Monday, 23 October 2017

Not all Landlords and Agents are Cowboys…

But there remain far too many operating in the private-rented housing sector.
The Private Rented Sector (PRS) has grown from 1 in 10 households in 2004 to 1 in 5 households in 2016 with the under-40s making up 70% of households.
More than four years ago, the all-party Communities and Local Government Committee (which I chair) reported on its investigation into the state of private-rented housing in England and Wales 1 . We concluded:
  • there had to be better, simpler regulation;
  • all tenants and landlords needed to be fully aware of their rights and responsibilities;
  • councils had to be given the flexibilities they require to enforce the law and raise standards, especially in relation to landlord licensing;
  • councils should be able to recoup housing benefit and tenants the rent paid, when landlords have been convicted of letting substandard property;
  • letting agents should be subject to the same controls as their counterparts in the sales sector. There needed to be a crackdown on the unreasonable and opaque fees charged not only by a few rogues but by many well-known high street agents.
  • with the sector home to an increasing number of families, the market needs to offer longer tenancies to those who need them;
  • we need action to speed up eviction processes where tenants breach tenancy agreements;
  • a halt to the vicious circle whereby rents and housing benefit drive each other up; and
  • action to finance new housing-to-let.
We followed up with information about the situation in Scotland where landlords and agents can’t charge letting fees. But the Conservative/Liberal Democrat government was complacent. In 2015, it said that the current legislation struck a fair balance between the rights and obligations of landlords and tenants, and that it had no plans to ban letting agent fees in England.
We have kept up the pressure on the government, particularly to act to deal with fees, substandard housing and rogue agents and landlords.
And, this month, we’ve launched a specific new inquiry 2 into concerns about the ability of local councils to protect tenants by tackling bad landlords and their practices. We’ll also be investigating whether landlord licensing schemes are promoting higher quality accommodation and the effectiveness of complaint mechanism for tenants. Find out more and submit your evidence by 24th November.
Meanwhile, last November, the government finally caved in and announced plans to ban letting agent fees paid by tenants. An official consultation ended in June. How much longer are tenants going to have to wait for the government to act?
1 https://publications.parliament.uk/pa/cm201314/cmselect/cmcomloc/50/50.pdf

2 http://www.parliament.uk/business/committees/committees-a-z/commons-select/communities-and-local-government-committee/news-parliament-2017/private-rented-sector-inquiry-17-19/

Raising the Cap

Around six months ago, following an investigation, a joint all-party Communities and Local Government Committee (which I chair) and Work and Pensions Committee report made some important recommendations to the government about what it needed to do to find a long-term, sustainable funding mechanism that ensures quality, provides value for money, and which protects and boosts the supply of supported housing.
More than 700,000 people in the UK benefit from the support and supervision provided within the supported housing sector. The vast majority of provision is sheltered accommodation for older people, but this sector also includes housing for people with learning and physical disabilities, individuals at risk of homelessness, refuges for women and children at risk of domestic violence, and many other client groups.
In 2016, the Government had announced proposals, for a new funding model for supported housing, to come into effect in 2019. Our investigation concluded that the government’s proposals were unlikely to achieve these objectives. That’s why we made some clear recommendations about what the government should do.
In fact, the government’s plans have caused an outcry, with social housing providers asserting that the system would be bureaucratic and  unworkable ,and would put elderly and disabled people uncertain about whether they could afford to remain in their homes. It would be like another phase of Bedroom Tax.
Charities which work with and support elderly and disabled people have also waded into the debate. Caroline Abrahams, a director of Age UK, said: “The consequences for older people of pressing ahead would have been disastrous…”
As important for the long-term, the financial impact of the proposals would lead to a massive cut in the building of new supported accommodation and make many existing sheltered accommodation schemes and hostels unviable. The chaos caused by the plans has already halted 85% of planned new supported housing schemes.

The communities secretary, Sajid Javid, told me recently that our report had been “very helpful”. This week, there is a Parliamentary debate about the issues. So, this will be the opportunity to show that he listened and is going to act.

Wednesday, 4 October 2017

Solar Panels

There are now nearly 1 million solar panel installations in the UK.
Most of these have been installed over the last decade, with the majority under-pinned by financial support by a variety of government grants. The big impetus came in April 2010, when electricity suppliers became obliged to pay a feed-in tariff (also known as ‘clean energy cash-back’) to people who generated their own renewable electricity. 
As a result, a number of organisations started offering free solar panels to some households and businesses. The deal was that that the home-owner or business got free electricity and the organisation took the income from the surplus electricity produced and which was fed into the national grid.
A number of constituents came to see me saying “Free electricity sounds like a really good deal, doesn’t it? What’s the catch?” As a result, seven years ago, I posted an article 1 advising that having solar panels on your home might be a really good thing, but you ought to ask a lot of questions – and get the answers – before proceeding.
The questions included:
• What are the guarantees about electricity production from this system?
• What happens if the kit stops working?
• Will it affect my mortgage?
• Do I need planning permission or building regulations approval?
• What happens if I want to sell my house but the buyer doesn’t want the kit?
• Who is responsible for any damage to neighbouring properties during installation?
• What happens if the organising company goes out of business?

As a result, I hope that local people did their homework and got the best deal they could, and avoided potential disasters, before signing on the dotted line.
Recently, the House of Commons’ Library published a very useful Q & A on Solar Panels 2 .
There is still support available for installing renewable technologies such as solar panels through Feed-in tariffs. Such schemes boosts the UK’s renewable capacity and can reduce household consumption, and possibly bills, for homeowners with panels.
However, just as in 2010, there are lots of questions you need to ask before going ahead. This independent analysis will help you to decide if and when.
1 11 November 2010 http://www.clivebetts.com/

2 http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8090

Tuesday, 3 October 2017

School Budgets

Children have gone back to school, but governors, teachers and parents are still no wiser about school budgets for the next three years.
The 2015 Conservative manifesto promise to maintain school budgets through to 2020 has already been broken. The Core Schools Budget has been falling since 2015, for the first time since before 1997. Analysis by the National Audit Office suggest that school budgets have been cut by some £2.7 billion in real terms since 2015.
The Conservative government is still planning to introduce a National Funding Formula for schools, which would redistribute the existing national schools budget. The redistribution would not only impact on differentials between areas throughout England, but also between schools in the same area.
When the then Deputy Prime Minister, having previously promised every school in his Sheffield Hallam constituency that they would be better resourced by a national funding formula, the former MP Nick Clegg went strangely quiet when this proved to be far from the case. Perhaps it’s part of the explanation for him being the former MP?
When the government’s latest plans were announced last year, they were met with opposition from many Conservative MPs when it emerged that many schools in their areas would lose out under the plans.
The consultation on the government’s plans closed a while ago now. The Secretary of State had said that the government would respond recently. But Mrs May’s government is looking so weak and wobbly that no-one will be surprised if there is another delay.
In the 2017 general election manifesto, Mrs May made a pledge that no school would lose funding as a result of the introduction of a new National Funding Formula. Then, in July, the Secretary of State for Education, Justine Greening, outlined an increase in the amount of funding each pupil would receive in 2018-19 and 2019-20, with additional increases for ‘underfunded schools’. But no details are available.
While the Secretary of State has outlined plans for an increase in funding of £1.3 billion across 2018-19 and 2019-20, this would do nothing to reverse the impact of existing cuts and schools across the country, so schools  will still be worse off than they were in 2015.
It has also become clear that these ‘additional resources’ for the schools’ budget are to be funded by a series of cuts to other education budgets, but Ms Greening has refused to say where and what the impact will be.
Unsurprisingly, she has continually ducked the basic question: Will there be any schools who will be worse off, in real terms, in 2020 than they are now?

I can tell you the answer: “Most of them.”

Monday, 2 October 2017

On your way, Mrs May

Shortly after the June general election, former Tory chancellor George Osborne described Theresa May as a ‘…dead woman walking and the only question is how long she remains on death row.’
Of course, this had absolutely nothing to do with the fact that May had sacked Osborne the day after she became the new Tory leader and Prime Minister. And, clearly, Osborne’s expectation that May would have to resign within weeks did not come to fruition.
However, as the Conservative Party Conference opens, all the talk is about who will be the next Tory leader. It is clear that Theresa May will not lead the Tories into the next general election. She was elected Tory leader because of who she was not, rather than who she is or what she represents.
Every day, she increasingly looks like a rabbit caught in the headlights. Her Brexit strategy – and I am being generous, because it is clear that she never had one – has been torn to pieces, as each and every assertion she and her other Cabinet Ministers have made about the terms of exit and ‘the new promised land’ have proved fatuous. She is not leading, but being blown from pillar to post by reality and by the UK’s deteriorating economic prospects.
It’s little wonder that, not too long ago, the international credit rating agencies cut the UK’s ratings because the likelihood of a hard Brexit and a squeeze on the public finances would damage the UK economy’s long-term health. And, now, the British Chambers of Commerce, representing businesses employing nearly six million people, have called for Mrs May and her Ministers to stop arguing about Brexit and to show "competence and coherence".
Within that context, it’s no surprise that the Conservatives are simply unable to make realistic responses to the key issues on the domestic agenda and are simply unable to set out sensible policies to address the growing crises, for example in housing, adult social care, and higher education (including tuition fees and maintenance allowances).
Quite disgracefully, the government won’t even ‘pause’ the timetable for the roll-out of Universal Credit to prevent thousands of low-income working families becoming embroiled in debt and the prospects of eviction.

On your way, Mrs May.

Wednesday, 13 September 2017

‘Cathy come home’ revisited


For my generation, a 1966 BBC play ‘Cathy Come Home’ is seared into our memories. It was later to be voted the best TV drama ever broadcast. It told the story of a young couple, who through job loss and pregnancy descend into poverty and homelessness. 
The play had been watched by 12 million viewers and created an enormous response. It led directly to the formation of the Crisis charity, which focused on the plight of the homeless, and significant support for the charity Shelter which, quite coincidentally, was launched a few days after the first broadcast.
However, despite the public outcry, there was no real institutional response until a decade later when the James Callaghan Labour government delivered the Housing (Homeless Persons) Act in 1977.
Twenty years later, the incoming Labour government inherited high levels of homelessness and set about cutting both rough-sleeping of individuals and of families in temporary accommodation. Between 1997 and 2010, ‘statutory’ homelessness fell by almost two-thirds (62%), from over 100,000 households to 40,000, and the number of people sleeping rough fell by roughly three-quarters (75%).
Recently, the National Audit Office (NAO) has published its report on the impact of the welfare reforms on homelessness since 2010 1 .
I don’t think that I have ever read a NAO report which has carried such thinly-veiled criticism of the responsible government ministers over the last seven years, and of the Conservative/Liberal Democrat and successive Conservative governments as a whole, for their lamentable disregard and disinterest on the increasing scale of homelessness and the plight of affected individuals and families.
The NAO reports that, in March 2017, there were 77,240 households in temporary accommodation in England, an increase of 60% since 2011. These households included 120,540 children, a 73% increase.
Homelessness currently costs the public purse more than £1 billion a year, with more than three quarters of this being spent on temporary accommodation, most funded by housing benefit.
And, what is causing this rising homelessness? The NAO says that it is the ending of private sector tenancies, which has overtaken all other causes to become the biggest single driver of statutory homelessness in England. The proportion of households becoming homeless by the end of an assured shorthold tenancy increased from 11% during 2009-10 to 32% during 2016-17.
So, as well as delivering a completely dysfunctional housing market, which has seen owner-occupation falling, a greater proportion of households being priced out of ownership, and rents taking record proportions of household income, the government’s policies of insecure tenancies and cuts in housing benefit are leading to five families are being made homeless in England every hour of each and every day.
Despite a 21% real terms cut in councils’ overall spending on housing services since 2010, spending on homelessness services has massively increased since 2010. The proportion of homeless households in temporary accommodation outside their local council area – away from family, friends, work and schools – has increased from 13% in 2011 to 28% today.
The NAO report then goes on to confirm that the government has no cross government strategy to prevent and tackle homelessness. It’s data collection is lacklustre and it takes no steps to monitor what is happening in local communities up and down the country.
In fact, without the recent passing of the Homelessness Reduction Act 2017 – which was only initiated and delivered because of the commitment of MPs of all parties in the Communities and Local Government Committee, which I chair – there would have been no government action to address the increasing plight of homeless families.
David Cameron, Nick Clegg and Theresa May should hold their heads in shame for this state of affairs. How dare they talk about the sanctity of family life, the importance of family stability, the essential need for children to get a good start in life, when they have consciously implemented policies which ensure that record numbers (still rising) of children are to be denied such opportunities?

1 https://www.nao.org.uk/report/homelessness/

Tuesday, 9 May 2017

Supporting supported housing

More than 700,000 people in the UK live in, and benefit from, the supported housing sector. By 2010, we probably need another 35,000 places.

Most of this is sheltered accommodation for older people, but it also includes housing for people with learning and physical disabilities, individuals at risk of homelessness, refuges for women and children at risk of domestic violence. Currently, a quarter of referrals to refuges for women and children at risk of domestic violence are refused, because of a lack of available space.

In September 2016, the Government announced proposals for funding changes which would come into effect from April 2019. Under the new model, core rent and service charges would be funded through Housing Benefit or Universal Credit, whilst any costs above the Local Housing Allowance rate would have to come from a ring-fenced budget allocated by local councils.

The all-party Communities and Local Government (which I chair) and Work and Pensions Committees launched a joint inquiry 1 to scrutinise these proposals. During our inquiry, we heard directly from
  • supported housing residents, who told us how much they valued the independence and improved quality of life which supported housing gives them; and
  • providers, who described the threats to future supply.
We agree the need to find a long-term, sustainable funding mechanism that ensures quality, provides value for money, and which protects and boosts the supply of supported housing. But we concluded that the government’s proposals are unlikely to achieve those objectives.

We have made some alternative recommendations, recognising the diversity of provision that is required. We also recommend that emergency accommodation and refuges have different funding mechanisms that reflect their unique roles.

Supported accommodation makes a significant contribution to adult social care. The government has made, and continues to make, a complete pig’s ear of funding adult social care, creating crises in the NHS and quite unacceptable situations for elderly citizens and their families.

The government is in serious danger of adding to the problem. It needs to change its proposals if it is to secure sustainable, high-quality housing supporting independence and a good quality of life for those in need.


1 Future of supported housing https://www.publications.parliament.uk/pa/cm201617/cmselect/cmcomloc/867/867.pdf

Monday, 8 May 2017

A breach of trust

A few weeks ago, I wrote about the current government’s failure to keep to the spirit, let alone the letter, of the Armed Forces Covenant.

Developed in 2000, the Covenant sets out the duties owed by government and society to those serving in our military services and to their families. When Secretary of State for Health, Alan Johnson – who has just announced his resignation from Parliament – ensured, for the first time, that veterans received priority treatment on the NHS on their return from active service.

I contrasted the excellent progress in implementing the Covenant by South Yorkshire councils, despite unprecedented budget cuts, with the position nationally. Last year, the Forces’ charity SSAFA found that just 16% of veterans thought that the Covenant was being implemented effectively.

I said that nothing better illustrated the government’s failure to implement the Covenant than the state of housing for forces’ families.

Just 50% of forces families are satisfied with the standards of management and maintenance of their homes. Satisfaction with the response to requests for repairs dropped 10 percent compared to the previous year and that 52% of personnel in SFA are dissatisfied with the quality of repairs. By contrast, the tenants of councils and other social housing providers typically report satisfaction levels over 85%.

Now, the all-party Defence Committee has concluded that, despite Conservative Ministerial promises about action and their intervention with an improvement plan, all the independent surveys and assessments confirm that service personnel are still dissatisfied with their housing.

But, what makes this all the more worse, is that the Ministry of Defence still won’t publish either the monthly performance data relating to repairs – for example, what proportion of repairs were completed satisfactorily in the target time – or information about the number and nature of complaints being received.

This is a disgrace. It’s bad enough that the performance is lousy, but to continue to try to cover up the scale of the problem is contemptible.

If Mrs May can’t be trusted to do right by our service families, why should we trust her on anything else?

Monday, 3 April 2017

A government soft on crime

Nothing sums up more succinctly or accurately my attitude to criminal justice policy than “Tough on crime; tough on the causes of crime.” I campaigned for that approach in the run-up to the 1997 general election and I still hold to that approach today.

In the 1990s, the Conservatives had become soft on crime – cutting the numbers of police officers, cutting prison numbers to save expenditure – and were doing little to prevent re-offending.

From 1997, I had no hesitation in supporting policies which saw tough action about anti-social behaviour, and the bad guys being locked up for serious sexual and violent crime, the possession and use of knives and guns, and persistent criminality, like burglary.

I also supported a whole range of initiatives which sought to prevent crime, divert young people away from criminal temptation, and in measures which cut re-offending and enabled rehabilitation.

However, this Conservative government has resorted to type. Police numbers have been significantly cut and there are more cuts to come. The probation and related offender-management services have been privatised, and we are now seeing monitoring reports of poor performance – letting down the public and offenders – from across the country.

The Conservative/Liberal Democrat Coalition government also pursued significant privatisation of the prison system. Is it any surprise that the companies now running our prisons are the same ones who massively over-charged us for offender tagging which was never undertaken (for example, SERCO had to repay more than £64 million), and handed back health and education contracts after failing to deliver what they had promised? Between 2010 and 2016, G4S was fined more than 100 times for breaching its contracts to run prisons.

The prison population has remained stable at around 85,000 in recent years, but the number of prison officers has been cut from 25,000 to less than 18,000. So, is it any surprise that violence, illegal drug-use, access to mobile phones, self-harm and suicides in prisons are at all-time highs? This also means that access to rehabilitation services has also been cut.

This government is soft on crime and unwilling to tackle the causes of crime. We will all suffer as a result.


Friday, 31 March 2017

Keeping the Covenant

The first Armed Forces Covenant was developed in 2000. It set out the duties owed by government and society to those serving in our military services and to their families. Its underlying principles are that the Forces should suffer no disadvantage, and should have special consideration in some circumstances.

Particular emanations of the Covenant have included housing – for example that forces families should not be disadvantaged in access to housing locally because they have been serving overseas – and access to health services. So, Alan Johnson was the first Health Secretary to ensure that veterans received priority treatment on the NHS on their return from active service.

I was extremely pleased when local councils in South Yorkshire were amongst the first local authorities to sign up to local covenants. Despite unprecedented cuts to their budgets, our local councils have made excellent progress in implementing those covenants.
Unfortunately, the same cannot be said of the national situation. Last year, the Forces’ charity SSAFA found that just 16% of veterans thought that the Covenant was being implemented effectively. It warned that the Covenant “provides excellent guidance but there is no guarantee of enforcement,” saying that “serving personnel are returning to their home towns after postings abroad or being discharged to find themselves at the bottom of the housing list and without places in the local schools for their children.”

In fact, it is clear that the government is simply failing to implement the spirit, let alone the letter, of the covenant. Nothing illustrates this better than the state of housing for forces’ families.

Just 50% of forces families are satisfied with the standards of management and maintenance of their homes. Satisfaction with the response to requests for repairs dropped 10 percent compared to the previous year and that 52% of personnel in SFA are dissatisfied with the quality of repairs.

Let me tell you that no council in England could countenance repairs’ satisfaction levels at this depth. Council and other social housing providers’ comparative figures are typically over 85%, and considerably in excess of the satisfaction levels reported by owner-occupiers of their own contracted repairs.

Forces’ housing is maintained in multi-million pound contracts by CarilionAmey. Its performance is a disgrace, and the government’s failure to improve the situation is contemptible. Forces’ families are being betrayed day-in, day-out by this breach of the Covenant.

Where’s the national media outrage?

Thursday, 30 March 2017

Racing to stay ahead

Parliament is currently considering the Vehicle Technology and Automotive Bill. Amongst other things, the Bill is about automated and electric vehicles.

This is a welcome opportunity for the UK to stay ahead of the pack in research and innovation that will shape how we travel in the future and create more of the high-skilled jobs that a modern economy needs. But, it needs to be seen in the much wider context of technological and climate change, the global economy and public health concerns.

Meanwhile, today’s news is heavily featuring global environmental pollution, with particular implications for the UK.

World Health Organisation reports confirm that environmental pollution is killing 1.7 million children each year. Environmental risks cause more than 1 in 4 deaths in children aged under 5 years every year. Children are especially vulnerable to pollution due to their developing organs and immune systems, and smaller bodies and airways. The most common causes of infant death globally – diarrhoea, malaria and pneumonia – are preventable with safe water and clean cooking fuels.

Asthma prevalence in children is increasing worldwide, with 11-14% of children aged 5 years and older currently reporting asthma symptoms. Every year, more than 570 000 children under 5 years die from respiratory diseases, such as pneumonia, linked to indoor and outdoor air pollution and second-hand tobacco smoke.

Air pollution is a big issue for every urban part of the UK, but many villages – especially those with main roads – are not immune, shortening the lives of an estimated 40,000 people a year. In my own constituency, there are significant air pollution problems, especially near the M1, and one school has already had to be moved. That’s why there is such an urgent need to develop and promote less-polluting vehicles and transport systems. 

Three weeks ago, the UK was given a final warning to comply with EU air pollution limits for nitrogen dioxide (NO2) or face a case at the European court of justice. If the UK does not show Brussels how it intends to comply with EU law by April, a court hearing with the power to impose heavy fines could begin later this year


 It’s time for the government to stop ducking and diving and to face up to today’s as well as tomorrow’s challenges.

Self-employed shambles

Theresa May and Phillip Hammond got themselves into a complete mess in the budget on the issue of taxation and national insurance and benefits for the self-employed.

There are nearly 5 million self-employed people in the UK, up from 3.8 million in 2008. Self-employment has accounted for 80% of the increase in employment over that period.

But the rise of self-employment is part of a wider shift towards low paid, precarious work. The number of women among the self-employed has risen by almost a third. The average self-employed worker earns £11,000, about half the average of the wider workforce.

It is estimated that around 45% of self-employed workers (1.7 million) are currently paid below the National Living Wage. It appears that most of these people are not self-employed by choice, but that a wide range of big companies have sought to organise their labour through various zero-hours and self-employment arrangements to cut labour costs. Some of these arrangements certainly look unlawful.

The combination of low-earnings and poor protection has left a large proportion of our workforce falling through the gap in the safety net. The self-employed miss out on the social security protections that come with direct employment e.g. Statutory Maternity Pay, Paternity Pay, Statutory Sick Pay or Statutory Adoption Pay.

At the other end of this scale are some very highly paid individuals who are using self-employment as a route to avoid paying their fair share of taxes and national insurance contributions. Apart from this small minority who would have been forced to pay their fair whack, who would have complained if the Chancellor had said ‘Technically, I know that taking this action breaks the letter of our manifesto promise, but the current situation is totally unfair.’?

But, he didn’t do that. His budget announcement would have adversely affected low income self-employed people. That’s why he was forced to u-turn the following day.

We need a new settlement for the self-employed. It must meet a number of tests, most importantly, that of Fairness.


Any future proposals must demonstrate fairness as between rights and responsibilities, contributions and benefits, irrespective of employment status.

Wednesday, 29 March 2017

Time to ring the bell

In 1986, the Thatcher government deregulated public transport, especially of our bus services. 

Its 1984 White Paper stated there “has been too little incentive to develop markets, to woo the customer” and that without “the dead hand of restrictive regulation” fares could be reduced, new and better services would be provided and more people would travel. That White Paper also said “if the customer has the final say, bus operators will look keenly to see where and when people want to travel. If one operator fails to provide a service that is wanted, another will.”

Of course, the opposite has happened.
  • Between 1986 and 2016, bus patronage in England outside London declined by 35%.
  • The decline in S Yorkshire has been almost twice that. In 1986, 286 million bus journeys were made. Today, that figure has fallen by 62% to 102 million.
  • Bu,t in London, where bus services remained regulated, bus patronage rose by 99%.
  • Bus fares in England outside London rose by over 156 per cent between 1995 and 2016, whilst the retail price index (RPI) rose by 77 per cent, which means bus fares have risen more than twice inflation.
  • The market is now dominated by five big bus operators – locally First and Stagecoach - with bus services run effectively as private monopolies. Unsurprisingly, they have high operating profits.
  • Today, about 40% of bus funding is public, but there is little local say about services.
So, the result of deregulation is that fares rose massively, passenger numbers fell dramatically, the number of routes fell, service frequencies suffered and congestion increased exponentially, at great cost to local businesses as well as to commuters.

Given the current considerable concern about adult social care, it is also worth recalling that the bus deregulation changes led to a significant increase in demand for care services, as many relatives and friends found they were unable (increased costs, cuts in frequency) to continue to give the voluntary care they had previously provided.


As the Bus Services Bill goes through Parliament, the government still needs to be persuaded that local transport and city region authorities must have greater powers to improve local public transport, through franchising and, if necessary, by establishing their own bus companies.

Not another broken promise?

Since Chancellor of the Exchequer Philip Hammond’s budget statement, nearly all the media reporting and comment has been about just one aspect of his announcements: changes to National Insurance for the self-employed.

Hammond and May’s perception of weak opposition has clearly made them and their advisers act complacently. It’s no surprise that Conservative internal tensions have been exposed.

Conservative opponents of Hammond’s proposals have focused their arguments in two ways.

First, they say that the proposal breaks an explicit Conservative 2015 Manifesto pledge. Well, of course that’s true, but I didn’t hear these same MPs jumping up and down with rage over the last eight years as Conservative-led governments broke promise after promise…on the NHS, on housing, on SureStart, on school budget…there is an almost endless list of broken pledges.

Second, they have argued, ideologically, that self-employment is close to the Conservative spirit, and that self-employment nurtures the entrepreneurial spirit which should be encouraged.

Of course, the entrepreneurial spirit should be encouraged, but that’s not a good reason for giving huge tax- and national insurance subsidies to wealthy and very high-paid individuals and to companies which abuse self-employment and zero hours’ contracts to conduct unfair competition with companies who play fair.

I welcome the review, led by Matthew Taylor, into the implications of new forms of work on worker rights and responsibilities, and on employer freedoms and obligations.

Nearly 1 in 6 of those working in the UK are now self-employed. There has been a big rise in short-term, casual, allegedly temporary work. There has also been an explosion of ‘disruptive’ businesses, where new ways of working and technology come together to create new products and services. Just consider the rise in internet shopping and its impact on the High Street and traffic congestion, let alone on working practices and arrangements.

The issue of tax cannot be isolated from the wider problems faced by self-employed people, including bogus self-employment and the overall impact on the economy and on communities and families. For example, the rise in self-employment and zero hours contracts has made it far more difficult – and expensive – for young people wanting to buy a home to satisfy building societies about their financial credibility.


The vast majority of people want to see fairness in employment rights and responsibilities and fairness in contribution arrangements in return for pension, health and other benefits. I support that.

Forget what they say; consider what they do

Two policies currently being promoted by the Conservative government in office and the Conservative Party in the country sharply highlight the Conservative’s values and priorities.

From April, the government is implementing changes in Inheritance Tax. The policy will only benefit families with homes worth more than £650,000. Under the new system, families will have a new £175,000 inheritance tax allowance for their home on top of the existing £325,000 threshold. It amounts to a tax giveaway of £38,400 for each of the estates affected. It amounts to a £1bn tax giveaway.

Of the 100 constituencies that will benefit the most, 96 are in London or the south-east. They are mostly represented by Conservative MPs, as are the 4 constituencies outside of London – Tatton (George Osborne’s constituency in Cheshire), Bath, Altrincham and Sale West (also in Cheshire) and Stratford-upon-Avon. Whereas these constituencies may each have 2000 or more homes valued at £650,000 or more, for the vast majority of constituencies, like mine, there are likely to 20 or less.

Carl Emmerson, of the independent Institute for Fiscal Studies, says that the policy clearly benefits the wealthy. When the threshold reaches its final level in 2020, “the biggest beneficiaries of this tax cut will be those whose parents are married and have an estate worth between £1m and £2m,” he said. “This small number of typically well-off individuals will see a £140,000 reduction in their inheritance tax bill.”

Meanwhile, the government is planning to make big cuts in the support to the poorest bereaved families.

The existing scheme, which is based on the NI record of the person who died, has three different benefits to support spouses and civil partners: Bereavement Payment (BP) – lump sum, Widowed Parent’s Allowance (WPA) and Bereavement Allowance (BA). The new replacement Bereavement Support Payment (BSP) will be for new claimants from 6 April 2017.

Under BSP, three-quarters of bereaved families will receive less in cash terms than under the current system. Further, nine-out-of-ten families will also see a cut to the length of time that they can receive support following a bereavement.

So, bereavement for the very wealthiest families (the top 5%) is to be acknowledged with big tax cuts, and bereavement for the poorest families means big cuts in support.


These policies tell you everything you need to know about the Conservative instinct.

Friday, 3 March 2017

Waking up

In October 2012, SKY announced that it would increase phone line rental charges by 18%. BT had already announced inflation-busting rises. Virgin and TalkTalk had already implemented way-above-inflation increases in line rental charges, but BT and Sky are the dominant domestic telecoms suppliers.  These new charges were almost double those of the lowest-cost provider. There was no justification for any price rise for line rentals at all. In fact, wholesale prices were falling.
I called on the Secretary of State for Trade and Industry and the competition authority (then the Competition Commission) to launch an investigation into the telecoms’ suppliers and, particularly, into landline charges. 1

I strongly made the point that increasing the unavoidable line rental charges meant that those who made the fewest calls – typically pensioners on the lowest incomes – were getting the highest percentage increases in their bills.

Further, I was sharply critical of the suppliers’ claims that there was a ‘highly competitive market’, asking how it was that BT and Sky managed to arrive at the same charges for daytime calls and connection fees. I said that customers were being taken for a ride.

But, what was the response of the Conservative Minister, Ed Vaizey, and OFCOM then? They said that they believed the retail market was competitive and

“… for Ofcom to open up an investigation in this area, it would need evidence of an abuse of a dominant position or evidence of collusion or anti-competitive agreements.”

They refused to budge from this position, despite the evidence staring them in the face.

For more than four years, landline charges rocketed above inflation and many telecoms suppliers have made a fortune at our expense.

Last December, Ofcom announced a review 2 into “unnecessarily high charges paid by the estimated two million households who pay for a standalone landline service…. Ofcom is concerned that (these) people are not being served well by the market.”

The regulator finally admitted that all the major landline providers had raised charges significantly since 2010, by between 28 per cent and 41 per cent in real terms. This was despite benefiting from a 25 per cent fall in the underlying wholesale cost.

Bluntly, customers had been taken for a ride whilst OFCOM and the government had been asleep on the job.

Now, OFCOM has announced 3 that “More than two million people who buy only a landline telephone service from BT would see their monthly bills cut by at least £5 per month…”
The fact that OFCOM has acted so quickly on some landline charges after such a short investigation simply demonstrates the significant scale of the market abuse that has been going on for so long.
As OFCOM now confirms “Landline-only customers are particularly affected by price hikes in telephone line rental. Major providers have increased their line rental charges significantly in recent years – by between 25% and 49% in real terms. This is despite providers benefiting from around a 26% fall in the underlying wholesale cost of providing a landline service.”

OFCOM’s proposals mean that BT customers with only a landline, currently paying £18.99 per month for line rental, will pay no more than £13.99 – a reduction of at least 26%. This cut returns the cost of line rental to 2009 levels in real terms, although there isn’t a refund for the years when many customers have been fleeced of some £300-400 each.

OFCOM has not explained why its proposals only relate to BT. It is clear that other dominant telecoms suppliers have been pursuing the same pricing policies. What action is to be taken against them?

Neither has OFCOM yet agreed to extend its investigations into all landline pricing, including those forming part of bundles of services. It is very clear that the landline price within bundled services has increasingly formed a larger part of the total charge. Yet, as OFCOM confirms, this is despite a 26% cut in the wholesale cost of landlines.

I’m pleased that OFCOM has woken up at last.

Now that it is awake, it needs to go further by (1) confirming that it is continuing to investigate the significant increases in the landline-only charges of other suppliers, and (2) extending the investigation to all landline pricing, whether standalone or charged as part of a bundle.

1 LINE UP – we’re being taken for a ride, 16th October 2012, http://www.clivebetts.com/