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Jeremy Corbyn's maximum wage law is the populism that he promised all along

The Labour leader first declared his support for an earnings cap in 2015. Why wasn't it repeated?

Even before Jeremy Corbyn has delivered his Brexit speech, he's managed to backtrack on it. The early extracts revealed that he is "not wedded" to EU free movement as "a point of principle" - an unmistakable shift from his previous stance. But in an interview with Good Morning Britain, Corbyn clarified that this was "not a sea change at all" and that, unlike Theresa May, he would prioritise single market access over controlling immigration. The Labour leader's position remains that tougher labour market regulation "will" have a downward effect on numbers, not that there "should" be one.

But Corbyn's equivocations on immigration have been eclipsed by his support for a maximum wage. Asked on the Today programme whether he favoured a limit on salaries, Corbyn said: "I would like there to be some kind of high earnings cap, quite honestly." He added that he "can't put a figure on it" but emphasised: "I would like to see a maximum earnings limit, quite honestly, because I think that would be a fairer thing to do. Because we cannot set ourselves up as being a grossly unequal, bargain basement economy on the shores of Europe. We have to be something that is more egalitarian, gives real opportunities to everybody and properly funds our public services."

Though many thought otherwise, the policy is not a new one. The Labour leader first declared his support for a maximum wage during his 2015 leadership campaign. He told the Herald: "Why is it that bankers on massive salaries require bonuses to work while street-cleaners require threats to make them work? ... There ought to be a maximum wage. The levels of inequality in Britain are getting worse."

But that so many assumed the policy was new was revealing in itself. Despite his obvious commitment to it, Corbyn has said little about the measure since 2015. It was often only during his leadership campaigns that many of his pledges were repeatedly aired. When journalists are tired of hearing something, it is said, the public hear it for the first time. But too often, not even reporters have been aware of Corbyn's stances.

The extracts of his speech, for instance, included no reference to the maximum wage law. Yet it is precisely the kind of measure that Corbyn's "populist" relaunch should have at its heart. It is distinctive, easy to explain and true to the Labour leader's values. Though polling by YouGov found that 44 per cent of voters opposed a maximum wage, 39 per cent supported one (a figure substantially higher than Labour's poll rating of 28 per cent). It is also most popular among the over-65s, a demographic that Labour badly needs to improve its support among. 

The policy is being denounced by economists (who warn that it will dramatically reduce tax revenue), by Ukip, which branded it "the politics of envy", and even by the Greens, who called it "an unproven, blunt instrument". But such opposition gives Corbyn the distinctiveness that he desperately needs. As Labour struggles to bridge the divide beween Remain and Leave supporters, its economic message must come to the fore. In supporting a maximum wage, Corbyn is simply offering the populism that he promised all along.

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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