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Reflections on social Europe

In the midst of serious recession "now is the time to reaffirm the EU’s core principles of openness,

There has never been a better time to reflect on Europe’s social dimension. Twenty years after the European Social Charter was first conceived, and following a period of sustained growth, we now face the most serious economic recession for 60 years.

The EU faces a huge challenge: how to respond to the economic crisis in a way that directly benefits all of Europe’s citizens. It’s not just about providing well targeted help to get families and sound businesses through the recession. We should also be working now to prepare Europe’s citizens to compete in the low carbon economy of the future. Above all, we need to ensure that no-one gets left behind. The answer is certainly not to tear up the EU’s rule-book and start again. Now is the time to reaffirm the EU’s core principles of openness, opportunity and solidarity.

With people losing their jobs, watching their savings shrink and struggling to keep up with their mortgage payments, the EU needs to prove that it can make a difference to the quality of their lives. That’s why the EU had to deliver a swift, decisive response when it became obvious that the financial crisis of last summer was going to affect each and every one of us.

What we saw from European leaders last autumn was an unprecedented level of coordination to stimulate our economies and to help reduce the severity and length of the global recession. The 200 billion euro recovery package agreed in December has done far more to increase business and consumer confidence than we could have achieved by acting alone. This is a good example of where the EU can add real value. In fact, if the EU hadn’t existed before the recession, we would have had to invent it.

We’ve also seen a renewed commitment in recent weeks to keeping markets open and resisting misguided calls for protectionism. Reigniting global trade and investment will be crucial to a swift recovery and the EU needs to ensure that the rules of the single market are upheld.

But open markets will not be enough. Strong societies depend on more than economic growth and to create a fair and sustainable future for all, we need to keep sight of Europe’s social dimension. There is no reason why the two should be contradictory.

The Labour government recognises the value of a strong EU social dimension and that is why we signed up to the Social Chapter in 1997. There is much we can be proud of. Through legislation and joined-up action by national governments, we have helped to take down the barriers to labour market mobility, enabling people and companies to work and travel freely through the EU. We have put in place minimum workplace standards to ensure decent working conditions and to outlaw workplace discrimination across the EU.

The Lisbon Strategy for Jobs and Growth has helped to boost employment, particularly among women and older workers. And work is progressing on the package of social measures proposed by the Commission last summer, which are built around the themes of opportunity and solidarity and are designed to help ensure that as Europe moves forward, no one is left behind.

We now need to increase the pace of reform in Europe: offering people support in difficult times, but matched with the expectation that they should not fall out of touch with the world of work. Rather than a system built on outdated notions about insulating workers and companies from competition, we need a modern, effective social dimension, which combines fairness with flexibility, and equips people to access the skills and opportunities that they need to compete in the new low carbon global economy.

We must also be clear about where action at the EU level on social initiatives can add value. Pockets of unemployment and deprivation are often most effectively identified and targeted at the local level. To tackle these problems, Europe needs modern and strategic forms of social partnership which include working with local authorities, the private sector and the third sector.

Too often this debate has been framed as an “either/or” question. But it’s clear to me that there doesn’t have to be a choice between the single market and social Europe – we don’t need to decide between putting people, or the economy, first. By focusing on people, we can help give Europe the skills it needs to prosper. By focusing on jobs and growth, we can help give people the opportunities they need to come out of poverty.

Strong societies are important for addressing all the challenges we face today, and Europe must not lose sight of this.

Caroline Flint MP is Minister for Europe in the Foreign and Commonwealth Office

Photo: Getty Images
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The Conservatives have failed on home ownership. Here's how Labour can do better

Far from helping first-time buyers, the government is robbing Peter to pay Paul

Making it easier for people to own their own first home is something to be celebrated. Most families would love to have the financial stability and permanency of home ownership. But the plans announced today to build 200,000 ‘starter homes’ are too little, too late.

The dire housing situation of our Greater London constituency of Mitcham & Morden is an indicator of the crisis across the country. In our area, house prices have increased by a staggering 42 per cent over the last three years alone, while the cost of private rent has increased by 22 per cent. Meanwhile, over 8200 residents are on the housing register, families on low incomes bidding for the small number of affordable housing in the area. In sum, these issues are making our area increasingly unaffordable for buyers, private renters and those in need of social and council housing.

But under these new plans, which sweep away planning rules that require property developers to build affordable homes for rent in order to increase the building homes for first-time buyers, a game of political smoke and mirrors is being conducted. Both renters and first-time buyers are desperately in need of government help, and a policy that pits the two against one another is robbing Peter to pay Paul. We need homes both to rent and to buy.

The fact is, removing the compulsion to provide properties for affordable rent will be disastrous for the many who cannot afford to buy. Presently, over half of the UK’s affordable homes are now built as part of private sector housing developments. Now this is going to be rolled back, and local government funds are increasingly being cut while housing associations are losing incentives to build, we have to ask ourselves, who will build the affordable properties we need to rent?

On top of this, these new houses are anything but ‘affordable’. The starter homes would be sold at a discount of 20 per cent, which is not insignificant. However, the policy is a non-starter for families on typical wages across most of the country, not just in London where the situation is even worse. Analysis by Shelter has demonstrated that families working for average local earnings will be priced out of these ‘affordable’ properties in 58 per cent of local authorities by 2020. On top of this, families earning George Osborne’s new ‘National Living Wage’ will still be priced out of 98 per cent of the country.

So who is this scheme for? Clearly not typical earners. A couple in London will need to earn £76,957 in London and £50,266 in the rest of the country to benefit from this new policy, indicating that ‘starter homes’ are for the benefit of wealthy, young professionals only.

Meanwhile, the home-owning prospects of working families on middle and low incomes will be squeezed further as the ‘Starter Homes’ discounts are funded by eliminating the affordable housing obligations of private property developers, who are presently generating homes for social housing tenants and shared ownership. These more affordable rental properties will now be replaced in essence with properties that most people will never be able to afford. It is great to help high earners own their own first homes, but it is not acceptable to do so at the expense of the prospects of middle and low earners.

We desperately want to see more first-time home owners, so that working people can work towards something solid and as financially stable as possible, rather than being at the mercy of private landlords.

But this policy should be a welcome addition to the existing range of affordable housing, rather than seeking to replace them.

As the New Statesman has already noted, the announcement is bad policy, but great politics for the Conservatives. Cameron sounds as if he is radically redressing housing crisis, while actually only really making the crisis better for high earners and large property developers who will ultimately be making a larger profit.

The Conservatives are also redefining what the priorities of “affordable housing” are, for obviously political reasons, as they are convinced that homeowners are more likely to vote for them - and that renters are not. In total, we believe this is indicative of crude political manoeuvring, meaning ordinary, working people lose out, again and again.

Labour needs to be careful in its criticism of the plans. We must absolutely fight the flawed logic of a policy that strengthens the situation of those lucky enough to already have the upper hand, at the literal expense of everyone else. But we need to do so while demonstrating that we understand and intrinsically share the universal aspiration of home security and permanency.

We need to fight for our own alternative that will broaden housing aspirations, rather than limit them, and demonstrate in Labour councils nationwide how we will fight for them. We can do this by fighting for shared ownership, ‘flexi-rent’ products, and rent-to-buy models that will make home ownership a reality for people on average incomes, alongside those earning most.

For instance, Merton council have worked in partnership with the Y:Cube development, which has just completed thirty-six factory-built, pre-fabricated, affordable apartments. The development was relatively low cost, constructed off-site, and the apartments are rented out at 65 per cent of the area’s market rent, while also being compact and energy efficient, with low maintenance costs for the tenant. Excellent developments like this also offer a real social investment for investors, while providing a solid return too: in short, profitability with a strong social conscience, fulfilling the housing needs of young renters.

First-time ownership is rapidly becoming a luxury that fewer and fewer of us will ever afford. But all hard-working people deserve a shot at it, something that the new Conservative government struggle to understand.