957202
Description
Flashcards by Laura McKenna, updated more than 1 year ago
|
Created by Laura McKenna
almost 10 years ago
|
|
| Question | Answer |
| Financing local government | Revenue vs capital finance Local authorities need money for two types of spending: > Capital expenditure - building infrastructure (offices, roads, traffic crossings, schools, housing) > Revenue expenditure - operating/maintaining these facilities daily (cash spent on staffing, lighting, heating, repairs etc) |
| Revenue expenditure and how it's financed | Financed through the council's income - Grants received from central government - Taxes raised locally/taxes allocated - Upfront fees and the penalties it charges for its services (e.g. parking permits and library fines) |
| Types of revenue grant | General block grants: - National Non-Domestic Rates (NNDR) - Revenue Support grants (RSG) - Area based grant (ABG) Specific grants: - Grants for particular services - Ring fenced grants - Unfenced grants - Police grants |
| The evolution of council tax | The council tax superseded the poll tax. The poll tax was inefficient because: - People refused to pay - People unregistered from the electoral register to avoid being tracked down - It was a head tax and not a property tax Replaced by John Major with the council tax: - Each household is billed on the assumption that it contains two adults - 25% single person discount: for those who live alone |
| Arguments for and against property-based tax | > Cheap to administer and collect, provides predictable source of income > Difficult for people to avoid paying because property is immobile > Simple and clearly understood system > Fair in theory that people occupying larger dwellings are likely to be better off > Property taxes can be disincentive of home improvement, because major refurbishment or extension is likely to hike bills. |
| Arguments for and against people-based tax | > Boosts local finance because number of bills sent out reflects all adults - rather than households > Arguably fairer - burden of paying for local services spreads across all adults > Fosters great local authority accountability - all adults charged, so can voice their opinions on use of money. > Individuals have to fill in forms to accept liability to taxes - reluctant to register. > Low-income groups pay the same as richer ones |
| Main sources of capital finance available to local authorities | - Prudential borrowing - emphasis switched away from controlling council spending to limiting borrowing - Supported capital expenditure: provided by government - Capital receipts - money raised through council's sale of capital assets - Capital grants - traditionally come from government departments. - EU grants and loans - Private sector investments - Local lotteries - Local strategic partnerships |
| Constitution | A set of shared values recognised and accepted by the subjects of a country. The UK's is unwritten |
| Components of the British Constitution | - Statute - Common law (case law/precedent) - Conventions - customs, traditions and long-standing practices. - Treaties: EU and other international agreements |
| Key constitutional offices of the monarch | - Head of state - Head of the executive, legislature, and judiciary - Commander-in-chief of the Armed Forces - Supreme governor of the established Church of England - Head of the Commonweath) |
| Actual prerogative powers (those exercised by the monarch) | - Reading the Queen's Speech - Governing the Church of England - The formal act of "creating" peers and conferring knighthoods and honours - Meeting the Prime Minister once a week - Entertaining visiting heads of state at Buckingham Palace - Touring other nations of official state visits - Chairing meetings of the Privy Council |
| Notional prerogative powers (those deferred to government) | Most sovereign powers are exercised "on the advice of minister" which means that ministers (mainly the PM) who take decisions. Powers include: - Dissolving and summoning Parliament - calling elections and forming new parliaments after the results are in. - Giving the royal assent to Bills passed by parliament - Appointing ministers and other senior public officials including judges/diplomats/governors/officers in the Armed Forces/ police chief constables/ Church of England Bishops and Archbishops - Devising the legislative agenda for each parliamentary session - Writing the Queen's speech - Declaring war and peace - Drawing up lists of nominations for peerages, knighthoods and other honours for the New Year Honours List and Queen's Birthday Honours List. |
| Monarchy funding | The monarchy is funded by: - The sovereign grant (an amalgamation of the Civil List and the Grants-in-aid): for the Queen's official duties, including the upkeep of palaces. - The Privy Purse: income from the Duchy of Lancaster - Personal income: e.g. Harry employed in the Armed Forces |
| The House of Commons | - The lower house - About 650 MPs - Each MP represents a constituency/seat - Commons chamber is ranged alongside two sets of opposing benches, presided over by the Speaker. - On the right of the speaker are the government benches, while the left are occupied by Her Majesty's loyal Opposition (generally the second biggest party after an election) - First-past-the-post electoral system - must gain a relative majority. - Business timetable is set by the Leader of the House - a cabinet minister. |
| The role of MPs in relation to constituents | - All MPs other than the serving government ministers or the opposition's shaddow ministers are known as backbenchers. - Constituency responsibilities include: > Holding weekly "surgeries" (drop in sessions for constituents to raise concerns) > Writing to ministers responsible for relevant departments to try to solve grievances/issues raised by constituents - Asking written oral questions as Question Time (including PMQ). Held for at least one hour a day, Wednesday lunchtime = PMQs. - Introducing private members' Bills (PMBs) - Coordinating e-petitions on behalf of constituents. |
| The role of MPs in relation to parliament | - Committee system: most backbenchers are members of at least one committee - Divided generally into three types: > Select committees > General committees (including public and private Bill committees and grand committees) > Joint committees Select committees: scrutinise the workings of individual government departments and parliament itself. Have the power to call MPs, senior civil servants and other public officials as witnesses. Can publish reports of their findings, but are criticised for being biased as they are permanent and chaired with the majority of the governing party. General committees: Aim to scrutinise, comment on, amend and refer back legislation to the commons. Can summon expert witnesses and officials outside parliament to give evidence. Joint committees: Composed jointly of MPs and peers |
| Party loyalty and the Whip system | Three broad definitions of the term "whip": - Whips: MPs or peers charged with "whipping into line" backbenchers when a debate/vote is regarded important by leadership. - Party whip: An MP's or peer's membership of his/her parliamentary party. - Three-line whip: votes judged by party leaders to be of the highest importance are highlighted and underlined three times in a weekly circular sent to MPs and peers. |
| The House of Lords | - The upper house - Many advocate House of Lords reform - it is undemocratic and peers are appointed. |
| Who sits in the Lords? | Two types of peers - Lords Spiritual and Lords Temporal - Lords Spiritual - 26 senior Archbishops and Bishops of the CoE - Lords Temporal make up the rest, mainly Life Peers appointed by the Monarch on the advice of the PM. - Number of members is not fixed - 90 hereditary peers (who were elected to stay after hereditary principle was abolished in The House of Lords Act 1999) |
| Who are they? | - Life Peers can come from all walks of life - Former politicians - Lord Mandelson - Former trade union leaders - Lord Morris - Business people - Lord Sugar - Health professionals- Lord Winston - Luvvies like Lord Attenborough |
| Role of the House of Lords | Legislative: legislation may start in either house first, the majority starts in the Commons. The Lords has the power to amend legislation but not reject it. It's major power is delay Deliberative - debating: Has a great deal of expertise, members are not bound by demands of constituents. Party discipline is less rigid than Commons, therefore standard of debate is high. Constitutional: Lords ensure that the government does not abuse its powers by whipping MPs to pass legislation. |
| Lords Speaker - Baroness D'Souza | - Presides over meetings, does not control it. House regulates itself, gives advice. - Responsible for security - Ceremonial role - speaks on behalf of House - Ambassador - Leader of the House of Lords: Lord Strathclyde |
| More politicians? | - If Lords is reformed, is that not another group of politicians? - How will they differ from Commons? - The public wants fewer politicians, not more. |
| Types of legislation | Primary and secondary legislation Primary legislation: > Public Bills: Change the law of the land > Private Bills: affect specific individuals or organisations (companies or local authorities) > Hybrid Bills: A mixture of the two. Affect a whole population, but impinge on some more than others. > Private members Bills (PMBs): introduced by backbenchers. 3 ways of introducing PMBs: PMB Friday, The ten-minute rule, Presentation Bills. Secondary Legislation: powers flowing from Acts. Rules, regulations and guidelines drawn up to implement Acts. |
| Role of the Commons Speaker | - Currently John Bercow - Presides over votes/debates, restores order when members become rowdy. - Chooses who speaks next - Discards party allegiance during time spent at post. |
| Local government decision making | The work of local authorities is divided between two groups: Councillors and Officers - Officers administer departmental services - concerned with processes/how services are run - Councillors make political judgements. Decide how to distribute money across services. Each represent their own electoral divisions. Unsalaried, unlike MPs. |
| Councillors' allowances and expenses | Allowances are designed to give elected members modest payments for attending meetings: - Basic allowance: flat-rate annual payment usually paid monthly - for all councillors within an authority. - Special responsibility allowance - additional payment received by councillors who hold posts of greater responsibility. Sizes of allwances vary on responsibility. - Those with dependent children/other relations can claim a separate carers'/dependents' allowance - Each English council can set its own allowance levels - Some council allowances are like full-time wages. Expenses: cover travel, overnight accommodation, postal costs, telephone bills related to council work. |
| The role of local government officers - experts | - Number of officers varies widely - Officers must be politically neutral - Their roles are to advise, support the executive/non-executive and scrutiny arms of the council. - 3 officials who oversee the workings of the council as a whole: - Chief Executive: council's main policy adviser - Monitoring officer - reports to members any maladministration/failures by councillors/officers. Chief legal officer, should be a trained lawyer. - Treasurer - oversees administration of finances. Must be a recognised accountant. |
| The types of decision-making | Committee style (pre-LGA) Executive (post-LGA) |
| Two types of executive management introduced by the Local Government Act 2000 | - Leader of the council and a cabinet/executive - Directly elected mayor (DEM) and a cabinet/executive All council's adopting one of these models divided hierarchy into: executive, non-executive and scrutiny |
| Non-executive committees | - Range of matters referred to non-executive is limited - Can only approve minor decisions - Major decisions may have to be decided by a full council |
| Scrutiny committees | - Examine council policy proposals/individual spending departments - Similar to select committees in Westminster - Can propose policy amendments/ call witnesses/publish reports, but cannot reject or overturn executive decisions. |
| Types and levels of council decision | - Full council now concerned with only most significant decisions - These key decisions must affect at least two electoral divisions and be likely to incur significant expenditure - Forward plan published each month to ensure transparency |
| Local Education Authorities (LEAs) | - Secure provisions of sufficient spaces - Provide administration and additional money for schools - Determine admission policies for schools - Determine school holidays - Oversee curriculum and operation of their schools - Provide free school meals and transport - Determine which children have special educational needs |
| School governors | - Financial running of schools - Appointment of staff - Overseeing curriculum/agreeing policies - Setting targets for schools - Agreeing policy on sex education - Jointly responsible for discipline - Publish information for parents |
| Academy schools | - Independent schools funded by the state - Must meet certain requirements set by the state - Sponsored by businesses/charities/other schools - Can deviate from the national curriculum - Have charitable status - Can select up to 10% of students on aptitude |
| Community schools | - Set up, run and owned entirely by the local authority - Comprehensive scools run directly by LEAs. - The local authority employs the staff, owns the lands and buildings and determines the admissions arrangements. - Follow the national curriculum, national pay and conditions, and are overseen by the local authority. |
| Free schools | - Fully self-governing primary/secondary providers set up by parents/teachers/communities in locations without sufficient "good quality" schools - Have charity status - Michael Gove's idea |
| The European Union | Two sides to EU debate: - Europhiles - see closer economic/political integration as - Eurosceptics - some are merely critical of the EU as bureaucratic/undemocratic, whereas others want to leave because of "United States of Europe" or a federal Europe in which national sovereignty is lost - Emerged post-war - Known as the European Common Market until the 70s |
| The main EU institutions | - European Commission (EC) - European Parliament (EP) - Council of Ministers - European Court of Justice (ECJ) - European Council |
| The Euorpean Commission | - The executive of the EU - Each department (Directorate-General) is headed by one of 28 commissioners, one from each members state. They are appointed for 5 years. - Primary institution responsible for initiating policy - Non-elected, controversial - Repeated attempts to reform EU commission - dubbed the "Brussels Bureaucrats" - Budget has not been signed off by the Court of Auditors since 1993 (19 years), issues of fraud, transparency and accountability |
| The European Parliament | - The legislature of the EU - Maastricht Treaty gave it powers to reject legislation. Joint legislative power with the Council of Ministers - co-decision - Elections held every five years - Proportional representation (PR) voting system - parties are awarded a number of seats proportional to their share of the vote - Twelve electoral regions for European parliaments - 72 British MEPs - Based in Brussels and sometimes Strasbourg - MEPs sit in party blocs, in a semi-circular chamber according to position on left-right spectrum. |
| The Council of Ministers | - Most powerful EU institution - Comprised of 28 departmental ministers from the member states - The council has 10 configurations (e.g. foreign affairs, environment) |
| Qualified Majority Voting (QMV) | - Unanimous approval of member states is normally required to pass major decision for the future of the EU (a.k.a budget, or admitting new countries to the EU) - QMV - MEMBER STATES ARE NOT ACCORDED EQUAL SAY IN THE COUNCIL, IT IS PROPORTIONAL TO POPULATION. Criticisms of QMV: - Smaller states have policies imposed on them by more heavily populated ones |
| The European Court of Justice (ECJ) | - Based in Luxembourg - 28 members, 1 judge per member state - Each judge is nominated on a 6 year basis - The court may be required to pass judgement when: > a member state has not implemented a treaty/directive > A complainant alleges that a governmental institution/NGO/commercial business has broken EU law |
| European Council | - "European Summit" - "Gained official status after Lisbon Treaty - Composed of heads of state/government of all 28 countries - Meets four times a year in Brussels - Responsible for mapping the overall future strategic for the EU. |
| Evolution of the Euro | - Came into being in 2002 - The European Central Bank (ECB) - 18 member states - John Major negotiated an opt-out protocol before signing the Maastricht treaty |
| The eurozone debt crisis | - Tumultuous recent events sparked by debt crises in Portugal, Italy, Ireland, Greece and Spain (PIGS) have sharpened opposition to the Euro - Bail out was led by Germany and France |
| Separation of powers | The state is split into three branches: - executive: the government - legislature: Parliament - judiciary: the courts |
| Rule of law | - The inalienable right of any citizen accused of a criminal offence to a free and fair trial before his peers and, crucially, enshrined the principle that no one is "above the law". |
| Parliamentary sovereignty | - Constitutional principle that parliament holds supremacy over sovereign in governing England and Wales |
| Collective and ministerial responsibility | Collective responsibility: all members of parliamentary party's front bench must agree to cabinet policies, or be prepared to resign. Ministerial responsibility: a minister bears the ultimate responsibility for the actions of their ministry or department, and must be prepared to resign at any mishaps. |
| Listed buildings | Buildings are listed if they have: - Architectural interest, e.g. art deco buildings - Historical interest - reflective of a particular period or movement - Links to nationally important people or events - Group value as an architectural or historical unit There are grades of listed building: - Grade 1 - buildings judged "exceptional" - Grade 2 - buildings judged as "particularly important Have to be at least three decades old |
| Conservation areas | - A further way of protecting groups of buildings is to designate them as conservation areas. - Designated by local authority - Quality of area is more important than individual buildings - Focus on exterior not interior of buildings - Can apply to natural areas not just buildings, e.g village green in Christchurch |
| The NHS | - Established in 1948 after the findings of the Beveridge report were published, and because of the introduction of National Insurance in 1911 which insured low-paid workers against sickness and unemployment. - Introduced by Nye Bevan the Health Minister at the time. "Stuffed their mouths with gold" - had to get family doctors and consultants on board. |
| How the NHS is funded | - Around 80% of NHS money is sourced from general taxation (Income Tax, VAT, duties on tobacco and alcohol), with the remaining 20% deriving from: - NHS element of National Insurance contributions - Charges to patients for drugs (prescriptions) and treatment - Income from land sales and income-generation schemes - Funds raised from voluntary sources, for example local hospital appeals. |
| Restructuring of the NHS | The NHS was restructured in 2012 following the Health and Social Care Act. Reforms included: - Care Commissioning Groups took over Primary Care Trusts. CCGs are local consortia of GPs (not soley GP led) who purchase services collaboratively (in which they are forced to participate). Aim to abolish bureaucracy. Argument against: GPs may know best when it comes to health, but not when it comes to spending. - NHS Commissioning Board took responsibility for commissioning primary care itself. They ensure that service standards are maintained to a national level. - Local authorities replaced Strategic Health Authorities in promoting improvement and overall healthcare provisions. They are often a local council's existing health and social care scrutiny committee. They will scrutinise services of all health care providers in the area. - Health and well-being boards were formed by all English local authorities. They bring together all commissioners of health and social care in each area, along with local representatives of Healthwatch. They look at improving health. Boards include elected local councillors. - Secondary care to be offered by "any qualified provider" as opposed to "any willing one", embracing competition between public, private and third sectors. - The Care Quality Commission assumes responsibility for regulating standards of health and social care across all providers, while Monitor will issue/withdraw licences to registered healthcare providers (including private companies and charities). Responsible for promoting efficiency, setting prices for NHS treatments and ensuring competition works in patients' interests. Competition is on the basis of quality, not price. |
| Further restructuring of the NHS | - Public Health England: New executive agency of the Department of Health. They promote healthier lifestyles and fund £4bn of public health initiatives across the country. - Shadow ministers/union leaders have accused government of subsidising the private sector with taxpayers' money, which will run the risk of increasing NHS waiting lists by prioritising fee-paying customers. - Market-based health service will disadvantage the less educated and/or pushy parents, and increase the likelihood of child abuse cases by ending the tradition of designated professional providing ongoing supervision. |
| Other recent controversies in the NHS | - Under Labour, doctors were paid extortionate bonuses if they offered extra services, AKA flu vaccinations - Andrew Lansley changed the rules of doctors concerning their pensions. They are now forced to work for longer, and they have to pay bigger monthly contributions for less reward in retirement. |
| Complaints | NHS complaints are handled by the Parliamentary and Health Service Ombudsman. They handle complaints in relation to: - Failure of NHS service standards - Failure to provide a service to which a person is entitled - Maladministration by an NHS body - Failure in the exercise of clinical judgement by hospitals or GPs. |
| The CQC | The CQC is authorised to issue trusts with fines/fixed penalities and enforcement notices for breaking the terms of their registrations. They can withdraw NHS licences from acute hpsitals that persistently fail cleanliness inspections. |
| NHS Foundation Trusts | - Not for profit, public benefit corporations. - Provide over 1/2 of all NHS hospital/mental health/ ambulance services. - Created to devolve decision making from central government to local organisations and communities. - Not directed by government which gives them a greater freedom to decide the way services are run. - Have to pass a variety of tests to achieve Foundation Trust. |
| Further issues within the NHS | - NHS ethics are under scrutiny since funding cuts means that the NHS cannot take on new and innovative treatment options which have proven to be successful elsewhere - for example, herceptin drug is shown to be effective in about 60-80% of patients with HER2+ breast cancer however has recently been denied on the NHS since a single treatment can cost upto £30,000 - Privatisation of the NHS: a lot of political parties are pushing to privatise the NHS - AKA selling hospitals to business firms for which the patients pay health insurance, detracting from the entire point of the NHS. - Privatisation = good for alleviating strain and demand on NHS - But bad = drains money making operations thus NHS cannot make profit - £60bn of NHS funds have been handed to private contractors, with nobody to policy them. |
| Devolution and Scottish independence | Since 1999, the UK has been witnessing devolution Devolution transfers powers for the UK parliament to assemblies in Cardiff and Belfast, and to the Scottish parliament in Edinburgh. |
| Major devolved powers of Scotland | - Agriculture, forestry and fishing - Education - Environment - Health - Housing - Justice, policing and courts (Scotland have always had a separate legal system) - Local government - Fire service - Economic development - Some transport |
| Non-devolved powers in Scotland | - Constitution - Defence and National Security - Foreign policy - Energy - Immigration and nationality - Trade and industry - Some transport - Social security |
| What Scottish nationalists want | - A more democratic Scotland - decisions are imposed on Scotland by Westminster which the majority of Scotland didn't vote for (poll tax, bedroom tax) - Scottish parliament already delivers free personal care for the elderly. They have restored free education of students and have kept the NHS in the public sector. - Prosperity: Scotland should be able to govern its own economic and tax policy. - A fairer society |
| Arguments in favour of independence | - Scotland can afford to be independent - Scotland's public finances are stronger than the UK's as a whole. People in Scotland contribute more tax than the average person in the UK. - Scotland will be more prosperous as an independent country. It has a strong economy supported by income generated by North Sea oil. Nationalists want to boost female work force to imitate Sweden and generate £700 million in tax revenue. - The UK is one of the most unequal countries in the developed world. Westminster policies are exacerbating poverty in Scotland. 9/10 MPs opposed the bedroom tax, but it is still imposed on Scotland. - Decisions about Scotland should be made by the people who live there. Taxes will be set by the Scottish Parliament, and public services can be protected from privatisation. |
| Arguments against independence | - Scotland's economy will be more stable and secure with the UK. Who bailed out RBS? Scotland's biggest trade market is the rest of the UK. - George Osborne said a "yes vote" means leaving the pound, as it a UK currency. Scottish nationalists want a currency union, but Westminster is opposed to currency unions after witnessing the Eurozone debt crisis. - Scotland can continue to have the best of both worlds - a Scottish Parliament, and UK membership. - Scotland doesn't have to use the euro as its currency as part of the UK. - Scotland would have to reapply for EU membership. They may have to queue up behind other countries such as Macedonia and Turkey. - President of the European Commission, Jose Manuel Barosso, has said it will be extremely difficult, if not impossible for Scotland to join the EU. All member states will have to approve it. Spain did not approve Kosovo, and may not approve Scotland due to their own concerns about separatist Catalans. |
| The economy | The market - In market economies, the market - through the law laws of supply and demand - determines: > What goods and services are produced > Their quantity > Their price There are varying market, e.g. the property market, the global market, the financial market etc |
| The public sector | The public sector refers to the sector run by the state - government departments, local governments, nationalised industries, NHS, the military Any borrowing by this sector counts towards the Public Sector Net Cash Requirement (PSNCR) The main role of the public sector is to provide efficient and adequate services. Public sector strikes/pensions |
| The private sector | The term private sector refers to organisations which are privately owned. These are mainly big/small companies and partnerships. Can range from your average cornershop to huge corporations like BP. The main role of the private sector is to make profit. |
| Inflation | Inflation is a state of affairs where there is an increase in the general level of prices and as a result the value of money (purchase power) falls. It is dangerous for the economy, and can lead to hyperinflation. Inflation is measure by Retail Price Index (RPI) and Consumer Price Index (CPI). |
| Deflation | Deflation is a policy to combat inflation, or it is a state of affairs where there is a general fall in the level of prices. This can push an economy into recession. Deflation increases the value of money over time. Deflationary policy may involve: - Raising interest rates - Raising taxes - Cutting public spending (austerity) This policy will lead to a fall in demand and unemployment will rise. It will usually be accompanied by a drop in prices. |
| Recession | Recession is a state of affairs where there has been a down-turn in the business cycle. Output and investment has dropped and unemployment has risen. In technical terms, a recession happens when there are two consecutive quarters of negative growth, shrinking the economy. |
| Growth | If the economy shrinks, it is not growing which means prosperity is not increasing. Growth is at the heart of a successful and flourishing economy. Reflation is a policy to combat a recession and to get the economy growing again. It may involve cutting interest rates and taxes to get consumers spending. Increasing public expenditure and building new road/rail/bridge projects stimulate the economy and create jobs. |
| The deficit | UK policy under the Coalition has been designed to cut the huge deficit run up by the previous government, due to public spending and the banking crisis. The Coalition cut public spending to reduce the deficit. The deficit is the government's running overdraft. It's the difference between the government's income and outgoings. It is not the total public debt, which is much larger. The deficit is so big due to the level of public spending on health and education by the previous Labour government, as well as the billions pumped in to the system to save the banking industry from collapse in 2008/2009. Much of Britain's banking industry is state owned now. |
| How did the banking crisis happen? | - US subprime mortgage market was flawed and led to a collapse all over the world - Bad loans were given to people who couldn't pay them back - Mortgages had been sold as investments around the world by investment banks like Lehman Brothers and Goldman Sachs - Investment was worth hundreds of billions |
| The banking crisis | Many of the investments sold turned out to be toxic debt because so many people defaulted on their loans These investments were bought by pensions funds/banks/public organisations around the world The sale of toxic debt triggered a global banking and financial crisis Some banks ran out of cash, and the cash machines nearly ran dry Government nationalised Northern Rock and part-bought RBS and Lloyds TSB |
| GDP and GNP | Gross Domestic Product (GDP) is the the total value of goods and services produced in a country in a one year period. Gross National Product (GNP) is the value of goods and services produced in a country MINUS the profts made by foreign companies operating in that country, but including profits made by companies operating overseas that bring it back to that country. |
| Balance of Payments and Balance of Trade | The Balance of Payments is an account which records a country's economic transactions with the rest of the world. The Balance of Trade is the difference in value between a country's exports and imports of goods. |
| Budget and The Comprehensive Spending Review (CSR) | The Budget: The government announces its spending plans, analyses the state of the economy and arranges taxation for the coming year. The budget: - Predicts the current financial years - Outlines the government's plan for public spending - Explains last year's accounts - Predicts the state of the economy for the next calendar year - Announces tax changes and reasons for them The Comprehensive Spending Review (CSR) is a three-year plan of government spending. It is delivered by the Chancellor. |
| Direct and Indirect taxes | Direct taxes: - Taxes on income or gains - The more you earn or gain, the more you pay in tax - It is called progressive taxation - Direct taxes include income tax, inheritance tax and capital gains tax Indirect taxes: - These are taxes on spending - The more you spend, the more tax you pay - VAT/petrol duty/cigarette or alcohol tax - These are called regressive taxes because they take no account of the ability to pay |
| Role of the treasury | The treasury is arguably the most powerful government department because the Chancellor decides how much the government will spend and all other departments will spend. Responsible for overall economic and fiscal policy - particularly in determining expenditure levels and taxation policy. Two Cabinet Ministers - Chancellor of the Exchequer and Chief Secretary to the Treasury. |
| Bank of England | It is the UK's central bank, responsible for monetary policy. It sets interest rates through the Monetary Policy Committee which is given an inflationary target to meet. Currently rates are at historic low of 0.5% due to the state of the economy. Arranges borrowing for the government Holds the country's foreign currency and gold reserves, and may intervene to influence the exchange rate. It holds the government bank accounts. A letter to number 11 > If inflation is over the target (target was 2%, currently 1.8%) the Governor of the Bank of England must write to the Chancellor to explain why and what he's doing about it. |
| Types of company | Sole traders are solely responsible for the profits and losses of their companies. Most companies are sole traders. Private Limited Companies: - They have a small number of owners who have bought shares in the company, so the profits and debts are shared between them. - If a company goes bankrupt the shareholders are only liable for the shares they own. - The company is required to make information about its accounts public. Public Limited Companies: - These companies have a large number of owners and the companies make their shares available to the public by full listing on the Stock Exchange. - Entry to the Stock Exchange require disclosure of even more information than for a Private Limited Company. |
| Contacts for business stories | Confederation of British Industry - a business organisation with business membership. Lobbies and advises government. Chambers of Commerce - represent nearly 100000 businesses. Trade Union Congress - national body, represents majority of trade unions. - Local trade union branches |
| Welfare services today | The social security represents the single largest area of government expenditure in Britain. Guarantees a "basic standard of living for those in financial need" Welfare accounts for more than 30% of Britain's overall spending budget. Welfare services have been administered over the years often by overlapping/conflicting government departments. Today welfare is administered by four departments: - Department for Work and Pensions (DWP) - Department for Education - Department of Health - The Treasury |
| Department for Work and Pensions (DWP) | The DWP administers a vast and complex benefit system. There are two broad categories of welfare benefit: - Contributory benefits - those available to people who paid sufficient National Insurance contributions. These include Jobseeker's Allowance and Incapacity Benefit. - Non-contributory benefits - bears no relation to someone's prior National Insurance contributions. Most are "needs-base" payments. These include some Income Support benefits and the basic level of Jobseeker's Allowance. Some are universal e.g. Winter Fuel Payment for everyone over 60. |
| Jobseeker's Allowance | - Paid to adults working fewer than 16 hours a week who are available for work or actively seeking full-time employment. - Flaws: "poverty traps", giving too much money to the poorer will act as a disincentive to find work. - The money that they receive is not necessarily the disincentive, it could be argued that wages are too low and act as a disincentive themselves. Minimum wage is not enough - Coalition introduced "three-strikes-and-you're-out" policies for those who repeatedly refuse offers of work. - "Mandatory Work Activity" aimed at 16-14 year olds with little prior work experience must undertake unpaid four-week stints of community project work. Those who fail to comply lost benefits for 3 months, and secondary offenders lose it for 6 months. - Other work experience schemes are aimed at the young. If they leave without good reason, they could lose 2 weeks worth of benefits. - In April 2014, harsh rules to drive the long-term unemployed into work came into force. They will only receive their benefits if they show up to the job centre every day or commit to 6 months of voluntary work. Announced by Work and Pensions Secretary Iain Duncan Smith. |
| Income Support | - A flexible non-contributory benefit available to 16-60 year olds on low incomes and not in full-time paid employment, who satisfy various other criteria (e.g. single parents, full-time carers or registered blind). - Those over 25 receive more support than those under 25. |
| Employment and Support Allowance (ESA) and Disability Living Allowance (DLA) | - ESA replaced Incapacity Benefit, for the sick/disabled. - Contributions-based payment for people judged incapable of working who are under the state pension age. DLA: - Eligibilty for this non-contributory benefit is based on someone's mental and physical needs. Less controversial than the ESA, not based on income/savings/ability to work. |
| HM Revenue and Customs (HMRC) | - Raises taxes to pay for benefits - Makes discrete payments to families/pensioners/others on limited incomes, through tax credits. - Designed to encourage low earners to stay in employment. |
| Universal Credit - the Coalition's welfare reform programme | - A new all-in-one benefit-cum-tax credit designed to simplify the complex array of benefits available. - Aims to be more responsive to claimants as individuals. - Key aim is to remove disincentives to work, by allowing people to retain more of their benefits (initially) as they move off the dole and into jobs. - Shifting individuals from a number of benefits to one singular payment regime will take until 2017 to do. |
| Other benefits | Child Benefit - remains universal, up to until one parents earns over £60 000. Statutory maternity and paternity pay: - Mothers are entitled to up to 9 months paid maternity leave. - Fathers are eligible for 2 weeks paternity pay at 90% of earnings. Statutory Sick Pay - available for up to 28 weeks to full-time employees unable to work through ill health. Widows' pensions - lump sums paid to women whose husbands were below retirement when they died. - Winter fuel allowance seen as regressive. |
Want to create your own Flashcards for free with GoConqr? Learn more.