Cameron's plan to "roll back" green charges could mean higher taxes, says Clegg

The Deputy PM suggests that the cost of green policies could be transferred from consumer bills to general taxation.

After David Cameron's surprise pledge at PMQs to "roll back" the "green regulations and charges that are putting up bills", Nick Clegg made little attempt to hide the extent of his disagreement with the Prime Minister this morning. He told the Today programme that he wasn't "fully expecting" Cameron's intervention (his office was given 30-minutes' notice) and that he didn't agree with the Tories that higher bills were "all the fault of us caring about the environment". He rightly pointed out that the majority of the green charges attacked by Cameron are actually energy efficiency measures designed to aid fuel-poor households, including the Energy Company Obligation (£50), the Warm Home Discount for pensioners (£11) and smart meters and better billing (£3). 

But sounding a more conciliatory note, he promised that he and Cameron would "come up, as we always do in coalition, with a solution in the national interest and resolve our differences". What could that solution be? As I noted yesterday, one option would be to transfer the cost of some of these green measures from consumer bills to general taxation, as the SNP pledged to do last week. In his Today interview, Clegg suggested just this, stating that policies such as the Warm Home Discount could be paid for out of "government expenditure". If there is to be a coalition compromise, expect it to look something like this. 

Whether this move would resolve Cameron's political troubles is doubtful; Labour would simply reply that the government is giving with one hand and taking with another. Owing to higher wholesale prices and profiteering by the big six, bills will continue to rise remorselessly. The public, 75% of whom don't believe that green taxes are to blame for steeper prices, will see no evidence that the government is prepared to side with them against the energy companies. Until that changes, Miliband's big freeze will continue to give him the edge. 

Nick Clegg speaks at the Liberal Democrat conference in Brighton last month. Photograph: Getty Images.

George Eaton is 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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