the balance of spending cuts versus tax rises would be 77% to 23%, resulting in public sector net borrowing of £149bn this year, £116bn next year, £89bn in 2012-13 and £60bn in 2013-14.

Having conceded that there would be no further reductions in Government capital spending; only the revenue side of the spending equation remained open to change. With planned average real terms budget cuts of 25% over four years, Government departmental cuts are to amount to £17bn by 2014-15. Only Health and International Aid will escape the axe.  In addition all public sector workers earning £21,000 or more will face a two-year pay freeze.  The approximately 1.7 million public sector workers earning less than £21,000 will get a flat pay-rise worth £250 in the years where their higher earning colleagues’ pay is frozen.  These measures are needful as the size of our government is unaffordable, unnecessary, and an unsustainable part of the problem - not the cure.
 
Another, Christian Party policy which was sadly only partially implemented was reducing Corporation Tax to 20%.  However, this was restricted to small businesses while larger firms are to see a year on year decrease of one percent for three years, starting next year, from 27% to 24%.  Here the Chancellor missed the opportunity to hang the sign over the nation’s door that ‘Britain is re-opened for Business’.  A favourable corporate tax regime is absolutely necessary for the inward investment and the business activity within, which is urgently needed to re-grow the economy. What we described in our manifesto as ‘Volcano Economics’.

On the plus side, as a stimulus to business activity, the entrepreneur’s Capital Gains Tax Relief, which currently stands at 10% on the first £2m of gains, will be extended to the first £5m of gains.  This will prove attractive in light of the 28% Capital Gains Tax rate introduced for higher rate income taxpayers.  Whilst the Christian Party still advocates a 20% Flat Rate Capital Gains Tax, maintaining the Capital Gains Tax at 18% for low and middle-income investors and savers is welcomed.

Also welcomed, is a the fact that the Bank Levy introduced in the Budget seeks only to raise £2bn per annum and comes at a time when France and Germany have pledged to bring in similar measures.  The levy will apply to the balance sheets of UK banks and building societies and the UK operations of foreign banks from January 2011.  The danger, however, that Britain faces with running ahead of the pack with this measure is that if other nations drag their feet in following suit, or do not follow at all, then Britain will become less attractive as an international banking centre.  The fact that small retail banks have been excluded from the levy is a smart move that might even encourage larger banks to un-bundle themselves creating separate retail and so-called ‘casino’ banking entities of their own volition.
 
In a brave effort to bridge the North/South divide the budget provides for people setting up new businesses outside London, the South East and the East of England an exemption from £5,000 of National Insurance payments for the first 10 workers.  This coupled with the £21 per week rise above indexation in the threshold at which employers start to pay National Insurance (coming into force from April 2011) provides real incentive for business start ups in some of the nation’s severest unemployment black spots.   London and the South East are well able to bear the bias, so this initiative cannot be a bad thing.

Other highlights in the budget included the proposal for private investment in the Post Office, which surprisingly hardly raised a murmur from the opposition benches.  It was not so long ago that part-privatisation of the Post Office was one of the country’s hottest political issues.  References to the environment in the Budget were underwhelming.  This possibly reflects that the Chancellor believes the hysteria surrounding global warming has been a luxury that we can no longer afford.  Indeed, Mr Osbourne wisely deferred adding further woes to the airline industry by choosing only to "explore changes to the aviation tax system" and promising consultation on any major changes.  A fund will be created to help finance regional capital projects, and White Papers will be published on tackling regional economic differences in Britain, and rebalancing the economy of Northern Ireland.   Labour’s ‘Landline Tax’ aimed at providing funding for fast broadband rollout will be scrapped.  Instead, money from the  digital switchover under-spend within the TV licence fee will be made available to  by the government to support private investment in the rollout of fast broadband.

Finally, given that hidden behind the defeat of the Labour Party at the General Election on 6 May,  there is the fact that the local authority elections held on the same day produced Labour's best local council election results since 1996, perhaps the Budget’s neatest measure relates to Council Tax.  This measure will not only reduce government spending; but also simultaneously stack the decks in favour of the Conservatives and Liberal Democrats for next year’s local council elections.  The Government will provide extra funds to local councils who propose low Council Tax increases. Such councils will be eligible for funding to enable them to freeze Council Tax for one year from April 2011.  Council Tax is the most regressive tax in Britain.  At the time when the coalition Government will face its first major electoral test; compliant Conservatives and Liberal Democrats controlled councils will be able to boast council tax freezes in the run to elections in May 2011 – something that Labour councils will find hard to emulate whilst fighting an ideology war against ‘The Unavoidable Budget’.