Support for higher public spending rises after Osborne's cuts

The number who want higher spending, even with higher taxes, has risen for the first time in nine years.

The majority of George Osborne's cuts are still to come but support for higher public spending, even if it means higher taxes, has already increased. Last year, according to the 2012 British Social Attitudes report, thirty six per cent of people said they wanted to see the government "increase taxes and spend more on health, education and social benefits", up from 31% in 2010 and the first increase for nearly a decade (see graph below). The majority (55%) said they would like to see spending levels remain the same, while just six per cent favoured lower taxes and lower spending.

Since around 88% of the coalition's cuts have yet to be made, this is likely to be the beginning of a shift back towards support for a larger state. In 1991, for instance, after the Thatcher government's comparatively minor cuts, 65 per cent said they wanted to see taxes and spending rise but this figure fell in response to Labour's spending increases.

Public support for higher spending rose from 31% in 2010 to 36% last year.

With some Conservatives arguing that the ring-fence on NHS spending should be removed, it's also worth noting that 68 per cent chose health as their first or second priority for extra government spending, with education in second place on 61 per cent, followed by police and prisons (15 per cent) and housing (14 per cent). Expect Tory MPs, angered by the coalition's decision to increase spending on international development by 35 per cent, to highlight the fact that overseas aid finished bottom, with just one per cent citing it as a spending priority. By contrast, 10 per cent favoured higher spending on defence, the one budget many Conservatives would like to see protected.

The right will also draw comfort from clear support for a more restrictive welfare system. During the early-1990s recession, 58 per cent wanted to see more spending on welfare benefits but now just 28 per cent do. Only 59 per cent agree that the government should be the main provider of support to the unemployed, down from 88 per cent a decade ago. Support for spending more on the disabled, traditionally viewed as the most deserving group, has also declined, although given the media's demonisation of welfare receipients this is perhaps unsurprising. Since 2008, the proportion saying that spending on disabled benefits should be increased has declined significantly from 63 per cent to 53 per cent. As the report notes, "This trend is not just a cyclical response to the ups and downs of economic activity; it suggests a fundamental long-term change in attitudes towards welfare and benefit recipients."

On immigration, while 51 per cent would like to see levels reduced "a lot" (up from 39 per cent in 1995) and a further 24 per cent would like to see levels reduced "a little", there is strong support for skilled migration. In total, 63 per cent say that skilled migration from eastern Europe is "good" or "very good" for Britain, while 61 per cent say the same about skilled migration "from Muslim countries like Pakistan".

Ed Miliband has been criticised by some on the left for responding to public concern about welfare and immigration but these findings suggest he is right to argue that Labour cannot be seen to accept the status quo. In the case of welfare, that means support for a more contributory system, and in the case of immigration, that means tighter regulation of the labour market to ensure that bosses cannot use foreign workers to undercut domestic wages.

Support for higher public spending has risen since George Osborne's cuts programme began. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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