Monday, 17 December 2012

No crib for a bed

This week, in thousands of schools, nurseries and churches, the Christmas story will be being re-told. Parents will be enthralled as they watch the re-enactment of Joseph and Mary’s search for a bed. So, it is timely to reflect on the search for a bed in the UK today.

Back in 2008, David Cameron said "I think that it is simply a disgrace that in the fifth-biggest economy in the world that we have people homeless, people sleeping on the streets, sofa-surfers, people in hospitals."

I agreed then and agree now. Perhaps it was just an error on his part that he forgot to mention that, under the Labour governments, homelessness had fallen by 70% from the inheritance of the previous Conservative government. That hadn’t happened by chance. It happened because of a concerted effort between central and local government, through the introduction of the Supporting People programme.

But what has happened since David Cameron took control in 2010?
  • Homelessness has risen relentlessly. Statutory homelessness, where families without a roof over their head are accepted by their local council as homeless, has risen by nearly a third since the general election.

  • The number of people sleeping rough has risen by 31%. Even more worrying, the number of young people sleeping rough has increased by 66%.

  • There are now more than 75,000 children living in temporary accommodation, and the use of bed and breakfast hotels has tripled since 2010. There has been a near 200% increase in the number of families in bed and breakfast accommodation for more than 6 weeks.

This isn’t surprising when you realise the scale of the government cuts. There are 1544 fewer bed spaces for the homeless compared to just 12 months ago, and 60% of these projects have already had significant funding cuts this year and expect more next year.

When this is taken together with the continuing reduction in new housing starts – which have fallen in each successive quarter since 2010 – and the 60% cut in the affordable housing budget, we shouldn’t be surprised by the impact. And it will get even worse next year, when the housing benefit changes are estimated to result in a further 40,000 households becoming homeless. Will we see headlines confirming that stables are to be used to provide emergency shelters?

None of this has happened by chance. It’s happened because David Cameron has chosen to do it.

Monday, 10 December 2012

Failing the test

In 2010, David Cameron, Nick Clegg and George Osborne said that there was one simple test by which the Conservative-Liberal Democrat coalition government should be judged. The test they chose was “to balance the books and get the debt down by 2015”.

Last week, in his Autumn Statement, George Osborne confirmed that the government would fail this test. Borrowing and debt figures have been revised upwards and the economy is shrinking. But, instead of a change of course, Osborne confirmed we’re going to get more of the same failing policies.

Over the last two years our economy has grown by just 0.6% - compared to the 4.6% the government promised, 3.6% in Germany and 4.1% in America – and this year is now predicted to contract. Growth forecasts have been downgraded yet again for this year, next year and every year up to 2016.

Nearly 1 million young people are out of work, long-term unemployment is rising and the claimant count is forecast to be 275,000 higher by 2015. Prices are forecast to carry on rising faster than wages for at least another year.

George Osborne was forced to confirm that he will not meet his fiscal rule to get the debt down by 2015, and that his pledge to balance the books by 2015 will also not be met until 2018 at the earliest. Borrowing and debt figures have been revised up this year and for future years. The government is set to borrow £212 billion more than they planned – more than the plans the government inherited and condemned at the time for not going far enough. The reason why borrowing and debt has been revised up is because slow growth and high unemployment means tax revenues are down and the benefits bill is up.

The government has decided that people on low and middle incomes should pay the price for their failure. They are pressing ahead with a £3 billion tax cut for the highest earners in the country – worth an average of £107,000 for 8,000 people earning over £1 million. Yet at the same time people on low and middle incomes are being hit hard with higher VAT, the granny tax, and real terms cuts to tax credits, jobseekers allowance, child and council tax benefits.

What kind of government believes that low-paid working people will only work harder if you take away their tax credits and make them worse off,  but millionaires will only work harder if you give them a tax cut to make them better off? One that fails the test.

Wednesday, 14 November 2012

Throwing away jobs and economic growth

Earlier this year, I chaired an all-party committee which looked at regional economic growth. In particular, we were looking at the use of the regional development funds in a context where the government had abolished the regional development agencies.

The European Regional Development Fund (ERDF) is the EU's main tool to reduce economic disparities between the regions. Worth €201 billion between 2007-13, most of the funding goes to the poorer regions in eastern and southern Europe. England's allocation during this period was nearly £3bn, with the largest share of the funds going to Cornwall and the Isles of Scilly, Merseyside and South Yorkshire, all of which face significant and long-standing challenges to economic growth.

It has contributed to major schemes such as the Eden Project in Cornwall, the Sage concert hall and the Baltic art gallery in Gateshead and the Kings Dock redevelopment in Liverpool and, many years ago, the renewal of the Lyceum Theatre in Sheffield. It has also supported many smaller projects across the country to boost enterprise and support small businesses.

However, ERDF funds have to be matched by public bodies in the UK – for every £ in ERDF grant, a public body – like a council – has to invest a similar amount. The abolition of the Regional Development Agencies removed the main source of match funding for ERDF projects, and the economic downturn has reduced the options for match funding even further.

We concluded that the Government simply did not seem to appreciate the problems that projects are facing in securing the match funding needed for them to go ahead. It failed to deliver on its promise to make it easier for projects to use its Regional Growth Fund (RGF) as match funding.  We urged the Government to set aside RGF money specifically for this purpose.

We were quite clear that if urgent action wasn’t taken to spend each region's ERDF allocation before 2015, the UK would not only be returning unspent ERDF grant, but also that value for money would suffer and ERDF would not make the significant impact it might do to generate economic growth in areas with the highest unemployment.

We believed the government was being totally complacent about the matter. Having abolished the Regional Development Agencies in a fit of ideological pique, it simply didn’t understand – or perhaps even care – how important ERDF funds were to local economic regeneration.
Last week, I reminded Michael Fallon - the Business Minister responsible – about the Committee’s recommendations which would have ensured that all the ERDF resources would be used and which the government had rejected.

For the first time he confirmed that ERDF would be underspent. In other words, grant-aid from the EU budget specifically designed to secure economic regeneration in the UK’s poorest areas was going to be returned to Europe.

Thus, at a time when we need to use every endeavor to increase local jobs and to support economic renewal, this government – through sheer incompetence and ideological indifference – has thrown away millions of pounds in grant which would have made a significant difference to the poorest areas in the UK.

Yet the media ignore it. Of course, it doesn’t involve sex, scandal or chocolate. It’s just about a huge loss of jobs and economic growth in communities which need it most. It’s about thousands of people who will remain on the dole instead of working in productive jobs.
It’s a scandal.

Tuesday, 13 November 2012

Planning to cut growth

The government has introduced a Growth and Infrastructure Bill. The best that can be said is that the title suggests that the government has at last recognized that economic growth and infrastructure renewal are crucially important. The bad news is that the Bill is a rag-bag of measures which have not been thought through.

Construction activity has declined again in both the private and public sectors. 400,000 homes could be built on sites which already have planning permission. 87% of planning applications are approved.

Last year, the government produced a review of the national planning policy framework. The all-party Select Committee, which I chair, took evidence from a wide range of organizations concerned with planning, development and housing. We were unanimous in our report, which was quite critical of many of the government’s key proposals. To give the government credit, it accepted most of the recommendations we made.

Yet, just a few months after that major overhaul, we are back discussing fundamental changes in the planning system. This is despite the fact that our investigation could find absolutely no evidence to support the view that the planning system was hindering appropriate development or house-building. When we asked Ministers, they have been unable to provide a single piece of evidence to suggest planning is the problem.
So, why are we back discussing these measures? Over the summer, we could almost see the wringing of hands at No. 10 and No. 11 because the economy would not move. They were worried about why there was no growth, not sure what to do about it and looking for others to blame. We could almost hear the call to the Secretary of State: “Find me some initiatives. Anything will do, so long as we look as though we’re doing something.” So we end up with a rag-bag of measures which have not been thought through. Government Ministers at the Department, given the job of trying to justify them have signally failed.

But just because they’re a rag-bag, it doesn’t mean they’re unimportant. For instance, the first clause of the bill effectively removes from any applicant the right to appeal to an independent body against a decision of their local planning committee. Having previously asserted their determination to remove all targets and central assessments, the government is to introduce new targets – but we don’t know what they are – and a central assessment process, except that the government can’t tell us what the criteria might be. Taken together, the proposals go completely against localism and introduce centralism to the planning system. 

What we do know is that the new uncertainties which the government has introduced will cut and delay development activity even more.
You can read the debate on the Growth and Infrastructure Bill at Column 596 at

You can watch what I said in the debate at:

Monday, 12 November 2012

Losing Energy

Energy bills are soaring, driving up inflation and contributing to the cost of living crisis afflicting millions of families. The government’s response is to tell consumers they’re to blame for not shopping around enough and to cut back on the support it is offering to help people heat their homes.

Last week the Prime Minister promised to legislate to force energy companies to put everyone on the cheapest tariff. Within 24 hours, this policy had completely unraveled. Now, all the Government is actually promising is to get the energy companies to write to people.

It is clear that nuclear energy will continue to play a key role in a balanced energy strategy, especially when addressing climate change. The UK currently has 10 operational nuclear power stations, but all have scheduled closure dates between 2014 and 2035. Delivering on new nuclear power is a huge task. Investors need certainty and confidence about the Government’s direction of travel and commitment to nuclear power.
Yet the government is all over the place. This is not surprising as the Liberal Democrat Minister for Energy was responsible for launching a ‘Say No to nuclear’ campaign in 2006.

And now the junior Conservative Energy Minister John Hayes declares that building “onshore wind farms is at an end. Enough is enough”, whilst his boss, Liberal Democrat Energy Minister Ed Davey, says “He doesn’t make policy. There’s going to be no change in the government policy on renewable energy. Onshore wind is one of the cheapest renewables. It has an important role to play in our energy future.” What a shambles.

The most sustainable way that people can cut their bills is by reducing energy use, mainly by insulation improvement. However, the government has slashed the Warm Front programme which had secured insulation improvement in more than 2 million homes over the last 10 years and - despite the fact that nearly 30,000 qualifying applications were turned away last year – plans to abolish the scheme next year.

In its place, the government has proposed the Green Deal – basically a pay as you save scheme. . Homeowners install measures such as insulation, lagging and double glazing with no upfront cost. The costs are then paid back over a period of up to 25 years with the savings expected to be made from lower energy bills. In April, the Deputy Prime Minister Nick Clegg said: “We'll ensure customers are never charged more for the home improvements than we expect them to make back in cheaper bills.”

However, the government is now proposing that the interest rate on the loan will be at 7.5%. The typical scheme is estimated to cost about £10,000, which at that rate would require an annual repayment of about £886. As the average annual dual-fuel bill is now £1,335, that would require cutting the typical household energy bill by two thirds just to break even. You’re right, it doesn’t stack up.

Meanwhile, our fuel bills will continue to rise and the energy companies will continue to make super profits.