Coalition Mid-Term review: David Cameron and Nick Clegg's foreword

"We will continue to put political partisanship to one side to govern in the long-term interests of the country."

Two and a half years ago, our parties came together in the national interest and formed a coalition at a time of real economic danger. The deficit was spiralling out of control, confidence was plummeting, and the world was looking to Britain with growing anxiety about our ability to service our debts.

This Government's most urgent job was to restore stability in our public finances and confidence in the British economy. In just two years we have cut the deficit by a quarter and have set out a credible path towards our goal to balance the current budget over the economic cycle.

Dealing with the deficit may have been our first task, but our most important task is to build a stronger, more balanced economy capable of delivering lasting growth and widely shared prosperity. In essence, this involves two things: growing the private sector, and reforming the public sector so that what the Government does - and the money it spends - boosts, rather than undermines, Britain's competitiveness.

Meeting this challenge is imperative if Britain isn't to fall behind in the global race, for while the Western economies have stalled in recent years, the emerging economies such as India, China, Indonesia, Malaysia, Brazil, Mexico and Turkey have been surging forward. In the coming years, some countries in the developed world will respond to this shift in economic power; but some will not. Those that do will prosper. Those that do not will decline. It is that simple.

That is why we have not baulked at the tough decisions needed to secure Britain's future. Whether it is reducing the deficit, rebalancing the economy, regulating the banks, tackling climate change, modernising our energy and transport infrastructure, putting our universities on a sustainable financial footing or dealing with the challenges of an ageing population and reforming public sector pensions, we have consistently chosen to do what is right over what is easy or popular; what is in our country's long- term interest over our parties' short-term interest.

Ultimately, however, Britain will only prosper in an increasingly competitive global economy if we can realise the full potential of each and every person in our country. That is why our plans for economic recovery are accompanied by a radical agenda of social renewal, to build not only a strong economy, but a fair society in which everyone, no matter what their background, can rise just as high as their aspirations and talents can take them.

Above all, that means having a welfare system that works and schools that teach our children properly. Since we came to office, more than 1 million jobs have been created in the private sector. We are fundamentally changing our welfare system to make work pay. And we have injected new ambition into our education system: making exams and testing more rigorous; backing teachers on discipline; allowing people who are passionate about education to open new schools in the state sector; and, crucially, supporting the poorest pupils through our Pupil Premium. 

We fully recognise that the changes needed to get Britain fit for the global race, combined with the strong economic headwinds we are still facing, have put many families' budgets under strain. That is why we are doing everything we can to help those who are working so hard to help themselves: moving rapidly towards a £10,000 personal income tax allowance, freezing council tax, helping with energy bills and cutting fuel duty.

So we are dealing with the deficit, rebuilding the economy, reforming welfare and education and supporting hard-working families through tough times. And on all of these key aims, our parties, after 32 months of coalition, remain steadfast and united. Of course there have been some issues on which we have not seen eye to eye, and no doubt there will be more. That is the nature of coalition. But on the things that matter most - the big structural reforms needed to secure our country's long-term future - our resolve and sense of shared purpose have, if anything, grown over time.

We came to office at a difficult time for our country. An economy still in shock. The Eurozone facing crisis. The inevitability that difficult cuts would have to be made. Worry, uncertainty and worse for many families and businesses. We have been determined to work in a way that keeps our country together through these times. That is why we have protected the NHS from spending cuts and protected schools, while other departments have faced significant spending reductions. That is why we have made sure that the richest have paid the most towards reducing the deficit. We have protected pensions, with the largest increase in the basic state pension. And we have kept our promises to the poorest in the world - meeting the pledges made about overseas aid. Today, at the half-way point in this Parliament, we are taking stock of the progress we have made in implementing the Coalition Agreement that we signed in May 2010. But we are also initiating a new set of reforms, building on those already under way, to secure our country's future and help people realise their ambitions.

We will support working families with their childcare costs. We will build more houses and make the dream of home ownership a reality for more people. We will set out plans for long-term investment in Britain's transport infrastructure. We will set out two big reforms to provide dignity in old age: an improved state pension that rewards saving, and more help with the costs of long-term care. And as we take these steps to reshape the British state for the 21st century, we will take further steps to limit its scope and extend our freedoms. We will be making announcements about each of these policy initiatives in due course. 

Our mission is clear: to get Britain living within its means and earning its way in the world once again. Our approach is consistent: to help hard-working families get by and get on, so that everyone can reach their full potential. And our resolve is unwavering: we will continue to put political partisanship to one side to govern in the long-term interests of the country.

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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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