Top accountancy firm loses appeal over failing to spot forged documents in huge London fire brigade privatisation scandal
The big four accountancy firms make a fat living from auditing the large number of private companies taking over public services.
But a Court of Appeal ruling last month suggests that if they don’t do the job properly they could now face huge damages claims from directors of companies who were duped by their negligent auditing.
The Assetco saga has been extensively covered on this blog. It involved the sale and leasing of the entire fire engine fleet of London and Lincolnshire to a gang of spivs and fraudsters – who were last known to still be evading justice nearly a decade after swindling investors and conning the London Fire Brigade. The Fire Brigades Union also took up the issue on behalf of its members.
ban after causing fraud
A separate investigation by the Financial Reporting Council found Assetco’s chief executive John Shannon ” causing or facilitating fraud. He was banned as practising as a chartered accountant for 16 years – a new British record – fined £250,000 and ordered to pay £300,000 in costs.
Raymond “Frank” Flynn (former Chief Financial Officer) for banned from practising for 14 years and Matthew Boyle (former Financial Controller) for 12 years. Additionally, £150,000 and £100,000 respectively have been imposed and they share paying part of the £400,000 costs bill.
Grant Thornton, and the accountant who audited the company Robert Napper, has led to a £3.7m fine for both of them for professional misconduct. ( Napper was fined £120,000) Neither Grant Thornton nor Mr Napper made any financial gain out of the scandal. The accountant took early retirement and now lives in a bucolic Oxfordshire village developing his hobby as a wine buff.. See here.
Now the Abu Dhabi directors of Assetco who took over in 2011- straight after the London and Lincoln operations collapsed have successfully sued Grant Thornton for £22m and their case has been upheld by the Court of Appeal.
The first trial lasted 20 days, involving extensive evidence from factual and expert witnesses and consideration of a large volume of documents and of 877 pages of written submissions as well as oral submissions.
Grant Thornton appealed but lost the case. The court was told that if Grant Thornton had audited the accounts properly they would have found evidence of forged documents which inflated the value of the firm.
The court were told Mr Shannon and Mr Flynn told GT that the “unitary payments” due under the London Contract had increased by nearly £47,000 per month (£564,000pa) from April 2009 and produced documents to establish it. The statements were dishonestly made, and the documents were forged. It was only on the basis of these alleged payments that the London Contract appeared to be profitable.
Grant Thornton argued unsuccessfully that they couldn’t be responsible for all the losses. The judges found in the company’s favour.
The Financial Reporting Council did pass its findings to the Serious Fraud Office but so far it appears nothing further has happened. Mr Shannon has thought to have moved to Thailand while Mr Flynn remains in Northern Ireland.
The most important development is this judgement could form a major piece of caselaw if any other major accountancy firm does not do its auditing job properly. It is a big shot across the bows of the big four accountancy firms to be more diligent.
I have done a special investigation for Byline Times showing the extraordinary contrast between the decline of the electorate in Westminster and Kensington and the huge property and tourist boom bringing in non voting oligarchs, foreign buyers and purpose built blocks of AirBnBs.
This may have contributed to Labour winning Battersea and Kensington from the Conservatives at the last election. This time it is not so clear as Labour and the Lib Dems are vying for votes.
As the manifesto season gears up – a very timely report today from the National Audit Office. It reveals David Cameron’s 2015 manifesto pledge to build 200,000 homes for first time buyers has resulted in not a single starter home being built. The full facts of this failed pledge are on Byline Timeshere.
Today I have decided to highlight one of my angry blog supporters who lives in Spain and is a victim of the pension scandal that has seen 3.8 million 50s women waiting up to six years to get their pension.
So outraged at the Prime Minister refusing to consider any compensation for the women that she has written to complain to Boris Johnson and highlight how much money he and his ministers have wasted after researching the bills.
As she puts it: ” Had we run our household budgets as you have run yours, we would have lost or homes and been made bankrupt yet you are able to get away with it. You will get extremely good Pensions unlike the true workers of the country who get the smallest Pension in Europe. I actually don’t know how you can sleep at night!
Carole Irwin lives in the mountains behind Malaga. She tells me :
” I am 60 years old and during my working life paid NI payments whilst working as a nurse for several years, and as a civilian in the Police Service. I then brought up my children, so received child benefit credits for those years.
I moved to Spain to retire with my family 14 years ago. 6 years ago l was diagnosed with an incurable and life changing illness. This costs me between 80€ and 90€ in medications per month alone.
This is why I became a member of #WePaidInYouPayOut which has been supporting Back to 60.
….I am one of the many who has received no letter informing me of this change. When I started working it was on the understanding although only an assumed agreement that I would receive my pension at 60.This change of retirement age along with my illness has affected our plans for our future life in Spain. “
This is her full letter to Mr Johnson:
” I am writing to you as l have many concerns about the enormous amounts of money being wasted by Government’s various departments. In order to be concise l am writing it in bullet points so as not to waste your time.
Firstly Chris Grayling ( who possibly has wasted the most money) who has served in several roles during his time in government and unbelievably still is employed as Secretary of State for Transport of the United Kingdom (2016 to 2019). Had he been employed in the private sector would have been dismissed as his record shows how incapable he actually is! *Chris Grayling alone has so far wasted almost 3 billion pounds of public money…
*At least £500 million to sort out the mess he made when attempting to privatise the probation service (source: National Audit Office)
*£33 million when sued by Eurotunnel over Seaborne Freight fiasco (source: The Guardian)
*£38 million – cost to the economy in the north of England due to the rail chaos in July 2018 (source The London Economic)
*£50,000 on the failed ‘lorry jam’ Brexit exercise in Kent (source: The Guardian)
*£70,000 on failed attempt to ban books from prisons (source: The Independent)
*£2 billion cost to taxpayers on the collapse of Virgin Trains east coast franchise (source The London Economic)
*£15 million a year in additional costs to the Carillion contract to run facilities management in prisons (source The London Economic)
*£5 million on ‘wasted rail fares’ for HS2 staff (source: Huffington Post)
*£50 million on cancelled No Deal ferry contracts (source: The Guardian)
*£32 million of charges that were unlawfully collected – which the government were ordered to pay back (source The London Economic)
*£23 million contract to develop a new generation of GPS tracking tags for dangerous offenders written off because the project proved “too challenging” (source The London Economic)
*£60 million over the £130 million original budget on the electronic tagging programme – described by the PAC as a “catastrophic waste of public money” (source The London Economic)
More government waste is shown by the Tax payers alliance.
Although excellent work has been undertaken by the Cabinet Office’s Efficiency and Reform Group in terms of finding savings, taxpayers’ cash has still been wasted in a number of ways, with significant sums ripe for being saved in many areas, including:
*£53 billion – Additional cost of funding pay and pensions for public sector workers over and above the private sector average, based on analysis of figures from the Office for National Statistics and the Pension Policy Institute *£25 billion – Amount wasted through inefficient public sector procurement and poor use of outsourcing, based on an authoritative report from the Institute of Directors *£20.3 billion – Cost to the economy of public sector fraud, according to the National Fraud Authority *£5 billion – Amount paid in benefits to those with an income in excess of £100,000 *£4 billion – Losses to the taxpayer from RBS and the sale of Northern Rock£2.9 billion – Amount spent needlessly by the Department for Business, Innovation & Skills and Department for Culture, Media & Sport, which should both be scrapped *£1.2 billion – Annual subsidy to foreign farmers through the EU’s Common Agricultural Policy The planning of the London garden bridge cost £58 million without so much as a pot plant being placed! These figures are also almost certainly an underestimate. A rigorous assessment of the public sector efficiency commissioned by the European Central Bank found that if the UK’s bloated public sector were as efficient as that in the economies of countries like the US, Australia, and Japan, no less than £137 billion could have been saved in the last year! Those is a Huge amount of money!
In addition to the big ticket items, we have identified hundreds of examples of smaller sums being wasted. It is, however, all still taxpayers’ money and there is no excuse for waste, regardless of the amount involved. Among the culprits identified are:
Arts Council: Gave a £95,000 grant to artists in Brighton for “Skip”, a rubbish dumpster outlined with yellow lights!
Crawley Council: Spent £5,070 on 12,200 hot drinks from vending machines for council employees, when the equivalent number of tea bags would have cost just £200!
Department for International Development: Spent £21.2 million on a road maintenance project in Bangladesh, later pulled due to “fiduciary irregularities” after it emerged that less than 10% had actually been spent on roads!
Durham Council: Funded a £12,000 clothing allowance to allow councillors to wear “Geordie Armani”!
Hull Council: Spent £40,000 on a concert in honour of the councillor who is Lord Mayor this year!
Ministry of Defence: Paid £22 for light bulbs that are normally 65p!
Prison Service: Paid £720,000 to professional actors for role playing that is aimed at helping inmates become employed.
Scottish Government: Signed a £1.4 million 4-year contract for taxis for civil servants in Edinburgh – despite staff being told to use buses.
Stoke-on-Trent Council: Spent £330,000 to pay for redundancy packages and subsequently rehiring 25 members of staff.
All this money wasted by your government was paid for by the hard working tax payers and I’m sure if l did more research l could find many more examples. One being to your own embarrassment the purchasing of water cannons. I wonder what they were worth at the local scrap dealer?
There are a great many extremely angry women not yet receiving their hard earned Pensions which was paid for by themselves throughout their lives by paying national insurance. I’m sure they would not have chosen to waste so much money in the way you did, as had that money still been available you could have decided we earned and deserved our pensions. Had we run our household budgets as you have run yours, we would have lost or homes and been made bankrupt yet to are able to get away with it. You will get extremely good Pensions unlike the true workers of the country who get the smallest Pension in Europe. I actually don’t know how you can sleep at night! Due to the appalling waste as listed above, please do it get too comfortable in your role as Prime Minister as l have a strong feeling come the next general election you will have many people choosing not to vote for your incompetent and cruel party.”
On Byline next month I am planning to try and see how much money the PM has also wasted on the No Deal Brexit which increasingly looks unlikely to happen on October 31. This can be added to the figures she has researched.
But I thought it was worth publishing this gigantic list because it highlights the anger people feel about this issue and the waste of taxpayers money by politicians. No doubt the reply will be stuck in a queue in the PM’s correspondence unit. But wider publication will not allow him so easily to get away with it. Nor should he.
The 2019 local elections were one of the most surreal in recent times. For a start two of the newest party groups, Nigel Farage’s Brexit Party and the breakaway group, ChangeUK, were too late to field any candidates. So they didn’t reflect the range of political alternatives on offer.
They took place against a background of massive disillusion with politicians and country bitterly divided between Remain and Brexit.
The comparison with 2015 – the last time the seats were fought- was not equally valid as the 2015 elections were on the same day as a general election when more people turn out to vote.
So it was not surprising that the two major parties suffered and there was a rise in the number of Independents elected reversing a trend for decades.
However contrary to some of the reporting disillusionment did not fall equally on the Tories and Labour. The Tories lost out massively , Labour did not.
The Conservative party lost 1,330 seats and lost control of 45 councils. They now have control of 93 councils. Labour gained some councils but finished with an overall loss of six councils ending up controlling 60.
The Lib Dems managed net gains of 11 councils – leaving them in control of 18. The Greens did not win any council but are now a presence in both rural and urban areas.
When you get down to the detail you find Labour’s performance reflects a trend that was going on last year. The party is finding it is losing ground in some traditional working class areas where they have dominated for decades but still gaining ground in the most unlikely of places, particularly in the South.
The must dramatic losses were in Sunderland ( 10 seats), Bolsover (14) and North East Derbyshire ( 17), Redcar and Cleveland ( 13) all traditional working class areas. They also were driven back in Derby where the Tories are now the largest party and lost five seats in South Tyneside. Labour lost to a landslide of Independents in Ashfield, Nottinghamshire and now only have two councillors left. Labour disappeared completely in Dacorum ( Hemel Hemsptead) where they have been declining for years. In Stoke on Trent where Labour launched its local election campaign it lost five seats and the Tories gained eight. They also lost control of Bolton, Darlington , Stockton, Middlesbrough and Hartlepool.
Now the council leader of Sunderland Graeme Miller blamed the loss of Labour seats on a ” massive protest ” over the party’s attitude to Brexit by agreeing there could be a second referendum. This may have been partly true – as other big losses were in Leave areas – but in Sunderland voters seem to be saying ” Anybody but Labour” by voting in UKIP, Liberal Democrat , Conservative and Green councillors.
Now if this was repeated all over the country it would have been a very bad night for Labour. But it wasn’t. Labour gained seats to take control of Trafford, High Peak and Gravesham in Kent. They also remarkably took over Witney town council winning 15 of 17 seats on David Cameron’s doorstep.
And again like last year they won seats in areas where Labour hasn’t existed for years. This included one seat on South Norfolk council, one seat on Lyme Regis town council, 16 gains in Thanet – last time a UKIP stronghold, six in Folkestone and Hythe, where they hadn’t been represented, and they doubled their councillors in Worthing from five to ten. They also won 3 seats on Lewes council in East Sussex where they have not been represented for a decade.More surprisingly they took two seats in Surrey on Waverley council – both in Godalming, bringing back into politics the former Labour MP for Broxtowe, Nick Palmer. The rout in Waverley which covers true blue Farnham and Haslemere saw a 49 seat Tory majority collapse with 30 Tory councillors losing their seats ( Lib Dems gained 13, Greens two, and Farnham Residents, an independent group ended up with 14 councillors.
The Liberal Democrats did well with landslide results in Chelmsford, North Norfolk, Bath and North East Somerset, Vale of the White Horse, Hinckley & Bosworth, Winchester, Cotswolds, North Devon, Mole Valley, North Devon, Somerset West & Taunton and Teignbridge. Without doubt at a local level they have shrugged off their appalling performances after the coalition government but it is not entirely clear that in every area it will mean a rejection of Brexit. The Greens also now have a presence on many councils by winning seats in both rural and urban areas and strengthening their position in Lewes, Brighton and Norwich.
The Conservative losses are so numerous that it is impossible to list all the 45 councils they no longer control. But there was a devastating trail across Kent and Surrey and serious losses in the West country. Among the biggest losses were Waverley (30), Guildford ( 22) Bath and North East Somerset ( 25) ,Chelmsford (31) , Swale (16) North Norfolk (19) and Kings Lynn (16).
What does all mean? It is too facile to see this as a Brexit v Remain result particularly as they have been a substantial rise in Independents. These are by no means all Tories in disguise. On one level it is the reverse of the 2017 general election which saw the two main parties dominate. Now they are in the back foot in some of their strongholds – whether it be the North East or parts of the Midlands for Labour or the South East, West country and parts of East Anglia for the Tories.
Labour is still advancing the South East and has strengthened its position in Manchester. The Lib Dems are back with a vengeance in former strongholds.What will happen next with the European elections and the Peterborough by-election may also not be a true guide.
We live in surreal times and these were surreal local elections.
The news that the Independent Inquiry into Child Sexual Abuse is to investigate events surrounding Elm Guest House in the London borough of Richmond is to be welcomed. But I have serious doubts whether the inquiry will have the time and space to properly investigate.
The item is one of a number sandwiched into three weeks of hearings under the Westminster strand of the inquiry and Alexis Jay, the chair made it clear ,last month there is no intention to make any of the investigations exhaustive.
As she said:”It is important that everyone, including the public, understands that this is not, and has never intended to be, an exhaustive examination of all Westminster-related child sexual abuse issues. Even focusing on institutional issues, a comprehensive
examination of all the allegations that have been made, and all the questions that have been raised, particular on the internet, would involve hearings lasting months, if not years.”
So what will this brief cover. Again according to her statement it will be limited:
“Another category of these investigations concerns allegations relating to Elm Guest House. Those allegations include possible misconduct on the part of the Metropolitan Police in the way in which investigations into goings on at Elm Guest House were conducted, and also allegations that the fruits of those investigations were covered up.
“The latter allegations include the well-known allegation that evidence relating to Leon Brittan’s presence at and/or involvement with Elm Guest House was suppressed. We propose to call some more detailed evidence relating to these cases at the hearings next year.”
So even the remit looking at Elm Guest House will be confined.
I got involved in reporting this after a source who was neither a child sex abuse survivor nor a politician, stumbled across it during an unrelated dispute. The source had also discovered – and I have never had time to investigate this – allegations of elder abuse at a home in Richmond. Until then as a journalist I had never investigated any cases of alleged child sexual abuse.
What followed was a whirlwind of allegations, some involving national politicians, others pointing to a lack of duty of care for children by Richmond Council at Grafton Close children’s home, a muddled police investigation, and a series of very disturbing stories from people who were children at the home at the time.
Father Anthony McSweeney; Pic Credit: BBC
It ended with the successful prosecution of a well connected Roman Catholic priest, Father Tony McSweeney and charges against the former deputy manager of the children’s home., John Stingemore. McSweeney was sentenced to three years in gaol, Stingemore died a fortnight before he was due to appear before Southwark Crown Court.
Unlike Operation Midland the Met Police investigation did produce results. In McSweeney’s case it forced the Roman Catholic Church to commission a report into what went wrong when it was revealed that the paedophile priest was caught some 30 years later with a file of indecent pictures on his computer while playing a major pastoral role with young boys and men in Norwich scouts, boxing clubs and with the Norwich City Football youth team.
While the evidence about any connection between Elm Guest House and Grafton Close was never tested in court because of Stingemore’s death the trial did reveal that both McSweeney accompanied by Stingemore took boys away from the home without permission for weekends at a flat in Bexhill. They were present where various alleged sexual assaults took place. If Stingemore had been convicted, the jury would have found out that soon after leaving Richmond, and working for another authority he was arrested and convicted of child sexual abuse.
All this suggested that Richmond Council was seriously amiss in looking after children in its care and that both elected councillors and officials should have known what was going on. But it looks that the inquiry would not look at this aspect, allowing the council to be let off the hook.
As serious as this is when Elm Guest House was raided by the police, Grafton Close was designated as a place of safety for any children that might be found there. Effectively the police unwittingly were sending children to an establishment run by a paedophile with a paedophile friend who regularly visited it.And by alerting Grafton Close in advance if there was a connection with Elm Guest House, the establishment would have got a tip off about the raid.
As for the place itself it seems like many hotels that welcomed gay guests in late 1970s and early 1980s, tolerated both consenting gay adults staying overnight and possibly paedophiles. The fact is unlike today homosexuality was viewed as a closet activity, driving both adults and paedophiles to the same venues. The situation is reflected in hotels used as gay haunts in North Wales at the same time.
As for VIPs and a police cover up at Elm Guest House the inquiry will have its work cut out. Perhaps they can throw light on the Metropolitan Police’s reply to Channel Four Dispatches that Sir Cyril Smith visited the venue. As for Leon Brittan, the identification that he is alleged to have visited the venue come not from survivors or any list compiled by anybody but from enraged residents of this posh Barnes road. They say they spotted both him and at other times boys getting out of cars late at night and were fed up with this sort of traffic in a respectable neighbourhood.
This month one of the most devastating reports into a privatisation rip off was published by the Financial Reporting Council, which regulates chartered accountants. It involves a saga much reported on this blog, the failed privatisation of London and Lincoln’s fire engines, handed over to what are now revealed to be liars and fraudsters who ran Assetco at the time.
The three top directors, chief executive, John Shannon; chief financial officer, Frank Flynn; and group financial controller, Matt Boyle, could not even be bothered to attend a tribunal hearing to defend themselves against 27 allegations of misconduct. Shannon and Boyle are thought to be somewhere in South East Asia Flynn is in Northern Ireland
Between them they lied and hid millions of pounds ripped off from income paid by London fire brigade – the London Fire and Emergency Planning Authority – through a string of Northern Ireland companies and a consultancy to Abu Dhabi and falsified invoices from the London authority to boost the income of Assetco duping shareholders so they could live on the hog with large salaries.
The worst culprit was John Shannon who has been banned as practising as a chartered accountant for 16 years – a new British record – fined £250,000 and ordered to pay £300,000 in costs. This was the same man who wined and dined the now disgraced former Tory chair of the London fire authority, Brian Coleman, while simultaneously ripping off the authority for personal gain.
His story included in a damning FRC reportis a trail of dishonesty and improper financial gain for himself and his family, His first act in 2008 was to take £1.5 million out of Assetco, ostensibly to invest in a Northern Ireland property company, Jaras Property Development. In fact the report found the money was transferred almost immediately from the company to Mr Shannon’s personal bank account to pay off a loan.
To compound his action when Assetco’s accounts were prepared for 2010 he created a false invoice and lied about the use of the money to fellow directors and the auditors, Grant Thornton.
The second dishonest act involved Assetco’s take over of Graphic, a company that provided lettering for vehicles, in 2010. Mr Shannon claimed he was owed £685,000 by the company. No documentation was ever found to prove the debt but the money taken from Assetco was the exact same money owed by this son, Joel, to clear a debt with another business he was running. The report concludes this was a sham.
He then moved to fiddle the accounts of another Assetco business, Assetco Abu Dhabi, which was launched with a £15m share issue. Included in the costs was a management fee to a firm called XYZ2 for £900,000. In fact there were no management services provided by this company, instead the money was used to pay off interest owed.
Earlier Mr Shannon and his fellow directors Frank Flynn and Matt Boyle inflated the goodwill value of three other companies,UV Modular Limited (“UVM”), The Vehicle Application Centre Limited (“TVAC”) and Simentra Limited (“Simentra”). All three had been bought by Assetco and had huge operating losses, all became insolvent, yet between them they were valued at over £15m.
UVM which built ambulances and mobility vehicles for the NHS was ” in a parlous financial condition ” and collapsed. It got contracts from the NHS by offering cheap deals which meant it lost money.
TVAC built chassis and fire appliances was acquired in 2007 and went bust in 2008 and was an operational disaster. But it was obviously intended to service fire engines for London.
Simentra had just three staff and was supposed to provide management advice for emergency services.
The report found Mr Shannon was well aware of this yet allowed the £15m for goodwill to be included as an asset in the company’s accounts.
Mr Shannon, Mr Flynn and Mr Boyle also inflated income from the London fire authority on purchasing equipment and providing emergency crew training. All this led to inflated accounts which Mr Shannon claimed he had not seen but the report found that he had lied to them about his knowledge of what was agreed to be published in the accounts. There is an earlier report on my blog here.
The conclusions against Mr Shannon are stark :” While there have been no actual convictions, certain of the activities contained within the allegations could be characterised as causing or facilitating fraud. The Jaras and Graphic Allegations amount to fraud on AssetCo by Mr Shannon. The XYZ Investment was also a fraud.”
The report also says the level of dishonesty even put the fire fighters work at risk. It is as well that Assetco operations in London and Lincolnshre went bust before the tragic Grenfell fire or their services would have only compounded the problems.
Most of the misconduct by Flynn and Boyle was to assist in covering up rather than exposing the dishonesty of Shannon.
Raymond “Frank” Flynn (former Chief Financial Officer) for banned from practising for 14 years and Matthew Boyle (former Financial Controller) for 12 years. Additionally, £150,000 and £100,000 respectively have been imposed and they share paying part of the £400,000 costs bill.
The Financial Reporting Council has a memorandum of understanding with the Serious Fraud Office which could launch a criminal investigation.
The SFO told me that they were aware of the case but could neither confirm nor deny whether they would take action. In my view they should pursue these people – even if they have left the country- with the aim of securing convictions so they can spend some time in British jails.
Without huge coverage MPs from two influential Parliamentary committees yesterday proposed a new tax system to pay for the burgeoning cost of social care.
The proposal could mean a new hike in national insurance contributions, some redistribution of money going to fund your local council, higher council, inheritance and income tax and/or abolishing some of the existing universal pension benefits, like the heating allowance or cutting future state pension rises.
Significantly it includes making existing pensioners pay more tax particularly if they are still supplementing their pension by working.
This makes this the first serious policy proposal to deliberately tax people differently depending on their age – and exempting the millennials at the expense of the elderly. In that it feeds into the current and my view misconceived debate that millennials are being robbed by wealthy pensioners and the system must be changed to tax pensioners more.
The proposals may well prove to be attractive to the present government which has been trying to create an inter generational wedge between the young and old people – as a sop to the younger generation who have been burdened with huge student loan debts by government policy and can’t afford to buy a home.
No one can deny that the present system for social care is in a mess and is underfunded and it is estimated by the report using data from the Institute of Fiscal Studies that spending on care needs to rise by 3.9 per cent a year just to keep the current severely means tested system which means many cannot get help. It will cost billions more if personal care like the NHS became free at the point of use.
At the moment many people are already paying for care through local council tax. When people ask where is all the council tax money is going – anything from 25 pc to 57pc is going on social care for the young and old. The average of 37.8 pc according to the report.
The government is also transferring a big tranche of business tax revenue from Whitehall to the councils and at the same time abolishing grants – but not according to the MPs earmarking any of this money for social care.
The MPs have done a lot of groundwork – suggesting an independent body should supervise the new earmarked tax- and have used a citizens assembly to advise them of how they could do it-. The report can be read in full here.
MPs need to tread very carefully over their funding proposals because there is no doubt it could make matters worse for a lot of people.
For a start – and it is picked up by people they consulted – 40 year olds will probably have the expense of large mortgages, or higher rents, the cost of bringing up children and may find, if they have had successful careers that they are paid enough to have to pay back student loans. So they may be even more squeezed.
They have completely ignored the plight of 3.9 million 50s women. – many being forced to work for up to six years – and would now have to pay extra insurance or tax just at the point when they find it difficult to get a highly paid job.
Also by extending national insurance contributions at a higher rate for those who still have a job after turning 65 could well hit people who have taken part time low paid jobs to make ends meet. The MPs also suggest the premium should apply to unearned income and investments held by pensioners – which amounts to a tax on pensioners savings.
The committee talks of setting an income threshold to make sure some pensioners are exempt – but does not state what this threshold should be.
To my mind there are too many questions that have not been answered or evaluated for the government to go ahead with this. People should remember that everybody who drew up this report was on an MPs salary of £77,000 a year, way above many people’s incomes.
Yes we need a debate on how to fund social care – but it shouldn’t be used as part of way to drive a wedge between generations- and we shouldn’t rush into yet another use for the National Insurance Fund when they are so many women who have been robbed of a decent pension by the existing system.
Now I have had time to look further into Labour’s performance in the local elections a rather extraordinary picture is emerging among the losses and gains made by Labour on the night.
The election has been presented as a boring status quo result but if you drill down into the figures it shows two rather extraordinary trends – Labour is losing among the UKIP more Brexit minded white working class voters to the Tories but making major progress in some of the most affluent areas that stayed Tory strongholds even under Tony Blair.
Probably one of the most striking results was in Westminster. Now Labour failed to make the huge headway – just gaining four seats overall though they narrowed the gap between Labour and Tory across the borough to 1.8 per cent. The Tories held the one seat they had in Pimlico after a defection last year.
Labour took one of three seats in the West End ward – covering Mayfair, Soho and Fitzrovia in Central London. What’s more the person who won – Pancho Lewis- did so with a by-election style rise in votes. In 2014, the party’s candidates received a total of 1,281 votes and this year the figure stood at 2,858 – more than the 2,831 votes for the three Conservatives. This means that Oxford Circus, Park Lane,Bond Street, Grosvenor Square, the Dorchester hotel, Savile Row, Regents Street and for that matter the editorial offices of Private Eye are represented by a socialist. Since the ward was created in 1978 Labour have never been in sniffing distance.
The Westminster result mirrors earlier council wins for Labour in the City of London where Labour won its first seat in the Portsoken ward in 2014 and then went on to win five seats -including one in the Barbican – in the next election.
A similar surprising victory for Labour was in Harrow where Labour increased its majority to seven over the Tories. It was where it was won that made it surprising.Labour took Harrow on the hill – one of the poshest bits of the borough – that includes Harrow School and a private hospital – not normally natural Labour territory. The Labour candidates put on 1500 votes between them.
And in Barnet amidst the carnage for some of the Labour councillors in Hendon – Labour did make a GAIN by two votes -ousting a Liberal Democrat in Childs Hill just north of Golders Green – in a diverse ward that included Jewish, Arab and Somali voters.
And in Redbridge – Labour which made a double digit number of gains – included the new ward of Wanstead Village where homes can go for £750,000 – again not natural Labour territory.
Outside London Labour did amazingly well in Worthing. Worthing has never had a Labour councillor since Harold Wilson’s second victory in 1966. Last year Labour won a seat in a by-election in the centre of the town. Last week it won another four council seats and came close in a number of others. They also gained three seats from the Conservatives in next door Adur – better known as Shoreham on Sea -while the Tories took two from UKIP. The MP for Worthing East and Shoreham , Tim Loughton, who has a majority of 5,106 over Labour should be worried.
The reverse can be shown in Nuneaton which if the council had a full election – it seems certain Labour would have lost it to the Tories. Labour lost eight seats – some by big margins- in a result that gave the Tories 51 per cent of the votes on a 32 per cent poll.
Nuneaton is 88.9 per cent white British with a large proportion of pensioners – immigration hardly exists – the biggest group are Poles -but it had strong support for UKIP. which has transferred to the Tories.The census figures showed it was overwhelmingly Christian with just 12 Jews and 2895 Muslims out of 126,000 people.Nearly two thirds of the population are working class – classified as C2, D or E.
This makes an interesting dilemma for Labour they are still gaining votes in areas that Tony Blair could not even dream about but equally they are losing votes in traditional English working class areas where they need support. But Labour need to progress in both old England and new diverse England to succeed. If there is any post mortem to be had after these elections – this is it.
The local elections have been portrayed in the mass media as a disappointment for Labour ,a shot in the arm for Theresa May and a revival for the Liberal Democrats
In the pre election scenario Labour were expected to sweep all before them winning Tory councils in London and elsewhere, Theresa May was going to face a dire night and the Lib Dems were not going to do so well because of their poll ratings.
Yes Labour are partly to blame for creating this scenario with the promise of a Momentum style surge knocking the Tories out of Barnet, Westminster, Wandsworth and Hillingdon in London and winning Swindon, Plymouth and Trafford outside the capital. They had high expectations after the surprise rebirth under Jeremy Corbyn in the last general election and thought another heave would do it.
But it would be very foolish to write up these elections as the end of Labour’s progress or ruling out a slow revival of the Liberal Democrats.
For a start the final analysis of voting by the BBC shows that if there was a general election was based on these voting figures Labour would have got another 21 seats, andbecome the largest party in Parliament . The Tories would have lost 38 seats and the Lib Dems gained another 10. If that had happened last year Theresa May would not have been able to form a government and it would be Labour plus a coalition that would be negotiating with Brussels. And if you compare it with last year’s council elections it was the Tories making nearly all the gains. not Labour.
A more detailed analysis shows why this is true. Although Labour did not gain the breakthrough to take another four London boroughs from the Tories, their vote share was much nearer than their seat share. In Westminster where the Lab vote share jumped by 7.6 per cent – the difference in percentage support between Labour and the Tories is not much more than point. In Wandsworth there is only a 150 votes difference between the Tories and Labour running the council.
Even in Barnet where Labour’s self inflicted wound over antisemitism led to a 13 seat Tory majority- the Tories biggest gains – the Labour share of the vote went up 2.8 pc but was trumped by a 6.6 per cent rise for the Tories.
Also not noticed in London is that Labour increased the number of seats on councils they already run, notably in Ealing, Enfield, Harrow, Hammersmith and Fulham and Waltham Forest – which will make it difficult for the Tories to regain Parliamentary seats.
In Swindon where Labour gained just one seat more people voted Labour than Tory but obviously not in the key wards. Interestingly in Plymouth where Labour won the council, more people voted Tory than Labour but not in the right places.
Also where councils switched from no overall control to Tory control – it was often by a couple of seats in places like Peterborough. The one exception was Nuneaton and Bedworth where the Tories were robbed – they got 51 per cent of the vote there but could win enough seats to take the council.
The other big factor which stymied Labour and helped the Tories was UKIP. Many UKIP voters became Tories so they could get a hard Brexit. In Basildon and Great Yarmouth this gave the Tories the edge over Labour. Labour did take back seats from UKIP, but the Tories took more. In Great Yarmouth former UKIP candidates actually became Tory candidates. Britain Elects shows this disparity examining 81 UKIP losses with the Tories gaining 47 seats from UKIP while Labour gained 30.
It should not be a total surprise that the Lib Dems do well in local elections, they have won quite a number of by-elections over the last year. But in three councils- where the whole authority was up for grabs – they did spectacularly well, trouncing the Tories. These are South Cambridgeshire, Richmond and Kingston, where they won sweeping gains pushing the Tories out. They also won seats in Hull, Sunderland and Gosport but were pushed back in Birmingham and Newcastle upon Tyne.
So what is the prospect? The Tories can take comfort that they were not trounced and could claim a mandate for a hard Brexit after hoovering up much of the UKIP vote. It is rather ironic that Theresa May treated councils she had not lost as a victory parade-normally you go to places to celebrate a Tory gain.
Labour need to tackle the antisemitic issue promptly and to reflect soberly on how they need more than an incompetent government to form a majority administration. And the Lib Dems need to build on their local government base as a springboard to win more seats in Westminster.
The reality for all parties is that it is going to be a hard slog to get or stay in government.