Monday, 21 July 2014

Out with the old, in with the new

The media has been full of David Cameron’s government re-shuffle.

I cannot be other than pleased that the badgers have got their revenge. Cameron decided to cull Owen Paterson as Environment Secretary. Clearly the badgers moved the goalposts a bit further than he expected!

I don’t think I can remember an Environment minister from any previous government who was as ideologically blinkered as Paterson. After all, it wasn't just his determination to push ahead with the hugely expensive and technically incompetent badger-cull in the face of all the independent scientific advice. He was also the minister who refused any briefings on climate change issues from the government’s own chief scientific officer.

However, more media attention has been given to Michael Gove who was relieved of command of schools – the job he had always wanted – and demoted to the prefects’ study, otherwise known as the Whips’ Office.

Mr Gove’s ideological supporters have been outspoken on his behalf, suggesting he was the Minister who had had the greatest impact, short- and long-term, in delivering the Conservative agenda. Of course, they totally ignore the fact that Gove secured and presided over a dangerous lack of local oversight in our school system; it’s what the investigations into the Trojan Horse allegations in some Birmingham schools described as ‘benign neglect’ from the Department for Education, with the local council having been stripped of powers to investigate and intervene. Gove also introduced and allowed unqualified teachers into the classroom on a permanent basis.

But the most serious criticism must be that, at a time when some areas are desperate for school places, and some children are having to travel many miles to get a school place, Michael Gove chose to give priority to establishing new Free Schools in areas with a surplus of places. That is unforgiveable.

He wasn’t sacked because he had fallen out with teachers. He was sacked because he was out of touch with the vast majority of parents and school governors about what needed to be done to secure continuous improvement in education.

We can only hope that Paterson and Gove’s successors have learned some lessons.

Monday, 7 July 2014

Panicking for the wrong reasons

I make no apology for returning to this Government’s appalling housing record. Its housing policies fly in the face of logic and sensibility. Conservative and Liberal Democrat Ministers are in complete denial about the impact on individuals, families and communities.

Like all MPs, I meet the victims day-in, day-out. It is not possible to go to a residents’ meeting or a local bring-and-buy or fayre or even to go shopping without someone wanting to talk about housing problems.

New house building has fallen to its lowest levels in peacetime since the 1920s.

The very first new coalition government housing decision in 2010 was to cut the affordable housing budget by 60%. Unsurprisingly, the number of affordable homes built in the last year was just two-thirds the number built in 2009/10.

The number of homes built for social rent has fallen by 75% since 2009/10 to 7,759 the lowest in twenty years and since records began.

Last week, the House of Commons Library revealed that since 2010, a housing gap (the gap between housing supply and demand) of more than 500,000 homes – nearly 46,000 in Yorkshire and Humberside - has arisen due to the Government’s failure to build the homes the country needs.

After a decade of falling numbers, homelessness has risen by a third since 2010 and rough sleeping is up by nearly a third. The number of families with children living in bed and breakfasts is at a 10 year high and the number in B&Bs illegally (more than six weeks) has risen by 800%. .

Meanwhile the government is fuelling house price inflation and the Bank of England is being forced to intervene to cap mortgage lending policies. Owner occupation is becoming simply unaffordable for many low to middle income families.

This week, a leaked government document revealed that the number of new homes to be built this year will be even lower than last. Ministers are now panicking because the actual figures will be published before the next general election.

Are they now acting urgently because they are concerned about the thousands of families who are in B&B, or living with relatives or friends, or in over-crowded bed-sitters? No. I don’t think so. They’re only concerned about avoiding a bad news story next year.

For thousands of families, the housing prospects are bleak.

Tuesday, 1 July 2014

Everything’s all right then? Well, No.

Just 12 months ago, I wrote*

“…..word on the street is that Iain Duncan Smith’s welfare reform programme is heading towards the rocks. If that results, he will be facing his own interview on the Work Programme in the near future.”

Clearly, I got something wrong. Iain Duncan Smith is still the responsible Secretary of State. 

In fact, the government simply denied the evidence that was accumulating. Pilot programmes – meant to test proposals and identify unanticipated problems - were simply ditched in order to keep to timetable.  Those of us asking challenging questions were just dismissed.

So, presumably, everything is all right with the government’s welfare reform agenda?

Make up your own mind:
  • the Department of Work and Pensions (DWP) is descending into chaos, with key programmes behind schedule and over-budget.
  • after spending £612 million, including £131 million written off or written down, the introduction of Universal Credit is now years behind schedule, with no clear plan for how, when, or whether full implementation will be achievable or represent value for money.
  • the Work Capability Assessment process is in “virtual collapse”.
  • the introduction of Personal Independence Payment has been described as “nothing short of a fiasco”. 
  • the Work Programme and Youth Contract have failed to meet their targets
  • the unfair Bedroom Tax risks costing more than it saves,
  • other related DWP programmes are performing poorly or in disarray
  • the Minister of State for Disabled People admits that more than 700,000 people are still waiting for a Work Capability Assessment, and
  • the Office for Budget Responsibility has found that projected spending on Employment and Support Allowance has risen by £812m, instead of falling.
So, everything’s all right then? Well, no.

Monday, 30 June 2014

Behind the rhetoric

This government has presided over the lowest level of house building in peacetime since the 1920s. The government’s Help to Buy scheme is fueling house-price inflation, with Ministers claiming this isn’t a problem because house prices (other than in London) haven’t yet returned to 2008 prices. Do they not understand that 2008 prices were unsustainable and had been fueled by easy credit and corrupted sub-prime lending?

The failure to tackle the housing shortage means the cost of housing is rising out of reach of low-to-middle-income earners. There has been a significant increase in private renting, with buy-to-let purchasers outbidding potential owners, particularly at the lower end of the market. And private rents have increased well above inflation.

Meanwhile, the government has been cutting housing benefit and introduced the bedroom tax, creating an impression that the total housing benefit bill has been falling. Nothing could be further from the rhetoric.

There has been a huge increase in the number of people who are in work but who need to claim housing benefit to help pay their rent. It’s a direct result of the government’s failure to make work pay, tackle the cost-of-living crisis and build the new homes we need.

Now it has been revealed that, in England, there has been a 60% increase in the number of working people needing to claim housing benefit to pay their rent since 2010. 400,000 more working people are claiming housing benefit costing the taxpayer an estimated extra £4.8bn in housing benefit over the course of this Parliament.

This isn’t just a problem in some areas. Every single council in the UK has seen an increase in the number of people in work claiming housing benefit. In fact, Sheffield has seen a 93% increase and Rotherham a 92% increase, since 2010.

The number of households in South Yorkshire reliant on housing benefit to help pay their housing bill has now increased to more than 120,000. This rather undermines the headline claims of economic recovery and increasing employment.

Tuesday, 24 June 2014

Waving and drowning

Whilst government ministers trumpet improvements in the UK economy, they are undoubtedly out-of-touch with the difficult reality for most households.

The headline employment figure may be up, but that is because of big increases in part-time and self-employment and zero hours contracts. The rate of inflation may have reduced but, for the last 4 years, most people’s earnings have been well below inflation, leaving them worse off. There has been a 60% increase in the number of working households getting housing benefit to help pay the rent.

Low income working households have been the hardest hit by a combination of wage freezes, big increases in energy and rent costs – whilst the energy companies and some landlords have made exceptional profits, and cuts in benefits.

Now, the Governor of the Bank of England is signalling early increases in interest rates. Undoubtedly, many households have been cushioned from the global economic crisis by, historically, very low interest rates. Increasing rates will undoubtedly feed in to mortgage interest rates and, it is estimated, that this will cause real problems for more than to million home-owners who are just managing to keep their heads above water at the moment.

In this situation, you would think that Cameron and Clegg would want to stop those falling in to, or in danger of falling in to, debt from being exploited. However, this is clearly not the case. Parliament is currently debating a Consumer Rights Bill and opportunities are being missed.

Everyone knows that log-book loans make pay-day lending look prudent. Logbook loans are a form of high cost credit, secured against the value of a motor vehicle. They are underpinned by ‘bill of sale’ agreements, a type of contract that goes back to the Victorian era and has no modern day consumer protections.

The Financial Conduct Authority (FCA) thinks that around 40,000 consumers took out logbook loans in 2013, typically borrowing £1,000 a time- although some lenders offer sums of up to £50,000. In 2010, the market was estimated to be in the region of £38m-40m, when the Office of Fair Trading reported more than 1,000 consumer complaints. These related to the lack of protections available to people if they fall into arrears, unfair collection practices, the complex and confusing nature of the language used in the agreements and the excessively high cost of the loans.

The Financial Conduct Authority says
‘…….logbook lenders have borrowers over a barrel’.

The Chief Executive of the Citizens Advice Bureaux says
‘The logbook industry is still in the dark ages and has been getting away with lawless practices. It is absolutely absurd that a firm should be able to take away someone’s possessions without any due legal process. High interest rates and lack of affordability checks as well as threatening practices and phantom charges mean logbook loans are a toxic mix of the worst parts of payday loans and unruly bailiffs.”

Yet the government not only refuses to abolish logbook loans, it is also voting against these Bill of Sale agreements having the same protections that apply to other contracts.

Then, some people in financial difficulty turn to companies which claim to be able to help them manage their debts. In fact, a staggering 5% of British adults - 2.5 million people - are currently on a debt management plan. But, in many cases, this can make things worse not better. 

Fee-charging debt management plans often prolong customers’ debts or increase them.  Some ‘cowboy’ firms are keeping up to 90% of money consumers give them to repay their debts as fees for their services rather than using it to help pay off creditors.

For a debt of £30,000, a client of a typical debt management company would pay almost £6,000 extra in fees, over and above repayments to creditors. This would extend the plan by approximately 18 months compared with a Stepchange organized debt management plan, which is free.

Ministers have admitted that there was evidence that the fees, which debt management companies were charging, were abusive but allow this to continue. The government is opposing measures which would allow the courts to scrutinise the fairness of these contracts.

Ministers are also opposing an increased levy on payday lenders to pay for the provision of independent and free debt advice and affordable alternatives like Credit Unions.

Ministers fail to recognise that many people are waving because they fear they are drowning. They need a lifebelt rather than to be left to the whims of the pirates.

The Condition of Britain

Last week, think-tank the Institute for Public Policy Research (IPPR) published its Condition of Britain report.

It’s an important contribution to the debate about how to build a better society in tough times. It sets out some valuable principles for reform around devolving power, rewarding contribution, and building institutions.

We’re in an economy where a minority are doing very well, but the majority are finding the household budget more difficult to balance than it was five years ago as price increases have outstripped income changes. In addition, there is a significant part of the population who see themselves as locked out of the opportunities available to the rest. That gap, and the level of inequality, is increasing.

The report proposes that we must all work together to build a stronger society on three ‘pillars’:
  • spreading power,
  • fostering contribution, and
  • strengthening shared institutions.
It then goes on to make 28 specific recommendations about:
  • Families: Raising children and nurturing relationships
  • Young people: enabling secure transitions into adulthood
  • Working life: promoting work and rewarding contribution
  • Housing: mobilising local leadership to build more homes.

These are big issues requiring tough decisions. Inevitably, some of the recommendations have received more publicity than others.

For instance, young people and their parents will be particularly interested in the proposal that 18-21 year olds who aren’t work ready should be in training and not on benefits. Therefore, they should be assisted to get good qualifications and/or work experience. Support would be given to those whose parents can’t support them through training, in the same way as we currently do for those in higher education. Exceptional support would be given to those who genuinely can’t live at home. But, otherwise, entitlement to Job Seekers Allowance should end.

What do you think?

You can read the report, in full or in summary, at

Tuesday, 10 June 2014

All students are equal………

I was very proud of the expansion of higher education a decade ago, which reversed the 36% cut in funding per student of the previous decade. The investment saw a significant increase in the number of students who came from families which had little or no experience of university. Many very able young people had thought that ‘university wasn’t for them”.

For instance, between 1998 and 2008, there was a 46% increase – from 1415 to 2070 - in the number of young people from Sheffield going to university. In my own constituency, there was a 57% increase and, in the neighbouring Brightside (David Blunkett’s) constituency, it was a massive 159%.[1]

Investment was also made specifically to boost access for students with disabilities, who were significantly under-represented in the university population, not because of lack of ability, but because of problems of physical access or the inability to fund essential aids for learning.

Many people have forgotten that, in 2009, Nick Clegg supported a big cut in higher education funding which would have meant that 200 fewer young people each year from Sheffield would go to university. So much for warm words about raising educational aspiration; it was clear that this funding reverse would mainly hit those families and communities which historically had the lowest access to advanced learning. This policy reverse was completely over-shadowed by Nick Clegg’s subsequent ditching of his tuition fees’ promise.

Now, as well as trebling tuition fees, the coalition government has managed to create a black hole in student finances and develop a funding system that is haemorrhaging taxpayers’ money. The all-Party Public Accounts Committee says taxpayers are facing a hole of as much as £80 billion in the student finances. Debt write-off rates from the tripled tuition fees are now so high that the new system is almost as expensive as the one it replaced.

So, the government is proposing more cuts in spending on higher education.

Amongst these is a proposal to ‘modernise’ (ie cut!) the Disabled Students Allowance (DSA), because the current level of funding is ‘unsustainable’ (ie too big!). The expenditure on DSA is about £125m a year – a drop in the ocean of the overall budget.

In 2013, there were 215,370 disabled students in the UK, representing 8.6% of all higher education students. 62.2% of disabled undergraduates who receive DSA reached a first or upper second class honours degree, compared to 60.7% of disabled students not receiving an allowance. More than 2,400 students at Sheffield University and Sheffield Hallam University currently receive some DSA.

The exact amount of DSA for an individual is agreed after a needs assessment conducted by a specialist staff member in consultation with the student. The amount is specifically related to the student’s particular needs, whether that be technology or transport.

I strongly support equal access to higher education. It shouldn’t be determined by whether your parents went to university or not, or whether they can afford to support you or not, or, if you have a disability, whether you can only do the course if you can personally and independently afford to pay for the necessary aids.

I fear that this government is reversing all the progress was made in equal access after 1997. Unless you are wealthy enough for this not to be an issue, someone in your family is almost certainly going to lose out.

[1] The number of young people from each Sheffield parliamentary constituency entered an undergraduate course at a UK higher education institution in (a) 1997-1998 and (b) 2007-2008:

                                    1997/8             2007/8             Increase
Brightside                       85                  220                  158.8%
Central                         190                  355                    86.8%
Hillsborough                 260                  410                    57.7%
Attercliffe                     175                  275                    57.1%
Heeley                          190                  265                    39.5%
Hallam                          515                  545                      5.8%
Sheffield                     1415                2070                    46.2%

Monday, 9 June 2014

Who benefits?

Research by the House of Commons Library has revealed that the cost of living crisis has led to a 60% increase in the number of working people needing to claim housing benefit to pay their rent since 2010. 

400,000 more working people are now claiming housing benefit costing the taxpayer an estimated extra £4.8bn in housing benefit over the course of this Parliament.

Every single local authority in the UK has seen an increase in the number of people in work claiming housing benefit. The biggest increase in the country was in Croydon which has seen an astonishing 1100 per cent rise since 2010. 

More locally, Sheffield has seen a 93% increase, Rotherham 92%, NE Derbyshire 62%, Doncaster and Bolsover 54%, with Chesterfield and Barnsley at 42%.

So, we now have the situation that thousands of hard-working local households are reliant on housing benefit just to pay the bills and to keep a roof over their heads. Working people are now on average £1600 a year worse off than in 2010 as wages have fallen while prices have soared. Many people in work can’t get the hours they need while low-paid and insecure work is forcing more people to rely on housing benefit. 

We also face a massive housing shortage in this country, as this government has presided over the lowest level of home building since the 1920s. Cameron and Clegg’s failure to tackle this shortage means the cost of housing is rising beyond the reach of ordinary working people.

Up and down the country, we see prospective house purchasers at the lower ends of the market being out-bid by buy-to-let landlords, where rents have continued to rise and, in consequence, forced increased expenditure on housing benefit.

It can’t be right that ordinary people who do the right thing and go to work have to rely on housing benefit. This government appears either unwilling or unable to do anything about this and seem content to let the British taxpayer pick up the bill. 

Thursday, 5 June 2014

Where there’s a will……….

Should will-writing only be carried out by a regulated legal professional, like a barrister, solicitor or specified legal executive?

There has been a wide-ranging debate on this, particularly over the last decade. It has been rather like watching the hokey-cokey as public, professional and political opinion has swayed between regulation and leaving things as they are.

As well as legal and finance professionals who specialise in advising on writing wills, there are also three associations of will-writers with different membership requirements and offering different codes of conduct. But there is no requirement to be a member of any of these before proffering advice.

As one person in favour of regulation persuasively and accurately argued
“Independent financial advisers are regulated and required to be qualified, and solicitors need to be qualified and closely controlled, but someone could be a convicted fraudster, set up as a will writer tomorrow with no qualifications, experience or professional indemnity insurance and proceed to dispense advice on tax, inheritance laws and so on. Most consumers are unable to judge the quality or value of the service that they are getting, so it is no exaggeration to say that will writing has become a happy hunting ground for the incompetent, the dishonest and the fly-by-night operator.”

In 2005, the last Labour government said it would only regulate if there was evidence it was necessary, whilst the Conservatives, in debate on the Legal Services Bill in 2007 called for will writing for fee, gain or reward to be added to the list of reserved legal activities. Then, in 2013, following a statutory investigation, the Legal Services Board recommended that will writing activities should be a reserved activity (ie regulated), but the new Conservative/Liberal Democrat government decided to reverse its earlier position and decline to regulate.

In January this year, the Legal Services Board convened a round-table of will-writers to try to find ways of improving service standards and quality. But, in May, the government confirmed that it did not intend to regulate.

Perhaps the most worrying thing is that around one-third of pensioners don’t have sufficient savings or assets that would require any specialist advice on will-writing. Further, what would day-time TV be like without ‘Heir Hunters’?

What we do know is that where there’s a will, someone will have an interest.

The best advice I can give is that, if you are looking for assistance in drafting your will, make sure you don’t get it from the dishonest or the incompetent.

I rather suspect that, after the next bad-news story about a family who have lost everything because of the poor advice from a will-writer, there will be another surge of pressure to regulate.

Thursday, 22 May 2014

More anarchy than deregulation

We are now considering the Government’s third Deregulation Bill in three years. It represents their absolute failure to address the cost of living crisis or implement a proper industrial strategy.

Deregulation alone is not a long-term, sustainable growth strategy. This Deregulation Bill is a desperate rag bag, comprising an incoherent bunch of proposals which look as though they were brought together after a drunken session at an anarchists’ convention.

The draft Bill’s statement of impact estimates that all the measures together would only save British businesses 20 pence per business per year. Wow! And this is Cameron’s latest big idea.

Therefore, you may think it’s not worth considering. Well, it is, because of the rag, tag and bobtail proposals that have been thrown in at the last minute.

For example, the government’s obsessive view, that health and safety legislation is a hindrance to the economy, has lead them to propose exempting self-employed people working in certain lines of work – to be decided by the Secretary of State – from health and safety legislation.

It’s staggeringly inept. From clarity, it will create confusion and muddle. It is estimated to save self-employed people thirty-seven pence each a year. Yes, you read that correctly, 37p each a year.

Then, we have botched proposals about taxis and private hire vehicles (PHV).

In May 2012 the Law Commission launched a consultation on changes to taxi regulation, with a final report and draft Bill originally scheduled for publication in April 2014. The industry, unions and local authorities have been engaging with this process. Then, out of the blue in January 2014 the Government announced a 10 day consultation on three measures relating to taxi and PHV regulation.

Then, in March, without any meaningful engagement with stakeholders, new proposals were made for this Deregulation Bill. Report Stage is expected in the next few weeks. The proposals include allowing a PHV operator to subcontract your booking, without your consent, to another operator who is licensed in a different licensing district.

I’ll leave you to think about whether you think this is either sensible or something you will welcome. For my part, I think the proposals are both unwise and unwelcome.