Buckingham Palace: Where Public Money Goes to Waste

Photo © 2009 Kyle Wood

Discovering severe financial mismanagement by the Royal Household, the Public Accounts Committee have now suggested that Buckingham Palace should be opened up to more paying customers when the Queen is not in residence.

Every year, £31m of taxpayer funds is handed over from the Government to the monarchy to allow them to perform their “official duties”. Arguably a nationalised institution, the monarchy spends this massive sum of money maintaining their palaces, paying their staff and funding Royal duties, like state visits.

It’s a well-worn analogy by now, but we must consider the hypocrisy of our funding of this historic institution. Whilst measly citizens tire themselves out with endless work and constant anxiety, hearing headlines around rising council taxes and electricity bills and seeing their friends, family and neighbours evicted from their homes because they have one too many bedrooms, the Queen seems exempt. Her home is taxpayer funded much like council houses but, with 240 bedrooms, the monarch, unlike less-privileged members of the population, isn’t faced with an eviction notice.

Yes, having a monarchy does come with its benefits – they do bring in some income through tourism – but these are benefits that can easily be found by pumping this extraordinary amount of money into other sectors. And, in light of the Public Accounts Committee’s findings that the Household has been overspending, what trust can we have in those that manage the Queen’s finances. According to the Committee’s reports, poor management by the Queen’s staff has meant that adequate funding has not been found for the monarchy to perform their duties that provide these benefits. “The Queen has not been served well,” the report finds. With just £31m a year and only £1m in their reserve fund, it must be difficult getting the food on the table in the evening. We mustn’t forget also that the monarchy does have its own private source of income, generated from their land, property and wider assets. Despite this, and the Public Accounts Committee’s criticism, the grant is set to rise to £37.9m this year.

And, therefore, it is simply ludicrous that those in the population with sincere adoration for the Monarchy, a keen interest in historical architecture or a curiosity to know what a life of luxury looks like, should be the people laden with the task of coughing up for the household’s poor financial management. To ask us, as citizens who contribute massively to this £31m grant, to pay even more to have the privilege of seeing a tiny proportion of the inside of a palace we technically all own a small part of is, quite frankly, appalling. It is those household staff with the remit of ensuring the funds are distributed appropriately that should be required to find a way of plugging their shortfall. This should most certainly be done in a way that does not mean that the public suffer even more.

Whatever your beliefs about the monarchy, it is a slap in the face to know that you should have to pay to visit a house that you are helping to fund. This house, filled with impressive art collections, and architecture of enviable grandness is just one of several that is given to the Monarchy and paid for with our taxes. If we are to truly end the financial mismanagement within the Royal Household, there is one clear solution: stop using public money to prop up this out-dated and useless institution.

A Tory Guide to Getting Quick Cash

Image by Palestine Solidarity Campaign

In times of economic crisis, the Conservatives usually find themselves in Government (cheekily proclaiming themselves the ‘natural party’) and with the task of cutting the deficit and balancing the books. This is a task they have long developed a strategy for – if you can’t cut the services, privatise them – easy. Unsurprisingly, this is exactly the kind of strategy that has been in place since the 2010 General Election win.

They are a party of supposed economic credibility; they can decrease the expenditure and debt of the country. But the tactic of privatisation is just an easy way of getting quick cash; if you can sell something for a good enough price, you’re going to get the money much quicker than if you persevered and waited for the profit (if there even is one) to add up. Take some examples that have come out recently: student loans debt, Royal Mail, blood plasma and, more recently, social services. Here we have a wide range of government-provided but publicly-funded services that are part of the majority of society’s everyday lives. These institutions arguably provide the backbone of UK stability and health, but the government is proposing to sell them off to possibly reckless profit-orientated major corporations.

The latter case, the idea of privatising the social services, is simply abhorrent. These services help the most vulnerable children in society, protecting them from harm and helping to enable themselves to get a better lifestyle. Whilst publicly run, this is exactly the kind of service the government should be funding and providing; a government should be concerned about the welfare of its paying citizens and working on behalf of its citizens. To grant this service to a major corporation is to ignore the fact that most companies have a primary interest in raising as much money as they can as quickly as they can. As long as they provide a legally compliant service, that’s as high as they will aim, whilst asking for extortionate price. We are only able to hope that, if the sale does indeed go ahead, that the resulting managers of the social services aren’t of detriment to those who desperately need them.

This isn’t just a made-up negative judgement; it’s fact. We saw earlier this week how security companies such as Serco and G4S have been overcharging the government and, thus, the public for the installation and monitoring of security tags on offenders. Our train providers are among the most expensive in Europe. And, there’s the ever-growing problem of companies moving abroad to rake in cheap labour, destroying jobs back in the UK. In a capitalist economy, it should come as no surprise that corporations only exist to make as much money off their consumer as they can get away with. They may not even care how their services are used, only that they are gaining some money in the process. Take for example, the reports that Palestinian children are being held and, allegedly, tortured, in G4S prisons in Israel. They claim they are not breaking “international law” but surely their actions are still immoral.

But this description can surely be applied to the Tory government too. Their strategy of making cuts and selling companies is simply a way of getting as much money back as they can almost ignoring the detrimental side-effects it may have on society. Meanwhile, they will report that borrowing has fallen, the deficit has fallen, and the Government is recovering the UK’s economy. Is this really the case or just an illusion?

Prime Minister's Questions - 26th June

Image by Victoria Kettlewell

Today’s Prime Minister’s Questions was dominated by questions on infrastructure, with members eagerly awaiting the Spending Review to be delivered by the Chancellor immediately after the scrutiny session. Miliband seemed in his element today as he attacked the Government for their poor record on delivering their promises on infrastructure, highlighting that only 7 of 756 infrastructure projects have been completed under this government, and 5 of those were started under Labour. Cameron tried to deflect the argument by questioning Labour’s record in their 13 years of power, to which Miliband easily answered that there 3700 rebuilt schools, 1000 new hospitals and 3500 new children’s centres. Cameron returned to his usual defence and stated that it was because of this that the country was in this “mess”. According to the Prime Minister, half of the population think Miliband belongs in Sesame Street rather than Downing Street. Serious concerns over the alleged bugging of the friends and family of Stephen Lawrence by police were raised by a Labour MP, with a positive response from the Prime Minister that two independent inquiries had been set up by the Home Secretary to investigate and that no additional oppositions were ruled out. Labour were attacked for the conflicting reports from Miliband and Balls about their commitments in regard to borrowing, with both contradicting each other. The session only served to prove that neither of the main parties are prepared to commit to further investment if elected in 2015.

Waging War on the Welfare State

Image by Helen Cobain

Welcome to April. At the next possible opportunity, make a U-turn.

Today is the day of the implementation of further dreaded cuts. As April arrives, we can only optimistically hope that it is some well-organised April Fool’s joke, but unfortunately we know better of a Conservative Government. Lambasted as the “nastiest” ever Government by the TUC, it is difficult to ignore the harsh effects of the benefit changes that are begin from today; from our beloved "bedroom tax” to the loss of legal aid. All of these seem set to only make the poor poorer in the name of deficit reduction.

While Iain Duncan Smith claims that they changes are “fair”, the shouts of society are in stark contrast and looking at the policies, we can understand why. Firstly, and most prominently argued, is the effects of the incoming “bedroom tax” which will force families out of social housing simply due to the number of rooms their house has. Two-thirds of the people who will be hit by this tax are disabled. People will be coerced into moving into smaller homes which may not meet their needs, in order to remain financially sustainable.

Perhaps in an attempt to pin some blame on the local councils, the Government are now offloading council tax benefits into local control (with a 10% reduction already imposed). Whilst local councils are already being forced into making cuts by the Government, there is little leeway for them to increase the spending in these areas and we are likely to see further reductions by local councils in order to meet the other demands required of them.

At the end of the month, the Universal Credit will be piloted in the area of Ashton-under-Lyne, intended to merge many different benefits together into one means-tested payments. However, this will undoubtedly reduce the amount of money that claimants will receive, pushing those with no alternatives further towards or below the poverty line. Furthermore, with the software for the pilot not yet looking ready, this reform is looking set to fail.

The U-turns and amendments of the Government on planned policies have simply demonstrated how ill thought-out their work is. With regards to the “bedroom tax”, it is a sorry state of affairs that the public and Labour must point out how the policy would disproportionately impact the elderly, disabled and military families, before the Government can realise what is wrong with their policies. It changes little though and many policies continue to pass through the Houses and into legislation without being properly scrutinised and surrounded by public and opposition doubt of their practicalities, effectiveness and, most importantly, impact.

However, the welfare system is far from perfect and its reform is not a topic we should just shy away from. There are things about the system which are fundamentally unfair; for example, that some families can be better on benefits than if they worked, but the battle plan of the Government is waging war on the wrong side. Rather than ensure that companies pay their employees wages which make living comfortably possible, therefore ensuring that people on benefits do not have more money than their working counterparts, they are simply reducing the amount of money they dole out to help those in real need of help.

The fiscal year of 2013/2014 will definitely hit hard, and those who need the most financial support will see it unfairly dwindling away whilst their rich counterparts receive a tax break. It is unfair, it is harsh and it is ill thought-out but these are reforms we will be forced to suffer the consequences of, simply so that we try and get rid of those minus signs in our bank balance.

Prime Minister’s Questions – 20th March

Image by Victoria Kettlewell

A serious undertone lay within the house today as members gathered for the budget announcement, resulting in a far more polite and short rally between Miliband and Cameron and the level of jeering was kept at a minimum. Finding consensus on the issues of the Cypriot euro bailout and the support for Syrian opposition, it could easily have been forgotten what a landmark day it was for the country; perhaps the work on the Leveson inquiry has showed the two parties that it is not impossible to reach something that all can agree on. Questions revolving around the budget were also kept at a minimum, most likely awaiting the question session after the announcement. Yet, this did not stop the Conservatives being blasted with their decision to cut the fifty pence tax rate for millionaires, which is set to come into effect next month. There was a disgusting display of a lack of concern from the Prime Minister when he appeared to shun the remarks of a Labour MP who told the story of a homeless teenager who must live off eleven pounds a week due to the Government’s economic policies. Obviously tired of the questions on the economy, Cameron claimed taking advice from the Labour party on the economy was ‘like taking advice from Enron on accountancy’ before refusing to answer what he would ‘spend his millionaire’s tax cut on’.

Prime Minister's Questions - 6th February

Image by Victoria Kettlewell

The day after a vote that Diane Abbott argued proved that “the arch of history bends slowly, but it bends towards justice”, Prime Minister’s Questions unsurprisingly did not show any criticism for the policy of same-sex marriage, a fantastic decision to moving towards equality in society shown by many members of all parties across the house. The debate swiftly moved into one on the ‘bedroom tax’. Cameron refuted claims that it was a tax, instead dubbing it a benefit. Miliband shook this defence off effectively, questioning the case that paying £25 more a week due to Government policies is not considered a tax. Rightly, it was raised across the Labour benches that this policy would hit those with disabled members of their family hardest. Cameron, again, seemed unable to defend himself, reversing questions towards Miliband. After criticisms almost amounting to corruption of the PM, Cameron accused Miliband of wanting to be the “fairy godmother” to trade unionists. One Labour MP cynically asked whether the recently discovered remains of Richard III had been declared fit to work by ATOS, receiving laughs and cheers from around the house, even from Cameron. Yet, in the midst of the IFS’ announcement that they expected the Government to borrow £64 billion more than expected, what really resounded was Miliband’s description of the PM as “weak, incompetent and totally out of touch”

January 2013 in Economics

Image by HM Treasury on Flickr

Now, before I start, I must admit that I am no expert in the field of economics. There are few words and statistics that I understand. But, the relationship between economic policy and return on that policy, in the way of contraction or growth, is not a difficult analysis to undertake. Hence, the recent news items regarding the nation’s return to contraction, the closure of Jessops, the cut of jobs by Honda and the contraction in the construction industry, all within the space of the week, signify a massive problem in our fiscal system.

In an earlier post, I predicted that the return to growth in the third quarter of 2012 was merely the result of the temporary Olympics and Jubilee celebrations (otherwise known as “artificially strong growth”) and this is exactly what has been confirmed by the National Institute of Economic and Social Research (NIESR), noting that without the Olympics the economy would have flat-lined. However, the final quarter of 2012 included the Christmas period – a period of increased and frivolous spending – so it comes as a surprise that we see this contraction so quickly. In another post, I predicted that 2013 would see the UK re-enter a recession. Now this  has not yet happened, (obviously due to the first quarter only having recently begun) but with such a quick contraction and the dent made in the employment figures this week, we can only expect to see this or a dramatic turn of events in the coming months.

Yet, based on just these major newsworthy statistics on job losses, we can already see 2170 people starting their new year without a job, entering an environment where intake of new employees is minimal and those without a job are being punished by the coalition’s blaming policies. Before long, we can see these people losing money on the benefits they did not necessarily used to have to rely on, and then being called scroungers of the state due to their reliance on and complaints about the reformed benefits system via this so-called revolutionary universal tax credit. Ironically, the Government wish to be the helping hand up, but these people will only remember having to take a forceful step down.

But much more ludicrously is the fact that this very week, despite these detrimental austerity measures, despite these massive job losses, despite the number of people’s lives they have ruined, our beloved MPs want a 32% raise in their wage packet. It comes as no surprise, that those who demanded the highest raise were from the already particularly well-off members of the Conservative party. Perhaps more surprisingly is that this raise was demanded by members of parties across the board and not just those of the three main parties.

It is disgusting and awful that those who are coercing the saving of money, reduction of budgets and removal of benefits are those also pleading for more money in their pockets. Because, after all, MPs should be exempt from the rules that they place on the rest of society.

Prime Minister’s Questions – 5th December

Image by Victoria Kettlewell

This week, MPs began Prime Minister’s Question Time by congratulating William on the success of his natural bodily functions, reminding us of the unforgettable, that William and Kate are expecting a baby. Eventually we moved onto the more important topics (one that actually affects our daily lives) of the implementation of the Leveson recommendations, where the PM and the Government were criticised for their apparent and backstabbing refusal to implement statutory requirements for an independent regulation system – a system that would seem intuitive to have to most people. Instead, Cameron says he has trust in the editors that they can establish that themselves and, by that, he means, he doesn’t want to interfere with his close friends and sponsors, only waste our money on an inquiry he won’t adhere to, whilst cutting services that we need, like the NHS. Obviously not enough money was spent on maths in their day, because neither Miliband nor Cameron seemed to agree on any statistics, both quoting different sets form the IMF and the OBR, and telling those opposite them they were constantly wrong. Cameron accused Labour of cutting the NHS and said the Tories were increasing the budget; Miliband accused the Tories of cutting the NHS and said Labour increased the budget. Somebody is right, but only the IMF knows that. PMQs seem to just set the precedent for the later Autumn statement, that outlined that the deficit has been reduced by 25% by deciding not to dish out any money any more.

 

Also posted on Redbrick

A Favourable Backbench Rebellion

Image by Constantin Deaconescu

I’m surprising myself by agreeing with Tory MP for Rochester and Strood, Mark Reckless, whom I have most often found myself contemptuously disagreeing with in the past. Plus, there’s the fact that he’s just a Tory in his day job. Mark is a massive Eurosceptic and somehow manages to argue that every problem we face is in some way Europe’s fault. Yet, yesterday, he stood as a backbencher and voted in favour of a reduction in the funds we provide to Europe. This, I fundamentally agree with in these tough times.

As a country, we are fighting our way through horrific austerity measures and facing devastating and disgusting cuts to our frontline services, yet continue to provide consistent financial support to this international body. Whilst we suffer the effects of cuts, we continue to provide funding to other countries without even beginning to negotiate a slight reduction in respect of our own financial difficulties. This is a preposterous idea. When we are supporting our own citizens less and less each day, why should we continue to support citizens of other countries at the same rate as before?

Now, don’t get me wrong; I do not believe we should wholly withdraw all of our financial support to other countries, but I believe in a proportional cut alongside our other cuts. If something must be cut, it must be cut in line with everything else. We should not favour one thing over another thing, unless with it comes overwhelming benefits.

Hence, I find myself on the side of Labour and a local Tory (although a backbencher, mind you) and agreeing with this successful rebellion on the Government. This is the right step forward; it’s just a shame that this does not create a mandate, and that the Government could still ignore the parliamentary vote when they make their EU funding proposal. Let’s hope they listen to the slight majority and reduce the EU benefit and return some of that saved money to our frightful economy.