Nick Clegg on the Lib Dem role in the Spending Review

Emphasises role of Lib Dem ministers in Spending Review, but denies that cuts aim to create a smalle

Nick Clegg has just sent out an email to Lib Dem members giving some of the rationale behind the Spending Review. It's very light on detail, but does provide a couple of interesting insights into how the Deputy Prime Minister is seeking to position his party politically going into this afternoon's announcement.

The core argument is, naturally, the same as the one offered by Cameron and Osborne – the outcome of the review is about fairness and, above all, cutting "Labour's deficit". But there are also certain phrases that demonstrate once again how tightly Clegg's fortunes are now tied to those of the coalition's leading Tory figures. The following paragraph is particularly interesting:

The spending review is a thoroughly Coalition product. Liberal Democrat ministers have been involved every step of the way. Our values and priorities are written through the review, like the message in a stick of rock.

As my colleagues Mehdi Hasan and James Macintyre pointed out in the run-up to the Lib Dem conference, the spending review is just the first in a series of tests for the Lib Dems as a party of government, perhaps the most significant being the local elections to come next May. But with the polling numbers long suggesting we can expect a big swell of unpopularity for this afternoon's announcement, the Spending Review isn't without its challenges for the Lib Dems. Members, and a fair number of Lib Dem MPs, will be feeling very uncomfortable this afternoon.

However, the key paragraph of the letter comes at the end, where Clegg lays out his version of the motivation behind the cuts:

We are not taking the decisions today because they are easy or because we want to see a smaller state, we are taking them because they are right.

He said something similar in his conference speech – it's clearly a line designed for the membership, many of whom will be feeling uneasy about the Tories' mantra of "smaller state, bigger society". Now that Clegg has positioned his party and his ministers so centrally to the Spending Review, it will be fascinating to see how his backbenchers choose to respond, come the inevitable fallout.

Caroline Crampton is assistant editor of the New Statesman. She writes a weekly podcast column.

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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 Battersea power station in 2012. Initially, it promised to build 636 affordable units. This was pretty meagre, but with four developers already having failed to develop the site, it was still enough for Wandsworth council to give planning consent. By the time I wrote Up In Smoke, this had been reduced 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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