Government plans aren't nearly enough to keep pace with rising flood risk. Photo: Getty
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The Treasury's flood defence plan leaves Britain dangerously exposed to climate change

New government plans for funding flood defences won't protect us.

So, almost a year on from Britain's wettest winter ever, whatever happened to David Cameron's pledge that "money is no object" in protecting people from flooding?

The government has been spinning furiously ahead of the Autumn Statement, desperate to get some good news coverage by announcing a set of shiny new infrastructure projects. This morning it was the turn of flood defences: £2.3bn of public investment over the next 6 years, "more than ever before".

The trouble is, "more than ever before" isn't nearly enough to keep pace with rising flood risk brought about by climate change. It's all very well to play political games by claiming that you're spending more than the last lot, but that's no comfort at all to the hundreds of thousands more homes that will be put at serious flood risk over the coming decade.

Let's crunch the numbers. The government says it will invest £2.3bn between 2015 and 2021 – with annual investment rising slowly to keep pace with inflation. Trouble is, climate change is kicking in much faster than inflation. Defra's own figures state clearly that over half a million more households could be put at significant flood risk by the 2020s – or to put it another way, by the end of the next parliament. So just to tread water in the face of rising seas and worsening downpours, investment needs to ramp up hugely.

Time and time again, experts have lined up to warn politicians that we need to increase flood defence investment by some £20m each year, on top of inflation  from the Foresight Review in 2004, to the Pitt Review in 2008, to the Environment Agency themselves in 2009. The government has ignored all of them, with the Chancellor slashing the floods budget by £100m shortly after taking office. As a result, a huge, half-billion-pound hole has opened up in our flood defences. The Committee on Climate Change have shown how steeply investment needs to rise if we're not to let hundreds of thousands more households slip into danger  and today's announcements come nowhere close.

The small print, too, reveals a strategy that's as leaky as a sieve. Friends of the Earth were passed the detailed, unpublished spending plans for flood defences last week, and we've gone through them with a fine-toothed comb. Repeatedly, councils and the Environment Agency have begged the government to release more money for vital schemes. "The need for funding for flood risk management has never been greater", warns one document; yet "a significant part of the capital programme bid [for defences] will remain unfunded."

Our analysis of the figures shows the government is putting a huge number of viable flood defence schemes on the backburner - at least 1.6billion pounds' worth that won't get funded over the next parliament. So when you see a frontbench politician unveiling a shiny new scheme, spare a thought for the thousands of households who aren't getting protected. Examples of unfunded schemes include refurbishments to sea walls at Newton Abbott in Devon (near to the Dawlish Warren rail link that collapsed following last winter's storms), tidal defences on the Isle of Wight that would safeguard 359 homes, and sea defences in Formby, Merseyside, that would have protected 297 households.

Worse, the Treasury is being so miserly that it's forcing councils and local businesses to cough up at least half a billion pounds towards schemes themselves. If they can't come up with the cash and close that black hole, many of the projects the government is so proudly announcing today will struggle to get built. It's a divisive approach that has great potential to increase inequality  rich parts of the country will get their defences built, whilst poorer, vulnerable areas could suffer.

Failing to tackle climate change comes with a heavy cost, and it's not right that the government makes flood-risk households pay the price for its failure to do so. A Chancellor truly committed to the welfare and security of British households would have found the money to protect us from the threat of rising seas and worsening floods.

All parties must, as a matter of national urgency, rethink how we protect the country from climate change  and do far more to tackle the pollution that's making it worse.​

Guy Shrubsole is energy campaigner at Friends of the Earth.

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The Autumn Statement proved it – we need a real alternative to austerity, now

Theresa May’s Tories have missed their chance to rescue the British economy.

After six wasted years of failed Conservative austerity measures, Philip Hammond had the opportunity last month in the Autumn Statement to change course and put in place the economic policies that would deliver greater prosperity, and make sure it was fairly shared.

Instead, he chose to continue with cuts to public services and in-work benefits while failing to deliver the scale of investment needed to secure future prosperity. The sense of betrayal is palpable.

The headline figures are grim. An analysis by the Institute for Fiscal Studies shows that real wages will not recover their 2008 levels even after 2020. The Tories are overseeing a lost decade in earnings that is, in the words Paul Johnson, the director of the IFS, “dreadful” and unprecedented in modern British history.

Meanwhile, the Treasury’s own analysis shows the cuts falling hardest on the poorest 30 per cent of the population. The Office for Budget Responsibility has reported that it expects a £122bn worsening in the public finances over the next five years. Of this, less than half – £59bn – is due to the Tories’ shambolic handling of Brexit. Most of the rest is thanks to their mishandling of the domestic economy.

 

Time to invest

The Tories may think that those people who are “just about managing” are an electoral demographic, but for Labour they are our friends, neighbours and the people we represent. People in all walks of life needed something better from this government, but the Autumn Statement was a betrayal of the hopes that they tried to raise beforehand.

Because the Tories cut when they should have invested, we now have a fundamentally weak economy that is unprepared for the challenges of Brexit. Low investment has meant that instead of installing new machinery, or building the new infrastructure that would support productive high-wage jobs, we have an economy that is more and more dependent on low-productivity, low-paid work. Every hour worked in the US, Germany or France produces on average a third more than an hour of work here.

Labour has different priorities. We will deliver the necessary investment in infrastructure and research funding, and back it up with an industrial strategy that can sustain well-paid, secure jobs in the industries of the future such as renewables. We will fight for Britain’s continued tariff-free access to the single market. We will reverse the tax giveaways to the mega-rich and the giant companies, instead using the money to make sure the NHS and our education system are properly funded. In 2020 we will introduce a real living wage, expected to be £10 an hour, to make sure every job pays a wage you can actually live on. And we will rebuild and transform our economy so no one and no community is left behind.

 

May’s missing alternative

This week, the Bank of England governor, Mark Carney, gave an important speech in which he hit the proverbial nail on the head. He was completely right to point out that societies need to redistribute the gains from trade and technology, and to educate and empower their citizens. We are going through a lost decade of earnings growth, as Carney highlights, and the crisis of productivity will not be solved without major government investment, backed up by an industrial strategy that can deliver growth.

Labour in government is committed to tackling the challenges of rising inequality, low wage growth, and driving up Britain’s productivity growth. But it is becoming clearer each day since Theresa May became Prime Minister that she, like her predecessor, has no credible solutions to the challenges our economy faces.

 

Crisis in Italy

The Italian people have decisively rejected the changes to their constitution proposed by Prime Minister Matteo Renzi, with nearly 60 per cent voting No. The Italian economy has not grown for close to two decades. A succession of governments has attempted to introduce free-market policies, including slashing pensions and undermining rights at work, but these have had little impact.

Renzi wanted extra powers to push through more free-market reforms, but he has now resigned after encountering opposition from across the Italian political spectrum. The absence of growth has left Italian banks with €360bn of loans that are not being repaid. Usually, these debts would be written off, but Italian banks lack the reserves to be able to absorb the losses. They need outside assistance to survive.

 

Bail in or bail out

The oldest bank in the world, Monte dei Paschi di Siena, needs €5bn before the end of the year if it is to avoid collapse. Renzi had arranged a financing deal but this is now under threat. Under new EU rules, governments are not allowed to bail out banks, like in the 2008 crisis. This is intended to protect taxpayers. Instead, bank investors are supposed to take a loss through a “bail-in”.

Unusually, however, Italian bank investors are not only big financial institutions such as insurance companies, but ordinary households. One-third of all Italian bank bonds are held by households, so a bail-in would hit them hard. And should Italy’s banks fail, the danger is that investors will pull money out of banks across Europe, causing further failures. British banks have been reducing their investments in Italy, but concerned UK regulators have asked recently for details of their exposure.

John McDonnell is the shadow chancellor


John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015. 

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump