Reading Liberal Democrats

Liberal Democrat Councillors in Reading were today welcoming the news that due to changes in the national tax system, implemented by Liberal Democrats in the Coalition Government, 1,680 of Reading’s poorest residents have been lifted out of the personal income tax band altogether.

A further 66,200 residents will also find their tax situation better off, when the changes are implemented in April this year – paying up to £200 less per year in income tax.

When the coalition was formed the two parties agreed to implement a key Liberal Democrat policy that the personal allowance for income tax should be increased in order to help lower and middle-income earners.

The change is being funded with the money that would have been used to pay for the increase in Employee National Insurance thresholds proposed by the Conservatives, as well as revenues from increases in Capital Gains Tax rates for non-business assets.

After pressure from the Liberal Democrats the two parties also agreed to a longer-term policy objective of further increasing the personal allowance to £10,000, making further real terms steps each year towards this objective. Achieving this would provide much more tax fairness towards the poorest in our society, something Liberal Democrats are committed to.

Speaking about the great news Cllr Kirsten Bayes, Liberal Democrat Spokesman for Finance said,

“This is great news for thousands of Reading residents, especially for the 1,680 residents who are being lifted out of the threshold for paying income tax. This will be a really positive bit of news for those people, who are amongst the poorest in our communities, at a time when many are struggling. Liberal Democrats are continuing to push for yearly increases to the allowance until we reach £10,000 as the threshold. This would provide much more tax fairness towards the poorest in our society.”

In Reading the changes proposed to lift the threshold for paying income tax by £1,000 in April to a figure of £7475 means that approximately 1,680 residents in Reading will pay no income tax at all, while a further 66,200 will pay less. The figures have been calculated on publicly available statistics and are not exact numbers.

The Labour Government’s flagship mortgage rescue scheme has – it was confirmed on Tuesday (13 October) – helped nobody at all in Reading since its launch in January.

Liberal Democrat campaigner Cllr Gareth Epps has slammed the failure of the Labour scheme that – while 40 households within Reading Borough saw their homes repossessed in the last quarter for which records are available, and 34 households applied for assistance under the scheme- none at all were found by the Council to be eligible under the scheme. The figures were released by Reading Borough Council at the Credit Crunch Summit and were published at the Full Council meeting.

On being questioned by Gareth about the reasons for this failure, Labour council leader Jo Lovelock admitted that the scheme was based too heavily on tackling negative equity – which is not the reason for the current wave of repossessions. The Lib Dems have demanded that more effective action be taken to tackle repossessions, by reforming mortgage law to allow courts to reduce repossessions. Lib Dems also called for a review of whether more effective steps can be taken by the Council to avoid Reading families losing their homes.

Commenting, Cllr Gareth Epps said:-
“It is clear the mortgage rescue scheme has utterly failed. It has been shown as little more than a publicity stunt that may have raised false hope for residents in the most difficult circumstances.

The Government’s own figures say that some 6,000 households are supposed to benefit from this scheme, but only 15 households nationwide have so far been found to be eligible. Repossessions are a ticking timebomb in the current economic climate. In the last recession I saw the effects repossession has on people; I would not wish it on anyone.

The Government should be reforming mortgage law to give courts the opportunity to resist pressure from lenders aggressively pursuing families. I hope the Council can work with Reading’s excellent advice services to outline what practical steps can be taken to prevent Reading families from losing their homes.”

Editor’s Notes:
The Mortgage Rescue Scheme “has been operational across the country since January 2009, aiming to prevent some of the most vulnerable families losing their homes and experiencing the trauma of repossession. The Mortgage Rescue package has two elements: (1) the ‘Government Mortgage to Rent’ option which involves an RSL purchasing the homeowner’s property, enabling the household to remain in the property as a tenant on an assured short hold tenancy, paying an intermediate rent; and (2) the ‘Shared Equity’ option which involves a RSL providing a loan to the homeowner to enable the homeowner’s monthly mortgage payments to be reduced.”

The impact assessment costs of implementation are available from the Impact Assessment Library here

Announced by the Government in November last year, the Mortgage Rescue Scheme was designed to help those most deeply affected by the ongoing recession. However, limits imposed by the Government’s own ministers mean that only 6,000 homes across the UK are protected by the plans, meaning that many in Reading will be left without support.

863 repossession claims, 66% higher than the South East average, were issued in Reading in 2008, whilst many more are expected in 2009 as the recession takes hold. Under current Government limits, the scheme will mean that only 35 (4%) of these local claims would be covered or offered any support.

Under the flagship scheme, only 1 in 25 households facing repossession will be able to receive any help or assistance, but despite this Reading Borough Council’s Labour councillors have decided to give this scheme number 1 priority in its ‘Credit Crunch Action Plan’.

Local Liberal Democrat spokesperson for Reading East, Gareth Epps said:
“Although the Mortgage Rescue Scheme was launched with a great fanfare by the Government in the autumn, this scheme is totally inadequate and simply cannot deal with the reality that many local residents are facing.

This council cannot continue to blindly adopt whatever the latest and disastrous Government policy is that comes along. The people of Reading deserve much better than slapdash Labour policy schemes.

The threat of repossession is a truly terrifying prospect and it is facing far too many people in Reading. I’m regularly meeting residents who are being threatened with the loss of their home – and they know that the Government scheme as it stands is useless. The Mortgage Rescue Scheme must be effectively expanded urgently or else thousands of local residents could face being thrown onto the streets.”

Editor’s Notes:

In 2008, 142,000 repossession claims were issued by the courts. Whilst most of these claims did not lead to homes being repossessed, this figure indicates the number of households that are in serious mortgage arrears and therefore would benefit from this scheme. However, the scheme is being restricted to only 6,000 households by the Government. In effect, only 4% of those who are vulnerable to repossession will be assisted by this scheme.

Lib Dems have welcomed the revised Budget agreed at a meeting of the Council on 2 March which contains a number of wins for local people including:

• Funding for the creation of a new ‘green hit squad’ targeting fly tipping hot spots across the borough
• Reduction in bulky waste charges to help Reading’s poorest residents
• Communications support for Reading’s network of Neighbourhood Police Action Groups (NAGs)
• The purchase of ‘speed guns’ to improve road safety

The Lib Dem plan which won Labour support also saw a minimum of £200,000 put back into the Council reserves.

Spending was made possible by savings in Labour’s budget identified by the Lib Dems, including:

• A freeze of councillors’ allowances
• Reducing the amount the Council spends on refreshments at Council meetings
• Reducing spending on non-essential items such as marketing and PR and consultants.

Labour politicians also agreed to the creation of a cross-party Budget Review Group, proposed by the Lib Dems. This Group will identify areas where savings can be made this year.

Lib Dem Group Leader, Cllr Gareth Epps commented:

“The budget agreed tonight containing a package of measures put forward by the Lib Dems which represents a better deal for Reading residents: cutting spending on spin and costly consultants, and focusing resources where they are needed most – helping to make the town cleaner, greener and safer.”

He added:

“What has been agreed tonight is a massive improvement on what had been proposed by Labour.

The cross-party Budget Review Group the Lib Dems put forward will be crucial to identify waste in the Council and ensure next year’s Budget is based on a firmer footing.”

Labour’s plan raided reserves and left nothing for a rainy day. As things stand the forecast for public sector funding looks ever bleaker.”

The approach taken by the Conservative Group was a disgrace – without a single positive idea. Had we followed their approach, the job of everyone working for the Council would have been put at risk. The Conservatives have proved themselves incapable of setting a budget.

It was left to the Lib Dems to stand up for the people of Reading – the only group to come forward with a plan for a lower Council Tax rate.”

Reading Borough Council’s Budget meeting this evening ended in disarray after Labour refused to negotiate a budget and the Tories refused to propose anything at all.

The Labour group suffered the ignominy of having its budget voted down by the Liberal Democrat and Conservative groups. The Conservatives then failed to table any amendment at all and then petulantly voted against every proposal put forward.

The Liberal Democrat group proposed an amendment which was fully costed and discussed with officers. The Lib Dem amendment proposed positive ideas as well as a reduced Council Tax increase and restoration of the cut in Council balances. Having vehemently objected to it as “grossly irresponsible”, Labour then bizarrely sought to discuss it as the basis of a potential compromise solution, but failed to put together a coherent or costed text. The Council meeting stood adjourned for around an hour. Councillors will now reconvene this (Wednesday) evening at 6.30pm.

Commenting, Cllr Gareth Epps, Leader of the Liberal Democrat Group, said:-

“This evening saw disgraceful behaviour from the Labour Group which threatens to bring the Council into disrepute.

The meeting itself may come to be known as the ‘Battle of Tony Page’s Ego‘ after the failed Labour Parliamentary candidate hurled abuse at the Liberal Democrat plans which he then sought to negotiate around – before changing his mind.

Labour Councillors showed no signs of understanding they no longer have a majority on the Council. Their idea of negotiation involved no compromise but demands that Liberal Democrats cave in. Their actions tonight have dealt a huge blow to their authority and credibility in Reading.

The 18 Conservative Councillors failed even to table an amendment. They should realise that as Councillors they have a responsibility to set a budget and cannot indulge in gesture politics.

The Liberal Democrats are the only Councillors who have behaved openly and with integrity. We have tabled our amendment and sought to use it or any other ideas as the basis for negotiations. It is up to Labour and/or the Conservatives to table a proposal in writing. We shall examine any such proposal seriously.”

Reading Liberal Democrats have revealed that the post of Vice-Chair of the new Berkshire Economic Strategy Board (BESB), which has been awarded to failed Labour ex-leader of Reading Council David Sutton, attracts a salary – and they have slammed the appointment of the ‘political undead’ to this post.

Reading Liberal Democrats have revealed that the post of Vice-Chair of the new Berkshire Economic Strategy Board (BESB), which has been awarded to failed Labour ex-leader of Reading Council David Sutton, attracts a salary – and they have slammed the appointment of the “political undead” to this post.

The Board has been jointly set up by Berkshire councils who made the appointment; however, no report has been made in public by Reading Borough Council (a financial contributor to the venture) until the report being considered by Monday’s Cabinet.

Cllr Gareth Epps, Leader of Reading Borough Council’s Liberal Democrat Group, said:-

“It is wrong for a body of this level of importance to make an appointment that seems to be a resurrection of the political undead.

While nobody can deny anyone the right to earn a living, the economic development of Berkshire is important. This Board will have to be transparent and accountable. The appointment of a failed politician whose time as a Council leader was notable for secrecy is hardly a good start.”

Reading Council’s budget is clearly under immense pressure says Cllr Gareth Epps leader of the Liberal Democrat group.

There is a substantial cash shortfall, caused by a number of factors. Foremost among these are a mean Government grant increase of only 1.5%, substantially behind inflation rates when it was set never mind now; a shortsighted budget passed by Labour and Conservative Councillors in 2008, and economic pressures caused by fuel price rises and the global financial situation.

Liberal Democrats on the Council take very seriously the need to put frontline services first. We are putting Council budgets under much greater scrutiny than they have ever been subjected to before, and will be looking at any signs of waste to be tackled first in order to protect vital public services.

A key problem is the way Whitehall increasingly takes money away from areas like Reading. Not only is our increase in council grant way below inflation, but measures like the “Tenant Tax” – siphoning off some £6 million of rent paid by Reading’s own council tenants – are absolutely unacceptable. Next year’s settlement is due to be even worse. It is time the Council confronted central Government – we need to fight for a fair deal for Reading.

Part of the trouble is directly due to the election bribe served up by Labour, and backed by the Tories, of a 2008-09 budget which stripped back vital reserves to keep council tax increases unsustainably low. I hate to say ‘we told you so’, but on this occasion we did. Their shortsighted action has contributed, arguably, up to £4 million – more than half – of the shortfall the Council is facing today. It has also removed the cushion provided by cash balances, which are now at a minimum. The Council’s own financial officers reported that this situation was If – and we hope it doesn’t happen – employees lose their jobs as a result, they will not thank the Labour or Conservative Groups on the Council.

Thankfully, at that meeting, other parties accepted our proposal for reviews of areas such as fees and charges, to take care of the Council’s longer-term financial interests. We will continue that responsible approach going forward into this budget process, and hope that the other political groups will do too.

Reading West Lib Dem parliamentary hopeful Patrick Murray has launched a scathing attack on the government’s announcement of measures to compensate 5 million of Britain’s poorest citizens who were penalised by the cutting of the 10p tax rate.

Alistair Darling claimed the change was the “fairest and most effective way” to help those who lost out from the scrapping of the 10p tax rate. He said it meant 22 million people on low and middle incomes would gain an additional £120 this year.

Patrick questioned the ‘fairness’ of the government’s proposals.

“How can Darling call this fair when he is compensating 17 million people who did not lose out on the 10p tax rate cut along with 4 million who did lose out and another 1 million of the poorest citizens who will only receive half the compensation they are owed ?”

“In the middle of an economic crisis when public spending is being cut to the bone Labour have come up with a tax cut that can only be seen as a bribe to buy back disaffected supporters who have turned away from New Labour’s ideas on fairness in droves. They can spend £50bn on propping up banks, another £3bn in tax cuts but they cannot provide decent homes, schools or care for people who need them most.”

Liberal Democrat Shadow Chancellor, Vince Cable said:

“This Government’s tax policy has descended into a complete farce.

“The abolition of the 10p rate was designed to help Labour win the election that never was. Now this by-election budget is designed to help them cling on to Crewe in next week’s vote.

“This u-turn leaves 1.1 million of the lowest paid workers losing up to £100 each.

“We can have no confidence in either a Prime Minister or a Chancellor who continue to make tax policy on the hoof, while still leaving the poorest out in the cold.”