Friday, 3 March 2017

Waking up

In October 2012, SKY announced that it would increase phone line rental charges by 18%. BT had already announced inflation-busting rises. Virgin and TalkTalk had already implemented way-above-inflation increases in line rental charges, but BT and Sky are the dominant domestic telecoms suppliers.  These new charges were almost double those of the lowest-cost provider. There was no justification for any price rise for line rentals at all. In fact, wholesale prices were falling.
I called on the Secretary of State for Trade and Industry and the competition authority (then the Competition Commission) to launch an investigation into the telecoms’ suppliers and, particularly, into landline charges. 1

I strongly made the point that increasing the unavoidable line rental charges meant that those who made the fewest calls – typically pensioners on the lowest incomes – were getting the highest percentage increases in their bills.

Further, I was sharply critical of the suppliers’ claims that there was a ‘highly competitive market’, asking how it was that BT and Sky managed to arrive at the same charges for daytime calls and connection fees. I said that customers were being taken for a ride.

But, what was the response of the Conservative Minister, Ed Vaizey, and OFCOM then? They said that they believed the retail market was competitive and

“… for Ofcom to open up an investigation in this area, it would need evidence of an abuse of a dominant position or evidence of collusion or anti-competitive agreements.”

They refused to budge from this position, despite the evidence staring them in the face.

For more than four years, landline charges rocketed above inflation and many telecoms suppliers have made a fortune at our expense.

Last December, Ofcom announced a review 2 into “unnecessarily high charges paid by the estimated two million households who pay for a standalone landline service…. Ofcom is concerned that (these) people are not being served well by the market.”

The regulator finally admitted that all the major landline providers had raised charges significantly since 2010, by between 28 per cent and 41 per cent in real terms. This was despite benefiting from a 25 per cent fall in the underlying wholesale cost.

Bluntly, customers had been taken for a ride whilst OFCOM and the government had been asleep on the job.

Now, OFCOM has announced 3 that “More than two million people who buy only a landline telephone service from BT would see their monthly bills cut by at least £5 per month…”
The fact that OFCOM has acted so quickly on some landline charges after such a short investigation simply demonstrates the significant scale of the market abuse that has been going on for so long.
As OFCOM now confirms “Landline-only customers are particularly affected by price hikes in telephone line rental. Major providers have increased their line rental charges significantly in recent years – by between 25% and 49% in real terms. This is despite providers benefiting from around a 26% fall in the underlying wholesale cost of providing a landline service.”

OFCOM’s proposals mean that BT customers with only a landline, currently paying £18.99 per month for line rental, will pay no more than £13.99 – a reduction of at least 26%. This cut returns the cost of line rental to 2009 levels in real terms, although there isn’t a refund for the years when many customers have been fleeced of some £300-400 each.

OFCOM has not explained why its proposals only relate to BT. It is clear that other dominant telecoms suppliers have been pursuing the same pricing policies. What action is to be taken against them?

Neither has OFCOM yet agreed to extend its investigations into all landline pricing, including those forming part of bundles of services. It is very clear that the landline price within bundled services has increasingly formed a larger part of the total charge. Yet, as OFCOM confirms, this is despite a 26% cut in the wholesale cost of landlines.

I’m pleased that OFCOM has woken up at last.

Now that it is awake, it needs to go further by (1) confirming that it is continuing to investigate the significant increases in the landline-only charges of other suppliers, and (2) extending the investigation to all landline pricing, whether standalone or charged as part of a bundle.

1 LINE UP – we’re being taken for a ride, 16th October 2012,

Wednesday, 1 February 2017

Another broken promise

Despite months of denial and prevarication, government ministers have finally had to concede that they are breaking their promises on protecting the NHS – it will have a cut in cash resources, let alone real terms, next year; it is unsurprising that waiting times and waiting lists are rocketing, and targets are not being met – and in housebuilding – there is no chance of 1 million new homes being built in this parliament as David Cameron claimed.

So, it’s now time to reveal this government’s latest broken promise – to protect the schools’ budget.

Both the National Audit Office and the independent Institute for Fiscal Studies have now confirmed that there will be an “8.0% real-terms reduction in per-pupil funding for mainstream schools between 2014-15 and 2019-20”.  This equates to around £3bn worth of savings that schools will be forced to make.

For many schools, the problem will be exacerbated by the implementation of the National Funding Formula. In December, the government said that 10,740 schools (54%) were set to gain extra money, while 9,128 (46%) will lose money from this redistribution. These changes are to be phased in from 2018.

The National Union of Teachers (NUT) has commissioned its own research and this suggests that the combination of the national funding cut and the redistribution will mean that
  • 98% of schools will have per-pupil funding cut,
  • the average cut for a primary school will be £87,117, with the average loss per primary school pupil being £339, and
  • the average cut to a secondary school will be £405,611 with the average loss per secondary school pupil being £477.
In my Sheffield South East constituency, the NUT estimates that schools will have a funding cut between 2013 and 2019 of about 8% on average.  Overall, Sheffield schools will be more than £22 million pa worse off in 2019/20 than they are this year.

In NE Derbyshire and Chesterfield, school budgets are predicted to fall by an average 4-7% - slightly lower than the national average cut; in Rotherham, it’s a 12% cut. As about 80% of a school’s budget goes on staff, it is inevitable that there will be reductions in teaching and teaching assistant staff in most schools.

You can see the expected outcome for every school at

Tuesday, 31 January 2017

Between 1997 and 2010, the UK built an additional two million homes, increased owner-occupation by more than a million and delivered the largest investment in social housing in a generation. [I wasn’t satisfied by this achievement, especially believing that there should also have been big investment in new social housing.] Further, headline or ‘statutory’ homelessness fell by almost two-thirds (62%), from over 100,000 households to 40,000, and the number of people sleeping rough fell by roughly three-quarters (75%).
By contrast, the Conservative/Liberal Democrat record on housing is seven years of failure, from falling home-ownership – there are 200,000 fewer home-owning households since 2010 – to homelessness. Since 2010, the trend of falling homelessness has gone into reverse. The number of statutory homeless households has increased by 45% and the number of rough sleepers has doubled, up 30% in the last year alone. Five families are being made homeless in England every hour of the day.

Right now, we need to build more homes in this country, particularly more affordable homes, and we need to build more affordable homes to rent. We also need to have longer secure tenancies, rent certainty and better minimum standards of management and repair.

We also must recognise that housing needs vary in different parts of the country. Different housing markets need different responses and initiatives, particularly in terms of tenure mix.

If the government’s long-promised housing white paper doesn’t address these challenges, then we should expect housing policy to be a key political battleground for the foreseeable future.

However, as a result of
  • some all-party investigation then cooperation and determination;
  • a Conservative MP willing to use his opportunity to promote a Bill;
  • a huge amount of behind-the-scenes hard work, debate and discussion involving Ministers, MPs, civil servants, and a range of professional and voluntary organisations;
  • creative use of a Select Committee to do pre-legislative scrutiny;
  • a Housing Minister, sensing which way the wind was blowing, being prepared to engage constructively and to back that with money; and
  • MPs, having made known their personal views about missed opportunities, being prepared to back the limited proposals;
the Homelessness Reduction Bill passed its third reading last week on the way to the statute book.

It should ensure that more, earlier and better support is given to those threatened by homelessness, and especially to those families with young children for whom the experience can do lifelong harm.

Monday, 23 January 2017

Contractual disgrace

I am not at all surprised to have learned this week about this government’s determined attempts to hush-up the disgraceful story of the performance of Concentrix – a US-based company – which had been contracted by HMRC to prevent fraud and reduce error in the administration of tax credits.

It is only through the persistent questioning of the government – and I congratulate my colleague Louise Haigh (MP for Sheffield Heeley) for her significant contribution to this – are we beginning to get to the truth about what has happened. If I were a conspiracy theorist, I’d be tempted to the view that this week’s publication of a National Audit Office (NAO) report on the affair had been timed to ensure minimal publicity, whilst the media was focused on Brexit issues.

Tax credits were introduced in 2003, but this government has systematically reduced their value. In 2014, the government contracted Concentrix to cut fraud and error in the system. This would be done by stopping the benefit being paid to some claimants.

Thousands of families in receipt of tax credits complained that they had been wrongly sanctioned; their benefits were just stopped, sometimes for months, without justification. Not only couldn’t families pay their bills, but children were refused school dinners because their benefits had been stopped.

Staggeringly, given the massive scale of failure to deliver the contract properly, Concentrix argued that it needed to be paid more than the contracted commission of 3.9% and negotiated this up to 11% in August 2015.

The NAO found that Concentrix had stopped or cut tax credits in 108,000 cases in less than 2 years, but almost a third of those decisions were overturned after a mandatory reconsideration. So, more than 30,000 families had been badly affected, with many brought to the point of destitution.

The contract required 90% of calls to Concentrix to be answered within 5 minutes, but for much of the time it was answering fewer than 5% in time. In August last year, Concentrix simply didn’t answer the phone to 19,000 claimants.

By September 2016, there was a backlog of 181,000 cases.

Although the contract was supposed to run until May this year, HMRC finally ended the contract with Concentrix in November 2016, and brought the work back in-house.

In the last two month’s data, it is revealed that 89% of those families which had their cases reviewed secured re-instatement of their tax credit.

The contractor’s performance was so disgraceful, it should simply be banned from working for the UK public sector for a decade. Ministers and senior civil servants who oversaw this shambles should be brought to account for their contribution.

Tuesday, 17 January 2017

Developing citizens for the future

The National Citizen Service (NCS) was launched in 2011. It’s a voluntary personal and social development programme for 15–17 year olds. After criticism at the time of its launch, it is a scheme which has now gathered considerable cross-party support.

Originally designed and implemented by a charity, the scheme has been supported by government funds for the last 5 years. Now, there is a National Citizen Service Bill going through Parliament to put the scheme on a secure footing.

NCS consists of courses for young people in England and Northern Ireland aged 16-17. The courses run for two to four weeks in school holidays, and are based on developing skills, confidence and social action.

Typically, groups of teenagers start with a week-long Outward Bound-type course at a rural activity centre involving physical and team-building activities. After this, they do a residential week, getting a taste of independent living and learning a variety of skills for their future. In the third, and sometimes a fourth, week, the youngsters plan and deliver a project in their local community, often to raise awareness or to fundraise for a particular scheme.

More than 75,000 young people were on the programme last year. It is planned to increase to 300,000 by 2020. They pay £50 towards it, with the rest being met by the taxpayer. More than 200 local organisations are involved in delivering the programme at local level.

I will be supporting the Bill because I think the programmes can play a significant part in developing citizens for the future.
But, as with all such initiatives, we need to be ever-vigilant in the implementation.

First, we must ensure that the scheme is open to everyone and that the most hard-to-reach youngsters – who would probably be those with the most to gain – are actively encouraged to participate. It is worrying that the proportion of NCS graduates who had been in receipt of free school meals has actually fallen since 2011, when it should have been increasing.

Second, the government is proposing a near-30% cut in support for each participant. We must ensure that the quality and breadth of the programme doesn’t fall, and that schemes include young people from diverse communities.

Thirdly, this scheme isn’t and cannot be a substitute for other youth services. The government is forcing massive cuts in local youth services which have engaged so many teenagers previously. That isn’t right.

Never mind Michael Fish…there are storms ahead

Last week, Andy Haldane, the Bank of England’s chief economist said that the failure to predict the global financial crisis was a “Michael Fish” moment for economists. (You may remember that the BBC Weatherman had dismissively rejected suggestions of a hurricane just before the most violent storms of the decade caused many £00m damage across the UK in 1987.)

Prior to the financial crisis in 2007/8, most establishment economists had simply failed to recognise the massive corruption of the sub-prime mortgage industry in the USA and the destruction its inevitable collapse would produce on global financial stability.

Mr Haldane was then questioned about whether, prior to last year’s referendum, the Bank had suggested a much sharper slowdown in the economy than has actually happened – another example of poor forecasting. Since the referendum, GDP growth was at a better-than-expected 0.6% between July and September. Mr Haldane suggested that this was because of consumer confidence and the housing market. He said it was “almost as though the referendum had not taken place” and that people's spending power had not been “materially dented” in 2016.

Mr Haldane then said that there were “reasonable grounds” for thinking 2017 might be a “somewhat more difficult year” for the consumer as the fall in the exchange rate began to affect prices. But he said there was “nothing inevitable” about that – it was just a “best guess”.

I have a nasty feeling that Mr Haldane is actually being far too optimistic in response to Brexiteer sneers and triumphalism.

Let’s just consider some facts (not speculation or forecasting) which ought to really concern us:
  • the value of the pound has fallen about 17% since June 2016. In the short-term this has boosted exports, but will inevitably increase price inflation soon.
  • unsecured consumer credit – which includes credit cards, car loans and second mortgages – grew by 11% last year to nearly £200bn. The last time it was growing at this rate and to this record level was immediately before the crash 2007/8.
  • nearly a million households – one-in-eight of all home-owners in England – are seriously struggling to meet their monthly mortgage payments of more than 35% of their total household income. 97% of those households are of working age and half have children. They have an average income of £25,000 per annum.
  • 4 in 10 adults in the UK have less than £500 (about the average weekly wage before deductions) savings
And then factor in that the government has forced through cuts, in the transfer to Universal Credit, which will see 2.5 million working families hit with an average loss of almost £2,100 a year.

It is very clear that many households are just keeping their heads above water and that even a small downturn could produce a serious deleterious outcome for many people as well as the UK economy.

Thursday, 5 January 2017

The Nasty Party returns

In October 2002, Theresa May, then Chairman of the Conservative Party and our current Prime Minister, told the Conservative Party Conference that: "There's a lot we need to do in this party of ours. Our base is too narrow and so, occasionally, are our sympathies. You know what some people call us – the Nasty Party."

She was talking about the Conservative Party being driven by members, and pandering to those electors, who were determined to retain financial and social privilege, who lacked concern about those less fortunate than themselves, who were anti-equalities – particularly anti-homosexual – and anti-minorities.

Of course, she was right. What is disappointing to note is that, in government, Theresa May appears determined to allow nasty sentiments to underpin the thrust of her government’s policy agenda. Two particular examples this month reflect her direction of travel.
The first concerns health and social care. More than a year ago, I wrote about the crisis that would grow in health and social care if the government did not reverse the cuts in councils’ social care resources and address NHS funding. Over the last year, every independent commentator and the government’s own advisers and regulators have reached the same conclusion and spoken out loudly.

Knowing that those with money can always buy their way out of trouble, Mrs May resolutely refused to budge to address the problem for the majority, until the storm of post-Autumn Statement criticism became overwhelming.

And, her response? It amounts to “We will stand by, and take credit for, our tax cuts to the richest individuals and corporates whilst continuing to cut funds for adult social care. But now we will ‘allow’ councils to significantly increase council tax to fund more social care… and then we will blame councils for tax increases.”

The hypocrisy is breath-taking. And, it won’t solve the funding crisis or the despair of many families.

The other example concerns the encouragement being given to the campaigners who want to repeal the 2005 Hunting Act. They are desperate to return to hunting wild mammals such as deer, hare, foxes and mink by packs of dogs.

Nothing could be more symbolic of a nasty party than one whose members are so at variance with the British people, 80% of whom have made it clear that such hunting should remain illegal.

Wednesday, 21 December 2016

End the uncertainty now

Over the years, one of the many issues that constituents have raised with me has been their frustration about the justice system’s seeming inability to bring to account those foreign criminals who hide in this country and British criminals who have fled overseas to avoid justice.

When you look back over parliamentary debates about this issue, you find that the loudest voices (across the political spectrum) have regularly been from those who point to unfairness compared to, or a lack of consistency with, UK law which, by facilitating extradition, would result in some injustice to the individual. However, the failure to act has led to many injustices with criminals escaping scot-free.
Measures to try to harmonise extradition procedures across Europe started in the mid-1990s. The 2001 September 11th attacks provided some impetus for change. The European Arrest Warrant (EAW) was finally implemented in 2004, with more states joining the arrangements since then.

The EAW is now seen as absolutely vital for ensuring fast and effective cross-border crime and justice measures. Since 2004, the EAW has meant that more than 7,000 people have been extradited from the UK to face trial or serve a sentence abroad; it has also resulted in more than 1,000 people being returned to the UK to face justice.

An excellent example of the success of the EAW was in apprehending and bringing to justice Sheffield criminal Craig Allen, who was sentenced to 20 years’ imprisonment for supplying Class A drugs in the UK – bringing death and destruction to many local communities – but orchestrating the criminality from Thailand and Holland. Allen was the first fugitive to be captured abroad after the launch of the National Crime Agency.

Without EAW it could take years to extradite dangerous criminals to and from Europe. However, the Government have given no commitment on their plans for crime and justice measures post Brexit.  

It’s nonsense to suggest that a continuing commitment to the EAW or membership of Europol should be part of the Brexit negotiations.

My constituents want criminals to be brought to justice. It’s time to end the uncertainty now.

No room at the inn

Many parents and grand-parents will have gone to their local school, church or community hall during the last week to see their children take part in Nativity performances.

The Christmas story evokes thoughts about the need for children to have a safe home, a secure roof over their head and to be given the opportunity to reach their maximum potential.

Anyone seriously concerned about these issues can only be dismayed by the direction of travel in the UK today.
Last week, without publicity, the government published the latest homelessness statistics.

These reveal that the number of children who are homeless and living in temporary accommodation has reached 124,000, compared to 109,000 at the same time last year.

The number of households that have become homeless after an eviction over the last year is up 12% compared to a year ago at 18,820. In addition, the total number of households in temporary accommodation has risen to 74,630, up 9% on a year earlier.

The vast majority of homeless is not a result of fecklessness. What we have seen over the past decade is a massive increase in the private-rented sector, fuelled by buy-to-let, with shorthold tenancies and persistent rent increases. Working families, who have just managed to hold on financially, have found themselves priced out of their homes and of the rental market at the end of their tenancies
21,400 homeless households – a 15% rise in the last year – have been sent on forced marches to a different area, away from their jobs, the children’s schools and their families and friends, which is having a devastating effect on family life.

The government’s housing plans are in disarray. The government’s new-build housing promises were being torn up within weeks of them being made. The long-promised housing white paper has been pushed back again into 2017.

We started this century with a decade of falling homelessness and a massive reduction in rough-sleeping. Since 2010, we have seen year-on-year increases. Anyone who says ‘voting doesn’t change anything’ is clearly living in a fact-free world.

Friday, 9 December 2016

Curiosity being quashed

Fifteen years ago, the then Labour government enabled free entry to Britain’s national museums. The policy came into practice on December 1st, 2001.

Visitor numbers at the museums that once charged have rocketed by over 200% from just 7 million in 2001 to nearly 22 million in 2016. Some of the museums – like the Royal Armouries in London, Leeds and Hampshire have seen visitor numbers rise by over 700%, and Liverpool’s National Museums have seen a rise of over 300%.

Not only did the number of visits to national museums increase, but there was also an increase in the number of visitors to many local museums, which received improved grant assistance to improve the quality of their presentations and to improve the educational experience for millions of school-children.

However, since 2010, the whole government approach to our arts, libraries and museums has gone in to reverse. The Conservative/Liberal Democrat coalition government, and then Conservative governments under David Cameron and Theresa May, have significantly cut financial support, requiring councils to cut arts and cultural expenditure by £165 million, including nearly £17 million in Yorkshire and Humberside. The government has now promised further cuts each year through to, at least, 2020.

Now, we are beginning to learn of the scale of EU resources which are used to support cultural services and are now at risk. The UK’s Arts and cultural bodies receive millions of pounds funding from the EU every year – including €17 million from the Creative Europe Programme in 2015 alone.

The Government announced in August that it would underwrite money awarded by EU competitive funds before Brexit through to 2020. The Creative Europe Programme is a competitive fund and, on the face of it, comes with the scope of that announcement; however, there was no mention of arts and culture in the statement and the Secretary of State, Karen Bradley, has been remarkably quiet about the commitment. Even if this resource was protected in the short-term, there is no commitment from 2020.

The free museums policy was bold and has delivered great achievements. It has been hugely successful. But the prospects for our museums and the cultural health of local communities are not good as the government imposes bigger and bigger cuts.