Nearly half of all households who cannot afford to heat their homes are in work, a shocking new report reveals.
Damning research from the right-wing think tank Policy Exchange, reveals how the Government is spending less than half of the £1.2 billion needed to tackle fuel poverty in England.
The government is currently investing £490 million a year to move all fuel poor homes in England to a ‘Band C’ energy efficiency rating by 2030. However, Policy Exchange has estimated the true cost to be £1.2 billion a year, leaving a £700 million per year funding gap.
‘Despite some recent improvement, the UK’s housing stock remains woefully inefficient compared to other European countries’, says Policy Exchange.
Policy Exchange calculates that fuel poor households would need to spend up to £1,700 extra a year to heat their homes to a suitable level (between 18 and 20 degrees Celsius).
Just over 1.1 million working households in England are classed as ‘fuel poor’, with 10% of all households in England now living in fuel poverty. The problem is most severe in rural communities, where many homes are off the gas grid.
The research also shows that fuel poverty has been made worse by rising energy bills, with gas prices rising by 128% over the last 10 years.
The findings may play into the hands of the Labour Party, who have pledged to freeze energy prices for 20 months if they win the next general election. Labour claim the move could save average households £120, but cost energy companies around £4.5 billion.
Policy Exchange suggests three ways to meet the gap in current Government funding:
- Energy efficiency subsidies should be more focused on fuel poor households. At present, only 33% of fuel poverty funding actually benefits the fuel poor. Refocusing the Energy Company Obligation (ECO) scheme on fuel poor households would raise £375million a year to allocate to fuel poor households.
- Only 10% of Winter Fuel Payment recipients are actually in fuel poverty. Introducing an ‘opt-in’ for the Winter Fuel Payment could save £400million a year which could be reallocated into energy efficiency measures for the fuel poor.
- Energy efficiency should be viewed as a ‘Top 40’ national infrastructure priority – utilising some of the government’s £100billion infrastructure budget over the next five years.
Author of the report, Richard Howard, said: “The facts paint a startling picture. There are over one million working households struggling to afford their energy bills, and living in under-heated homes.”
A government spokesperson said: “Fuel poverty has fallen year on year under this government, and we’re spending more than ever before to ensure more people stay warm this winter”.
Ed Miliband has challenged David Cameron to fast track legislation giving Ofgem the power to cut energy bills. The Labour leader has also called for a new measure on living standards.
Ed Miliband said: “The key test for success of an economic policy is its impact on living standards for working people and the next government will take radical action to restore the link between the wealth of our nation and family finances.
“Millions of people have been ripped off by the big energy firms who never seem to pass on savings to customers. In the last year, wholesale energy costs have fallen by between 9 per cent and 20 per cent but no supplier has reduced the price of their standard tariff.
“The next government is committed to making to [sic] big changes in our energy market: freezing energy prices until 2017 so that bills can fall but not rise, resetting the market and bringing in a tough new regulator to stop the rip-offs in the future.
He added: “But now George Osborne, who used to warn such measures were impossible, is claiming he understands that the energy market is broken. So next week, we’ll give him, David Cameron and Nick Clegg the chance to help all those families they have been ripped off by the energy companies under this government.
“They have been making noises about energy bills. Now they can put their money where their mouth is because, if we work across party lines, we can bring in new powers for the regulator to cut bills and force energy firms to pass on savings to consumers.
“This can begin in Wednesday with a vote in the House of Commons on fast track legislation.
“This zombie Government has had no new meaningful legislation for months. But, with this vote Parliament can require the government to bring forward fast-track legislation. It would mean we would still do some good before Parliament is dissolved before the General Election. All it takes is other parties to abandon their previous opposition to fixing our broken energy market.”
Source – Welfare Weekly, 11 Jan 2015
This article was written by Patrick Wintour, political editor, for The Guardian on Thursday 8th January 2015
Pleas to the government to suspend its benefit sanctions regime pending a fundamental review of its impact – especially on the mentally ill and disabled – were made at the first session of a broad inquiry by the Department of Work and Pensions Select Committee.
In a two-and-half hour session involving academics, food banks administrators, disabled groups and employment service professionals, the select committee repeatedly heard the sanctions regime had changed over the last two years, creating a punitive culture of fear – especially amongst the disabled.
Mathew Oakley, the independent reviewer for sanctions appointed by the DWP did not join in their fiercest criticism of the system but said it would be wise for the government to undertake a general stock-take of the system in view of the extent to which it has changed over the past two parliaments.
> Matthew Oakley is the guy who in 2011 was behind a Policy Exchange thinktank report titled: Something For Nothing : Reinstating Conditionality For Jobseekers, which called for a new points based system for Jobseekers Allowance that recognises different ‘job-search’ activities that claimants are required to carry out each week.
‘Attending a job interview’, which is currently not a recognised job seeking activity, would earn a greater number of points than ‘putting together a CV’ or ‘seeking information about a job’.
Claimants would have to reach a specific number of points each week to receive their benefits. If they failed to reach the minimum target benefits would be withheld.
Or sanctioned in other words. So no prizes for guessing which side of the fence he’s on…
He was one of many witnesses that said the government lacked systematic information on what happened to jobseeker’s allowance claimants if they are sanctioned including whether they went into work, the black economy or instead disengaged, leading to the growing gap between the number unemployed and the numbers claiming JSA.
Dr David Webster, visiting professor of Glasgow University, claimed the system had a gradually parallel secret penal system – a view dismissed by one Tory committee member as ‘completely absurd and bizarre’. Webster said the DWP may now be saving as much as £275m a year due to claimants being stopped.
Tony Wilson, the Centre for Social and Economic Inclusion, said sanctions “are running so far ahead of what works we should suspend the applications of sanctions unless we have a much clearer idea of what works and the impact of sanctions”.
Paul Farmer, the chief executive officer of mental health charity Mind said sanctions amongst those on employment support allowance has risen from 1,700 a month to 4,800 a month, adding there had been a disproportionate impact on people on mental health.
He claimed 60% of those on ESA have a mental health problem, yet in only 8% of cases were GPs being contacted as required in guidance to seek their views on the pressing ahead with sanctions.
Chris Mould, the chairman of the Trussell Trust, one of the chief organisers of food banks in the UK, said there had been a radical change in the way very disproportionate decisions were being taken since the latter part of 2012 , adding it was clear some job centres were being more punitive than others. He said in too many cases it takes too long for a claimant to secure redress if they have had their benefit withdrawn.
Kirsty McHugh, the chief executive of Employment Related Services Association, the representative body for the employment support sector, also called for an overhaul including the introduction of an “early warning” system which could be used at first offence rather than imposing a sanction. She added frontline employment providers of the work programme should be given more discretion about when they should report jobseekers to Jobcentre Plus for potential sanctioning.
She also called for greater clarity across the system about which jobseekers are classed as “vulnerable” and should be exempt from sanctions.
McHugh said “For a minority of people, receiving a sanction can be the wake up call they need to help them move into work. However, for the vast majority of jobseekers, sanctions are more likely to hinder their journey into employment.”
> Yeah… that’s what we’ve been telling you for the past few years. So nice you’re catching up, but for some people its all too late.
Source – Welfare Weekly, 08 Jan 2015
Workers could be forced to pay at least £5 a week to private insurers to receive higher benefits, under new plans being considered by the Tories.
The proposal included in a report from the right-wing think tank Policy Exchange, who have close ties to the Tories, would see people who work more than 20 hours a week paying into a compulsory “collective insurance scheme”.
> As well as the compulsory National Insurance ?
Policy Exchange argue that this would help restore the “contributory principle” in the benefits system. The more workers paid into the private insurance scheme, the more they would be able to draw out if they lose their job.
> But surely National Insurance is the “contributory principle” in the benefits system ?
Contributory benefits accounted for 41% of all benefit payments in the 1970’s. This has now fallen to just 10%.
The scheme would be run by private insurers and fund managers, reports the Independent newspaper, but would be guaranteed by the Government.
According to the Policy Exchange the plan would save the Government around £2.6 billion a year and would replace the £72 a week contribution-based Jobseeker’s Allowance (JSA).
Workers who have been in employment for at least two years can currently claim contributory JSA for up to six months if they become unemployed, funded through National Insurance contributions.
The introduction of a “welfare account” would see workers National Insurance contributions reduced.
> But its not really a reduction if you’re having to pay out on a different scheme, is it ?
Payments from workers would raise £8 billion a year, £2 billion of which would go into a collective unemployment insurance scheme. The remainder would go into each persons individual “welfare account”.
Individuals who pay £5 a week would be permitted to withdraw £20 a week from their personal account to top up their unemployment benefit.
Higher earners would be able to pay as much as £100 a week into the insurance scheme, and could use the additional money to fund retraining or in the event of a personal emergency or ill-health. If they do did not use the money it would top-up their pension when they retire by £10,000.
The proposal is currently being considered by the Tories and could form part of their general election manifesto.
Author of the report Steve Hughes said:
“The current system does not reflect the contributions that people make through their working lives. It does not reflect changes to the modern-day labour market such as the rise in self-employment. And it does not meet the variety of needs that individuals have.”
“Successive governments have tried and failed to improve the system from the top down. This has created a culture of something for nothing, with people becoming reliant on the state. Radical reform is needed to restore public trust in the welfare state.
“Personal responsibility must be at the heart of a change to the system. A new collective insurance scheme alongside personal welfare accounts will form the backbone of these reforms.”
> A love the way they talk about personal responsibility when its a compulsory scheme, decided by others. Where’s the personal input ?
The scheme could eventually be extended to include maternity leave, mortgage interest payments and social care. In the long-term it could mark the beginning of the end for the Welfare State and usher in a privately run, or corporate welfare system.
> And isn’t that the bottom line ? Private insurance firms, fund managers… all the usual parasites will be lining up to take far more government funding than will ever be spent on benefits to the people that need it.
Source – Welfare Weekly, 15 Oct 2014
A property expert has slammed proposals from a think tank to reduce the £26,000 a year benefit cap outside of London and the South-East.
The centre-right think tank Policy Exchange has suggested that a regionally based benefit cap, which takes into account varying living costs across different regions, could save the government £100 million a year.
Ajay Jagota, from a North-East based sales and letting business, said that if benefits are capped based upon regional differences in living costs, then taxes should also be capped using the same analogy.
“You can’t just pick and choose what government decisions are based on local living costs and which aren’t”, Mr Jagota said.
Mr Jagota told 24dash.com that the policy “won’t save a penny” and would just “push up costs elsewhere”.
Lowering the benefit cap would result in tenants falling into arrears on their rent as their incomes fall, said Mr Jagota. The UK “could end up with a postcode lottery which hurts landlords, not layabouts”, he said.
So far the benefit cap has had very little impact on government welfare expenditure. Official figures suggest that the policy has cut social security spending by just 0.08% since it was introduced in April 2013.
Mr Jagota said: “If this really was a problem, wouldn’t the streets of the North East be awash with southern jobseekers, migrating North for an easier life? It’s certainly not something I’ve seen much evidence of.
The property expert said that a regional benefit cap could have a negative impact on local economies and landlords, by making it less appealing for people to move and work outside of the capital.
“The real problem in need of tackling is London’s broken housing market, where there are too many people and not enough houses. The North East shouldn’t have to subsidise that, especially when you’re actively making it less appealing for people to move to other parts of the country.”
> We’ve also had right-wing think tanks suggesting that we should have lower minimum wages outside London / South East but, as the man says, no similar suggestions for lowering of taxes, travel costs, food, housing, etc, at a similar rate.
Source – Welfare News Service, 18 Aug 2014
> Call the nurses – he’s got out of his padded cell again…
The UK is attracting high levels of immigration because the benefit system in allowing too many British born people to escape work, says Iain Duncan Smith.
The Secretary of State for Work and Pensions will further demonise benefit claimants in a speech on Monday. He will say that immigrants are coming to the UK because unemployed Brits are preferring to live on benefits, rather than accepting the jobs on offer.
“Immigration into the UK is a supply and demand issue. Businesses needed the labour and because of the way our benefit system was constructed, too few of the economically inactive took the jobs on offer.”
He will add: “This economy can never be where it should, holding its own in this tough world marketplace, unless British families play a full productive part in that plan.”
> Situation normal – “Its not our fault, it’s yours. And we’re going to punish you for it.”
Iain Duncan Smith is also expected to say that the government’s welfare policies have cut social security by £2.5 billion. However, the claim is highly contested by Labour who argue that the government has over-spent on social security by as much as £13 billion.
Rachel Reeves MP, Labour’s Shadow Work and Pensions Secretary, said:
“David Cameron’s government has failed to control social security spending and is set to overspend on welfare by a staggering £13 billion.
“Under Iain Duncan Smith housing benefit spending is rising, not falling. The number of working people claiming housing benefit is set to double between 2010 – 2018 costing every British household £488.
“The Government’s flagship welfare reforms are in chaos. Millions of taxpayers money has been wasted on the £12.8billion Universal Credit which less than 7000 people are claiming.”
The Conservative Party is expected to pledge more cuts to welfare spending in their 2015 election manifesto.
The right-wing think tank Policy Exchange, who have close ties to Number 10, are also calling on the Tories to reduce the £26,000 benefit cap outside of London and the South East.
> IDS has obviously lost the plot, he may well be insane. But all his nonsense will be lapped-up by the right-wing press, trumpted by Tory MPs ever eagre to put the blame elsewhere… and in a minute Milliband will be along to promise to be even harder on the worst off, because that appears to be his idea of politics.
How much longer can it go on ?
Source – Welfare News Service, 11 Aug 2014
Systematic problems in the way the government administers and imposes benefit sanctions, including disproportionate burdens on the most vulnerable, are revealed in a report commissioned by the Department for Work and Pensions.
The report found the way in which the DWP communicated with claimants was legalistic, unclear and confusing. The most vulnerable claimants were often left at a loss as to why benefits were stopped and frequently not informed by the DWP about hardship payments to which they were entitled, it said.
It also revealed serious flaws in how sanctions were imposed, with Work Programme providers required to send participants for sanctions when they knew they had done nothing wrong, leaving “claimants … sent from pillar to post”.
> Personal experience – I was sanctioned by the Work Programme for not attending an appointment that didn’t exist – in actual fact the appointment was for the following week, which I did attend. Nevertheless, if I hadn’t appealed it (and won) the sanction would have stood.
The independent report was written for the DWP by Matthew Oakley, a respected welfare expert who is widely acknowledged as one of the leading thinkers on welfare on the centre right and as a result his criticisms, couched in careful language, are all the more damaging for a government that has consistently said the sanction regime is fair.
> This would be the very same Matthew Oakley who last year was pushing the idea of lower wages for regions like the North East. At that time he was talking as head of economics and social policy at the right wing “think tank” Policy Exchange. Just how independent a report he’s likely to produce is open to question.
His main recommendations, which have been accepted by ministers, are:
- All correspondence with claimants, including its style and content, should be reviewed
- Claimants must be given personalised information about why they have been referred
- Clear information must be given about the appeals process and access to hardship payments
- A guide to benefit sanctions must be easily accessible in hard copy and online
- Claimants who need particular help in understanding letters must be identified and spoken to
- People should get information through their “preferred channel“
- Procedures should be reviewed to ensure people have a clear understanding of their responsibilities
The DWP responded to the report by saying it would be updating the way it talked to benefit claimants, setting up a specialist team to look at all communications, including claimant letters, and working more closely with local authorities and advice centres to simplify the system.
Read Matthew Oakley’s full report on the government website here
Source – Benefits & Work, 23 July 2014
Child Benefit should be limited to no more than four children per family to help cut welfare spending, say Policy Exchange.
A report by the centre-right think tank has recommended limiting child benefit for larger families. The move could save around £1 billion over the course of a parliament, say Policy Exchange.
Policy Exchange is said to have close ties with the Conservative Party and was founded by a group that included Michael Gove, Francis Maude and Nick Boles. Many of the past recommendations made by the think tank have been adopted into tory manifestos.
If this new policy is adopted, it would see child benefit progressively cut for each child born into a family, and rise by no more than 1% each year over the five-year course of a parliament.
Parents would initially receive £21.50 a week for their first child, £14.85 for the second child, £14.30 for the third and £13.70 for the fourth. Payments would be limited to no more than four children per family. Supporters of the policy claim it would help deter immigrant from coming to the UK to claim benefits for their children.
Policy Exchange said that a YouGov poll, commissioned by the think tank, found that 67% of voters would support cutting child benefit for larger families. 20% were opposed to the move.
According to the results of the poll, the proposal is supported by 83% of Conservative voters, 63% of Liberal Democrat voters and 55% of Labour voters.
The Conservatives have previously considered a similar proposal put forward by Nadim Zahawi to limit child benefit to just two children, but decided against the policy out of fear it would cost the party votes.
The author of the report, Steve Hughes, said:
“The chancellor has suggested that annual welfare savings of £12bn will have to be found to avoid further and faster cuts to departmental budgets.
“Choosing where this money comes from is not easy, but with such high levels of public support, capping child benefit at four children and redesigning payment levels offers a very real opportunity to generate some much needed savings in the fairest way possible.”
A spokesperson for the right-wing pressure group, Taxpayers Alliance, told the Daily Express:
“No one should be immune from having to make the sometimes hard choices associated with having a family and people have to realise that there is not a bottomless pit of money.”
Opponents argue that the tory-led coalition government has consistently targeted Britain’s poorest households with draconian welfare cuts, while continuing to allow multinational companies to escape paying their ‘fair share’ in tax and handing tax cuts to the highest earners, who could afford to pay more.
They also say that there has been far too much focus on cutting state benefits, rather than introducing a living wage to help parents cover the cost of living and raise their own children, instead of having to rely on benefits to top-up stagnating wages.
Figures released by the Office for National Statistics (ONS) yesterday (17 June) appear to support such an argument. ONS figures show that average pay has increased by only 0.7% on this time last year, or just 0.3% excluding bonuses – well below inflation which currently stands at 1.9%.
A Survation poll for the union Unite, found that over a third (34%) of low wage earners cannot afford to shop where they work and nearly sixty percent of workers earning £6.50 or below (58%) feel trapped in low waged work. 79% of respondents said that they want work to pay and want to earn a living wage instead of depending on benefit top ups.
Welfare News Service requested a comment from the Child Poverty Action Group (CPAG) on how limiting child benefit would impact upon child poverty figures. Unfortunately they did not respond in time for publication.
Source – Welfare News Service, 17 July 2014
Until seven years ago, there was a secret room at Darlington station. Just off one of the platforms, between the standard-class waiting room and a cleaners’ storeroom, and set back behind three successive doors, it was small and plain: a desk, a grimy extractor fan and two windows made opaque to passing travellers by reflective material.
Tony Blair used this room when he was prime minister. His constituency, Sedgefield in County Durham, was a short drive away. When he needed to get to London, 260 miles south, he and his entourage would often catch the fast Darlington train, which can take less than two and a half hours.
More usefully still, many other key New Labour figures took the same line, among them Peter Mandelson, Alan Milburn and David Miliband. Altogether, the north-east of England, which contains about a 25th of the UK population, was represented by “a third of Blair’s first cabinet“, noted the veteran anatomist of British power networks, Anthony Sampson, in 2004. (Sampson was himself born in County Durham.) Rarely before had our remotest and often poorest region been such a hub of political influence.
> Of course it could be argued that their only real interest in the region was that it provided safe Labour seats – Mandelson got elected in Hartlepool ! Atriumph of blind devotion over common sense if ever there was one.
When Blair arrived early or his train arrived late, it was felt by Whitehall that the increasingly controversial premier could not just stand on a platform, waiting. Hence the secret room. Now, it is just the station manager’s office. The building around it has gone back to being a market town station with flaking paint and a fragile roof, where isolated passenger footsteps echo in the long middle-of-the-day lull and trains for Scotland and the south of England rattle through without stopping. No current cabinet minister has a north-east seat – only two of its MPs are Tories. Labour’s power base is now in London, Yorkshire and the north-west.
Since the Blair era, the area has slipped in other ways. Between 2007 and 2012, unemployment rose faster than in any other UK region, to more than 10%, the highest in the country. Throughout 2013, as joblessness receded in most of the UK, in the north-east it carried on rising. This year, it has begun to fall a little but remains the worst in the nation.
> And how much of that fall can be attributed to sanctions ? Quite a chunk, I’d guess.
Since 2007, the area’s contribution to national economic growth, measured as gross value added, has shrunk from an already weak 3% in the Blair years to barely 2%. The Northern Rock building society, with roots in the region going back a century and a half, has suffered a humiliating meltdown. The north-east has been, and will probably continue to be, especially harshly treated by the coalition’s spending cuts.
According to the Special Interest Group of Municipal Authorities, a typical council in the region will lose £665 in government funding per inhabitant between 2010 and 2018, the biggest national fall. Meanwhile, public sector employment in the region – the highest in England at more than one job in five – has been falling since 2009, a year before the coalition took office.
At Newcastle United, one of the north-east’s disproportionate number of fiercely followed, rarely successful football clubs, the recent sponsorship of the team shirt tells a similarly dispiriting story: Northern Rock from 2003-2011; Virgin Money, Northern Rock’s current, Edinburgh-based owners, from 2012- 2013; this season, the payday loan company Wonga.
Between 2011 and 2012, child poverty rates in Middlesbrough and Newcastle Central rose to 40% and 38% respectively.
“For as long as anyone alive will remember, this has been a ‘problem region’: a special case, a sick man,” wrote the Newcastle-born novelist Richard T Kelly in a 2011 essay, What’s Left For The North-East?
In recent years, some rightwingers have begun to throw up their hands. “It is at least as hard to buck geography as it is to buck the market,” said the influential Tory thinktank Policy Exchange in 2008. “It is time to stop pretending that there is a bright future for Sunderland.”
And last year the Tory peer Lord Howell suggested the region had “large uninhabited and desolate areas… where there’s plenty of room for fracking“. Weeks later, the Economist described Middlesbrough and Hartlepool as part of “Britain’s rust belt“; “Despite dollops of public money and years of heroic effort… [these] former industrial heartlands are quietly decaying.“
The magazine concluded with an unlikely but ominous comparison: “The Cotswolds were the industrial engines of their day. One reason they are now so pretty is that, centuries ago, huge numbers of people fled them.”
From Darlington, an old and scuzzy two-carriage train chugs east along a branch line towards Middlesbrough. Along the way, it stops at Thornaby-on-Tees, an ex-industrial town beside the river Tees. From the 1840s until the 1980s, the Head Wrightson ironworks here made everything from parts for bridges to parts for nuclear power stations; then foreign competition closed it.
In 1987, Margaret Thatcher visited the site and took a much-photographed walk across a yellowing wasteland of weeds and factory remnants, wearing an inappropriate smart suit but looking unusually pensive. Shortly afterwards, her government, seeking to soften its reputation as the hammer of the north, created the Teesside Development Corporation, and the wasteland was turned into the Teesdale Business Park, a US-style landscape of corporate lawns, car parks and low office blocks.
The blocks are still there, neat and anonymous except for the corporate logos: Barclaycard, the NHS, the privatised services firm Serco. The car parks are full of mid-range vehicles. For three decades, the north-east has been a centre for modestly paid clerical work, such as call centres and the “back office” administrative processes of companies based elsewhere. But at the Teesdale Business Park, “To Let” is the most common logo; some are so old, they have rotted and snapped off.
As with Thornaby, Middlesbrough is a flat riverside town that once grew fast because of iron foundries: from only 25 inhabitants in 1801 to 165,000 in the 1960s. The Victorian centre was built to a grid pattern, like a US boom town, with docks just to the north for exporting iron and coal.
But in 1980 the docks closed, the population began to fall, and a void opened between the town and the river. It is still there, starting a few yards from the town centre; a great windswept triangle of rubble and rust, boarded-up houses, Dickensian wall fragments and roads to nowhere. Derelict waterfront warehouses stand in the distance. A middle-aged security man in a peeling wood cabin guards them. “There’s lots of steel cable in those sheds,” he says. “And lots of people try to steal it.” When asked how long it has been so run-down, he shrugs and says without emotion: “As long as I can remember.“
The town’s population is around 138,000. To a visitor, the long, straight streets of the town centre seem eerily empty of pedestrians. At the sizable railway station, the weekday rush hour sometimes barely exists: at 8.30 on a Friday morning, I counted fewer than a dozen other people on the platforms. The station cafe had not bothered to open.
“If things carry on as they are now,” says Alex Niven, a leftwing writer from Northumberland, “in five years the situation will get somewhere like Detroit.” Several other authorities in the north-east that I interviewed invoked the long-imploding American city, unprompted.
He left the area 10 years ago, aged 18, and now lives in London. “Almost all my friends from school live in London now. When you go back to the north-east, the landscape’s kind of crumbling. There is this sort of sadness. It feels like a people who’ve been weakened, who’ve just been cut loose.”
Geography does not help. “The north-east is at the far corner of the country, but it is separated by more than just miles,” writes Harry Pearson, born near Middlesbrough, in his 1994 book The Far Corner.
“There is the wilderness of the Pennines to the west, the emptiness of the North York Moors to the south, and to the north, the Scottish border… Sometimes the north-east [seems] more like an island than a region.”
It is an island that the HS2 rail project is not currently intended to reach. Meanwhile, the prospect of Scottish independence and the near-certainty of more Scottish devolution threatens to marginalise the region further. “Scotland can already do more to attract inward investment than we can,” says Chi Onwurah, Labour MP for Newcastle Central. “More power for Scotland, in that sense, would not be a benefit for us.”
Pinned to a board in her constituency office is a list of Newcastle food banks. Outside, contrastingly, the grand city centre streets are much busier than in Middlesbrough, full of prosperously dressed people and big branches of the same upmarket chainstores as in richer places.
“Newcastle is the economic capital of the north-east,” she says, “but the centre, especially, is not representative of the region.” A few minutes’ walk farther out, cheap cafes offer soup of the day for a pound, and other scruffy businesses have long ceased to offer anything. “Every time I see a building boarded up,” Onwurah says, “it strikes fear into my heart.”
Onwurah grew up on a Newcastle council estate in the 60s and 70s. It was then a smoky, clattering centre for shipbuilding and other heavy industry, but these were in terminal decline. In 1984, she left to study electrical engineering, then worked away from Newcastle for a quarter of a century, until she was elected as MP in 2010. In the interim, the city reshaped its economy around tourism and nightlife, as an internationally hyped “party city“; around sport, with the 90s resurgence of Newcastle United; and around culture, with the opening in Gateshead of the Baltic art gallery in 2002 and the Sage music centre in 2004.
“It was a very heady time,” says Niven, who supports Newcastle United and as a teenager often travelled into the city from rural Northumberland. “The north-east has a brash, confident side. There’s also often a sense of slumbering potential, that one day a messiah or a revival will come.”
In the 90s and noughties, optimism was most concrete along the river Tyne, which separates Gateshead and Newcastle. Decaying canyons of quayside buildings filled with flash new bars, expensive flats, high-end office space and public art. It was easy to visit Newcastle – which I often did then – and think it was becoming a swaggering, economically self-sufficient provincial city, such as those you find in less centralised countries: another Marseille or Hamburg.
The quaysides are slightly less uplifting now. On the Newcastle side, several bars have shut down. Bridge Court, an enormous, empty office block, has a plaque that reads, “The foundation stone was laid by Mr Eddie George, governor of the Bank of England, on 22 September 1994“; another sign says, “Demolition. Keep Out“.
Niven sees the north-east’s revival under the Blair government as “largely superficial. In the long term, it didn’t lead to better jobs and infrastructure. You can’t base the revival of a region on nightlife and football.“
Onwurah, whose grandfather worked in the shipyards and whose mother grew up on the quayside, is less scathing: “Labour did a lot in the north-east, to stop the concentration of economic power elsewhere getting much worse, but we didn’t overcome the underlying issue. We haven’t got the previous sources of economic growth. And we haven’t got enough skills and entrepreneurs.” A successful region, she says, has a “critical mass” economically. “If you don’t have critical mass, to attract people and investment, you go into decline. We’re on the edge of that.” She holds up her hands and makes a flat, wobbling gesture: “We’re teetering.“
In Middlesbrough, the riverside wasteland has been earmarked for regeneration – as a new area called Middlehaven – for almost 30 years. Recessions, anxious developers and the town’s wider economic struggles have confined most construction to the area’s fringe. Yet there is one exception: an incongruous silvery curve of a building in the centre of the emptiness. Middlesbrough College opened in 2008; it houses engineering workshops, training kitchens, hair and beauty salons, and other vocational course facilities for 16- to 18-year-olds. In 2011, it was rated “good with outstanding features” by Ofsted. Walking down the college’s bright and warm internal street, seconds after being out in the dereliction, and seeing students at work in the glass-walled rooms or rushing back and forth, it seems absurd to think that Middlesbrough does not have a long-term future. But in the window of the in-house Jobs Shop, only half a dozen positions are offered. One is at a local seaside care home for the elderly: the successful applicant will earn £107.20 for a 40-hour week.
Further education is one of the north-east’s few growth industries. “Without it, I dread to think what some of the cities would be doing,” says Andy Pike, director of Newcastle University’s Centre for Urban and Regional Development Studies. “A lot of people want to come and study in the north-east” – academic standards are high, living costs low and the nightlife boisterous. But, Pike adds, “We have a problem with graduate retention: not as many stay as could do. It’s a thin labour market. The people who stay typically will not end up in graduate jobs. And then local non-graduates will be bumped out of the labour market altogether.”
> But the influx of students also puts a strain on rented accommodation. Certainly in Sunderland (which seems to be ignored in this article) its noticable that streets near to the university appear to becoming student-only ghettos – private landlords presumably looking to maximise profits by packing them in.
In the north-east, the increasingly de-skilled, low-paid labour market of Britain under the coalition is at its meanest. Full-time wages are the lowest of any UK region.
In 2007, the Middlesbrough Institute of Modern Art, or Mima, cheekily echoing New York’s Moma gallery, opened on a redeveloped square in the town centre. It looks the part: slick, glassy exterior; high-ceilinged interior; dozens of attentive young staff in Mima T-shirts. It offers an ambitious programme of community events and exhibitions – currently, Art And Optimism In 1950s Britain. Yet a gallery cannot make a town centre vibrant by itself. On Thursday evenings, it opens late, but on the Thursday I visited I saw four other visitors in half an hour.
Since the 1930s, governments have tested regeneration projects in the region. Edward Twiddy is one of the latest reformers to be despatched from London. Since 2012, he has been head of the North-East Local Enterprise Partnership (Nelep), a typically optimistic coalition creation, which aims to get business and local councils – almost all Labour – to work together for the area’s economic benefit.
Twiddy previously worked at the Treasury and for the Foreign Office in Iraq. He is slight and cerebral-looking, and speaks mostly in fluent Whitehall jargon. “The region’s still going through some fairly big structural changes,” he tells me. “The north-east was over-specialised – in coal, for example. Nowadays, people need to be able to approach life differently. You’ve got to be able to travel, to be competitive… Economic activity will move [away] if you cannot convince the market that yours is the right place to work.” But even Twiddy is off: he is set to leave Nelep for Atom, a new digital bank to be based “in the north-east“.
I ask how many staff Nelep has. Twiddy pauses: “The core is four. Then there are people doing discrete pieces of work for us, people loaned to us, people I’ve scrabbled around for, got a few pennies for… There are about 11 or 12 of us in all.” Nelep replaced One North-East, a regional development agency created by the Blair government that had 400 staff.
Yet there is a more economically independent side to the region. A few miles east of the centre of Newcastle, a side road leads steeply downhill to a half-hidden stretch of the Tyne. In the early 1980s, the quays here were a rotting ladder of derelict docks and slipways. Then two local property developers, Freddy and Bruce Shepherd, began to buy the land, clean it up, reuse the old cranes and rent out the quaysides: first to companies involved in North Sea oil, then to others involved in undersea cable-laying and offshore wind power.
Shepherd Offshore now stretches along the Tyne for miles. In its riverside boardroom, with giant reels of cable as tall as tugboats looming outside the windows, Twiddy makes the introductions over coffee served in Versace mugs. The Shepherds are heavyset men with fierce handshakes and slightly loose tongues. “We are the raggy end of the couch up here in the north-east,” Bruce says. Freddy interjects: “We get nothing easy. Not off the government. Without us, there would be nothing here but two abandoned shipyards.” “Up and down the river, we’re close knit,” Bruce says. “There are more than 2,500 jobs. We’re a manufacturing base. We train people. But we’re forgotten down here.”
How many jobs were there in the days of the shipyards? “Six and a half thousand,” Freddy says. “I was an apprentice in the shipyard here. You’re never going to get back to those numbers.”
Bruce offers a tour of the quay in his spotless Range Rover. As we drive, he points out other cars parked nose to tail at the roadside: “There’s never enough parking. The number of people working here keeps growing.” We leave the road and enter a muddy construction site, scheduled to house a new national research centre for offshore and undersea technology, a collaboration between the Shepherds, Newcastle city council and Newcastle University. Bruce ploughs through puddles, his property developer’s patter in full flow, then stops his spattered Range Rover at a fence that faces the famous old Swan Hunter shipyard. It is still a wasteland, but new developments are encroaching from all directions.
Another sign of entropy reversed would be to attract more southerners; not just to study but to work. Twiddy is one. Tony Trapp is another. Raised in London, he has been one of the area’s handful of legendary entrepreneurs since the 70s. Then, he helped invent an undersea plough for laying seabed pipes and cables by driving a specially adapted tractor up and down a beach in Northumberland. Several companies and clever products later, he now runs Osbit Power, which makes self-stabilising gangways to connect offshore wind turbines to maintenance vessels.
The enterprise is based in a previously derelict hotel in sweeping Northumberland countryside. Behind its unkempt walls, purposeful-looking young employees cluster at desks or in front of whiteboards, while Trapp, a creased man of 68 with a murmuring voice but an intoxicating can-do aura, briefs them and holds court. “I’ve always based my businesses on clever graduates,” he says later. “I’ve taken on hundreds, some from Newcastle University, from Northumbria University. For offshore engineering, the north-east is the best place in Europe.“
But in other ways he sees the local economy as still underpowered. “Persuading clever people from the south to come here is quite hard. It’s not just the image they have of the north-east – it does have the worst statistics, in health, in booze… If you look at many CEOs of big companies here, they don’t live up here. They live in Surrey, London. It’s insulting, in a way.” For a second, he looks his age. “I don’t have the solution to the north-east.”
It is not Twiddy’s job to voice such doubts. Instead, he takes me to the coast, not far from where Trapp tested his undersea plough. It is a brilliant blue day, and the often luminous north-east light is at its most seductive. We drive into the small town of Blyth, where there has been a port since the 12th century, which suggests the region has more staying power than the doom-mongers claim. We approach a cluster of shiny, towering blue-grey sheds, where the National Renewable Energy Centre tests blades for offshore wind farms. In December, the government increased its subsidy for this source of electricity, a rare gift from Whitehall to the north-east in the age of austerity. Twiddy sounds like a small boy for a moment: “The crane for lifting the blades is just amazing!“
We walk to one of the windowless sheds. Inside, spot-lit, suspended above an expanse of polished concrete floor, a single pale grey blade, with weights and cables attached to it, flexes slowly up and down, vast and stately as the tail of a whale. The only sound is the hum of the air-conditioning. In a space the size of a small cathedral, but clean and tidy as a science lab, only two employees are visible: distant, purposeful figures in dust coats.
Working here looks much better than working in a chilly shipyard, a call centre or a nightclub, or for most of the region’s previous economic saviours. But Mill says the centre has a staff of 69. The north-east will need an awful lot more workplaces like it this if it is going to stop teetering.
Source – The Guardian 10 May 2014
This article was written by Patrick Wintour and Patrick Butler, for The Guardian on Monday 3rd March 2014
Nearly 70,000 job seekers have had their benefits withdrawn unfairly, making them reliant on food banks, the right-of-centre thinktank Policy Exchange has said .
The intervention is the first by a respected rightwing voice claiming that something has gone wrong with the administration of benefits.
A chorus of churches, charities and Labour has been warning the work and pensions secretary, Iain Duncan Smith, for months that the administration of benefit sanctions has become too punitive.
Duncan Smith has commissioned a limited independent review into the administration of sanctions, and this is likely to confirm problems in the way they are imposed, but not challenge their level.
Policy Exchange says almost a third of all people who break their job search conditions for the first time have their benefits taken away by mistake and face unnecessary hardship as a result.
Guy Miscampbell, the author of the Policy Exchange report, said: “It is clear that there are a significant number of people who have their benefit taken away from them unfairly. Four weeks without any money is driving people to desperate measures including a reliance on food banks”.
The report suggests: “With some 874,000 adverse decisions being made between October 2012 and September 2013, and over 146,000 of them being successfully appealed or reconsidered it is clear that the possibility of wrongly applied sanctions, and what their effects might be, is an important one. With some estimates suggesting that 43% of those referred to food banks are there due to benefit stoppage or being refused a crisis loan, it is clear that there is not currently an adequate safety net for those who are wrongly sanctioned”.
The report comes as a public health specialist, Professor Elizabeth Dowler of Warwick University, said that poverty–stricken families who cannot afford to buy sufficient food are overtaking unhealthy eating as the most pressing public health concern.
The claim is made in a BBC Panorama documentary broadcast on Monday evening, which found that over a third of local authorities in England and Wales were providing funding for food banks, despite government claims that charity food is not a part of the social security system. “Food banks are an inadequate plaster over a gaping wound,” Dowler said.
On Sunday, Cardinal Vincent Nichols, the archbishop of Westminster, repeated his criticisms of the welfare system, saying that “some of the priests who are right there on the ground say it comes across as punitive”. He revealed that he was bringing a group of priests together to discuss the evidence, and welcomed the inquiry into food banks being chaired by the archbishop of Truro and Frank Field.
Policy Exchange suggests issuing first-time offenders, who may or may not have been fairly sanctioned, with a ‘yellow card’ in the form of a benefits card. It says this would be a more compassionate way of trying to help people back into work.
Benefits would be accessed via this card for a maximum of eight weeks. If the claimant continues to breach job search conditions, the card and benefits would be taken away. This system would provide a safety net, mitigating hardship while a sanction is appealed, forcing claimants to re-engage with Jobcentre staff and deterring non-compliance through the added inconvenience of daily sign on.
They would also be asked to sign on daily as part of a proposal to create a more compassionate but stricter sanctions regime.
It suggests that repeat offenders should be punished more seriously.
> So its still all sticks and no carrots…
The report also recommends more stringent penalties for people who consistently break the terms of their job search requirements. According to the research, between October 2012 and September 2013 there were 30,000 claimants on their third sanction or more for lower tier offences such as missing an interview with a Jobcentre adviser. Repeat offenders should have their benefits taken away for a longer period of time from 13 to 26 weeks for a third breach. For each offence, a further 13 weeks should be added.
Monday’s Panorama also uncovers evidence that a jobcentre appears to be explicitly alerting its staff to the financial savings to be made through “sanctioning” job seekers when they are judged to have broken benefit conditions.
A wall chart in a Grantham jobcentre explicitly sets out the cash savings available to the Department for Work and Pensions (DWP) through stopping the benefits of claimants, ranging from £227.20 a week for a four-week sanction to £3,728 for a sanction lasting one year.The DWP told Panorama: “This was an isolated incident and does not reflect our policy on sanctions.”
> And we don’t believe you.
In a way, its more comforting to believe that they do have targets…otherwise you’d be left with the impression that a large proportion of Jobcentre staff are vicious, sadistic bastards willing to wreck people’s lives on a whim.
Source – Welfare News Service, 03 Mar 2014
Right wing “think tank” Policy Exchange (PE) – described by the Daily Telegraph as “the largest, but also the most influential think tank on the right” – wants pay to be cut for public sector workers in the North East (and Merseyside, and the South West), pointing to research claiming that taxpayer-funded jobs in the region pay as much as 3200 pounds more than their equivalents in the private sector.
(As usual I have problems with terms like “as much as 3200”, which probably means a few lucky people do, but the majority get nowhere near. But policies like this will always quote the highest figure earned by the minority, rather than the far lower one that is the lot of the majority. Just something to bear in mind…)
What the PE has in its sights is regional pay policies. Matthew Oakley, head of economics and social policy at PE : “Nationalised pay negotiation is not fit for purpose for the modern public sector. It is bad for the economy and bad for public services. While the unions should still have a strong role in the future, we should move to a system where local public sector employers can decide how to negotiate salaries with employees in order to reflect the realities of their labour market.”
Which I translate as something like – employers tell employees ” lots of unemployment out there – either you accept lower wages or we find someone who will.”
Incidentally, could this be the same Matthew Oakley who was recently described by The Void as ” Britain’s biggest scrounger” ? It certainly could.
Matthew Oakley has previously authored a paper on welfare reform which includes not only a demand for a greater use of sanctions for part workers, but astonishingly even pre-emptive benefit sanctions for people on fixed term contracts. Oakley believes that these workers should be stripped of any entitlement to benefits at all if Jobcentre staff decide that they weren’t doing enough to find work even before they lost their job.
So impressed was Iain Duncan Smith with this swivel-eyed nonsense that he gave Oakley a non-job on the Social Security Advisory Committee (SSAC) – the body whose job it is to scrutinise social security reforms.. This means he is now paid £256.80 a day of tax payer’s cash to provide so-called expert opinions on policies he helped create.
Prior to working at the Policy Exchange, Oakley was in another tax payer funded non-job at the Treasury where he worked on a white paper outlining proposals for Universal Credit. Now Iain Duncan Smith is to shovel yet more of our money into his grubby pockets by asking him to carry out what is laughingly called an ‘independent review’ of benefit sanctions.
Whilst over two million people are desperate for any job, Oakley now has three – and two of them at our expense.
Nice work if you can get it !
But as pointed out by Neil Foster, head of policy at the Northern TUC : “PE still fail to compare like with like since many of the jobs in the public sector simply don’t exist in the private sector and vice versa.
“They lost the argument on regional pay and I’d advise them to move on to other areas of research such as looking at the wealth at the top that has gone up during austerity, rather than arguing North East nurses, midwives, teachers and school cooks are overpaid.”
You might think that what all this proves is that the wages of private sector workers are being kept low by unscruprulous employers, and that rather than reducing the pay of the public sector, we should instead be raising the wages of the private sector.
Alternatively, you might think that if we should have lower regional wages, we should also have lower regional outgoings – lower power bills, food prices, transport, etc. But “pay more, get less” is the unofficial motto of organizations like PE and the neo-liberal forces they serve.
You might also like to bear in mind that a study for the GMB union shows 631,000 public sector jobs have been lost since the Coalition came to power in 2010,
and the union predicts that fresh cuts being eyed by Tory Chancellor George Osborne will take that figure over a million before the next election in May 2015.
GMB national officer Brian Strutton said: “These statistics show the devastating effect of this Government’s austerity cuts on total public sector employment. Some parts of the country that are most dependent on the public sector to support their local economies have been hardest hit.The tragedy is that the worse is yet to come.
“The Office for Budget Responsibility’s forecast for net total public sector job losses during the lifetime of this Parliament means that the prospect for the next two years could be up to a further 400,000 job losses.”
Still, as we’ve often been told, the private sector will take up the slack and replace all those lost public sector jobs, albeit for lower wages.
It doesn’t seem to be happening. Isn’t that strange ?
You don’t think they might have been lying to us, do you ?