Why Labour's position on welfare needs urgent reform

A poll shows Labour's tougher stance on cuts has not increased support. What about standing up for t

The papers this morning are dominated by one story: the Lords defeat of the government's proposed welfare cap.

An alliance of bishops, Liberal Democrat rebels, and crossbench and Labour peers voted in favour of an amendment to Iain Duncan Smith's flagship benefits cap. The Lords voted 252-237 to exclude child benefit from the £26,000 per year cap on household benefits. This marks the welfare reform bill's fifth defeat in the upper house.

In the end, the amendment was backed by Labour -- although, as my colleague George Eaton explained yesterday, this was by no means a simple position:

Somewhat confusingly, Labour doesn't actually want child benefit exempted from the cap (which it supports in principle). Rather, it is supporting the amendment as a means of getting the welfare bill back to the Commons, where a new vote can be held on its homelessness amendment.

Why the labyrinthine stance on this? Well, some of this morning's headlines might hold a clue. ""Insult to every working family," screams the Daily Mail's front page, railing against the bishops who led the revolt. The Sun also rounds on the bishops for "meddling" in politics.

The fact is, as I blogged yesterday, an overwhelming majority of the public are in favour of a cap on benefits -- support stands at 76 per cent of the public at large and 69 per cent of Labour supporters. This puts Labour in a tricky spot: as a party, it should stand up for the most vulnerable, yet it does not want to fly in the face of public opinion, hence the slightly baffling line that they support the cap "in principle, but not in practice".

This attempt to have their cake and eat it -- supporting the benefit cap (and cuts more widely) while also not supporting it -- is not having the desired effect, if this morning's polls are to be believed. A Guardian/ICM poll gives the Conservatives a five point lead over Labour (at 40 and 35, respectively) -- their highest standing since before the general election. This would place the Tories on the verge of an outright majority at a general election. It is worth noting that this substantial lead may be an outlier: both YouGov and Populus today give Labour a one point lead.

Debate over Labour's new, harder stance on the cuts has dominated the last week or so, and the ICM poll contains some interesting results on this. Asked how the tougher position affected likelihood to support Labour, 72 per cent said it made no difference one way or another. Just 10 per cent said it would make them more likely to vote Labour, while 13 per cent said it made them less likely to vote for the party. This gives the shift a net rating of minus three points.

Labour top command will doubtless say that the party's economic shift has simply not yet had time to get through to voters. Yet, as Mary Riddell argues persuasively in the Telegraph today, the problem may be more deep-seated than that:

Though pathetically slight, the curbs unveiled by Vince Cable prove that, on executive pay, the Labour leader has the Tories on the run. But Mr Miliband's failure to be equally clear about the needs, the responsibilities and the rights of those at the bottom of society has made him the victim of his own fairness campaign. The "squeezed middle", as he is learning, can and will exert a cobra grip on those further down the social heap.

...

Welfare, not wealth, may prove the defining issue of Mr Miliband's leadership. In the coming weeks, he must prove that he can wrong-foot Mr Cameron on the poor as well as on the rich. Labour, of all parties, must stand up unequivocally for those in greatest need. "Leave it to the bishops" is not an election-winning slogan.

Labour needs to start reframing the debate and conveying to the public why the cap is unfair (and looking at ways of ending benefit dependence while mitigating the negative impacts), not simply trying to benefit from public support for a policy the party is clearly uncomfortable with.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for 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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