Balls's job guarantee is a left-wing idea wrapped in right-wing rhetoric

Labour's 'tough' message risks encouraging the belief that benefit claimants seek to avoid work.

Shadow chancellor Ed Balls announced plans today for a compulsory jobs guarantee for the long-term unemployed to be funded by reducing tax relief on pension contributions for those earning over £150,000.

Balls details the policy in an article written for PoliticsHome. In the piece he blasts the coalition for labelling "people who want to work" as 'scroungers'; he describes their rhetoric as "divisive, nasty and misleading". But the subtext of much of his own article is also that benefit claimants are a drain on public money, and that their claims are often fraudulent, as shown by the headings of his "three tests" for welfare reform: firstly, "it must pay more to be in work than live on benefits", secondly "we must get tough on the scourge of long-term unemployment by matching rights with responsibilities", and thirdly any welfare reform "must be fair to those who genuinely want to work." Does this language not sound familiar?

Between the headings, Balls makes the nuanced - though rather obvious - point that "the vast majority" of Job Seeker's Allowance claimants "desperately want to find a job". But elsewhere in the piece, the shadow chancellor says that Labour are proposing welfare reform on the grounds that "we won't get the costs of welfare down if adults who can work are languishing on the dole for year".

So is Labour's proposal doing the long-term workless a favour, or is it threatening them? And is Labour a group of reformers masquerading as moderates, or a populist centre party that wants to appear to sympathise with the poor? The policy would suggest the former, the rhetoric the latter.

The latest YouGov poll puts Labour on 43 per cent, compared to 32 per cent for the Conservatives. With the collapse in support for the Lib Dems from left-leaning voters and widespread public anger about cuts and inequality, Labour has the chance to present a real alternative to the coalition's austerity agenda. But in order to win votes it must be seen to be consistent and strong in its message, or it risks appearing ridiculous, as we saw when Ed Milliband refused to get off the fence on union walk-outs in 2011.

In order to harness dissatisfaction, Labour needs to walk the walk, but it also needs to talk the talk. Go on, say it Eds – 'I am left-wing'.

Shadow chancellor Ed Balls said that Labour would match "rights with responsibilities". Photograph: Getty Images.
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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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