Week 43 10 26th October 2010

Tendring Topics…….on Line

‘We’re all in it together?’

I have to confess that when the Chancellor of the Exchequer finally announced his spending review on 20th October, my first feelings were of relief. The cuts didn’t, at first glance, seem quite as bad as had been expected. Government Departments, for instance, had been asked to cut only 19 percent of their spending when, just a fortnight earlier, the prime minister himself had suggested that those cuts would be 25 percent. Pensioners winter fuel allowances were untouched, as were our free prescriptions, tv licences and bus passes!

Looking back over the years though, I remembered that whenever unpopular finance measures had been introduced, they had never been quite as awful as had been predicted. The former Public Relations Officer in me entertained the cynical thought that some of that gloomy prior speculation may have been deliberately promoted, so that our feelings of dismay when the facts were revealed would be tempered by those of relief. We had been encouraged to expect even worse.

One cut that was deeper than had been anticipated has been in central government support for local authorities. This is to be cut, not by the anticipated 25 but by 26 percent; only one percent – but one percent of a very large sum is quite a lot. The effects of this cut won’t be noticed for months, perhaps not for a year or two. And then, when refuse collections are halved, broken paving stones are not replaced, the needs of the very young and the very old are neglected, libraries and leisure centres are closed down or survive only by introducing crippling charges to users, it won’t be central government that will be blamed but ‘that lot at the Town Hall’.

Among the local authorities whose governmental support will be cut is our own Essex County Council. We now learn that they were millions of pounds ‘in the red’ even before this financial crisis hit us. Surprised? I’m not. Jetting influential councillors and top officials half-way round the world to stay in luxury hotels, establishing an office in mainland China to encourage Essex exports (has it, in fact, found us any markets?), setting up a bank, taking over failing Post Offices, and putting self congratulatory adverts on tv cost money. What a pity that, unlike the Government, they can’t blame the debt on the profligacy of the previous Labour administration! The County Council is, of course, responsible for the care and support of the elderly and disabled. I’ll just have to try my very hardest keep out of a care home and maintain my present degree of independence for whatever remains of my life. I’d be unwise to count on much Social Service support!

There are plenty of people who will suffer – really suffer – as a result of this spending review. They are the people, and the families, who survive on the benefits that are to be reduced or eliminated. Some of them no doubt are scroungers who have chosen a life of squalid idleness, funded by benefit fraud and minor crime. I shall be very surprised if these are any more than a small minority. Most, I think, lack saleable skills, are mentally, physically or emotionally inadequate, or have been just plain unlucky. Some would undoubtedly take any job that was offered. But none is offered. And if there is one thing that can be predicted with certainty, it is that the coming months will bring fewer jobs and more unemployed.

Those of us who were brought up in loving homes with parents, however poor, who valued education and wanted their offspring ‘to get on in the world’ often don’t realize how very, very lucky we have been. It is those who didn’t have those advantages, those who drew a losing ticket in the lottery of life, who will have to suffer most to free us from the economic prison into which we have been led by avaricious financiers, and myopic politicians incapable of looking beyond the next election.

Saving the Planet! (and saving on gas bills)

From time to time there are features in the popular press ‘exposing the renewable energy racket’. According to the authors, all this business about the need for alternative sources of energy and the savings, or even profit, that can be made by solar power or wind turbine installation is illusory. There’s rarely enough sun or wind in Britain to make either source of power profitable. Better by far to install double-glazing and draught proofing, and rely on tried-and-tested gas or oil (‘there are still plenty of reserves of both in the world!) for space and water heating. What rubbish!

I know nothing about privately owned wind-turbines in the back garden, or roofs with their sunward slopes covered with solar panels; heating homes and hot water and selling surplus electricity back to the national suppliers. My experience is limited to a single small solar water heating system that I had installed in my bungalow just before Easter in 2009. I knew that I was unlikely to live long enough to see it recover the capital cost of its installation, but I thought that it would add value to my home and that its saving would probably exceed the meagre interest that I was receiving from the ‘rainy-day-fund’ in my Building Society account. It has fulfilled all my expectations.

On the southern slope of my bungalow roof I have a solar panel and two photoelectric cells, one on each side of it. An antifreeze solution is pumped in a closed circuit through the solar panel to heat the water in a heavily insulated storage cylinder in the roof space. This cylinder is connected to my main storage cylinder so that when domestic hot water is drawn off for baths, showers, washing and so on, preheated water flows into the main storage cylinder. During sunny summer days, sufficient water is heated to meet all domestic hot water needs. Even in the winter the domestic water supply is preheated, so that less fuel is needed to bring the water in the main storage cylinder up to the required temperature.

There are, in fact, two electric pumps, both activated by the photoelectric cells on the roof. One circulates the antifreeze solution between the solar panel and the new storage cylinder in the roof-space, the other exchanges the water between the new storage cylinder and the main storage cylinder, when the temperature of the water in the upper cylinder is ten degrees Celsius higher than that in the main cylinder. This means that there is little wastage of cold water when the hot taps are turned on, and that, on warm and sunny days, I have two cylinders – between 50 and 60 gallons in all – of stored solar heated hot water. Temperature sensors, connected to a control panel in my airing cupboard, switch the two pumps on and off.

The completed system is complex but the principle on which it operates is straightforward enough. I described a very basic solar water heating system in my ‘David and Charles Manual of Home Plumbing’ and my ‘Teach Yourself – Plumbing’, published way back in the 1980s. Then though, I knew nothing about photoelectric cells or electronic control. Nor, I think, had anyone at that time conceived the idea of the second pump. My solar system is now working perfectly – though I wouldn’t pretend that it didn’t have plenty of teething troubles, to which the installers (Solar Power (UK) Ltd. of Rayne, Braintree) gave prompt and painstaking professional attention.

I pay my gas and electricity bills together by direct debit monthly to one supplier, Eon through an ‘Age Concern’ account. Eighteen months ago I was paying £110 per month. A year ago, when my solar heating system had been installed but was still having teething problems, my monthly payment was reduced to £70. I have just been informed that, from 1st December this year, I shall be paying £53 a month only – and that is after a long, hard winter and a far-less-than-perfect summer. The Building Society annual interest on the capital cost of the installation hadn’t been anything like the £684 annually that solar power is saving me – and that saving is tax-free!

Let no one tell me solar water heating doesn’t pay. Mine certainly does!

Writing about tax-free savings…….

…….reminded me that among the features of the Spending Review that brought joy to the hearts of all of us pensioners, was the retention of our Winter Fuel Allowance, free bus passes, free tv licences and free medical prescriptions. The national press had prophesied that the first two of these might well be dropped or at least means tested.

However, my sense of satisfaction was severely dented when I read the headline in one of the dailies that I trust, ‘Disabled and sick pay the price to save winter fuel allowance’. I read on: The main losers are those receiving Employment and Support Allowance, a payment of up to £97 a week for those unable to work because of ill health or disability. Under the changes, claimants will receive the benefit for only 12 months………..At the end of that time, some of those still claiming will either be forced to find work or given the Job Seekers’ Allowance instead, meaning they could be around £30 a week worse off. Others will be given a slice of the old benefit under a means tested basis. All of this comes on top of the £11bn chopped from the welfare budget in June’s emergency budget; cuts to the disability living allowance, housing benefit and child benefit, and a £3.2bn tax credit squeeze.

Is the un-means-tested winter fuel allowance paid to us pensioners, at the expense of others many of who may be worse off than at least some of ourselves? Ought we to receive a universal benefit, whatever our circumstances may be, while others lose theirs or are severely means tested? Should our eligibility for winter fuel allowance be means tested, or limited to those disabled or over a rather higher age than at present? I don’t like means-tested benefits. They are expensive to administer and some who really do need the extra money might be reluctant to fill in the required forms, disclosing their poverty. We oldies are sometimes proud!

I suggest a fairer idea would be to make the winter fuel benefit taxable, though I suspect that the suggestion will outrage many of my fellow pensioners. Our state retirement pension is already ‘means tested’ in that it is added onto any other income that we may have, and income tax is deducted from the total. Why not treat winter fuel allowances, in the same way? Those who have no private pension or other income to supplement their state pension would continue to get their benefit with no deductions. PAYE would deduct the appropriate sum from the total incomes of the better-off at source. I would still, I think, get about two thirds of my present winter fuel allowance. Others, whose private pension or other income bring them within the higher tax band, would retain about half of theirs.

It is a system that would surely be reasonable and not too difficult to administer. Why not apply it to other ‘universal’ benefits? The main objection that I can see is that our current income tax system needs to have more income ‘bands’ and that those who receive (I can’t bring myself to say ‘earn’) over a million pounds a year, pay just the same rate on their taxable income as the inhabitants of ‘Middle England’ with an income of perhaps £50,000 a year. It is a reform that could certainly be introduced by a resolute government that was not blinded by billionaires!

How the ‘other half’ lives!

How appropriate that just as the Chancellor was telling us all to tighten our belts, the Supreme Court in London was ruling on the divorce settlement of a couple of millionaires! The marriage of Katrin Radmacher, who is said to be worth more than £100 million and Nicolas Granatino had ended. The latter had hoped that the Supreme Court would help him get his hands on what he considered to be a fair share of his former wife’s fortune.

He failed, but we don’t have to worry. He won’t be joining the queue for ‘benefit’ from a hard-up British government. His ‘failure’ leaves him with a million pounds in cash, the use of a £2.5 million property rent-free for 15 years, a holiday home in the south of France until the youngest child of the former marriage is 22, a personal income of £76,000 a year for the next fifteen years, and child maintenance of £70,000 a year even though he is not the primary carer. He will also get £25,000 for a car, and most of his debts paid of by his ex-wife. Most of us, I think, could manage to live with that kind of failure! ‘We’re all in this together’, says the Chancellor. I doubt if Mr Granatino and the former Mrs Granatino, beset by their own personal problems, have even noticed that the society in which they live has a few financial problems of its own. If I may make a minor alteration the last verse of a once-popular folk ballad:

It’s the rich wot gets the pleasure.
It’s the poor wot ‘as to pay.
Thus it was in former ages
And it’s just the same today!