More anarchy than deregulation

We are now considering the Government’s third Deregulation Bill in three years. It represents their absolute failure to address the cost of living crisis or implement a proper industrial strategy.

Deregulation alone is not a long-term, sustainable growth strategy. This Deregulation Bill is a desperate rag bag, comprising an incoherent bunch of proposals which look as though they were brought together after a drunken session at an anarchists’ convention.

The draft Bill’s statement of impact estimates that all the measures together would only save British businesses 20 pence per business per year. Wow! And this is Cameron’s latest big idea.

Therefore, you may think it’s not worth considering. Well, it is, because of the rag, tag and bobtail proposals that have been thrown in at the last minute.

For example, the government’s obsessive view, that health and safety legislation is a hindrance to the economy, has lead them to propose exempting self-employed people working in certain lines of work – to be decided by the Secretary of State – from health and safety legislation.

It’s staggeringly inept. From clarity, it will create confusion and muddle. It is estimated to save self-employed people thirty-seven pence each a year. Yes, you read that correctly, 37p each a year.

Then, we have botched proposals about taxis and private hire vehicles (PHV).

In May 2012 the Law Commission launched a consultation on changes to taxi regulation, with a final report and draft Bill originally scheduled for publication in April 2014. The industry, unions and local authorities have been engaging with this process. Then, out of the blue in January 2014 the Government announced a 10 day consultation on three measures relating to taxi and PHV regulation.

Then, in March, without any meaningful engagement with stakeholders, new proposals were made for this Deregulation Bill. Report Stage is expected in the next few weeks. The proposals include allowing a PHV operator to subcontract your booking, without your consent, to another operator who is licensed in a different licensing district.

I’ll leave you to think about whether you think this is either sensible or something you will welcome. For my part, I think the proposals are both unwise and unwelcome.

The regulation of letting agents

I have written before about private rented housing and, specifically, about the investigations and recommendations of the all-party communities and local government select committee, which I chair[1].

The housing crisis is pushing home ownership out of reach for many people. We are building less than half the number of homes we need to keep up with demand. The current coalition government has presided over the lowest level of house-building in peacetime since the 1920s.

Since its launch, I have been asking serious questions about the appropriateness of George Osborne’s Help to Buy programme. Now, as I write, the Governor of the Bank of England says the housing market has “deep, deep” problems and is the “biggest risk” to Britain’s economic recovery sending a clear message to the Bank’s new Financial Policy Committee (FPC) to consider early intervention.

Meanwhile, 9 million people now rent privately including over 1.3 million families with children.  Nearly half of private rented households are over the age of 35. Many want the same security and stability they would have if they owned a home or had rented from their council.

But rules on private renting have not caught up with these changes, leaving people struggling with the growing cost of renting and with the insecurity and uncertainty built into the rental market. I shall write separately about rents and tenancy terms, but want to concentrate here on the regulation of letting agents.

The cost of letting agents’ fees, which can be up to £500 every time someone moves house, has added to the growing cost of renting. There are large numbers of complaints about agents, almost all about fees and charges. It is not just that there is one fee upfront for a tenancy agreement; there are also the charges for inventories and for credit checks. 

People enter into a viewing not knowing what the ultimate charge will be. It is a charge they have to find upfront as a prospective tenant; at the same time as they are trying to find the deposit.

The process gets repeated to a degree every time people renew their tenancy after six months or 12 months, and that militates against having longer term contracts. Agents see this as an incentive not to let longer term contracts because short-term contracts mean renewals and more fees for them. 

The Committee said there should be absolute transparency of fees upfront when a property is advertised and it must be clear what the totality of charges to tenants will be, and there should be no double charging. If there is transparency, it will be harder for a letting agent to charge a tenant and a landlord for the same thing, which happens at present.

We did not then recommend a complete abolition of fees to tenants. What we said was that it has been done in Scotland and that we should review the Scottish experience. We will do that in the autumn. 

We’ll also consider whether banning charges to tenants means higher rents. If so, there is a question as to whether tenants favour paying slightly more in rent rather than being forced to pay massive fees upfront, often on a frequent basis.

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[1] http://clivebettsmp.blogspot.co.uk/  24 March 2014

Sheffield hit hard by cuts – is that fair?

Between 1997 and 2008 levels of Government borrowing fell as a proportion of the country’s income. Then the worldwide banking crisis caused a recession which sharply reduced income from taxes and increased the deficit.

Despite austerity measures the Government is still borrowing over £100bn a year having failed as promised to balance the books in this Parliament.

I want to address how fair the cuts are to the people I represent in Sheffield.

Firstly to reduce borrowing taxes have been increased. Most would agree that those with the most should have their taxes increased the most. Is it fair that as working families struggle with the rising cost of living, millionaires’ income tax is cut and the bankers who caused the crisis get bonuses without any extra tax being levied on them?

Most of the effort to reduce borrowing has been by cutting spending. Has this been done fairly? Is it fair that grants to councils have been cut more than twice as much as other spending? Are important services such as help for the elderly and disabled, refuse collection, parks, libraries, sport facilities, and subsidies for buses and trams less important than anything else government does?

I know from listening to constituents that they feel it’s unfair that the elderly and disabled have received the largest cuts. Perhaps it’s because ministers find it easier to pass responsibility for the cuts onto councils rather than doing them themselves.

Finally, there is the issue of whether cuts have been applied fairly. Is it fair that in this Parliament Government will cut the grant to Sheffield Council by half, with more cuts planned after the election? The Prime Minister says “we’re all in this together”, but his local authority of West Oxfordshire, one of the country’s least deprived areas, gets an increase in spending of 3.1 per cent in 2013/14. By 2017 the government plans that Sheffield Council will have less to spend on services than affluent Wokingham. This isn’t right or fair.

As a Sheffield MP it’s my job to fight for a fairer deal for Sheffield. I would like to think the other MPs in the city will be doing the same. I know most of them are.

This article first appeared in THE STAR on 8^th May 2014 at

http://www.thestar.co.uk/news/letters-opinion/sheffield-hit-hard-by-cuts-is-that-fair-1-6603685

Some facts: all checkable:

• Between 1997 and 2008, UK government borrowing fell as a proportion of both national income and Gross Domestic Product.
• The global financial crisis was caused by incompetent, reckless and, sometimes, criminal banking and unsustainable private borrowing and debt.
• Between 1997 and 2008, the Conservatives had exactly the same net spending plans as Labour; they were only marginally lower in 2009/10.
• Between 1997 and 2010, the Liberal Democrats demanded net expenditure higher than Labour and the Conservatives in each and every year.
• Between 1997 and 2008, UK government borrowing fell as a proportion of both national income and Gross Domestic Product.
• UK government borrowing rose massively from 2008 because we nationalised the banks’ private borrowing and losses to prevent the collapse of the finance system, and because tax income dropped sharply because of the economic crisis.
• Despite promising to have balanced the books by 2015, the Conservative/ Liberal Democrat government is still borrowing an additional £100bn a year.
• The vast majority of ordinary working families are much worse off since 2010, because of the VAT increase to 20%, above inflation energy bills and frozen wages.
• Working families on the lowest incomes have been the hardest hit because of the bedroom tax, and cuts in council tax and housing benefits.
• Millionaires have been given an income tax cut, on average, of more than £100,000 a year.
• Bankers’ bonuses have got bigger, without being subject to any extra tax.
• In 1984, on average, bank executives were paid 16 times the wage of the banks’ lowest paid employees. In 2014, it will be 160 times the lowest wage.
• The biggest cut in government expenditure has been in grant to local councils. In councils of all political controls, libraries, children’s centres, bus services and youth and sports facilities are closing. Fees and charges for care services, burials, sports and parking are all increasing. More than 500,000 elderly people have lost their care service altogether.
• The government is forcing a massive switch of resources from the poorer, urban north to the wealthier, rural south-east. For example, Sheffield has had its government grant cut by £226.40 per head, whereas wealthy Wokingham has lost £1.44.
• The government wants to switch £40m a year of health funding from Sheffield to Surrey and the SE, where people are already wealthier, healthier and live much longer.

Water, water everywhere

We’ve had a lot of rain over the last year. The good news is that most reservoirs are full and aquifers have been topped up. The bad news is that many households are struggling to pay their water bills.

There is a cost of living crisis. Inflation has far exceeded income increases over the last 4 years. Inflation in utility, energy and housing bills has been even higher and lower-income working families have been the hardest hit. OFWAT estimates that 11% of households currently spend more than 5% of their income on their water and sewage bill. That’s 2.26 million households across England and Wales, 990,000 adults, 730,000 pensioners, and 540,000 families with children.

Water bills have increased by almost 50 per cent in real terms since privatisation in 1989. Many companies are using complex and ‘opaque’ financial structures, including worryingly high levels of debt, to minimise tax in the UK. The Chairman of Ofwat has warned of increasing levels of debt in the sector: “the overall proportion of equity has diminished from 42.5% in 2006 to 30% of regulatory capital value today with several companies at 80% gearing, thus obtaining only one fifth of their financing from equity”. Profit margins are exceptionally high, with the regional water companies making £1.9billion in pre-tax profit last year and returning £1.8billion of this to shareholders.

The Government’s voluntary approach, by which water companies can choose whether to offer a ‘social tariff’, has resulted in only three water companies offering a scheme, assisting fewer than 25,000 consumers nationally. Following significant criticism, last October, David Cameron’s spokesman briefed that there was imminently to be ‘decisive action on water bills’ from Owen Paterson and Defra. This turned out to be nothing more than a letter to the water companies asking them not to put up bills. You can guess what they did with it!

There is a Water Bill in Parliament at the moment. Cameron and Clegg ought to do three things now:

• introduce a national affordability scheme – to replace voluntary arrangements - to help those struggling with their bills, funded by the water companies from their excessive profits, thus ending the current postcode lottery;
• give OFWAT stronger powers to cut bills - when these monopoly providers benefit from favourable economic circumstances outside their control; and
• enable OFWAT to take corporate structures and levels of investment, tax and dividends into account - when setting the regulatory framework for each company.

Will they do that? I wouldn’t bet on it.

Planning change

In 2012, the government introduced the National Planning Policy Framework (NPPF). Ministers claimed this speeded up and streamlined the system. They also stated that if councils failed to meet particular targets – for example, the speed with which planning applications are determined – the government would deem those councils to be failing and would intervene.

At the end of last year, the all-party Communities and Local Government Committee, which I chair, commissioned some research to examine whether different outcomes in relation to these targets are a reflection on the quality and value of the outcomes to citizens and developers. The researchers told us:

“It is clear that the planning performance targets do not tell the whole story; they may mask both good and bad practice and can be misleading about practice and outcomes……..” 

So, simply measuring performance, by the number of decisions taken within eight or 13 weeks from the start of the formal process, masks good and bad performance. 

They also found that some councils, which the government deemed "exemplary" because of their speed of decision-making, were actually "described as horrendous by those with first-hand experience of working with them", and that some appeared to be trying to "game the system".

It is particularly concerning that good councils, which focus on customer service, enable good development and deliver good value, could be placed in special measures because they miss arbitrary and unsatisfactory targets. The Government’s planning performance targets may actually be driving perverse behaviour.

This research is a starting point for our inquiry into the whole of the NPPF. We welcome evidence about how the National Planning Policy Framework has worked in the last two years. In particular, we will be looking at the impact of the NPPF on three key areas:

• planning for housing;
• town centres; and
• planning for energy infrastructure 

If you want to contribute your views or, more importantly, your experience of the NPPF in operation, please do so by Thursday May 8th. Advice on the terms of reference and the best way to submit evidence are available at

http://www.parliament.uk/business/committees/committees-a-z/commons-select/communities-and-local-government-committee/inquiries/parliament-2010/national-planning-policy-framework/

The government’s badger-cull policy is ‘still bonkers’

I have written here before about this government’s ridiculous badger-cull policy. ‘Bonkers’ is the politest epithet I can think of.

This week, the latest report of the government’s own Independent Expert Panel was leaked. Let me share just a couple of quotes to give you a flavour of what they had to say.

On humaneness:

“It is extremely likely that between 7.4% and 22.8% of badgers that were shot at were still alive after 5 min, and therefore at risk of experiencing marked pain. We are concerned at the potential for suffering that these figures imply.”

The target was for no more than 5% of badger taking five minutes to die.

On effectiveness:

“Controlled shooting in conjunction with cage trapping, over the 6-week period of the pilot culls, failed to remove at least 70% of the pre-cull badger population from either pilot area. It is extremely likely that combined shooting and cage trapping removed less than 48.1% of the badgers in Somerset and less than 39.1% of the badgers in Gloucestershire.”

Not only is the policy completely ineffective, it is costing £1m a year already.

Bluntly, Conservative Secretary of State Owen Paterson has put posturing before good policy, secrecy before transparency, conflict before consensus, and prejudice before science. His policy is now so discredited and embarrassing that there won’t even be any independent scientific oversight of the next culls. It’s a disgrace.

These culls have been bad for farmers, bad for the taxpayer and bad for our wildlife.

What is surprising is that Liberal Democrat MPs are consistently supporting the government’s ridiculous policy.

Do the badgers have to put on bright clothing and turn up at Liberal Democrat HQ to picket Nick Clegg before the Liberal Democrats change their minds?

No excuses

In January[1], I wrote about the need for the government to take urgent action to restore the value of the National Minimum Wage (NMW) and to enforce it in practice.

In March[2], the government announced above inflation increases to take effect from October. However, the increase is still not sufficient to regain the value in 2010, since when all other increases have been somewhat below inflation.

The responsibility for enforcement of the NMW rests with Her Majesty’s Revenue and Customs (HMRC), although it is not believed that the Queen herself has yet been out on a raid. HMRC’s enforcement teams investigate complaints and have responsibility for educating employers and employees about what happens if they fail to pay what they must.

Last year, HMRC’s investigations resulted in over 26,000 people getting a total of £4 million in back pay. However, I believe that much more should be done and that some employers have got away too lightly with cheating employees and competitors.

To coincide with NMW’s 15th anniversary, HMRC has published[3] a list of the worst excuses it has seen over the past year for employers failing to pay the minimum wage.

Try these:

1. An employer said a woman on the premises was not entitled to the minimum wage as she was his wife. When asked what his wife’s name was, the employer said: “Err, her name? What’s your name, love?”

2. One employer told HMRC: “My employees don’t speak English, so they’re not entitled to it.”

3. An employee ran out of the premises when HMRC officers arrived to check for minimum wage infringements. The same employee then returned - minus the work pinafore - with the employer claiming they were a customer.

4. Another employer told HMRC: “When the NMW goes up I do increase the amount I pay a little, even if the total pay is still below the NMW. I don’t think it’s right to ignore rises in NMW.”

5. Upon inspection, an employer told HMRC: “I know I am paying them too little, but they are happy to work for this amount because they are getting experience.”

6. An employer said his employee was just working for a few days, with a view to buying the business. When HMRC checked food safety records, the employee’s name was found on historic food temperature records.

7. An employer claimed they realised they were not paying employees the minimum wage and had just this week increased their wages - to an hourly rate which was still below the minimum wage.

8. An employer told HMRC: “It wasn’t a conscious decision to say ‘I’m not going to pay this’, but I’ve never really considered doing it because I’ve not had people come to me and say: ‘I’m not getting paid enough’ or: ‘Is this the minimum wage?’”

9. One employer claimed an employee was just a friend, and only in the restaurant as they were in the area. HMRC officers returned another day to find the employee in the kitchen preparing food.

10. A number of employers claimed that accommodation they provided workers made up for their shortfall in wages.

No excuses. I’m clear that employers who fail to pay properly should be forced to pay the back pay and hefty fines.

More information about the different minimum wage rates, which depend upon age and apprentice status, can be found at www.gov.uk/national-minimum-wage-rates

If you believe you are not being paid the minimum wage, call the Pay and Work Rights Helpline, in confidence, for advice, in more than 100 languages, on 0800 917 2368. Calls to the Helpline from interns who are working for nothing, or for “expenses only”, are being fast-tracked for investigation.

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[1] 16 January 2014 http://clivebettsmp.blogspot.co.uk/2014_01_12_archive.html

[2] http://www.bbc.co.uk/news/business-26543267

[3] http://www.mynewsdesk.com/uk/hm-revenue-customs-hmrc/pressreleases/hmrc-reveals-10-worst-excuses-for-not-paying-the-minimum-wage-980157?utm_source=realtime&utm_medium=email&utm_campaign=Subscription&utm_content=

Our next generation

Although there have been lots of headlines about increasing employment, the number of people in work simply reflects the increase in the working age population.

The unemployment rate is still higher than in 2010. Further, the headline statements mask a significant increase in part-time employment amongst people who want full-time jobs, and in self-employment.

Three particular groups of those without jobs ought to concern us all.

• First, there are 393,000 over-50s who are unemployed, of whom 277,000 (70.5%) have been out of work for longer than a year.
• Second, the Work Programme is failing disabled people miserably, getting only around 5% into work.
• Third, the rate of unemployment among under-25s still almost 20%. Youth unemployment, at over 912,000 is unacceptably high. 60% of the way through the programme of Youth Contract wage subsidies, which began in April 2012, only about 7% of those supposed to be helped have been.

The most recent Work Programme data indicated that only 1 in 5 of people who have been on the Work Programme for two years have secured a sustained job. The number of people returning to JCP after being on the programme exceeds those gaining a job, and the gap between these two measures is growing as referrals are on a downward trend.

The proportion of Employment and Support Allowance (ESA) New Customers attaining a Job Outcome payment within a year has remained at around 1 in 20 for each monthly intake. And now we learn that nearly 60% of jobs on Government website may have been placed by bogus firms.

David Cameron and Nick Clegg may believe that keeping 20% of our young people is a price worth paying. I don’t. Those of us who saw what damage high youth unemployment in the 1980s and early 1990s did to young people, families and local communities don’t want to go there again.

We need a strategy which gets more people into good training and sustainable jobs, by investing for the future. It would include a Compulsory Jobs Guarantee for young people.

Progress on the private rented sector

Progress on some issues often appears slow, even when there is agreement

The all-party communities and local government select committee, which I chair, has conducted a lengthy investigation into private rented housing, resulting in a report and a government response to our recommendations. And at last, we have had a debate about the next steps.

The private rented housing sector is of increasing importance with 18% of households now living in privately rented homes. This growth did not happen suddenly, following the banking crisis of 2008; it had been taking place before that over a period of time.

The private rented sector is now home to a wider range of households, particularly families with children who need more security.

Our investigation took us to Germany, where we found that a far greater proportion of households rent. Standards are good and tenants have tenancies for life, which they can pass on to family members.

We have made many recommendations and many of the committee’s ideas can be found in the government’s Review of Property Conditions in the Private Rented Sector. Having initially dismissed our recommendations for mandatory carbon monoxide and smoke alarms in private rented homes and for five-yearly checks of the electrical installations, the government is now consulting on them.

However, there are two specific recommendations that the government has rejected. The first is: greater flexibility of local authority powers to raise standards and to deal with rogue landlords. The second: the regulation of letting agents.

The government has yet to respond positively to our call for simpler regulation, as we currently have a bewildering array of legislation and regulation. This doesn’t help landlords, tenants or regulators. Given its drive to tackle red tape and bureaucracy, such a refusal is surprising. However, following our call for easy-to-read fact sheets and model tenancy agreements, the government has produced a draft tenant’s charter and is promising a model tenancy agreement.

We asked for a review of the housing health and safety rating system. Although valued by many professionals, most landlords – let alone tenants – find it difficult to understand. The government seems unprepared to take on a wholesale review, but it is trying to produce guidance for tenants and to update the methodology.

Some of the worst housing standards are in the private rented sector. That does not mean every such property is bad. We should not give all private landlords a bad name.

But as well as some of the worst properties, the private rented sector has some of the most vulnerable occupiers, and that juxtaposition should really worry us.

Some landlords simply want to sit and do nothing, while others blatantly break the law and think they can get away with it. We must bear down on the really bad landlords without putting extra burdens on the good ones.

We did not favour a national landlord licensing scheme because we have tended to be localist and to believe that authorities should be allowed to choose for themselves and local people. However, selective licensing does tend to be cumbersome, time consuming and bureaucratic. The criteria are currently very restricted. We proposed relaxed criteria, greater flexibility for councils, and the ability to have a local accreditation scheme which was mandatory for all landlords.

Unfortunately, the government has said no to mandatory accreditation schemes and no to a review of the flexibility of selective licensing. Its latest proposals suggest tightening the criteria for selective licensing, rather than increasing flexibility. Two steps forward, one back.

I have also pressed the government to take appropriate action to ensure that, when councils successfully prosecute bad landlords, they should be entitled to get back their full reasonable costs. Why should the worst landlords be subsidised by ordinary hard-working families?

The long-term solution is of course to increase the supply of housing, including new purpose-built accommodation for private renting. If we could convert benefits payments to bricks and mortar instantaneously we might well have found the holy grail. We shall need to return to this.

It’s a case of ‘some progress made; but a lot more to do’.

This article first appeared in the Local Government Chronicle on 21 March 2014

http://www.lgcplus.com/briefings/progess-on-the-private-rented-sector/5069063.article?blocktitle=Views-from-the-panel&contentID=2341

 

Mesothelioma

Mesothelioma is a form of cancer caused by exposure to asbestos. It is a long-tail disease – which means people exposed to asbestos decades ago are only now discovering the consequences of their employers’ ignorance or negligence.

With people moving in and out of jobs in the industry, and widespread misplacement of insurance and employment records, many sufferers (approximately one in every eight) are unable to trace their employer or insurer to lodge a complaint.

Therefore, I welcomed some new regulations this week that provide for the Secretary of State to establish a long-overdue scheme for mesothelioma victims and their families - who, for decades, have been denied access to the compensation they deserve.  This new law originates from a consultation launched by the last government in February 2010. It follows a long history of Labour interventions to secure justice for mesothelioma sufferers.

In 1969, the Employers Liability Act, required employers to insure against liability for injury or disease to their employees arising out of their employment. The Pneumoconiosis Act in 1979 provided lump sum compensation payments to people suffering from certain dust-related diseases or, if they have died, their dependents, where a claim for damages is not possible because the employer is no longer in business. In 2008, the Mesothelioma Payments Scheme provided lump sum payments for people suffering from diffuse mesothelioma, who are unable to claim compensation from other sources - such as women who washed their husbands’ contaminated clothes, or the self-employed.

This new law provides a legislative framework to make payments to people with the disease who are unable to trace their employer or their Employer’s Liability insurer.

The Scheme will be industry-funded by a levy on currently active insurers in the UK Employers’ Liability market. Insurers have said that provided this levy does not exceed 3% of Gross Written Premiums, they will prevent this additional cost from being passed onto business.

The Scheme is intended as a fund of last resort. Claimants who are unable to trace their employer or their employer’s insurer can apply to the fund. I’m especially pleased that, after all-party pressure, successful applicants will receive 80% of the average compensation of claimants of the same age who have pursued successful civil compensation claims.

I hope that claims can now be progressed and settled quickly.