George Osborne meets a couple at the Berkeley Homes Royal Arsenal Riverside development in Woolwich. Photograph: Getty Images.
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Osborne's housing plans are too little, too late

After four years of empty rhetoric, the best the Chancellor could do was to recycle an announcement from 2012 with a commitment to fewer homes.

Yesterday George Osborne announced the government’s intention to build a Garden City in Ebbsfleet and to extend the Help to Buy scheme until 2020. Had this been 2010, the Chancellor might have been able to expect some praise for his decision to announce the creation of the former. A rapid move would have been deserving of some recognition. Instead, in 2010, the first decision ministers took was to cut the budget for affordable homes by 60 per cent - a choice which effectively cut off at the knees affordable housebuilding.

A year on, and the then housing minister, Grant Shapps, wrote an article on the merits of the idea of Garden Cities. It’s an interesting piece but readers will have been entitled to ask "where’s the beef?" since there was no policy or action behind it, just talk. Six months later, we were treated to some more warm words on Garden Cities but this time in a speech by the Prime Minister who promised a "consultation" later that year.

Another six months later, and this time it was the turn of the Deputy Prime Minister to talk in glowing terms about the principles of Garden Cities - he went further promising a "prospectus". Then, for the whole of 2013, despite the number of homes built slipping to the lowest peacetime level since the 1920s, the government went quiet on Garden Cities.

Earlier this year, we learned that there was a secret plan to build Garden Cities in at least two locations which was being suppressed by David Cameron who was running scared of his own backbenchers despite a national housing crisis.

Back to the present day, and George Osborne has announced the government’s intention to build a Garden City of 15,000 homes in Ebbsfleet. An announcement which could hardly seem less impressive after nearly four years of empty rhetoric and suppressed reports until it became clear that the government had already announced a scheme at Ebbsfleet a year and a half ago to build 20,000 homes, 5,000 more than Osborne announced yesterday.

The Chancellor also had nothing to say about the principles on which Garden Cities are founded. They include strong vision and leadership, provision of mixed-tenure homes and housing types that are affordable for ordinary people which includes a strong element of social housing and a strong commitment to tackling climate change and access to green space for local communities. Compare these with the record of David Cameron who has shown no leadership whatsoever in tackling the housing crisis, who has all but abandoned social housing and appears intent on its destruction. And whose record on tackling climate change can be summed by his own statement to "get rid of all the green crap". One does not hold out much hope for the true principles of Garden Cities being implemented.

On the second part of the Chancellor’s announcement yesterday, the extension of Help to Buy, Labour has always been clear that we support help for first time-buyers. But soaring house prices and a shortage of homes mean the very first-time buyers the scheme should be helping are finding it ever harder to afford a home of their own. George Osborne has claimed that the scheme will build up to 120,000 homes, but the National Audit Office has said it cannot confirm the government’s assumptions of how many homes will be built because ministers have failed to robustly assess its impact.

As Ed Balls said on Saturday, we need a Help to Build policy to boost housing supply and tackle the cost-of-living crisis, alongside a reformed Help to Buy scheme. We want to see guarantees that help small and medium-sized builders to access finance – through the banks – to get them building. Failure to tackle this crisis will mean home ownership will remain out of reach of many low and middle-income earners, rents will continue to rise faster than wages and waiting lists will grow ever longer.

George Osborne’s announcement yesterday on Ebbsfleet will not be seen as a sign of success but one of failure. After four years of empty rhetoric, the best the Chancellor could do was to recycle an announcement from 2012 with a commitment to fewer homes. To tackle the housing shortage, so central to the cost-of-living crisis, we need a government that is prepared to take real action, not just talk. That’s why Labour has committed to getting 200,000 homes a year built by 2020, including by building a new generation of new towns and garden cities.

Ed Miliband has appointed Sir Michael Lyons to lead an independent housing commission with one aim: delivering a roadmap of how the next Labour government can begin addressing the housing shortage immediately on entering office. A One Nation Labour Government won’t wait four years - we’ll get started on day one and we’ll show the leadership and determination to tackle the housing shortage, address the cost-of-living crisis and meet the aspirations of people across our country.

Emma Reynolds is shadow housing minister and MP for Wolverhampton North East.

Emma Reynolds is MP for Wolverhampton North East and former shadow Europe minister.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.