Sunday 31 October 2010

Housing: the cruellest lottery of them all.

We all love a flutter on the lottery, at least we do unless the stake is the roof over our heads. The government’s plans to reform housing benefit and rents for social housing could, campaign groups say, create just such a lottery.

Under plans announced as part of the comprehensive spending review housing benefits will be capped at £ 400 per week and the government has announced plans to allow landlords providing social housing to charge tenants rent at 80% of the market rate. A move that could see people on low incomes, pensioners and benefits claimants priced out of London and many other major cities.

A spokesperson for one London borough told the press on Friday that he welcomed the plans because, ‘Anything that introduces more flexibility is a good thing.’ Charities that campaign on housing issues have been, with good reason, rather less sanguine. The homelessness charity Shelter has raised concerns that landlords will raise rents for tenants in social housing without having given proper consideration to their ability to pay.

The National Housing Federation has also expressed concern that many families on low incomes in London and other major cities will struggle to meet higher rental costs, their calls is backed by a survey carried out by the TUC and the Fabian Society, which found that 49% of people living in private rented accommodation and 66% of people in social housing would struggle if benefits were to be cut in line with government plans. As a result they could be forced to move to the outer suburbs of large cities or smaller towns in cheaper parts of the country, fracturing families and putting extra pressure on councils at a time when they are being obliged to cut spending by up to 30%.

Brendan Barber of the TUC attacked the thinking behind the government’s plans saying ‘ministers want us to believe that housing benefit is going to what they would call work-shy scroungers, yet in reality only one claimant in eight is unemployed. The rest are mainly low income working households, pensioners and the disables.’

London Mayor Boris Johnson, never knowingly under exposed, captured the headlines by making a similar point in more colourful language by claiming the plans would amount to a ‘Kosovo style social cleansing’ of London. A storm of protest led by Liberal Democrat Employment Minister Ed Vasey forced him to retract his comments, but however silly the way it was expressed the Blonde Bombshell has a point.

Cutting housing benefits and raising the rents on what little social housing exists will cause untold suffering for many people, people by the way that the new model Conservative Party pledged to care for during the downturn, it will change the nature of our cities and do much to further entrench social inequalities.

What is Her Majesty’s loyal opposition planning to do about this? Labour leader Ed Milliband told the Scottish Labour Party conference this week that he would force a vote in parliament on the issue and called on disgruntled Lib Dem backbenchers to ‘join us, vote against these unfair and unworkable changes and force the government to think again.’

Fighting talk of the sort you would expect from an opposition leader, although he seems a little naive to be making an appeal to the conscience of the Liberal Democrats or expecting the Tory half of their arranged marriage to think again, they did precious little of that to start with. It is certainly a more productive activity that reading memos such as the one he, allegedly, received this week advising him to pepper his performances at PMQ’s with more jokes.

Actually given Harriet Harman’s unfortunate comparison between Chief Secretary to the Treasury Danny Alexander and a ‘ginger rodent’ it might be a good idea for the Labour front bench team to avoid the funnies for a while.

Elsewhere in his speech to the party faithful in Scotland Ed Milliband said that Labour must ‘stand up for the truth’; quite so, but some of the truths might not be particularly palatable. The largest and most uncomfortable such truth is that during their thirteen years in power Labour did little or nothing about social housing.

Why could that be? Maybe they felt talking about such things smacked a little too much of socialism, a naughty word in New Labour circles because it is linked to awkward ideas such as there being better motivations than self interest. Perhaps they feared making the same mistakes as other governments had over social housing, building estates that all too quickly attracted the ‘sink’ tag from the tabloid press.

Whatever the reason they fiddled while more and more Britons lost the ability to pay for the roof over their heads, fighting these ill thought out and potentially disastrous plans will only be the start of what they must do to make amends for not acting when they had the chance.

Sunday 24 October 2010

The ugly face of ‘Greedy Britain.’

In 2007, just before Northern Rock crashed and Gordon Brown ‘bottled’ calling the election that could have saved his party from disaster the artist Damian Hirst unveiled one of his most controversial works. Entitled ‘For the Love of God’ it consisted of a human skull encrusted with 8,601 flawless diamonds and had a price tag of £50 million.

At the time critical opinion was divided over whether it represented a comment on mortality or the excesses of a society that seemed to be living on an inexhaustible supply of credit. I recall joking to a friend that it was only a matter of time before a Premiership footballer had a similar process carried out on his own skull pre-mortem as the ultimate statement of ‘because I’m worth it’ bling.

That joke came back to haunt me this week as I read about the ever more absurd capering of Wayne Rooney as he squabbled with his club, Manchester United, over whether or not he would sign a new contract. For a long time it looked like he wouldn’t sign on the dotted line, despite having hidden the light of his at best limited talents under a bushel of tabloid headlines for most of the past year Mr Rooney was too big for the club, football in general and his own golden boots.

Then on Friday afternoon the news came out, disaster had been averted at the last second Rooney had graciously agreed to sign a contract worth some £200,000 a week plus bonuses and endorsements. Speaking to the press he proclaimed himself to have ‘absolute faith in the management, coaching staff, board and owners’ were ‘totally committed to making sure United maintains its proud winning tradition- which is the reason I joined the club in the first place.’ And there we were thinking it was all to do with the money; shame on us eh.

Showing something close to self awareness Rooney said he recognised supporters ‘might not take too quickly’ to his newly rediscovered loyalty to the club with out which he would be stacking shelves, if he was lucky, but promised to give ‘100% on the pitch’, if only so that his ‘people’ can keep creaming off their 10% off it.

The carnival of greed, self absorption and pure tedium surrounding Wayne Rooney and his money would have been just another episode in football’s ongoing attempt to turn itself from a sport into a soap opera, if it hadn’t coincided with the comprehensive spending review we’ve all been looking forward to in the way dental patients look forward to root canal surgery.

On Wednesday the nice Mr Osborne announced that 500,000 public sector employees will soon not have to worry about the morning commute because they won’t have a job to commute to along with savage cuts to benefits and public services. The Office for Budget Responsibility, set up by the government, says the cuts are regressive and will hit the poorest people hardest; Boy George replies that if the poor can’t afford bread they’ll have to eat cake or something like that.

At the same time he claims that paying the equivalent of 0.01% of their balance sheet as a levy is a ‘fair contribution’ to dealing with the crisis that was largely created by their irresponsible lending. He has also invited them to sign up to a voluntary charter on tax avoidance, so far four out of fifteen major banks have signed up, in the interests of health and safety I wouldn’t advise anyone to hold their breath while you wait for the rest to follow suit.

What has any of this got to do with whether or not Wayne Rooney signs a new contract? Quite a lot; let me explain.

The argument used by Rooney, or his management anyway, was that Manchester united either paid what he demanded or faced the prospect of his upping sticks and moving to rivals Manchester City isn’t so dissimilar from that employed by banks, hedge funds and the like who threaten to relocate to the US, China or elsewhere if the government tries to regulate their activities. That we cave in every time says much that is unflattering about the courage of our regulators and the strength of our society.

Cuts to spending and a rebalancing of the economy away from services and the public sector in favour of manufacturing would have been inevitable whichever party won the election last May, but the speed with which this government is entering into them is ill advised and driven by ideology rather than economic good sense. Growth is being imperilled and there is a serious risk of whole communities being pitched into depths of poverty so deep as to make escape impossible.

This isn’t just a call for a return to the Punch and Judy round of politics where the left takes money away from the rich only for the right to give it back to them a few years later, what we need is a reasoned debate about the sort of society we want to live in. Do we want to inhabit a jungle where it is every man and woman for themselves and the poor and vulnerable are trampled underfoot, or do we want to create a situation where enterprise flourished but recognises the need to protect the vulnerable?

That debate can’t begin until the rich, be they footballers seeking a new contract or bankers seeking to protect their turf stop holding the rest of us to ransom.

Sunday 17 October 2010

Britain’s big experiment begins.

This week Britain embarks on the biggest experiment in its post war political history. An experiment that will see Chancellor George Osborne attempt to cut the debt burden from 11% to 2% of GDP in the next five years, along the way making the biggest cuts in public spending seen since the war.

The gamble behind the experiment is that the private sector backed by the Bank of England will step in to rescue an economy that has become too dependant on government and that the ‘big society’ will do the same for communities across the county who have dependency issues of their own.

Gamblers, it should be remembered, tend more towards optimism than practicality, with a rise in VAT looming and the effect of mass redundancies in the public sector to be considered the outlook looks stormy to say the least. As shadow Chancellor Alan Johnson told the BBC on Sunday morning there is a risk of Britain experiencing something similar to Japan’s ‘lost decade’.

The situation is not improved by the emergence over the weekend as snippets of information about the negotiations between the Treasury and individual government departments that there is a distinct set of winners and losers when it comes to where the axe falls. Although ‘winning’ in this context is something of a relative concept.

The defence budget, it is believed, will only be cut by 8%, a significant victory for Defence Secretary Liam Fox who has pleased the military top brass by ‘going native’ more quickly and completely than most ministers. Even so the cuts that the military faces will still be severe and to some extent seem to lack common sense.

Reuters and other news agencies report that the Royal Navy will get the two new aircraft carriers they were promised by the last government, but it is by no means clear what planes will fly from their decks since the joint RAF/Fleet Air Arm Harrier jump jets look certain to be scrapped and funding for any replacement will be cut to the bone. The Army stands to lose 7,000 soldiers and its bases in Germany along with a large percentage of its artillery and armour.

A small morsel has been thrown to the wavering MP’s on the Liberal Democrat benches in the shape of a promise to save £750million on the cost of maintaining Trident, but nobody seems quite certain how this is to be done. The option of cancelling the country’s unusable nuclear deterrent altogether was whisked off the table before it could upset too many Tory backwoodsmen.

Whatever happens the cuts along with the ongoing pressures of the war in Afghanistan and other global commitments cannot help create, as Colonel Richard Kemp told the BBC over the weekend a sense of ‘corrosive’ uncertainty amongst members of the armed forces with the potential to cause ‘a real morale problem.’

Education or spending on schools anyway, also looks likely to escape a severe cut, although the wider education budget will not. Deputy Prime Minister Nick Clegg announced in a speech in Derbyshire last week the creation of a ‘pupil premium’ to support children from disadvantaged backgrounds from pre-school to university saying that it is ‘the right thing to do to invest in the future, even if it makes things harder today.’

Labour’s Andy Burnham, along, I imagine, with many parents remains unconvinced by the virtues of the ‘pupil premium’, telling the BBC that ‘beyond the smoke and mirrors’ it is was a distinct possibility the plan would involve money that was ‘not additional to the schools budget but recycled from within it’ and, if the Institute for Fiscal Studies is correct could ‘widen inequalities in funding for deprived pupils.’

Welfare looks set to be the biggest loser of all when the axe falls with George Osborne threatening a new range of punishments for people who make fraudulent, or simply mistaken, benefits claims. This is to be backed up by the hiring of 200 Gangbusters type inspectors to roam the country seeking out cheats in a plan, he said, to show once and for all that ‘benefit fraud is a crime that just doesn’t pay.’ Boy George, it would seem fancies himself as a latter day Eliot Ness.

During the election and the protracted build up to the spending review ‘fairness’ was the buzz word of the moment, so much so that it seems to have lost any real meaning now the cuts are about to become a reality. In its place we have a sort of bizarre auction in which whoever shouts loudest wins and the people who were silenced by disadvantage are certain to lose.

As a result defence wins because a lot of Tory voters in the shires would be upset if Britannia admitted to no longer being in a position to rule the waves, even though the problems relation to accommodation, overwork and poor support when they get injured on active service that have plagued the services for years remain unaddressed.

Protection spending on schools and bringing in a ‘pupil premium’ might quiet the troublesome consciences of a few Liberal Democrats, but is, as looks likely, unrestricted tuition fees price poor students out of going to university our historic problems relating to social mobility will get worse instead of better.

The big experiment is, in reality, little more than a gamble and one with high stakes too. As Peter Dixon of Commerzbank told Reuters last week if the gamble doesn’t work ‘it isn’t the rating agencies the government has to fear; it’s the electorate.’

Monday 11 October 2010

Choosing a team.

Despite the bright promises being made by the Met Office about the possibility of an Indian Summer Autumn is upon us. The conference season has blown itself out and all across the country the trees in public parks and suburban streets are taking on the colours of a sunset painted by Turner.

Next week newly elected leader of the opposition Ed Milliband will take part in his first Prime Minister’s Questions and in honour of the even has spent the weekend choosing the members of his shadow cabinet. An activity the media has attempted to liken to picking them members of, say, a football team.

As analogies go this is pretty much of a dud. Unlike even the lowliest of Sunday league managers Ed Milliband doesn’t get to pick his players, the shadow cabinet is chosen on the votes of MP’s, just where they play on the pitch.

Ed Balls and Yvette Cooper both make the cut, but not, much to the disappointment of the press pack, in the role of Shadow Chancellor. Harriet Harman holds onto her job as deputy leader of the party, Andy Burnham gets the health brief and Sidiq Khan, former campaign manager to David Milliband gets to shadow the Justice Secretary.

Peter Hain and Shaun Woodward, big beasts in the last government, miss out on seats in the shadow cabinet but keep the briefs for, respectively, Northern Ireland and the Welsh Office. A list of eager young MP’s will bag junior appointments between now and mid-week and somewhere along the line scores will be settled and egos salved after the shocks and scares of the leadership election.

The BBC helpfully produced a chart comparing the new shadow cabinet to the real thing. Now we know that 44% of the shadow cabinet are women compared to 17% in the cabinet, 56% of the members are under fifty and only 37% went to Oxford or Cambridge. Fascinating stuff I ‘m sure, but the public interest will focus rather more on the fact that only a handful of the shadow cabinet voted for Ed Milliband to be party leader.

The surprise appointment is that of former Home Secretary Alan Johnson as Shadow Chancellor, ever modest he joked to the BBC that his first act in his new post would be to ‘pick up an economics primer for beginners.’ For a man who claimed not to be up to the job of being party leader Mr Johnson has a strange knack for landing plum roles. A cynic might say that he has plans to come at the leadership by a roundabout route when public feeling towards Labour is a little less toxic; the cynic might well have a point.

Speaking about his new team Ed Milliband told the press they were ‘united in one central mission for the future, to win back the British people and take Labour back into power.’ They were committed, he said, to rejection the ‘pessimism’ of the coalition as they set out their ‘vision of what Britain can achieve.’

Brave talk I’m sure, but it is hard not to feel some agreement with the assessment of Liberal Democrat Tim Farron when he says ‘Ed Milliband claimed to represent a new generation, but his shadow cabinet looks very much like the New Labour establishment that came before it.’

This matters because it isn’t just Ed Milliband who will be choosing a team this autumn, we the voting public will be doing something similar.

When the times were good and the job of government was to keep things jogging along in the usual way politicians could settle comfortably on the centre ground and the public could retreat into the false comfort of thinking ‘they’re all the same.’ Now times are harder, and with the government poised to make the deepest cuts to public spending ever known in peacetime things are going to get a lot worse, positions will have to be taken if either the bitter medicine of spending cuts is to work or a viable alternative treatment be found.

However warm it may be outside, however much we would like it to be otherwise, you only have to look at the political meteorology of our present situation to see this is going to be a stormy autumn.

Friday 8 October 2010

Cameron’s call to arms.

It was never going to be an easy conference for a party that has won an election, but failed to win a majority. The backlash to the announcement by Chancellor George Osborne of a drastic cut to Child Benefit came close to turning it into a disastrous one.

What was needed when David Cameron took to the stage of Birmingham’s Symphony Hall to say that it was an ‘honour and a privilege to stand here, in front of the party I lead, in front of the country I love, as the Conservative Prime Minister of the United Kingdom’, was something special in the way of a leader’s speech. A touch of Harry to strengthen the sinews of the troops for the coming battle, and by and large the party faithful got their wish.

After paying tribute to his predecessors, William Hague, Iain Duncan Smith and Michael Howard for, respectively, getting the party ‘back on its feet’, giving it back its ‘heart’ and its ‘confidence’ he launched into a spirited defence of the coalition. On May 7th he had, he said, woken up knowing that what the country needed was ‘leadership not partisanship’, leading him to join with a Liberal Democrat party that had proved to be ‘proper partners’ in the brave political experiment currently being played out and were ‘getting stuck in, making big decisions, shaping what we do and taking responsibility.’

He also launched into the attack on the legacy left by thirteen years of Labour rule, listing spin, attacks of civil liberties and irresponsible borrowing amongst their crimes. Labour were, he said, ‘still in denial’ over the deficit and ‘must never, ever be allowed near our economy again.’

On the benefits that had come close to derailing what should have been a victory parade he said they, and the deeper cuts to come, were based on an understanding of fairness as meaning ‘supporting people out of poverty, not trapping them in dependency,’ for too long action to help the poor had been measured by ‘the size of the cheque we give to people.’

The new style Conservative Party would, now that it was in government would ‘invest in early years care, help put troubled families back on track, use a pupil premium to make sure the kids from the poorest homes go to the best schools not the worst and make sure that work really pays for every single person in our country.’ All that and cut the deficit in time for the next election, big ambitions to match the big society.

On the subject of this pet project he said ‘the old way of doing things; the high spending, all controlling, heavy handed state,’ had been defeated and people power was about to win the day. The age of ‘unchecked individualism’ was over and the age of ‘national unity and purpose’ is about to begin; along with a new age of austerity.

Britain will, on his watch he said become, ‘a nation of go-getters, where people step forward not sit back, where people come together to make life better’, and through tough times in the short term would in the longer term create ‘a life more fulfilled and fulfilling for everyone.’

Government would, Mr Cameron said, play its part in this process but it was up to individuals and communities to pitch in to ‘start those businesses that will take us to growth’ and to ‘step forward and seize’ the opportunities provided by the devolution of power from the centre.

In the tough times to come it was time he said for people to ‘pull together. Let’s come together. Let’s work together in the national interest.’

In what has been a rather muted conference season this was by a long way the most effective speech given by a party leader, although the karaoke statesmanship of Nick Clegg and the pantomime surrounding the Labour leadership contest didn’t set the bar so high.

David Cameron ticked all the right boxes, bashing Labour and the ‘big state’, praising self reliance and playing on the seductive theme of Britain being a country uniquely equipped to cope with hard times due to innate resilience and resourcefulness of its people. That sort of thins always plays well with the Tory grassroots and a large section of the tabloid press, what floating voters made of it isn’t quite so clear.

At the time of the election I wondered which Mr Cameron would govern if he won, Dave the metropolitan liberal or David the rather old fashioned Tory, now we know. Dave has been banished and David has grabbed the crown.

That doesn’t make the cuts his government is about to unleash on the country any less ill advised or the damage they risk doing to the economy any less severe. It does mark him out though as a more formidable opponent that the Labour Party, the trades unions and his opponents within the Conservative Party might have thought.

Monday 4 October 2010

The families we aren’t all talking about this conference season, but should be.

David Cameron says on the eve of his party’s first conference since returning to power that we should all stop worrying and learn to love the spending cuts, or at least put them ‘into perspective.’

The comments were made in an interview with the BBC’s Andrew Marr, as the government confirmed big changes to the benefits system. Changes that Mr Cameron called ‘refreshingly radical’ and which he promised would always make people better off to be in work than claiming benefits.

Welfare reform is at the heart of Conservative plans for cutting the deficit and will see most current benefits combined into a ‘universal credit’ that will be more responsive to changes in the circumstances of claimants. Iain Duncan Smith, the architect of the reforms promised they would ‘break the cycle of dependency and poverty that has become so entrenched in poor communities.’

Who could disagree with that? It should pay people to work; benefits should be a short term support not a life sentence. The trouble is reality tends to play havoc with the best laid plans of politicians.

For a start the economic outlook is far from promising, Ireland is tottering on the brink of bankruptcy again and may drag other European economies into the abyss. At least one Tory ‘big beast’ has expressed reservations about the future and since it is Ken Clarke, Chancellor during the recession of the Major years, it might be a good idea to listen to what he has to say.

Speaking to the Observer on the eve of the party conference he said he was ‘at the more pessimistic end’ of opinions about the economic future and was not ‘sunnily optimistic about where the Western economy is going.’

He expressed support for the cuts to public spending and said there was a below 50% chance of a double-dip recession hitting Britain, but refused to rule out the possibility of one being caused by ‘some fresh wave of global fear and crisis’ in the near future.

Last week’s Labour conference was all about families, or rather the feuds within a particular family; it was, if you like, Eastenders with policy documents.

This week’s should be too, but this time about families who live in the world outside the Westminster bubble. Not the families claiming universal benefits when they’re rich enough to do without or the ‘feckless scroungers’ who normally surface whenever welfare reform is discussed.

The families in question are those of people working in threatened public sector jobs or struggling to get by on benefits. They aren’t ‘public sector fat cats’ of the sort pilloried in some sections of the tabloid press or guilty of making a ‘lifestyle choice’ to be on benefits; they’re just doing their best to get by.

Later this month they’re going to be dealt a body blow by the cuts to public spending from which many may never fully recover. It is by no means, despite all their talk about ‘sharing the pain’ and all being ‘in it together’ whether a government composed largely of people with first rate educations and little idea about life as lived by ordinary voters, fully grasp the extent of the suffering they are about to unleash.

They will have to learn quickly though, this goes as much for the Labour Party as it struggles to come up with a credible alternative as the Tories making the cuts in the first place, because vague talk about the ‘blitz spirit’ from politicians will cut little ice with people who didn’t have much to start with and now risk losing the lot.

Friday 1 October 2010

Labour- the next generation.

New Labour is dead actually it died in May, but the death certificate didn’t arrive until this week. It was delivered by new party leader Ed Milliband in his first major speech.

Speaking from the platform at the party conference in Manchester on Tuesday he praised Labour’s achievements in power, but said the party had ‘painful truths’ to learn about why it had lost the election and with it the trust of the public.

These truths included failing to regulate the banks, sabotaging civil liberties in the fight against terrorism and, most of all, taking the country to war in Iraq. Mr Milliband said ‘we were wrong. Wrong to take Britain to war and we need to be honest about that, a statement that didn’t meet with the unquestioning support of older brother David, who was caught by the TV cameras whispering something less than complementary to deputy leader Harriet Harman.

Mr Milliband the younger also hit out at claims that he was in the pocket of the unions, saying he would have ‘no truck with overblown rhetoric about waves of irresponsible strikes’, cue footage of Tony Woodley looking less than delighted. Ed Milliband, went the implied message, isn’t ‘their’ man, he isn’t anybody’s man apart from his own.

He also joked about the ‘Red Ed’ tag attached to him over the weekend by the right wing media, calling for cheap jibes to be replaced by a ‘grown up debate’ on political issues. Labour on his watch, he said would have ‘different attitudes, different ideas, different ways of doing politics.’ It would be diametrically opposed to the ‘miserable, pessimistic view of what we can do’ to combat the deficit being propagated by the Coalition. Labour were, he said, ‘the optimists and together we will change Britain.’

The delivery was a million miles away from the showmanship used by Tony Blair in years gone by, or his surprising heir Nick Clegg only last week come to that. At times it tipped over into the sort of earnestness you might expect from the captain of a sixth form debating society, but it took courage to admit that Iraq was a mistake and he showed a touch of humour that was a welcome change from the neurotic gloom of the Brown years.

It would, perhaps, be unkind to be too critical of what was a rather underpowered keynote speech, great political speeches, unlike say great pop songs aren’t written on the hoof. Ed Milliband had just seventy two hours in which to prepare for his big moment and it showed.

That said he did strike the right note by saying that Labour has to learn hard lessons and find a new direction if the party ever hopes to return to power. The question is what should that direction be?

It would be dangerously comforting for Ed Milliband to listen too closely to the siren voices telling him that what the party needs is more of the same, a newer New Labour if you like. The spin and cynicism of the Blair/Brown years has proved itself to be anathema to party members and public alike.

There is little call for Labour to return to the inward looking squabbles over arcane points of dogma that were a feature of their failure to engage in discourse with the wider voting public during the 1980’s. Ed can though afford to be redder than he thinks, at least he can if he can persuade the voters that Labour is committed to fairness and has a viable alternative to cutting services to the bone.

As first conferences in opposition go fortune has looked more kindly on the Labour Party than it might have done. It was certainly an improvement on last year’s awful train wreck which saw the Sun abandon its support for the party.

Despite the embarrassment of having the former Foreign Secretary David Milliband bow out of front line politics, for now at least, only hours after he made his first big speech having a new leader in place should give Labour a much needed fillip in the polls and, maybe, a renewed sense of purpose. How long either will last once the frivolity of the conference season is over and the hard work of being in opposition starts in earnest is anyone’s guess.