Category Archives: Housing

Flooding: Environment Agency, food security, wildlife and the PM’s advice

Camilla Hodgson reports that ten English authorities with the highest number of homes at serious flood risk plan to build homes in what the government considers “high-risk” areas. Almost 35,000 are planned – and more in lower-risk flood zones, according to local planning documents analysed by the FT.

Council planning officers at both Fenland and Hull councils said the risk of flooding must be balanced against the importance of economic growth.

Robert Muir-Wood, chief research officer at catastrophe risk modelling company Risk Management Solutions warns of several hazards, including:

  • the failure to consider insurance during the planning process, so that some homes end up being uninsurable or very expensive to protect;
  • councils’ inability to afford to monitor the installation of planned mitigation measures – such as raising the height of the electrics in new housing
  • and that currently developers bear no further responsibility for properties after they are sold.

in November The Lincolnite reported that more than 5,000 homes have been proposed in high-risk zones of Lincolnshire, where roads and thousands of acres of farmland were flooded with some farms being totally marooned.

Andrew Ward, one of the affected farmers, described the ‘horrendous’ damage: “Potatoes, sugar beet and maize have been ruined and the loss of wildlife will be colossal here, all of their habitats will be ruined.”

He complains that the Environment Agency are using farmland as flood plains to prevent flooding in Lincoln: “The rivers need to be dredged but we haven’t ever seen it happen here”. The Environment Agency has insisted that it does carry out regular and ongoing maintenance and blamed problems on the heavy rainfall. See video link

On the campaign trail in flood-hit Derbyshire, the prime minister said: “We’ve got to stop building on flood plains. We’ve got to stop building on areas which are vulnerable to flooding.”

In due course this statement should be fact-checked.

 

 

 

 

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Wry smile? Michael Rosen’s 10-point Guide to Labour Leadership Candidates

A gift from Robert Kornreich, a Kings Heath reader; emphasis added.

1. The Economy: if you’re asked about why ‘Labour crashed the economy’ – concede everything. Apologise profusely. Say, ‘Yes we did.’ Smile weakly. Agree if the interviewer makes out ‘there was no money left.’ Agree that it was ‘necessary’ to ‘get things right’ and ‘tough decisions had to be made’ and perhaps ‘we were in the wrong place to put them right at the time.’

Don’t ever point out that in fact it wasn’t the ‘economy’ (in the sense  of the government’s finances) that had ‘crashed’. It was the bankers’ who wouldn’t or couldn’t lend money any more.

Never point out that the UK is a currency-issuing economy. Never point out that the government has been issuing billions of what they call ‘quantitative easing’ which has the net effect of making the super-rich richer by increasing the value of their assets.

Don’t make a big deal out of ‘inequality’. Instead, cite the misleading statistics on the inequality of pay. These ignore the inequality of wealth which factors in ‘assets’ e.g. property.

Never mention trade unions. It has been shown that a unionised workforce is able to squeeze a little bit more wages out of the system, alongside better work safety, guaranteed breaks, improvements of working conditions. Never ever mention this. Let interviewers talk about ‘union barons’ and smile weakly.

Never mention ‘nationalisation’. Give that up. All of it. Right away. If power firms, railway companies, water companies, the postal service or any other part of the economy is doing a rubbish job and ripping off people, on no account suggest that nationalisation might be a possible solution. Keep talking about ‘responsible business’ or some cack about ‘a new kind of capitalist’.

The amount of national debt in proportion to the GDP is worrying some economists. You can mention this but if anyone says that you talking about this is ‘damaging confidence’, clam up and smile weakly.  

The amount of private debt created by the Tories in order to make up for weak demand is getting to a point where some in the financial community are getting a teensy bit worried that the old domino effect could strike again: a bank in some part of the world system might shut its doors and then another and another and we’re back in 2008. The fact that this is finance capitalism being finance capitalism must never be mentioned by you. You must keep up the pretence that this is some kind of present difficulty in what is really a perfect system. Talk about ‘regulation’ and ‘responsible banking’ as if that could or would solve anything.

If the whole financial system collapses, blame Russia, China, Iran and Jeremy Corbyn. 

2. Foreign policy. You are just allowed to say that perhaps the Iraq War was not ideal (don’t mention the millions of deaths, rise and rise of terrorist groups)  but there are no other wars that you can say were wrong. 

You should talk as if ‘Britain’ (never say ‘UK’) has to ‘help sort out’ anything going on anywhere so long as the US thinks it’s right to do so. Clearly, Iran needs to be ‘sorted out’ next, so say so. Never question the right of ‘Britain’ to do so.

When the media machine gets going explaining why some country (any country) is the greatest threat the world has ever known, agree with this. Smile weakly. Point out that this is ‘patriotic’.

Talk about something called ‘Britain’s standing in the world’ as if you’re talking about Queen Victoria being crowned Empress of India.  Talking of Queens, always say the Queen is wonderful. And so is the Royal Family. Nick Boris Johnson’s phrase ‘beyond reproach’. Mention that your mother loves Prince William.

3. The Election defeat. Make absolutely clear that there was only one cause for this: Corbyn. Never admit that any move over Brexit that he put forward came as a result of something your group pushed him into. On no account let anyone make comparisons of the popular vote: Brown (less than Corbyn), Miliband (less than Corbyn). Never make the point that the Labour Party hasn’t actually disappeared and that 10 million people voted for a Corbyn-led Labour Party this time and 12 million last time.

Keep saying the manifesto was a mistake. Don’t go into details. Begin sentences with, ‘I just think that…’

43 out of the 59 constituencies that went from Labour to Tory were in Leave seats. On no account mention this. Don’t mention the fact that probably, once Johnson came back with a deal, the game was up for Labour.

What you have to keep saying is ‘we’re listening to people’s concerns’. Be very clear that this isn’t anything to do with poverty caused deliberately by the Tories. That’s much too confrontational. ‘Listening to people’s concerns’ means you visiting somewhere for the TV and  letting people on camera or on the radio ramble on at you for hours about how they aren’t racist but the trouble is that immigrants have cut their wages, getting council houses, putting pressure on the national health and talking loudly on buses.

On no account point out that poverty, housing shortage and an under-funded NHS were created by the Tory government through austerity as a deliberate part of cutting the role of the state and them (not immigrants) trying to create a cheaper labour force. You must never ever say this. 

4. Antisemitism. You will be asked about ‘antisemitism in the Labour Party’. This is good. You will not be asked about ‘antisemitism in society’, or ‘antisemitism in the Tory Party’, so you must not mention these either. There is only ‘antisemitism in the Labour Party’. Concede everything.

On no account question whether any report or account was in any way exaggerated, distorted. You must not mention the fact that when Johnson was elected as leader of the Tory Party, every journalist in every newspaper knew that he had been editor of the Spectator and had edited ‘Taki’ who regularly poured out antisemitic jibes in his column for Johnson or on his own blog or other publications. Don’t mention that not a single one of these journalists mentioned this. Don’t say that you are in any way concerned by Rees-Mogg and his antisemitic jibes about ‘illuminati’ and Soros, his retweeting of a tweet from the Alternativ für Deutschland or that he has hung out with far right groups.

Don’t on any account mention the links between the Tory MEPs and far-right groups in Europe. Don’t mention that Boris and Orban (antisemite) appear to get along very nicely. On no account dig up anything on the way that Dominic Cummings talks about Goldman Sachs – it’s almost identical to the way antisemites used to talk about Rothschild.

Just keep saying sorry for ‘antisemitism in the Labour Party’ as if it’s the first, last and only presence of antisemitism in the UK today.

Always refer to ‘the Jewish community’ as if it is one monolithic entity all thinking and living in more or less the same way, even though it’s a teeny bit antisemitic to say so. It’s the kind of antisemitism that no one notices so it doesn’t matter.

5. Israel.  Remember Ed Miliband – he suggested that one way to get the ‘Peace Process’ going again was for the UK to recognise a Palestinian state before negations. He was immediately vilified, Maureen Lipman left the Labour Party and, apparently, thousands of Jews followed her. Miliband was, according to the Jewish Chronicle ‘toxic’. On no account repeat Ed’s proposal.

Talk about the ‘peace process’ as if it’s a real thing. You can frown in a caring sort of a way about the West Bank and Gaza but on no account propose anything concrete or useful. Accept that all problems in Israel, the West Bank, and Gaza are caused by Palestinians. 

6. Brexit. You’re stuffed. There will either be a very hard Brexit or a very very hard no-deal Brexit. Remember, no one understands trade deals, nor do you. Keep saying phrases like ‘the very best for Britain’. It doesn’t mean anything because something can be, say, the very best for bankers and it’s absolutely no good for working people. The advantage of keeping going on about ‘Britain’ is that it feeds into people’s sense of entitlement and special status as Brits in the world.

7. Education. Don’t disagree with the academy and free schools programme. Don’t make a fuss about unaccountable academy management siphoning off millions. On no account oppose grammar schools. These offer the illusion that they are good for the poor because a tiny percentage of poor people go to them. Never describe the schools that are not grammar schools as  ‘Sec Mods’. Keep calling them High Schools and do the ‘progressive’ bit by saying that there are teachers in High Schools who are doing a fantastic job. This has the advantage of being both patronising and unnecessary and completely misses the point that the people you will call the ‘disadvantaged’ are disadvantaged by grammar schools.

8. Social mobility. This is going to be one of your big ones. Keep going on about social mobility. On no account mention the fact that there are 3 key motors that prevent social mobility: inherited wealth, private education and inherited wealth. To mention these is class war. Don’t do it.

In fact, social mobility also accepts the idea that there must be and will always have to be the very poor, not quite so poor, the fairly poor, the not poor, the quite well off, the very well off and the eyewatering obscenely super-rich. All we can hope for, you point out, is that a few people might move up from one of these layers to another. On no account mention that someone must move down for someone else to move up – assuming the numbers stay the same. In other words, social mobility means society immobility. No change. Keep going on about social mobility as if it’s a really progressive alternative radical idea. Mention the fact that your grandfather was poor, you are not and it’s all down to ‘social mobility’. Never mention the role of the expansion of the economy over the last 100 years as a factor.

9. Immigration.  The best plan here is to agree with everything that the Tories do. They will probably fill the airwaves with anti-immigrant rhetoric mixed with how wonderful certain individual migrants have been. Just copy this.

They will say that they’re going to follow the Australian system, so you should either agree or find another country – Canada or New Zealand (somewhere with a largely white government and English-speaking) – and say that we could follow what they do. The election has shown that not challenging anti-immigrant rhetoric leads many people to think that immigrants have caused their poverty which then in turn leads them to vote for the very people who have made them poor.  You must not make this point.

10. Housing. The last Labour Governments could have created a fantastic legacy of social housing. Gordon Brown muttered as much himself as he was leaving office. You could try to say one or two things about social housing but it generally reeks of ‘old socialism’, so avoid it.  In order to sound modern and forward looking, you need to say things like ‘we’re looking into exciting forms of shared partnerships’ or ‘we’re talking with business about how to get more affordable homes on to the market’. The great thing about the word ‘affordable’ is that it sounds like anyone and everyone can ‘afford’ the housing that’s ‘affordable’. They can’t. It’s complete nonsense but you must go on using the word anyway.

 

PS That’s all for now. Come back to me for more in a few days time.

Tuesday, 17 December 2019

http://michaelrosenblog.blogspot.com/2019/12/my-media-10-point-guide-to-labour.html

 

 

 

 

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Jeremy Corbyn’s politically unique offer: truth, compassion, justice, peace and a sufficiency for all

Many years ago, around the time when Jeremy Corbyn challenged Margaret Thatcher about the plight of people living in London’s ‘cardboard city(see video), I sat next to him at some peace-related gathering in London.

We were supposed to discuss one of the issues on the agenda, but after one glance at his rather surly, sulky face I decided to cross the room and there had the good fortune to meet the genial Professor John Roberts, an exceptionally caring and thoughtful historian who was a World Federalist.

Over the years however I did note and credit JC’s consistent stand for peace, justice and the less fortunate and his much maligned mediation with warring parties, hoping to bring about peace by diplomacy.

Many working for good can bear witness to his steadfast support

One of these is Richard Gifford, who for many years has freely given legal services on behalf of the Chagos Islanders, unjustly displaced from their homeland, now used as an American military base (above, centre). To their discredit, the USA and UK governments, despite an overwhelming vote in the UN assembly, have disobeyed the order of the International Court of Justice at the Hague in May to hand back the islands as soon as possible.

In Corbyn the Spirit of ’45 survives

That spirit led to the setting up of the welfare state and the national health service – dreamed about by the soldiers planning a better future in their trenches. After corresponding with leading writers, artists and politicians, they helped to form the Common Wealth Party, many later transferring to Labour, Green or regionalist parties as founder members died or retired.

Poster for the Spirit of 45, filmed by Ken Loach

That intense young man has now matured into a ‘statesmanlike party leader’, resembling Professor Roberts in appearance and mindset.

He is valued by many European ministers and heads of states; Politico’s headline was ‘Brussels rolls out a red carpet for Jeremy Corbyn‘ but the Daily Mail hastily withdrew its original paragraph, “Corbyn appeared to be the statesmanlike party leader holding all the cars. He was greeted by “all the European press” like a “Prime Minister in waiting”, one aide told me” (see video).

World Federalism, which once seemed rather ‘way out’, now seems to be a really sensible way of addressing the towering threats posed by climate related instability.

And Jeremy Corbyn is the only British leader credibly offering to address the plight of the 10% on low incomes with no secure housing or employment, to cease the harassment of the disabled and to save young lives – and huge sums of money – from being wasted in aiding and abetting unjust military interventions.

 

 

 

 

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Labour has pledged to end deregulation of housing construction and ‘human warehousing’

 

Deregulation is posing problems in many sectors. Recently it was announced that the House of Commons Business, Energy and Industrial Strategy Committee is to examine Thomas Cook’s ongoing corporate governance, accounting, auditing and regulatory failures, ‘while the gravy train for directors continued’ (Prem Sikka, September).

Advocates of deregulation – the reduction or elimination of government power (state rules) – say that it removes unnecessary bureaucracy and barriers to competition.

Prem Sikka (Professor of Accounting at University of Sheffield) now turns to the effect of deregulation on social housing. He focusses on the controversial ‘permitted development’ (PDR) system for the delivery of new homes which Labour has pledged to end – a decision commended by the Town and Country Planning Association. Reports last year highlighted the poor quality homes coming through the permitted development system and a get-out clause that exempts schemes from providing vital social and affordable housing.

Human warehousing

The permitted development system has led to the delivery of homes as small as 13 square metressmaller than the average living room. A BBC report about an office-to-residential permitted development conversion carried out by Caridon Property is quoted by Shelter. It has been used as temporary accommodation since 2018 and the homeless families with children crammed into tiny ‘studio flats’ have to ‘eat, drink and sleep in their beds’.

London Assembly study also noted that many PD homes are smaller than the minimum space standards and exacerbate the already huge issue of overcrowding – and by avoiding the planning system, developers are no longer obliged to contribute to the provision of affordable housing.

Newbury House in Ilford offers flats that apparently measure as little as 3.6 metres by 3.6 metres (12ft x 12ft), with residents packed in “like sardines”, a busy six-lane highway just yards away, broken glass and rubbish strewn all around outside.

The Developer, which informs and connects professionals working in urban development and design, adds more detail and is campaigning for these potentially dangerous conversions to be stopped.

A study by the Royal Institute of Chartered Surveyors which examined the quality of PD in parts of Camden, Croydon, Leeds, Leicester and Reading, concluded that PD has allowed extremely poor-quality housing to be developed and PD residential quality was significantly worse than schemes which required planning permission – particularly in office-to-residential conversions. Of 568 buildings studied, another report found an inconsistency in the quality of developments, with only 30% of units delivered through permitted development meeting national space standards.

And Conservative MP for Harlow Robert Halfon (left) agrees with Sikka’s October verdict: ‘Government deregulation of housing construction is delivering social cleansing and the slums of the future’.

In 2013 – following pressure from ‘profit hungry’ property developers – the Conservative and Liberal Democrat coalition government deregulated and disempowered local councils, passing legislation enabling developers to convert office blocks, agricultural buildings and warehouses into residential properties without full planning permission.

Richer councils are sending people to poorer areas already facing acute economic problems as part of a social cleansing process. Families with children, senior citizens, low-paid, the unemployed, people with special needs and others, faced with the choice of long waiting lists for housing, temporary accommodation, dilapidated housing and high rents by private landlords, have been persuaded to relocate to another area.

As part of a recent research project, Sikka met council leaders from many of these poorer areas, struggling to cope with the problems caused by deregulation and the loss of central government funding to local councils since 2010 cut by 26% in real terms. He writes:

“The class nature of permitted developments (PD) is evident as there are more PDs in Harrow and Hounslow compared to wealthy Kensington and Chelsea. They have been a boon for housing developers. The chief executives of this country’s ten biggest developers received a combined £63.6m last year for building slums, called by some, ‘human warehousing’ “.

Poorer areas already struggling to cope with acute economic problems have to find new jobs, schools, transport, family doctors and hospitals, without prior planning or resources, while richer areas with lower numbers of people on benefits, lower unemployment rates and less pressure on local schools, hospitals and social infrastructure, embark on the process of gentrification.

  

Professor Sikka’s article may be read here.

 

 

 

 

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Conservative, Labour & Greens to serve on EJC

On Tuesday, the Institute for Public Policy Research launches its Environmental Justice Commission (EJC) and people are coming together across Conservative, Labour and Green parties to serve on it – leading figures from business, academia, civil society, trade unions, youth and climate activism.

Ed Miliband, Labour MP for Doncaster North and a former leader of the Labour party; Caroline Lucas, Green MP for Brighton Pavilion and Laura Sandys, a former Conservative MP for South Thanet, have written about this and many readers’ comments are well worth reading. Important points made are summarised below

Too often the issue of climate change seems marginal to the public’s concerns, when it is in fact central.

The task is to ally the issue of climate change with the economic and social transformation that our country needs.

This will be done by committing to a Green New Deal (GND), with an unprecedented mobilisation and deployment of resources to tackle the accelerating climate crisis and transform our economy and society for all. Read more on the Green New Deal website.

Its aims are to:

  • mobilise a carbon army of workers to retrofit and insulate homes, cutting bills, reducing emissions and making people’s lives better
  • move to sustainable forms of transport and zero-carbon vehicles as quickly as possible, saving thousands of lives from air pollution
  • end the opposition to onshore wind power and position ourselves as a global centre of excellence for renewable manufacturing
  • protect and restore threatened habitats and
  • secure major transitions in agriculture and diets that are essential if we are to meet our obligations.

See: https://www.youtube.com/watch?v=DpM9gRDr26I

People have been asking how we can revive communities that have been left out of prosperity. They ask whether they and their children will be able to get work and also what the quality of that work will be and what skills will be needed. ECJ believes GND has the potential to do this.

The areas of policy mentioned above answer the immediate economic concerns of people for jobs and hope. Green jobs must be secure and decently paid, with a central role for trade unions in a just transition for all workers and communities affected.

The commission will aim to help the UK to take a lead, believing that there is economic and societal advantage in doing so. An increasing number of people, young and old, see that the way we run our economy is damaging our climate, our environment and our society, but that, crucially, it is within our power to change it for the better. And change it we must.

 

 

 

 

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Jeremy Corbyn: brutal Communist, European socialist or mainstream Scandinavian social democrat?

Corbyn smears escalate

Yesterday came a warning: “With a general election possibly afoot, we must all be alert to the orchestrated dirty tricks and the ferocity of the propaganda assault that will inevitably be launched against Jeremy Corbyn and Labour by the terrified establishment”. It was issued by Richard House, after replying to ‘absurd views’ in the Independent alleging that Jeremy Corbyn would usher in ‘a communist government’ of a brutal nature.

Articles in the Murdoch Times today bore these headlines

  • MPs launch angry revolt over leaders’ Brexit talks: Breakthrough hopes fade after May meets Corbyn
  • Brexit talks: Dark clouds gather as Theresa May and Jeremy Corbyn work out what to do next
  • The PM, as we must still call her, was numb — perhaps past caring
  • Two-party cartel would regret an election now: The electorate is more volatile than ever and many will be looking for a home beyond the Conservatives and Labour. 

Jeremy Corbyn’s popularity with Europe’s socialist leaders was highlighted some time ago with a standing ovation noted in the Financial Times:

“UK Labour leader Jeremy Corbyn was given a rapturous reception by his Socialist allies in Brussels on Thursday, as he warned that leaving the EU without a Brexit deal would be “catastrophic” for the UK economy. Mr Corbyn was met with a standing ovation by Europe’s centre-left parties as he addressed delegates at the Europe Together conference, just hours before prime minister Theresa May was scheduled to meet her EU counterparts at a European leaders’ summit”. We omit the description of Ms May’s very cool reception. 

Corbyn’s negotiating skills are appreciated by senior EU figures, including Michel Barnier.

 

EU Brexit negotiator Michel Barnier (R) and British Labour Party leader Jeremy Corbyn walk prior to a meeting on July 13, 2017 in Brussels.  

Another perspective: Jeremy Corbyn is a mainstream [Scandinavian] social democrat 

That is the view of Jonas Fossli Gjersø, a Scandinavian who has spent more than a decade living in Britain (full text here), who opens:

“From his style to his policies Mr Corbyn would, in Norway, be an unremarkably mainstream, run-of-the-mill social-democrat. His policy-platform places him squarely in the Norwegian Labour Party from which the last leader is such a widely respected establishment figure that upon resignation he became the current Secretary-General of NATO.

“Yet, here in the United Kingdom a politician who makes similar policy-proposals, indeed those that form the very bedrock of the Nordic-model, is brandished as an extremist of the hard-left and a danger to society”.

British media’s portrayal of Corbyn, and by extent his policies are somewhat exaggerated and verging on the realm of character assassination rather than objective analysis and journalism.

Mr Corbyn’s policy-platform, particularly in regard to his domestic policies are largely identical with the Norwegian Labour Party manifesto. They enjoy near universal support among the Norwegian electorate and, in fact, they are so mainstream that not even the most right-wing of Norwegian political parties would challenge them. They include:

  • railway nationalisation,
  • partial or full state ownership of key companies or sectors,
  • universal healthcare provisions,
  • state-funded house-building,
  • no tuition fee education,
  • education grants and loans

Jonas (right) adds that such policies have been integral to the social-democratic post-war consensus in all the Nordic countries, which. enjoy some of the world’s highest living standards and presumably should be a model to be emulated rather than avoided, and continues:

The whole controversy surrounding Mr Corbyn probably betrays more about Britain’s class divisions and how far the UK’s political spectrum has shifted to the right since the early-1980s, than it does of the practicality of his policy-proposals.

Reflecting this is British media whose ownership is highly concentrated: 70% of national newspapers are owned by just three companies and a third are owned by Rupert Murdoch’s News UK . . . the British media has focused its reporting on the personal characteristics of Mr Corbyn, usually in rather unflattering terms, and shown scant or shallow regard to his policy-agenda.

He notes that a direct comparison of Britain with other similar European states would reveal both the dire condition of British living-standards for populations, particularly outside London and how conventionally social-democratic are Mr Corbyn’s policies.

Jonas Fossli Gjersø ends: “You might agree or disagree with his political position, but it is still far too early to discount Mr Corbyn’s potential success at the next general election – particularly if he manages to mobilise support from the circa 40% of the electorate who regularly fail to cast their ballot in elections…

“(J)ust as few recognised the socio-economic and ideological structural changes which converged to underpin Margaret Thatcher’s meteoric rise in the early-1980s, we cannot exclude the possibility that we are witnessing the social-democratic mirror image of that process today, with a prevailing wind from the left rather than the right”.

 

 

 

 

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FT: Help to Buy is ‘a state-sponsored taxpayer exploitation machine building a legacy of misery’

This eye-catching headline was placed above an article by Merryn Somerset Webb, editor-in-chief of MoneyWeek, in the Financial Times. She pointed out that Help to Buy (H2B) has been a huge boost to the housebuilding sector, as only new-build homes are eligible under this scheme, keeping it going through the years following the financial crisis.

Kate Davies, executive director of Intermediary Mortgage Lenders Association says Help to Buy is now “a cornerstone of the UK property market”.

Ms Somerset Webb points out that the main beneficiaries have been the big developers who have been provided with “an almost endless source of state financed, captured and slightly desperate buyers”. Jules Birch (Inside Housing), writing in similar vein, points out that housebuilding output has increased, but not ‘remotely as much as profits, bonuses and dividends’.

She comments that H2B hasn’t helped the smaller players much, as ‘hordes of them’ had already gone down with the market in 2008-9 and then records these relevant facts:

  • Two hundred thousand people in the UK have now bought houses using former chancellor George Osborne’s Help to Buy equity loan scheme, paying the average 16% new-build premium.
  • The taxpayer has lent those people £10bn, an average of £55,000 each . . . ‘a special kind of quantitative easing just for them’.
  • The maximum you can borrow from the taxpayer is 20% of the purchase price cap of £600,000 in most of the UK and 40% of the cap in London — £120,000 and £240,000 respectively.
  • Research suggests that Help to Buy purchasers pay 5 to 8% more than ordinary buyers of newbuilds, allowing the builders to increase their prices.
  • 18% of Help to Buy house sales in early 2017 were leasehold properties with escalating ground rents.
  • Half of Persimmon sales are H2B; their pre-tax profits have just passed £1bn.

Writing in the LSE journal, two senior Cambridge academics confirm that the main beneficiaries are large house-builders

In their report: Helping or Hindering? The latest on Help to Buy, they conclude that Help to Buy has had ‘regressive distributional consequences’. They quote ‘one executive’ in the FT who claimed that the scheme had allowed him to raise selling prices by 10%, which would almost double the profit margin for most builders. The market agreed: when rumours circulated on 4 August 2017 that H2B might be withdrawn, £1.3 billion was wiped off the stock market value of the five biggest builders within 90 minutes.

They also present some of the findings by Resolution Foundation research, which suggest that about 35% of H2B recipients could have bought a home without the subsidy:

“Those who have purchased a property with an HTB equity loan have an income significantly higher than the median – indeed, 40% of HTB loans have gone to those with annual incomes of £50,000-plus. Unsurprisingly, DCLG’s own assessment of the policy suggests that 35% of HTB recipients could have bought a home in the absence of the subsidy”. 

 

 

 

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The Financial Times offers two perspectives on the shadow chancellor’s economic proposals

Earlier this month the FT warmed to the shadow chancellor. Following Jim Pickard’s first respectful report on any aspect of Labour policy, an article, by Jim O’Neill, chair of the Chatham House think-tank and former Treasury minister, had the headline, “The UK opposition steps into an economic void left by a government grappling with Brexit”.

 

Following a couple of caveats, O’Neill writes: “In at least six policy areas, which Mr Corbyn and his shadow chancellor John McDonnell are treating as priorities, businesses and the government need to catch up (detail here)”.

  • The first area on which Labour sees clearly is Britain’s productivity crisis.
  • Second is the orthodox belief that lower corporation tax will magically boost investment spending.
  • Third, risking large amounts of money on fixed investment no longer appears attractive.
  • Fourth, businesses need to rediscover profit with purpose.
  • Finally, there is the housing crisis.

But today there was a decided change of direction – had the editorial board been leant on?

THE EDITORIAL BOARD: Labour’s economic plans have serious flaws: shadow chancellor John McDonnell is ignoring the realities of modern business. The following – mainly speculative – points fail to convince:

  1. Mr McDonnell’s most eye-catching announcement was a compulsory share ownership scheme. Employee ownership and other profit-sharing schemes are by no means outlandish. Many businesses already choose to run them in order to recruit and motivate their workforce. There are also sound political reasons to give employees a greater share of ownership and a bigger voice on boards after a decade in which wages have remained stagnant in real terms. But companies should not be coerced into taking such action.
  2. Mr McDonnell claims these proposals are designed to tackle Britain’s productivity crisis – the evidence for this is sketchy and outdated.
  3. It could increase the cost of capital and deter investment.
  4. As the scheme would bear only on employers with more than 250 workers, it could also disincentivise growing businesses.
  5. There is a real danger that Labour’s prescriptions may end up only harming the patient.
  6. Businesses (and many voters) are concerned that the proposals on the table may only be the tip of Labour’s interventionist ambitions.
  7. With Brexit representing a step into the unknown, however, the UK needs to preserve business and economic stability, not further radical experimentation

Then a reversion to something approaching approval

“Nationalisation, dilution of shareholdings, workers on boards, sweeping trade union powers — John McDonnell’s economic prospectus for Britain is the Labour party’s most radical in several decades. The shadow chancellor further developed the party’s socialist credentials in his address to its conference in Liverpool on Monday. He senses that the appetite for change is great enough to take Labour into office on a hard-left ticket at the next election”. And: “Labour’s policies do speak to the mood of many voters. Many Britons believe inequality is growing, public services are collapsing and the excesses of capitalism need taming”.

Though not as wholehearted as the conclusion of former Treasury minister O’Neill:Dealing with the UK’s deep-seated economic problems requires sustained thinking and attention, not just occasional lip service. The Labour Party has stepped into the vacuum left by the government and appears to be offering the radical change that people seek.

End note: email from Moseley hit harder than the editorial board: 

  • Looking forward to a rise in the number of companies with 249 employees, if any stay in the UK, should the nightmare come about at the next election ( Ed: as share ownership proposals apply only to companies with over 250 employees).
  • The shadow Treasury team admits that private, unlisted companies could not be compelled to hand out dividends to workers. In theory that could incentivise public companies to delist from the stock market.
  • The next problem is that foreign-listed companies will not be obliged to hand equity to their UK workforces. Again, that could provide an incentive for London-listed companies to switch their listings to an alternative financial centre such as New York or Frankfurt.
  • Nor is it clear how the British government could force an overseas company with a London listing to comply with the scheme if most of its workers are abroad.
  • One group of workers who could feel aggrieved by the proposals are those in the privatised utilities such as rail and water. Labour is determined to nationalise the utilities, and admits that — as state workers — staff would no longer be eligible for the share scheme. At present a third of employees in United Utilities participate in their employee share scheme, as do two thirds of South West Water employees and 70 per cent of Severn Trent’s UK employees.
  • Another complication is that some companies could find alternative routes to rewarding shareholders, for example by carrying out share buybacks instead of dividends.

 

 

oo

 

Austerity 5: former Conservative MP deplores the effects of austerity

Matthew Parris writes in the Times, “the cracks are showing in austerity Britain”

We don’t think enough about local government, one of whose jobs it is to mend potholes. When in our own lives our nearside front tyre is shredded, the pothole, Parris believes, represents “a momentary twitching-back of one tiny corner of a great curtain, behind which lie, no, not potholes, but a million anxious human stories, caused in part by cuts in public spending”.

He adds that accidents due to potholes are usually relatively trivial compared with cuts which for others may have meant:

  • the loss of social care in dementia,
  • no Sure Start centre for a child,
  • the closure of a small local hospital
  • or the end of a vital local bus service.

Potholes are a parable for others that matter even more. Unfilled potholes put lives at risk and have become a symbol of the damage done to every walk of life by spending cuts.

All the pressures on those who run government, local and central, are to worry about the short-term. it is usually possible to leave issues like road maintenance, decaying school buildings, rotting prisons, social care for the elderly, Britain’s military preparedness or a cash-strapped health service, to tread water for years or even decades. “They’ll get by,” say fiscal hawks, and in the short-term they’re often right.

  • Nobody’s likely to invade us;
  • the NHS is used to squeezing slightly more out of not enough;
  • cutting pre-school provision is hardly the Slaughter of the Innocents;
  • the elderly won’t all get dementia at once;
  • there’s little public sympathy for prisoners;
  • teachers can place a bucket under the hole in the roof
  • and road users can dodge potholes.

Parris continues: “But beneath the surface problems build up. The old get older, and more numerous. Potholes start breaking cyclists’ necks. Care homes start going under. The Crown Prosecution Service begins to flounder. We run out of social housing. Prisoners riot. And is there really no link between things like pre-schooling, sports and leisure centres and local outreach work, and the discouragement of knife crime?”

“When New Labour was elected in 1997 we Tories groaned as it tipper-trucked money into the NHS, school building and other public services. Thirteen years later when Labour left office the undersupply was monetary, the red ink all too visible”.

Parris asks: “Must we forever oscillate like this?

One answer: Green & Labour Party leaders would meet these needs and avoid red ink by redirecting the money raised by quantitative easing.

 

 

 

o

 

Sprinklers for parliament but not for tower blocks

Inside Housing reports that the government has approved upgrades to parliament, including sprinklers, despite turning down requests from councils for cash to fund fire safety works on tower blocks.

Councils which hoped to install sprinklers following the Grenfell Tower tragedy in June which killed 71 people have received no commitment from government on funding.

Jane Urquhart, portfolio holder for housing at Nottingham City Council, said: “The government has found the resources necessary to install sprinklers in the Houses of Parliament as a sensible fire safety precaution for the safety of those who work and visit there. It does seem strange that, at the same time, the housing minister deems sprinklers in social housing tower blocks not to be essential to ensure the safety of our tenants”. Alison Butler, cabinet member for housing at the council, said:

“Parliament is a historic building and it is a place where people work, but protecting people’s lives and their homes should be a higher priority”.

The Times reports that David Stewart, a Labour MSP for the Highlands and Islands, is bringing in a member’s bill which would place a duty on councils and registered social landlords to fit automatic fire suppression systems in all new social housing. He said that sprinkler systems were so effective at preventing the spread of fires that there had been no instances of multiple fire deaths when a working sprinkler system was in place.

“This simple change in law is a practical step that will save lives. Councils in Angus, Fife and Dundee already install sprinklers into their new developments as standard and I want to see this approach extended.”

As Alison Butler said, protecting people’s lives and their homes should be given  priority.

 

 

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