Bill-by-bill: From pay to poverty

Thursday, 4 December 2008

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Banks

By Ben Russell

Opposition MPs have warned that banking reforms will do little to break the logjam preventing lending reaching consumers and small businesses. Gordon Brown had announced that banks’ voluntary code of practice would be legally binding, giving financial services watchdogs new powers to impose fines or freeze banks’ assets if they did not comply with the code, which forces lenders to be fair when they change interest rates or conditions of loans or overdrafts.

Treasury officials confirmed that the Financial Services Authority is already consulting on plans to make the voluntary banking code compulsory, amid fears that banks are flouting their own rules during the credit crunch. Small businesses and individual customers have complained of sudden changes to the terms and conditions of their loans, sometimes with only 48 hours to comply.

Under the plans, which do not require primary legislation, the FSA would be able to enforce the code, at present policed by industry bodies such as the Banking Association and the Building Society Association. The FSA will be able to impose huge fines, freeze assets or name and shame firms which breach its rules. The code governs areas such as fair advertising, changes to loan and overdraft interest rates and cooling-off periods for people taking out financial products.

But David Cameron, the Tory leader, called for further state action to get lending moving, and challenged Mr Brown over the reform in the Commons. He warned: “His bank recapitalisation is not working. It rescued the banks. It has not rescued small businesses. We need a government insurance scheme to get the banks lending.”

Angela Knight, chief executive of the British Bankers’ Association, said: “We have been in discussion with the Government and FSA on giving more certainty to all stakeholders by putting the Banking Codes on to a statutory footing. The codes have served their purpose well in bridging the gap between what comes under the remit of the FSA and credit, which does not.”

Mr Brown said he would meet the banks to discuss measures to help small businesses. They include an insistence that banks that take government funds restore lending to 2007 levels; a £1bn export credit scheme; and £1bn for the small-business loan guarantee scheme.

CONTROVERSY RATING ***

Will not end lending logjam

Curbs on cheap drink and ‘sex clubs’

By Michael Savage

Aggressive alcohol promotions which encourage drinking at knock-down prices will be banned under powers unveiled by the Government.

Offers inviting women to drink for free will also be targeted by moves to tackle antisocial behaviour. Higher fines may be used to stop drinking in public places where alcohol has been banned. Smaller glasses will have to be made available.

Supermarkets will be made to drop deals encouraging consumers to buy alcohol in high volumes to qualify for discounts. A fund of £4.5m will also be given to councils to tackle pubs and clubs using over-aggressive marketing, with £1.5m targeted at areas hit hardest by binge-drinking.

A compulsory code of responsible selling will be applied to all alcohol sellers after an independent review found that a voluntary code currently in place was having little effect on curbing cut-price deals.

The measures, part of the Crime and Policing Bill, follow long-awaited research that found discounts did encourage increased drinking.

The Home Secretary, Jacqui Smith, said: “I have a duty to crack down on irresponsible promotions that can fuel excessive drinking and lead people into crime and disorder.”

Some feared that the new law would hurt struggling pubs. “The Government has the weapons it needs to tackle irresponsible retailers by rigorously enforcing the Licensing Act,” said Rob Hayward, chief executive of the British Beer and Pub Association. “We don’t need new laws and regulations, just better enforcement of existing laws.” The shadow Home Secretary, Dominic Grieve, said the measures would not tackle binge-drinking. “The answer lies in focused measures and law enforcement – not yet more laws and regulation that sound tough, but are never actually enforced,” he said.

The Bill will also seal a U-turn on lap-dancing clubs, which are currently classed alongside caf�s and pubs under, making it harder to oppose one opening. The number of clubs has doubled to more than 300 since 2004. They will now be categorised in the same way as sex shops.

CONTROVERSY RATING ***

Tackling antisocial behaviour will please many, but extra costs for businesses won’t

Welfare

By Andrew Grice

A new round of welfare reforms will impose benefit cuts on the unemployed, sick and disabled and single parents unless they take steps to prepare themselves for a return to work. The Welfare Reform Bill is designed to reduce the number of people on incapacity benefits by one million, and help 300,000 more lone parents and one million older people into work. Income support will be abolished, with claimants moved to Jobseeker’s allowance if they are well or a new employment and support allowance if they are sick. The partners of claimants will be required to look for work and there will be “work-focused interviews” for the over 60s. Everyone except single mothers whose youngest child is under one and the severely disabled would have to prepare themselves for a return to work or face benefit cuts. People who make fraudulent claims would suffer the same penalty after one offence.

James Purnell, the Secretary of State for Work and Pensions, rejected calls from Labour MPs and pressure groups to slow the reforms because fewer jobs would be available in the recession. “In difficult economic circumstances, people need more support not less,” he said. “It is crucial we do everything we can to make sure people stay connected to the labour market in tough times.” But Brendan Barber, the TUC general secretary, said the proposals looked like a “leftover from pre-recessionary times”. He added: “They are based on the view that anyone can get a job if they have the right attitudes, training and advice.” The Tories said many proposals had been “borrowed” from them and Labour’s plans were not ambitious enough. The radical extension of “tough love” policies was balanced by the promise of a Bill to enshrine in law Labour’s ground-breaking pledge to eradicate child poverty by 2010. FionaWeir, chief executive of One Parent Families Gingerbread, a charity supporting lone parents, called for an annual reporting mechanism. She said: “This is a breakthrough measure which demonstrates that the Government remains determined in the fight against child poverty. Enshrining in legislation the target to end child poverty by 2020 will help ensure that policy across the current Government and in future Parliaments is working towards this.”

CONTROVERSY RATING ****

Labour rebellion likely

Police & crime

By Ben Russell

Senior police will answer to directly elected police authorities under highly contentious plans to make forces more accountable to the public. Police and local authority figures, as well as Labour and opposition MPs, have deep reservations about the proposals, fearing they will allow extremist parties such as the BNP influence over the way the police are run.

At present, police authorities, which hold chief constables to account, are made up of indirectly elected local councillors. In future, the Government wants the bodies directly elected by local voters, raising fears that low turnouts may give minority parties a foothold.

The Tories condemned the plans as “half-hearted” compared with their own plan for directly-elected police commissioners.

Bob Jones, chairman of the Association of Police Authorities, warned the measure would cause

political infighting. He said: “While there is much to be welcomed in the Queen’s Speech, it is regretful that the Government has indicated it is still pressing ahead with the introduction of directly elected crime and policing representatives on police authorities. This is not the right time to reintroduce party politics into policing. Recently publicised events such as the arrest of Damian Green illustrate only too well the dangers of mixing politics and policing.”

The Liberal Democrat home affairs spokesman, Chris Huhne, said: “This Government is brilliant at taking a good idea and making it a bad one, as it is doing with its plans for local accountability of the police. These proposals will encourage confrontational politics, populist posturing and unrepresentative police authorities with lots of middle-aged white men in suits.”

The Bill also includes proposals to improve the seizure of asset, strengthen powers to tackle serious crime and boost airport security.

CONTROVERSY RATING ****

Tension with town halls

Savings

By Michael Savage

The government will establish a scheme to boost the savings of eight million of the poorest|people in Britain.

Under the savings scheme set out in the Savings Gateway Accounts Bill, the Government will contribute 50p for every £1 that the account-holder saves.

It is hoped that the scheme will “kick-start” a saving habit among low-income earners, with household debt in Britain having now reached more than £1.4bn, according to the Bank of England.

The scheme is also designed to introduce people to banks and other financial institutions, targetting people who have not prev

iously had any involvement with financial products.

Anyone who qualifies for benefits or tax credits will be eligible for the savings account, and will be able to open and operate one from their local Post Office.

But critics described the scheme as a “rehash”, saying that the Government had been promising it for five years without delivering.

The Conservatives accused the Government of cherry-picking the idea for the scheme – which was first announced in this year’s Budget – from their 2005 manifesto.

They also accused the Government of watering down the scheme that was originally proposed – the original concept envisaged matching the savings of low-income earners, pound for pound.

CONTROVERSY RATING: *

Critics say it doesn’t go far enough

Immigration

By Nigel Morris

Immigrants who commit any sort of crime and make little effort to integrate into British society will face a longer wait for a UK passport.

The Borders, Immigration and Citizenship Bill sets out plans for foreigners to “earn” citizenship by demonstrating commitment to Britain.

Immigrants have to wait a standard five years before applying for a passport but, under the Bill, those who learn English quickly and pass citizenship tests could have their citizenship fast-tracked while others showing less determination to integrate will have theirs delayed.

The Bill is the biggest overhaul of immigration law in nearly 40 years, replacing 10 major pieces of legisla

tion. Critics argue that its very existence is an admission of the failure of previous reforms.

Ministers say the “firm but fair” measures will strengthen frontier controls by giving the new UK Border Agency powers to carry out customs and immigration checks.

It also gives officials power to demand from people who have travelled abroad the production of identity documents. The pressure group Liberty said the move could amount to “sneaking in compulsory identity cards via the back door”.

The UK Border Agency will be given responsibility for looking after the children of asylum-seekers.

Children born to British mothers before 1961 will be entitled to British citizenship. Previously it was passed on only though fathers.

CONTROVERSY RATING ***

Could provoke a civil liberties storm

Equality

By Ben Russell

Ministers vowed to tackle the pay gap between men and women with the new Equality Bill, which will streamline anti-discrimination law. It will include powers to ban discrimination against older people and outlaw “secrecy clauses” designed to prevent staff comparing pay rates.

Help the Aged and Age Concern welcomed measures to outlaw age discrimination, and unions welcomed action on pay inequalities. But business leaders criticised measures to use Government contracts to tackle pay gaps, warning they could discourage small businesses from tendering.

CONTROVERSY RATING ****

Comparing pay spells trouble

Education

By Richard Garner

New powers to tackle under-performing schools and impose more discipline in the classroom were outlined.

Local authorities will be given a duty to take early action to either improve the performance of schools or close them if their exam pass rate fails to improve. It follows the Government’s decision to insist all schools reach the benchmark of getting 30 per cent of pupils obtaining five A* to C-grade GCSE passes (including maths and English) by 2010 – or face the prospect of closure or replacement by one of Labour’s flagship new academies. This summer saw 475 schools fail to reach the benchmark.

On discipline, the legislation outlined in the speech will give teachers the power to search pupils for alcohol, drugs and stolen goods. They already have the power to confiscate

items such as mobile phones. Ministers also plan sweeping new measures to strip schools of their power to run their own budgets if they fail to comply with the new teachers’ contract – which gives staff the guarantee of 10 per cent of their working week away from the classroom for marking and preparation. Under the proposals, much sought after by some of the teachers’ unions, the Children’s Secretary, Ed Balls, could impose his own appointees on the school’s governing body if it failed to abide by the agreement, or return its finances to local authority control.

Other measures in a Children, Skills and Learning Bill will include introducing a more streamlined procedure for parents to complain about their children’s schooling.

The proposals are unlikely to face defeat in the Commons, but teachers did complain of the Government’s constant “vilification” of schools.

CONTROVERSY RATING ****

Getting tough on schools and pupils

NHS

By Jeremy Laurance

Patients will for the first time be able to see what they are entitled to from the NHS, while hospitals will have to demonstrate the quality of the care they provide.

The new NHS constitution, included in a Health Bill, will set out patients’ rights to choose how and where they are treated and will place a duty on all hospitals and GP surgeries to honour it.

The Bill will also allow direct payments to some patients with chronic conditions such as diabetes so that they can purchase and arrange their own healthcare, by hiring nurses, for instance.

The Bill will tighten regulations on the sale of tobacco, although the Department of Health said a possible banning of cigarette displays in retailers was under consultation.

The NHS constitution is expected to end the lottery whereby some patients have been denied access to drugs while others have not. It also includes plans to force hospitals to publish “quality accounts” of the care they provide.

Neil Dickson, chief executive of the King’s Fund, the health policy think-tank, said: “This is good news for patients as they will be able to check on the quality of the services they are being offered.”

But the British Medical Association warned that the constitution could help to “reinforce the commercialisation of healthcare”. Hamish Meldrum, chairman of the BMA Council, also said that the proposals missed an opportunity to depoliticise the delivery of healthcare.

Action on Smoking and Health called for clarity on legislation to protect children from tobacco.

CONTROVERSY RATING ****

Risk of “commercialisation” of care

Lest we forget: Dropped Bills

The Government decided to cut out several Bills from the Queen’s Speech originally included in its draft version announced in May.

*Plans for a British Bill of Rights have been shelved. Other areas of constitutional reform, such as giving Parliament greater say before committing the country to war, have also been kicked into the long grass.

*The controversial Communications Data Bill, which would have handed authorities the power to collect data on users’ internet habits and phone calls, was also dropped.

*The Heritage Protection Bill, designed to simplify the protection of important heritage sites, has also been axed, despite winning support from MPs in all three parties.