Archives for category: Finance

This question was posed last week and I replied cautiously, “Wait and see”.

However a link from Welfare Weekly sent by a Bournville reader led to forebodings.

It included information taken from the website ‘They Work for You‘ which shows that Esther McVey, who has been appointed as Secretary for Work and Pensions:

  • consistently voted for reducing housing benefit for social tenants deemed to have excess bedrooms (which Labour describe as the “bedroom tax”),
  • consistently voted against raising welfare benefits at least in line with prices,
  • consistently voted against paying higher benefits over longer periods for those unable to work due to illness or disability,
  • generally voted for making local councils responsible for helping those in financial need afford their council tax and reducing the amount spent on such support,
  • consistently voted for a reduction in spending on welfare benefits and
  • generally voted against spending public money to create guaranteed jobs for young people who have spent a long time unemployed.

Then a message about Dominic Raab’s appointment as new housing minister appeared in the inbox 

It recalled that only a year ago, Labour attempted to get an amendment added to the Housing and Planning Bill requiring that houses rented to human beings be ‘fit for human habitation’.

Raab voted against making it a legal requirement for rented housing to be fit for people to live in. Indeed, as the party voting record for the amendment shows, not a single Conservative MP voted to support it.

Another cause for concern was his remark about foodbank users in his constituencies, first reported in the local media: “I’ve studied the Trussell Trust data, what they tend to find is the typical user of a foodbank is not someone that is languishing in poverty, it is someone who has a cash flow problem episodically”.

But the Cobham Foodbank in Mr Raab’s constituency, affiliated to the Trussell Trust, has issued figures on referrals to its service from April 2016 to March 2017: low income was the main reason more than 910 adults and children received foodbank aid over the 12 months. Debt was the second most likely cause to seek assistance, with 669 people, including 362 children, helped by the foodbank. And more than 160 people were referred due to benefit changes and delays.

Most of the comfortable merely feel uneasy about these appointments, but people struggling on low incomes, in poor-quality housing or homeless must be taking these appointments to heart and feeling profoundly worried about their future.

 

 

 

o

Advertisements

‘The Labour party would have found an ally in Attwood’

Dr Geoffrey Ingham, Financial Times (Letters):

“The early 19th century member of parliament, proto-Keynesian and pro-industry Birmingham banker Thomas Attwood must be cheering from his grave at the Labour party’s proposal to move most of the Bank of England to Birmingham “to shake up more than three centuries of association between the Old Lady and the City of London”.

“In the 1820s, Attwood railed against the City and the Bank in parliament and print: “Half the circulation of the kingdom is determined in stagnant masses into what is called the money market, in order to gorge the moneyed interest.” Rather, he advocated that “the use of credit should be expanded until the demand for labour, in all the great departments of industry, becomes permanently greater than its supply”.

“The prime minister, Lord Melbourne, summarily dismissed his impudence: “Birmingham is not England.”

“If Labour’s fantasy is to be pursued perhaps they might also look at the part played by the Treasury in the fate of the Wilson-Brown industrial strategy in the 1960s. Attwood was again prescient:

“The Bank of England is a grand political engine . . . by means of which the Treasury may pinch and grind the country as they please.”

“In Yes, Prime Minister, the PM Jim Hacker sent shivers through Sir Humphrey Appleby with his plan to relocate the Treasury “somewhere up North”. Needless to say, Sir Humphrey prevailed.”

In an email message Geoffrey Ingham said that he came across Thomas Attwood when he was writing his book Capitalism Divided? (1984) on the deleterious effects of the City and its close links with the Bank and Treasury, on the British economy. He added that Attwood has been very much overlooked in academic economics and history and that he broadly agrees with Attwood’s aims.

 

 

 

 

 

 

d

 

“100 tenants a day lose homes as rising rents and benefit freeze hit”The Observer July 2017.

In the same month, a Joseph Rowntree Foundation study attributed 80% of the recent rise in evictions to the “no fault” process under section 21 of the Housing Act 1988. Two months’ written notice is all that private landlords need to do: they don’t need to give any reason when they ask tenants to leave.

It allows the worst landlords to ignore disrepair – tenants who complain are given notice – a process officially recognised under the name retaliatory eviction’.

Read more about retaliatory eviction’ – the subject of Commons Briefing paper SN07015 by Wendy Wilson – published on June 13, 2017.   

 Jeremy Corbyn raised the issue forcefully in today’s Prime Minister’s Questions

His exchange with the Prime Minister may be seen here, courtesy of Steve Walker and the full transcript in Hansard may be seen here.

Mr Corbyn reviewed the government’s record:

  • Homelessness is up by 50% and rough sleeping has doubled. Homelessness and rough sleeping have risen every single year since 2010.
  • Evictions by private landlords have quadrupled since 2010. There is no security in the private rented sector.
  • One-for-one replacement of council housing sold off through the right to buy was promised, but just one in five council homes have been replaced.
  • Hundreds of thousands of people are on housing waiting lists.

Shelter is calling for the introduction of a stable rental contract – to become the norm in England.

Campbell Robb, chief executive, said: “With the possibility of eviction with just two months’ notice, and constant worries about when the next rent rise will hit, the current rental market isn’t giving people – particularly families – the stability they need to put down roots. The stable rental contract offers renters a five-year tenancy and gives landlords more confidence in a steady income, all within the existing legal framework”.

Scotland for best practice to date: the Scottish secure tenancy

In Scotland, under Jack McConnell’s Labour government, by an order under section 11 of the 2001 the Housing (Scotland) Act tenants of local authorities, housing associations & tenants who are members of fully mutual co-operative housing associations, from 30 September 2002, became Scottish secure tenants.

Read the excellent terms here. Will a Labour government in this country adopt this Rolls Royce standard model and also introduce a stable rental contract for those in private accommodation? Or will the profit motive win the day?

 

 

b

Reading Christian Wolmar’s article: ‘Rail’s dirty secret’, recalled last year’s  question on this site: ‘How many lungs and hearts will be damaged by air pollution before action is taken?’

There is concern about the levels of diesel-generated air-pollution on Grand Central (New Street) platforms experienced by travellers like Professor Rex Harris (Birmingham) whose work includes the promotion of a hydrogen fuelled transport system for rail and waterways.

Professor Thorne’s student monitoring air pollutants at Grand Central

Research conducted by Professor John Thorne (Birmingham) found almost seven times the annual average EU limit of particulate matter on one platform.

The TV programme Dispatches then visited New Street Station with its own monitors and found “high levels of nitrogen dioxide and particulates on one of the platforms… way above EU annual limits”. Network Rail told the programme it wanted the station to be a “safe and healthy environment” and that in the coming years it “will shift to less polluting electric trains”. Wolmar writes:

In the Rail Engineer, Malcolm Dobell wrote about a hydrogen fuel cell locomotive he saw four years ago; a team from Birmingham University had designed, constructed and entered a fuel cell powered one-fifth scale locomotive in the Institution of Mechanical Engineers’ Railway challenge.

He reported that Alstom’s new train, the Coradia iLint (above), which runs on hydrogen power rather than diesel, has had its first successful test run. It is the first low floor passenger train in the world to be powered by a hydrogen fuel cell.

The hydrogen used for the test runs is the by-product of an industrial process, which is reasonably reused as a waste product, but because Germany has invested heavily in wind turbine technology as part of its energy mix, it will also be able to use the energy generated by the wind turbines to make hydrogen when electricity demand is low.

As Dobell mentioned, the Birmingham Centre for Fuel Cell and Hydrogen Research undertook a cross-disciplinary venture with a number of Birmingham Energy Institute academics and Birmingham Centre for Railway Research and Education, to design and construct the UK’s first practical hydrogen-powered locomotive.  The Centre’s website adds that there will be a requirement for such autonomously powered trains to serve non-electrified lines.

Hydrogen-powered locomotives, cars and boats, emitting only steam and condensed water, Dobell comments, are better for the environment, more pleasant for passengers and less disruptive to communities.

Time for change.

 

 

 

v

In July, Birmingham City Council reneged on an ACAS-mediated, cabinet-approved agreement between the Unite union and Birmingham’s talented Council Leader, John Clancy, which was to end the seven-week refuse collection dispute.

The well-paid BCC chief executive (right) was seeking to downgrade 106 Grade 3 jobs to a Grade 2, which meant that workers would lose £3,500-5,000 from their already low salaries of around £20,000.

And when BCC reneged on the Unite/Clancy deal, they also issued redundancy notices to the Grade 3 workers. These were later banned in the High Court when Mr Justice Fraser spoke at length about the “extraordinary” and “astonishing” state of affairs at Birmingham City Council with “chaos” between senior personnel. Read more about his reflections here.

Council leader Ian Ward (left) told a BBC reporter: “The cost of the (three month) dispute, yes that’s cost in excess of £6m”.

This ‘new’ version of the original deal (details here), described by union insiders as a ‘total climb-down’, was agreed at a special meeting of the BCC cabinet on Friday.

 ITV reports that yesterday Birmingham bin workers voted to accept the council deal.

So a seven week dispute was allowed to go on for three months, regardless of health and safety implications, losing £6m of ratepayers’ money – and the wrong head rolled.

 

 

 

m

The Financial Times has reported that John Healey, shadow housing minister, has set out Labour’s plans to tighten a housebuilding loophole introduced by the Conservatives that has been blamed for halving the number of “affordable homes” built in Britain over the past five years by making it too easy for property developers to “dodge their obligations” by being allowed to haggle over the number of social homes they build.

Inside Housing adds that recent research by Shelter covering 11 local authorities found viability assessments had been used to deliver a 79% reduction in affordable housing built, compared to what council policies would demand.

Carol Wilcox Secretary of the Labour Land Campaign, Christchurch, Dorset, commented in the FT that Labour should instead be arguing for Section 106 Agreements to be scrapped rather than reformed.

She cites a study by Oxford Brookes university, which found that the number of affordable homes delivered through Section 106 dropped from 28,972 in 2010-11 to just 16,452 in 2015-16 — contributing to the wider downward trend, continuing:

“The whole system is open to corruption. There are websites that describe, for the amateur, how to negotiate with local authorities to avoid more than just the affordable homes obligation (one here). These agreements, together with their younger sibling, the Community Infrastructure Levy, are in effect just another misguided attempt to capture the uplift in value from change of use to residential”.

Her alternative: a comprehensive land value tax system which could easily finance public investment in goods and services up front and capture the rising land value from the resulting revenue stream. Increased public spending would lead to increased land value, leading to increased land value tax, leading to increased public investment

 — a virtuous circle in fact.

 

 

 

v

People passing the illuminated Bournville factory buildings late at night will have noted its 24-hour operation – evidence of a thriving enterprise.

The factory buildings in 1932: unchanged exterior

The FT’s John Murray Brown (paywall) reports from Bournville that Mondelez has completed a two-year modernisation programme, investing £75m in the chocolate maker’s flagship factory: “Shiny new production equipment has been installed at the “factory in a garden” built by Quaker George Cadbury in 1879 alongside houses for its workers who had relocated from Birmingham’s industrial belt.

Under the agreement, 1,300 workers at Bournville and two other Cadbury factories in the UK will receive a pay rise of 3.2% in 2017-18, and an increase in line with inflation in 2018-19. Joe Clarke of Unite says this is considerably higher than other recent settlements in the food and drinks industry, which have been about 2.4%.

Mr Clarke highlighted the chocolate maker’s “strong ethical traditions: “Cadbury has a long history of good industrial relations. We’ve got records which go back to the tea break agreement of 1922.” Cadbury established works councils, with management and employee representative meeting to discuss company plans, back in the 1930s. It was also one of the first companies to offer sick pay and pension rights for women.

The improvement in industrial relations at Cadbury came after controversy when the company was bought by Kraft Foods of the US in 2010. The Takeover Panel, the custodian of UK rules on mergers and acquisitions, after reneging on a promise not to shut Cadbury’s Somerdale plant at Keynsham near Bristol but it was made clear that the original decision had been made by Cadbury in 2007.

There have been 200 voluntary redundancies at Bournville under the modernisation programme, bringing the manufacturing workforce down to about 800. The four new production lines have led to ‘dramatic’ productivity improvements closing the gap with Mondelez’ German plant. In an embedded video, David Bailey, professor of industrial strategy at Aston University business school, said, “We hadn’t seen significant investment at Bournville for a long time. It was pretty dilapidated. Old plant and equipment. The focus on productivity is the only way any company manufacturing in a relatively high-cost economy can survive in the long run”.

The changes at Bournville mean manufacturing is assured “for a generation not just for the short term”, according to Glenn Caton, president of Mondelez’s northern Europe operations.  

 

 

 

v

Moseley Road Baths is one of the nation’s most significant heritage swimming pools – it is the oldest Grade II* Listed baths still open for public swimming. Last year nearly 80,000 people swam in this community pool.

The Baths were earmarked for closure last July but a community campaign and the support of heritage organisations led to Birmingham City Council granting a reprieve.

Next April Moseley Road Baths action group, who have formed a Community Interest Company (CIC), will take over the running of the baths from Council. The company’s business plan shows that MRBCIC can break even within three years but in the first year it needs to raise £75,000 to help to pay for essentials like staffing, heat, light and water. The company is seeking grant funding for some of this, but the group is also calling on support from anyone reading this appeal to add to this, helping us to meet two critical costs (swim trainers and lifeguard volunteers).

MRBCIC has nine months to develop a workable model for swimming, with the aim of taking over operational responsibility for water activity from April 2018. Since then it has been working hard – liaising with heritage partners, bringing in advisers, understanding the community swimming need and producing a business plan which shows that MRBCIC can break even within three years.  Click here to read the business plan.

Our initial target is to raise £13,552 to train 8 volunteers in lifeguarding and teaching as well as in customer service skills, health and safety, etc. Each volunteer must be trained so that  safe swimming can be offered at all times.  Crowdfunding is the first stage in raising the funds needed to ensure they have a fully trained team ready to go. Read more on their website.

Please spread the word – and if willing and able – donate by following the link.

 

 

 

 

 

Political Concern comments on Druids Heath and the role of the modern council

The presenter of this BBC radio programme, Adrian Goldberg, grew up on the Druids Heath council estate in Birmingham, the home of the ‘municipalism’ pioneered by Joseph Chamberlain when he was Mayor of Birmingham – summarised by Walsall MP John McShane in the Commons in 1930:

“A young person today lives in a municipal house, and he washes himself … in municipal water. He rides on a municipal tram or omnibus, and I have no doubt that before long he will be riding in a municipal aeroplane. He walks on a municipal road; he is educated in a municipal school. He reads in a municipal library and he has his sport on a municipal recreation ground. When he is ill he is doctored and nursed in a municipal hospital and when he dies he is buried in a municipal cemetery.”

Adrian is described as being an ideal candidate to judge the changing nature of the local council, because when he and his family moved there the local authority provided a range of services. He comments, “Today the situation is much more complex”- follow the link to read more.

Political Concern adds:

Inside Housing reports the housing minister’s description of sprinkler systems for high rise blocks as “additional rather than essential”, refusing a council’s request for funding offered after the Grenfell Tower tragedy.

And comments: “Strangely, the conservative Prime Minister expresses admiration for Joseph Chamberlain”.

Mayor of Birmingham in 1873, city MP in 1876, Joseph Chamberlain directed the construction of good housing for the poorest, libraries, municipal swimming pools and schools. Unlike Ms May and colleagues, he was not in favour of a market economy, arguing for tariffs on goods from countries outside the British Empire. He was also an ‘economic interventionist’ (see Lewis Goodall, Newsnight), described as a “gas and water socialist”. He took profit-making private enterprises into public hands, declaring that “profit was irrelevant”.

In no way is she following the example of her hero. Ms May’s government continues to implement a series of cuts affecting the lives of the country’s poorest and most disabled with might and main. Ironically the contemporary politician sharing Chamberlain’s principles is the opposition leader, Jeremy Corbyn, whose policies she echoes but does not implement.

 

 

 

v

 

 

 

d

In 2015, Welfare Weekly reported that research by the Institute for Fiscal Studies (IFS) found that 2.6million working families on Universal Credit would lose £1,600 a year from the changes and 1.9 million would be £1,400 a year better off.

Analysis from the independent Office for Budget Responsibility suggested the changes to universal credit would save the chancellor close to £3bn by 2019-20 – a figure quoted by Public Finance.

Graph from House of Commons Library blog, last November, ‘Jam Tomorrow’

In March this year a study by the Child Poverty Action Group (CPAG) and the IPPR thinktank that a series of cuts and changes have left the government’s flagship welfare overhaul failing to meet its original aims.

Although universal credit was intended to boost household incomes by strengthening incentives for claimants to move into work or take on more hours, the study says that more families will be worse off than under the scheme’s original design.

Families with children are the biggest losers under the cuts made to universal credit since it was first established. Lone parent families will be on average £2,380 a year worse off, while families with two children lose £1,100 on average and those with three youngsters lose £2,540. Lone parents and couples where one parent works part-time to care for young children are hit particularly hard and face having have to find up to two days’ extra work a week to meet the shortfall in income from the cuts.

Currently just 450,000 people are on universal credit, which is not expected to be fully operational across the country until 2022. At that point, according to estimates by the Institute for Fiscal Studies, 2.1 million families will be worse off under the new system, and 1.8 million better off.

David Hencke quotes Catherine McKinnell, Labour MP for Newcastle North, who said:

“My office has been deluged with complaints from constituents about a Universal Credit system that is clearly struggling to cope and failing to deliver the support that claimants need in anything like an orderly or timely fashion”.

She reveals a very sorry picture. The new IT system means people can’t talk to a human. It has a verification process that requires claimants to produce photographic identification such as a passport or driving licence, “which many simply do not possess and certainly cannot afford”. She adds:

“There are numerous examples of Universal Credit claims being shut down before they should be; of documentation being provided to the DWP, at the constituent’s cost, and repeatedly being lost or even destroyed; and of totally conflicting, often incorrect, information being provided to constituents about their claims.” A list of other problems may be seen here.

Precisely the case seen repeatedly 20 years ago when the writer (David Hencke) was a volunteer in a local night-shelter.

Hencke ends, “What this shows to me is a growing disconnect between the people at the top – who are computer savvy, have nice centrally heated homes, no problems with bills, can afford expensive holidays, and can’t conceive of anyone not having a passport – designing a system for poor, dispossessed, desperate people without any understanding of how the world works for them.

 

 

 

 

b