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How Blackpool became a “dumping ground” for the socially excluded

Beyond the fun of Blackpool Tower and Pleasure Beach is one of England's most deprived communities.

Photo: Felix Clay/Eyevine/Redux

By late autumn, only the shop signs along Blackpool’s tired seafront are defiantly cheerful, with their promises of “family amusements” and “happy dayz” of discount rock and cheap cabaret. Every year on 10 November, Blackpool’s nightly illuminations are switched off, marking the end of the holiday season, and around 2,500 people become unemployed overnight. Cheap air travel has been slowly killing the local tourism trade for decades but no one has come up with an alternative to halt the town’s decline. 

Two hundred metres inland from the promenade, pebble-dash terraces that were once guest houses and B&Bs have been converted into bedsits renting for around £65 a week and attracting a new kind of visitor. Blackpool has become a town where “you can turn up with a bin bag and £150, and you can get a flat,” says Simon Blackburn, leader of Blackpool Council. 

We meet in his office in Bay House, a shelter for homeless young people at the end of a street full of run-down bedsits. Here in South Shore, a two-bedroom house is currently on sale for £40,000. Low property prices and fond memories of childhood holidays do attract newcomers, but, says Blackburn, “one of the main reasons someone comes here is because something’s gone wrong in their life”. He describes how he himself turned up in Blackpool well over a decade ago with just a sports bag and £170. 

He was lucky. He first found a job working on Blackpool Pleasure Beach and a year later enrolled at the University of Central Lancashire, before eventually training as a social worker. As well as heading up Blackpool Council, he manages the Bay House shelter. “I earn 50k and that makes me a Blackpool millionaire,” he says, as Bentley, his eightweek-old puppy, attacks my shoelaces. 

In a report released earlier this year, the Centre for Social Justice described British seaside towns such as Blackpool as “dumping grounds for people facing problems such as unemployment, social exclusion and substance abuse”. Few new arrivals can expect to find a job and the town’s cheap rental market makes it easy for residents to slip between the cracks of public health and child protection programmes. 

“When the social worker or school nurse comes, or the health visitor starts being persistent and begins wanting to see your child, you can move a few streets away, with another 150 quid and another bin bag, and get another flat, and then another. We end up chasing people,” Blackburn tells me. He says he wanted to meet at Bay House, rather than in the rather grand town hall, so that I can see at first hand the social problems this is creating. He leads me out of his office to meet some of the hostel’s residents.

“Everyone who comes here, all they see is the prom but as soon as you come one street in, you see this,” says Hayden gesturing vaguely at Bay House’s common room and the deserted street outside. Hayden, who is 18, moved into the shelter a year ago after his father tried to kill him. His parents had moved to Blackpool from Birmingham several years earlier to evade child protection officers who wanted to place him in care. 

Hayden’s fiancée, Clare, whom he met at Bay House, also arrived at the shelter after fleeing violence at home. Together, they are trying to rebuild their lives but it’s a permanent struggle. Clare’s benefits have been cut because of a bureaucratic slip-up at her local further education college; they are living off a joint budget of £58 a week while they grapple with the paperwork. Both are enrolled in education and hoping for work but if they accept a job at minimum wage, with limited hours – the best they can wish for – their housing benefit will be cut and they will have to leave Bay House. “You just want to curl up in a ball and cry, because you feel like you’re in a never-ending circle,” Clare says. 

Even harder than the daily grind of poverty is the everyday violence. “After 8pm, I don’t even dare walk to the end of the road,” Clare says. A few weeks ago she was held at knifepoint after men broke into her bedroom. On another occasion, a friend came into her room threatening to slit his girlfriend’s throat. “We thought he was just high and taking the mick, but we found out two weeks’ later that he actually did it.” One of the residents of Bay House was murdered at the end of the street last year and, five minutes’ walk away, Clare’s childhood friend Sasha Marsden was stabbed 58 times and set on fire in January 2013 by a local barman, David Minto. Minto had arranged a meeting with Sasha under the false pretence of offering her part-time work. In July he was sentenced to a minimum of 35 years in jail.

When I ask Hayden how often he’s felt that his life was at risk, he splutters at the stupidity of the question. “I honestly can’t answer that. You know if you’re someone who’s from a nice home and everything, and you are like, ‘Oh this happened once’ or ‘These two situations’? For me, every single day there’s the potential of me losing my life.”  

Rates of violent crime, sexual assault and domestic violence in Blackpool exceed national averages, in part because of the high rates of drug and alcohol abuse in the city: Blackpool has the highest number of alcohol-related deaths and the second highest incidence of opiate and crack cocaine use in Britain. Hayden and Clare’s parents were addicted to drugs, which Clare believes is a symptom of the lack of work or hope that affects Blackpool’s most deprived communities. She says her mother’s neighbours “are all involved in drink and drugs. Because they are on benefits and don’t have anything else to do all day.” 

Substance abuse and high rates of mental illness – Blackpool has the country’s highest male suicide rate – have in turn contributed to the worst levels of family breakdown in the country. One in 67 children in Blackpool is in care, the highest in England. 

Blackpool Council is trying to tackle these urgent welfare needs while also aggressively having to cut its budget. By the next election, its budget will be half what it was in 2009/10. “The one and only advantage of what the government is doing to us, which quite frankly is fucking us over, is that they are not being prescriptive,” Blackburn says. His council is taking advantage of this freedom with a bold change of tack. It is calculating that overhauling Blackpool’s housing stock will have a knock-on effect on individual wellbeing, public health, unemployment and anti-social behaviour – in Blackburn’s words, “You have to drain the swamp within which the problem exists” – and so the council is focusing its limited resources on property.

The five council-run tower blocks in the deprived Queen’s Park estate are being pulled down – two have been demolished this year – and will be replaced by 198 family homes and apartments in low-rise buildings. Across Blackpool, council housing is being repurposed so that one-bed flats are converted to family properties. And, in March 2012, a selective licensing scheme came into effect in the South Shore area. Under the scheme, all landlords in the area have to apply for a licence, which costs £670 per house, flat or bedsit, with additional fees applied to houses in multiple occupation (HMOs) – usually ex-guest houses converted into five or more bedsits. Licensed landlords all have to agree to certain standards on property management. The scheme is self-financing. Proceeds from licences are used to fund a housing enforcement team and a transience team, who can refer tenants on to social services and public health providers.

Councillor Gillian Campbell is responsible for the selective licensing scheme and often accompanies housing enforcement officers on their visits. “Some of the places we’ve come across have been absolutely awful. You wouldn’t let a rat live in them. It’s been disgusting and quite heartbreaking as well, because some people are used to it, they don’t think they deserve better,” she tells me. Some of the houses she’s visited have had no heating or warm water, or indeed no plumbing or water at all. The team has seen collapsed ceilings, dangerous damp, exposed wiring and people living with dead and decomposing animals. 

At one point, after carefully checking whether I’ve eaten, Campbell whips out a photo of a corner bath filled to the rim with urine, faeces and loo roll. She tells me that a week ago she visited a flat where an elderly man had for years been using a cupboard in the hall as a toilet. Although the council is paying for a carer, no carer has been visiting him. However, the landlady does come each week to collect the rent, despite a smell so strong “it hurts your eyes”. Campbell says that when she confronted her, the landlady argued that “it’s up to him how he chooses to live”. 

Some landlords are “making their money off human suffering and misery, and we won’t tolerate that any longer”, says Campbell, who at points in our conversation appears close to tears. Having herself struggled with mental health problems as a single mother living in a noisy, dangerous Edinburgh tower block, she says she’s painfully aware of how bad housing can affect people. She’s optimistic, however, that the scheme, which now covers 1,800 properties, is making a difference: “The residents are happy, the businesses are happy, the place feels almost cleaner and a bit brighter.” 

But not everyone is convinced by the benefits of selective licensing, not least private landlords. Paul Bander is a board member of the Fylde Coast Landlords Forum, and owns a dozen properties in Blackpool. He says that forcing landlords to pay for licences is “heavy handed” and a “fee-grabbing exercise” for the council (the council insists that all of the money raised is recycled back into the scheme). “The vast majority of landlords are nice, law-abiding citizens; we pay our taxes and we provide a very useful social need because the public sector doesn’t provide enough housing,” he adds. He argues it’s not landlords’ fault when their tenants trash their properties. “The council loves blaming landlords, when the reality is they haven’t invested in Blackpool for the past 10-15 years,” he says. Both parties would agree that the relationship between landlords and the council is strained at best. 

At Streetlife, a homeless shelter providing emergency short-term accommodation to young people, its chief executive Jane Hugo also voices concerns about the council. By demolishing one-bedroom flats in high-rises and clamping down on dishevelled bedsits, the council is reducing the amount of housing available to young people. Under-35s receive a lower level of housing benefit, and are more likely to be living on their own, so they cannot afford higher-quality properties. She believes that cracking down on sub-standard rental properties is a good thing, but alternative accommodation for young people forced to rent at the bottom of the market isn’t being found fast enough.

At the same time, an amendment to council rules is creating extra pressures for young people in desperate need of accommodation. Since September, those seeking to access housing services have to prove that they have lived in the city for at least three years. For young people who have spent time sleeping on friends’ sofas, or moving from flat to flat and working cash in hand, providing the necessary evidence can be difficult. And while young people are trying to gather the paperwork they need, Streetlife is not allowed to house them. Unless the council changes its rules, Streetlife will no longer be financially viable: Hugo says her charity needs 75 per cent occupancy to survive but since September they have struggled to fill half the beds each night. 

At Streetlife I meet Connor, a 24-year-old who had dropped in to the centre for some subsidised egg on toast. He had been sleeping on a friend’s sofa for the past few nights but a week earlier he’d slept on the pavement just outside the homeless shelter, knowing there were empty beds inside. “I curled up in a ball under a blanket. I even put my head underneath, just to stay warm,” he says. 

Connor was placed in care in Blackpool when he was 12, and stayed there until he was 18. Six years ago, he moved in with his girlfriend in Thornton, a few miles from Blackpool. In the past four months, his mother died, his girlfriend suffered a miscarriage and then they split up. He is heartbroken – “She was my soulmate,” he says – but his more immediate concern is whether he’ll have to sleep rough again tonight. When I leave him he’s preparing to call up the council to see if they’ve come to any decision about his case or if he’ll sleep out in the cold. “We support the idea of a local connection, we can’t help everybody, but we would prefer it if people are treated with a little bit more dignity and compassion,” says Hugo, who is now lobbying for the council to change its laws. “The doors are being slammed everywhere young people turn.” 

Even if Blackpool is able to regenerate its housing stock and if this leads to improvements in the city’s poor health and high levels of social breakdown, this will take years to make a difference. For young people, hardest hit by Blackpool’s social and economic decline, this is little consolation. 

“A lot of this is about hope . . . Kids in here [Bay House], how do you tell them not to smoke, or to get up and go to college?” says Simon Blackburn at one point during our conversation. He says it’s difficult to keep them optimistic about the future when the best they can hope for is “a seasonal job in McDonald’s or on the Pleasure Beach”. It’s also about young people’s horizons; and their sense of belonging to their town when they are socially and economically excluded. Blackburn tells the story of how this summer, some of the women at Bay House had laid out towels in the grit and the oil outside the neighbouring garage to sunbathe. He had to persuade them to walk the few hundred metres to sunbathe on the beach – the possibility hadn’t occurred to them. 

Hayden and Clare are teenagers yet they sound resigned to being part of a lost generation; their ambitions are centred on bringing up children with better life chances than they ever had. Once they have completed their movingly modest “five-step plan”, which culminates in buying a flat, Clare wants to become a mother and foster parent, to help children like themselves who “never got any love or attention”. 

“I want to give them a good life, where they have clothes and don’t have to worry about when they will be fed, and I want to help them with their homework or if they want to go to university,” she says. And for her, that means one thing. “I want out of Blackpool.”

Sophie McBain is a New Statesman staff writer. Some names have been changed to protect identities.

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

***

The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

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In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt