Financial burden of riots will be crippling.

Recent widespread disturbances are placing a heavy financial burden on individuals, police and insur

As businesses in cities across the UK prepare for another night of chaos, figures are constantly under revision in an attempt to predict the cost of the riots.

On Tuesday, £100m was put forward as an estimate. That was before Manchester and Salford, amongst others, witnessed serious overnight disturbances. From looted shops and street fires to a massive increase in police numbers, the costs are escalating.

As it stands, legislation dictates that the police authorities must meet the costs of rioting under the Riots (Damages) Act 1886, which specifies that local police authorities must compensate victims where damage has been caused by people "riotously and tumultuously assembled".

Although some police authorities are insured against such events, whatever costs not covered must be met by police budgets. In light of the policing budget reduction as part of the public spending cuts, this signals serious concerns for the Met in particular. Reassurances are now being sought to ensure that front-line services including policing, fire and ambulance services will have everything they require to deal with ongoing disturbances.

As well as the immediate outcomes of the riots, longer-term impacts on services such as tourism should not be overlooked. Shadow business minister Chuka Umunna has said that the riots will have a seriously detrimental impact on Britain's economic recovery, particularly on small businesses, many of whom will be forced into bankruptcy. The service sector, which makes up around three-quarters of total UK GDP, grew by just 0.2 per cent over the last quarter. It has been "massively dented" by recent events, according to the Labour MP.

The Association of British Insurers (ABI) have made it clear that insurers are working as quickly as possible to deal with claims, despite limitations such as access to dangerous buildings and crime scenes. The organisation is urging people to contact their insurer immediately in order to check what they are covered for and arrange help. Nick Starling, Director of General Insurance and Health at the organisation, said: "We have every sympathy for residents and business owners who have suffered damage to their properties. This is a time of enormous stress for them".

Comments over what the social impacts of the riots have been prolific, many of them making links between the coalition's drastic austerity measures and the ongoing implications of these, particularly now in light of the past few days. Mary Riddell points out the deep social cost of high unemployment:

If there are no jobs for today's malcontents and no means to exploit their skills, then the UK is in graver trouble than it thinks. Mr Osborne may congratulate himself on his prudence, but retrenchment also bears a social cost. We are seeing just how steep that price may be.


Tess Riley is a freelance journalist and social justice campaigner. She also works, part time, for Streetbank, and can be found on Twitter at @tess_riley

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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.