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?

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.

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.

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/

² https://www.ofcom.org.uk/about-ofcom/latest/features-and-news/landline-prices-review

³ https://www.ofcom.org.uk/about-ofcom/latest/features-and-news/cheaper-landline-only-bills

Another broken promise

Despite months of denial and prevarication, government ministers have finally had to concede that they are breaking their promises on protecting the NHS – it will have a cut in cash resources, let alone real terms, next year; it is unsurprising that waiting times and waiting lists are rocketing, and targets are not being met – and in housebuilding – there is no chance of 1 million new homes being built in this parliament as David Cameron claimed.

So, it’s now time to reveal this government’s latest broken promise – to protect the schools’ budget.

Both the National Audit Office and the independent Institute for Fiscal Studies have now confirmed that there will be an “8.0% real-terms reduction in per-pupil funding for mainstream schools between 2014-15 and 2019-20”.  This equates to around £3bn worth of savings that schools will be forced to make.

For many schools, the problem will be exacerbated by the implementation of the National Funding Formula. In December, the government said that 10,740 schools (54%) were set to gain extra money, while 9,128 (46%) will lose money from this redistribution. These changes are to be phased in from 2018.

The National Union of Teachers (NUT) has commissioned its own research and this suggests that the combination of the national funding cut and the redistribution will mean that

• 98% of schools will have per-pupil funding cut,
• the average cut for a primary school will be £87,117, with the average loss per primary school pupil being £339, and
• the average cut to a secondary school will be £405,611 with the average loss per secondary school pupil being £477.

In my Sheffield South East constituency, the NUT estimates that schools will have a funding cut between 2013 and 2019 of about 8% on average.  Overall, Sheffield schools will be more than £22 million pa worse off in 2019/20 than they are this year.

In NE Derbyshire and Chesterfield, school budgets are predicted to fall by an average 4-7% - slightly lower than the national average cut; in Rotherham, it’s a 12% cut. As about 80% of a school’s budget goes on staff, it is inevitable that there will be reductions in teaching and teaching assistant staff in most schools.

You can see the expected outcome for every school at http://www.schoolcuts.org.uk

Between 1997 and 2010, the UK built an additional two million homes, increased owner-occupation by more than a million and delivered the largest investment in social housing in a generation. [I wasn’t satisfied by this achievement, especially believing that there should also have been big investment in new social housing.] Further, headline or ‘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%).

By contrast, the Conservative/Liberal Democrat record on housing is seven years of failure, from falling home-ownership – there are 200,000 fewer home-owning households since 2010 – to homelessness. Since 2010, the trend of falling homelessness has gone into reverse. The number of statutory homeless households has increased by 45% and the number of rough sleepers has doubled, up 30% in the last year alone. Five families are being made homeless in England every hour of the day.

Right now, we need to build more homes in this country, particularly more affordable homes, and we need to build more affordable homes to rent. We also need to have longer secure tenancies, rent certainty and better minimum standards of management and repair.

We also must recognise that housing needs vary in different parts of the country. Different housing markets need different responses and initiatives, particularly in terms of tenure mix.

If the government’s long-promised housing white paper doesn’t address these challenges, then we should expect housing policy to be a key political battleground for the foreseeable future.

However, as a result of

• some all-party investigation then cooperation and determination;
• a Conservative MP willing to use his opportunity to promote a Bill;
• a huge amount of behind-the-scenes hard work, debate and discussion involving Ministers, MPs, civil servants, and a range of professional and voluntary organisations;
• creative use of a Select Committee to do pre-legislative scrutiny;
• a Housing Minister, sensing which way the wind was blowing, being prepared to engage constructively and to back that with money; and
• MPs, having made known their personal views about missed opportunities, being prepared to back the limited proposals;

the Homelessness Reduction Bill passed its third reading last week on the way to the statute book.

It should ensure that more, earlier and better support is given to those threatened by homelessness, and especially to those families with young children for whom the experience can do lifelong harm.

Contractual disgrace

I am not at all surprised to have learned this week about this government’s determined attempts to hush-up the disgraceful story of the performance of Concentrix – a US-based company – which had been contracted by HMRC to prevent fraud and reduce error in the administration of tax credits.

It is only through the persistent questioning of the government – and I congratulate my colleague Louise Haigh (MP for Sheffield Heeley) for her significant contribution to this – are we beginning to get to the truth about what has happened. If I were a conspiracy theorist, I’d be tempted to the view that this week’s publication of a National Audit Office (NAO) report on the affair had been timed to ensure minimal publicity, whilst the media was focused on Brexit issues.

Tax credits were introduced in 2003, but this government has systematically reduced their value. In 2014, the government contracted Concentrix to cut fraud and error in the system. This would be done by stopping the benefit being paid to some claimants.

Thousands of families in receipt of tax credits complained that they had been wrongly sanctioned; their benefits were just stopped, sometimes for months, without justification. Not only couldn’t families pay their bills, but children were refused school dinners because their benefits had been stopped.

Staggeringly, given the massive scale of failure to deliver the contract properly, Concentrix argued that it needed to be paid more than the contracted commission of 3.9% and negotiated this up to 11% in August 2015.

The NAO found that Concentrix had stopped or cut tax credits in 108,000 cases in less than 2 years, but almost a third of those decisions were overturned after a mandatory reconsideration. So, more than 30,000 families had been badly affected, with many brought to the point of destitution.

The contract required 90% of calls to Concentrix to be answered within 5 minutes, but for much of the time it was answering fewer than 5% in time. In August last year, Concentrix simply didn’t answer the phone to 19,000 claimants.

By September 2016, there was a backlog of 181,000 cases.

Although the contract was supposed to run until May this year, HMRC finally ended the contract with Concentrix in November 2016, and brought the work back in-house.

In the last two month’s data, it is revealed that 89% of those families which had their cases reviewed secured re-instatement of their tax credit.

The contractor’s performance was so disgraceful, it should simply be banned from working for the UK public sector for a decade. Ministers and senior civil servants who oversaw this shambles should be brought to account for their contribution.