The Tories' EU games are undermining their "grown-up" economic message

The threat by Nissan to withdraw from Britain if the UK leaves the EU shows how the Tories' euroscepticism pulls against their emphasis on stability.

As Labour gains ground with its cost-of-living offensive, the Tories have sought to present themselves as the "grown-up" party that can be trusted to maintain economic stability and avoid short-term "gimmicks" that threaten this aim. But this strategy risks being undermined by their decision to raise the spectre of EU withdrawal. On the day that MPs debate Conservative MP James Wharton's bill guaranteeing a referendum in 2017 (and Adam Afriyie's amendment for a vote in October), the head of Nissan has warned that his company could withdraw from Britain if the UK leaves the EU. Carlos Ghosn said: "If anything has to change we [would] need to reconsider our strategy and our investments for the future." Were Nissan to leave, 6,500 jobs at the company's Sunderland site would be lost.

For the Tories, who have made much of the renaissance of car manufacturing in Britain (with output forecast to reach a record high by 2015), it's an awkward message. Of the 30 brands manufacturing 70 models in the UK, Nissan is the largest and recently announced that its Sunderland plant would move to 24-hour production in 2014 to meet demand. With the uncertainty now set to endure until at least 2015, Ghosn's warning is likely to be the first of many that tarnish the Tories' economic brand.

And for what gain? Those who confidently predicted back in January that Cameron's EU referendum pledge would shoot Farage's fox, or even set the Conservatives on the road to victory, have been proved entirely wrong. The motivations of those who support UKIP are too complex and long-term for them to be bought off by the promise of a vote in 2017.

While the public share the Tories' euroscepticism, they do not share their obsession with the subject. As polling by Ipsos MORI has consistently shown, voters do not regard it as one of the ten most important issues. It's true that they overwhelmingly support an EU referendum but as pollsters regularly attest, this merely reflects their general predilection for such votes.

Cameron knows and understands all of the above. One of the principal aims of his speech was to settle the debate, calm his restive backbenchers and move on. But with the focus now likely to shift to exactly which powers he will seek to repatriate, there is little prospect of any relief.

David Cameron gestures during a press conference at the end of the second and last day of an European Union (EU) Council meeting on October 25, 2013 at the EU Headquarters in Brussels. 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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