The Battle of Beecroft ... to be continued?

Tories suspect consultation is a Lib Dem ploy to shelve plans to scrap some employment protection.

Is the government going to press ahead with plans to allow small businesses to "fire at will" or not? It was the most controversial recommendation in the Beecroft review - a Tory-commissioned report into reforms to employment law - and one that was fiercely resisted by the Liberal Democrats. They argued that a measure likely to make people feel insecure in their jobs would dampen confidence and discourage spending, slowing the economy down further. (They also recognised that it might just make the government look mean.) The Tories are generally persuaded that firms are reluctant to hire if they can't then easily sack under-performing staff. Earlier this week Business Secretary Vince Cable announced that a number of measures to loosen employment protection might indeed be implemented.

This has been reported as a humiliating defeat for the Lib Dems.

In fact the story is more complicated. Cable and Ed Davey, his fellow Lib Dem minister in the Business department, have always been quite sympathetic to the "supply side" case for labour market liberalisation. But the Lib Dem leadership thought "no fault dismissal" was going too far. There has been some pretty ferocious briefing against Beecroft's plan, which aides to Nick Clegg have been quietly denouncing as a shoddy piece of work, commissioned as a favour to a Tory donor (venture capitalist Adrian Beecroft) and, politically speaking, a bit nuts. Have they lost this argument in the "quad" - the foursome of top ministers that runs the coalition? On closer inspection, the Beecroft proposals are mostly being put out for wider consultation. Cable has agreed to "look at the evidence". Some Tories are suspicious that this is a Lib Dem ruse to kick Beecroft into the long grass. David Cameron is known to have a short attention span and the suspicion is that, once the Autumn Statement on the economy is out of the way and some other big events have come along to distract the prime minister - as is inevitable - the fire-at-will idea can be quietly shelved. This, some Tories mutter, is a classic Lib Dem tactic in the coalition. They cite as evidence the way Cameron's tough rhetoric after the summer riots was talked down by Lib Dems and eventually came to nothing. Rightwing Tories accuse the Lib Dems of using the endless demands on the PM's time and his tendency not to concentrate on one thing for long to filibuster ideas off Downing Street's agenda. So the Battle of Beecroft goes on.

Rafael Behr is political columnist at the Guardian and former 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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