Monday, October 28, 2024
Investment in public services must be key aim of budget
To be fair, some of the speculation about what is likely to be in Rachel Reeves' speech is likely to be right, if only because she and her colleagues have been slowly releasing details in an effort to soften us up. It's also the case that Labour have painted themselves into a corner on this one by announcing straightaway that they found a £22billion black hole in the nation's finances, while at the same time tying their own hands in closing this gap by promising not to raise income tax, VAT or national insurance paymeents, all measures that could quickly deal with the deficit.
I don't want to get involved in the speculation, except to say that from a government point of view, this must be one of the most ineptly managed lead-ins to a budget for some considerable time. When you have ministers from Keir Starmer downwards, tying themselves in knots, while struggling to define what working people are, just so they can create some fiscal room for manoeuvre, then you know that they are in trouble.
One article I can identify with is this one in the Guardian. This quotes a poll of 500 UK business leaders undertaken on behalf of the TUC, which found that UK businesses are losing staff working time because of waits for healthcare or caring duties due to underfunded public services.
The paper reports that more than half of these business leaders said workers had to take time off in the last year because of problems accessing public services:
The TUC said the extent of time lost to public service pressures showed that the government should spend more on repairing services. While higher taxes tend to be unpopular with businesses, the union body argued that better public services would help UK companies to grow by allowing workers to be more productive.
The polling, carried out by Opinium, suggested that 35% of business leaders – ranging from small business owners up to management of large businesses – had staff absent while waiting for hospital treatment, and 17% for mental health treatment.
The Institute for Public Policy Research, a thinktank with close links to Labour, has previously argued that poor health is holding back the UK economy. It said last month that the 900,000 people lost to the labour force since the coronavirus pandemic would cost HMRC £5bn in lost revenue this year.
Caring duties were also a drain on time, with nearly a fifth of bosses saying staff took time off to fill in for social care for an adult relative, while 17% said workers took time off because they were unable to find childcare.
This poll underlines once again how our care system is broken and how it is pulling the health service down with it.
If Rachel Reeves does just one thing on Wednesday then she needs to start putting this right. Our public services are in a parlous state and the failure to invest in them is damaging our economy. Sorting that out must be a key objective of this budget.
Sunday, October 27, 2024
Welsh Labour is Starmer's problem on the NHS
LBC suggest that NHS day-to-day budget could see an increase of around three to four per cent for this year as well as 2025-26 - totalling £10 billion a year, though this has not been confirmed:
Extra details on Labour's pledge for 40,000 more appointments and operations a week are also expected to be announced.
But senior NHS leaders have said focusing on routine operations could be at the expense of emergency care.
NHS Confederation chief Matthew Taylor said focusing on routine operations "must not be to the detriment of the very real and immediate pressures facing emergency care this winter".
Writing in the paper, Ms Pritchard said the NHS had been told by the government that "there will be no NHS investment without reform".
"Far from being daunted, we welcome that," she said.
A recent review found that, despite the hospital workforce increasing by 17 per cent in four years, surgeons are performing 12 per cent fewer operations and A and E doctors or nurses are seeing 18 per cent fewer people.
There is no doubt that reform is needed, but will throwing money at the problem work, and what kind of reform does she have in mind? It is likely that this extra money will hardly touch the sides, and without proper funding to increase capacity in social care and support carers, its impact may well be limited.
Starmer and Reeves' bigger problem however is Labour already patch record on the health service. Here in Wales where Labour have run health and social care for twenty five years, we are well past crisis point. As the jounalist Will Hayward points out in his latest e-newsletter, the latest Welsh NHS waiting list data is out and they are now longer than they have ever been, exceeding even the Covid period.
He says that the list of those waiting over one or two years has been rising month on month through the summer:
The overall total is also going up. Welsh Labour have said they are putting in an extra £28m to tackle the longest waits but it will take some time to see if this makes an impact in data.
It is also worth noting that ailments do not stay the same while someone is on a waiting list. They often become more severe and complex meaning that when you eventually do come to treat it, it is a far harder proposition. A stitch in time (literally) saves nine. This is to say nothing to the other issues that come with long term illness like weight issues and mental health deterioration.
If Welsh Labour are no longer the largest party come 2026, it will be the inability to get these lists down which will be the primary reason.
A Reeves injection of new money into the health service will generate quite a big Barnett consequential for Wales, possibly as much as half a billion pounds. That would be very welcome, but if the Welsh Labour government do not use it well, then the problems will continue.
Labour's record in Wales is a major embarrassment for Starmer. Can they fix it? We will see.
Saturday, October 26, 2024
Brexit and the price of power
Before Brexit, the UK procured power through the EU’s internal electricity market, which brought together bids and offers in a system known as “single day-ahead coupling”, using an algorithm to optimise pricing and flows.
The UK imports and exports electricity through interconnectors – huge undersea cables – to Norway, Ireland, France, Belgium, Denmark and the Netherlands.
After the post-Brexit trade deal came into force in January 2021, the British market was no longer part of the algorithmic system, reducing the efficiency of trading and pushing up costs.
“One of the unfortunate consequences of Brexit is that we have been left with these very inefficient trading arrangements, and there is a cost to that,” said Energy UK’s deputy director, Kisha Couchman.
“There’s been upwards of somewhere between £100m and £370m and that has ultimately been borne by the consumer,” she told a British Irish Chamber of Commerce conference in Dublin.
The price increase is another consequence of leaving the single market under the “hard Brexit” sought and sealed by Boris Johnson’s government in late 2020.
Energy UK said relinking the UK to a unified trading operation would not only reduce the cost of electricity, but also create a “greater incentive for decarbonisation across both jurisdictions”.
It said a return to a more efficient import and export arrangement would benefit both the UK and the EU as they strive to achieve net zero by 2050.
“Linkage is critical for the UK and EU industries and is supported by British and European industry and civil society alike. This should be a priority for the new UK government to address,” it said in a recent report.
In a briefing issued this week, Energy UK said
“Unless the UK moves toward closer cooperation with the EU on energy and climate it may lead to additional costs of up to £10bn this parliament through higher energy bills and lower Treasury revenues,” it said.
It calculated that energy trading outside the bloc was costing the UK £120m to £370m a year. It also estimates a further £800m in carbon tax charges the EU plans to introduce on imports from 2026.
According to its analysis, the Treasury will lose between £900m and £2.4bn in revenue a year as a result of a reduction in demand for UK energy that new emissions trading rules are expected to trigger as the EU implements its carbon border adjustment mechanism in 2026.
It notes the UK is likely to become a net exporter of electricity by 2030, but that the new carbon tax barriers “will make it harder for the UK to fulfil its potential”.
Previous research found that the change to trading arrangements over the interconnectors can add between 0.25% and 0.7% to wholesale costs, with £90m to £250m added in 2021.
Maybe they should have put that on the side of the bus.
Friday, October 25, 2024
Filling the gap
One route is to tax wealth, an area long-neglected by government, with the result that those holding substantial assets are paying proportionally less tax than somebody on the basic rate.
The Mirror reports on new research that has found that a 2% tax on the fortunes of the super-rich over £10million could raise £24billion.
They add that this extra tax would be paid by the very wealthiest 0.1% of the population and help fix the crisis-hit NHS or massively reduce staggering levels of child poverty:
Last week a survey found a majority of voters (63%) would support a 2% tax on assets over £10million while just 12% were opposed. Earlier this week a group of 30 MPs also called on Chancellor Rachel Reeves to impose the tax on "extreme wealth"- rather than any spending cuts.
The CEO of 38 Degrees Matthew McGregor said: "The NHS has been declared officially broken and the ‘black hole’ in public finances that the Government has inherited is a well-publicised problem - one that the British public want to see bold solutions to. A Ten Million Tax of 2% on assets over £10 million is just the kind of measure that voters back.
"A move like this would see the ultra-rich contribute a tiny proportion of their vast wealth - and in return, this money could be spent making a huge difference to millions of peoples’ lives - whether by funding 1.8 million more cancer treatments or lifting families pushed to the brink by the cost of living crisis, out of poverty."
He added: “At the budget next week, there are big decisions to be made and a big opportunity for the Government. By introducing a Ten Million Tax, they can prove who they are here to serve, and finally put our country back on track.”
The fact is that if we want better public services, we have to pay for them. And that means that tax revenues have to increase. Higher growth could fill that gap, but we are not going to get that without significant investment (and some sort of reprochment with the EU) and so we need to raise the cash in the most equitable way possible.
If that means taxing wealth then I am okay with that.
They add that this extra tax would be paid by the very wealthiest 0.1% of the population and help fix the crisis-hit NHS or massively reduce staggering levels of child poverty:
Last week a survey found a majority of voters (63%) would support a 2% tax on assets over £10million while just 12% were opposed. Earlier this week a group of 30 MPs also called on Chancellor Rachel Reeves to impose the tax on "extreme wealth"- rather than any spending cuts.
The CEO of 38 Degrees Matthew McGregor said: "The NHS has been declared officially broken and the ‘black hole’ in public finances that the Government has inherited is a well-publicised problem - one that the British public want to see bold solutions to. A Ten Million Tax of 2% on assets over £10 million is just the kind of measure that voters back.
"A move like this would see the ultra-rich contribute a tiny proportion of their vast wealth - and in return, this money could be spent making a huge difference to millions of peoples’ lives - whether by funding 1.8 million more cancer treatments or lifting families pushed to the brink by the cost of living crisis, out of poverty."
He added: “At the budget next week, there are big decisions to be made and a big opportunity for the Government. By introducing a Ten Million Tax, they can prove who they are here to serve, and finally put our country back on track.”
The fact is that if we want better public services, we have to pay for them. And that means that tax revenues have to increase. Higher growth could fill that gap, but we are not going to get that without significant investment (and some sort of reprochment with the EU) and so we need to raise the cash in the most equitable way possible.
If that means taxing wealth then I am okay with that.
Thursday, October 24, 2024
Pressure on PM for closer ties with the EU
The paper says that the group, which aims to “discover areas of mutual co-operation and interest” and probe the UK-EU relationship, held its first meeting on Tuesday:
The group will seek to “foster positive relationships with colleagues across Europe”, as well as “encouraging an open and honest dialogue for politicians of all stripes”, co-chair Dr Rosena Allin-Khan said.
The meeting was attended by multiple prominent Labour backbenchers including Dawn Butler, Yasmin Qureshi and Marsha de Cordova.
Former Labour MP Rosie Duffield, who now sits as an independent after quitting the party, was also in attendance, as well as Liberal Democrat, SNP and Green MPs.
Sir Keir has faced criticism for his decision to disband the European Scrutiny Committee after Labour won the last election, with MPs now forming their own group to fill the democratic void.
The first meeting of the new All-Party Parliamentary Group (APPG) on Europe, chaired by Dr Allin-Khan and Tory peer Lord Kirkhope, saw multiple parliamentarians express their dismay that there wasn’t another avenue for discussion and scrutiny on European issues since the axing of the committee, sources in attendance told The Independent.
At the time, the decision was dubbed a “disgrace” by Sir Bill Cash, the former Tory MP who chaired the committee for 14 years before standing down at the last election.
But Dr Mike Galsworthy, Chairman of the European Movement - which is supporting the APPG - said the new group would bring in a “fresh new era of European engagement.”
It comes as Sir Keir attempts to pursue a “reset” with the EU, pledging to “make Brexit work” by renegotiating the deal agreed upon by Boris Johnson and the Tories.
Joe Meighan, public affairs manager at the European Movement warned the prime minister against running a “covert charm offensive with Europe”, saying it “risks any advancements being labelled as undemocratic”.
“Our exit from the EU and removal from its apparatus should give cause for deeper parliamentary scrutiny, not the opposite. If Starmer’s great reset is to be fair, equitable and democratic, it must be one routed through the House of Parliament and not Labour HQ”, he said.
Meanwhile, Lord Kirkhope told The Independent the new group is “crucial” following the decision to abolish the European Scrutiny Committee.
“It will allow us to assess policies as they evolve and apply a positive, pragmatic approach to our relationship with Europe.
“We’ve bilateral ties with many European countries, but what’s been lacking is a broader, strategic view of our relationship with the EU as a whole”, he said.
This new group is very welcome but it doesn't bode well for Labour's so-called reset that Starmer's first act in this direction on becoming PM was to abolish the European Scrutiny Committee.
Wednesday, October 23, 2024
For the sake of the economy Reeves needs to bite the bullet on tax and spend
Of course these things are just snapshots, it is the trends that matter, but if they allow the government to do the right thing, then who am I to argue.
This poll from IPSO from five days ago should be sending a powerful message to Chancellor Rachel Reeves. It found that two in five (40%) Britons say they support increasing spending on public services, even if it means that they personally pay more tax.
IPSO found that support for increased spending rises to 52% of those who voted Labour in 2019, as opposed to 35% of those who voted Conservative. There is also an age split, with 46% of over 55s wanting higher spending (20% prefer tax cuts) but among 18-34 years 34% wanting higher spending and 37% tax cuts.
When asked about specific issues, 6 in 10 (61%) of Britons support the next Chancellor increasing spending on the NHS, even if it means they personally pay more in taxes. This is followed by education (44%), policing (41%), and defence (40%). The public are most split on increasing their own personal taxes to pay for higher spending on green projects to reduce the impact of climate change (34% support higher spending even if that means higher personal taxes, 29% would prefer cutting taxes).
Labour however, have painted themselves into a corner. They have severely limited their options by promising not to raise income tax, VAT or national insurance on working people. There are also doubts about the workability of charging VAT on private education and accelerating the taxing of non-doms.
With a £22 billion budget gap and failing public services, Reeves really needs the extra revenue. The economy too, desperately needs capital investment in housing, transport, health, AI and many more areas if we are to compete with other countries and raise GDP. Such investment is key to levelling up the poorer parts of the UK.
Having a situation whereby average income per head is lower than most other Western nations is unsustainable. In his book 'This Time no mistakes' Will Hutton quotes John Burn-Murdoch of the Financial Times who has shown how skewed our economoy is towards London. He says that the UK capital is so disproprtionately rich that if it is not included in the figures the average income per head in the rest of the UK falls below that of the poorest US state, Mississippi.
Starmer and Reeves need to succeed where Boris Johnson, for all his rhetoric, failed. If they do not use this budget to set off on the road to tackling poverty in this country by investing in the economy then their project is doomed from the beginning.
Tuesday, October 22, 2024
Too high a price
The Independent reports that Keir Starmer has come under pressure to publish the true costs of Brexit after a minister confirmed Britain has spent £24bn alone withdrawing from the EU – with a further £6.4bn still to pay. Treasury minister Tulip Siddiq replied to a parliamentary question to say that Britain has paid the EU £23.8bn as part of its “financial settlement” agreement.
Naturally this has created waves, even though I think we all suspected that this was the sort of ball park figure that Brexit had cost us:
Best for Britain chief executive Naomi Smith told The Independent: “Exiting the European Union not only cost the UK vast amounts of money, but economic growth, opportunities for young people, influence on the world stage, and much more.
“But this government has the opportunity to reverse that downwards trend, building on a strong start to bring us closer to the EU through policies like beneficial alignment and a reciprocal youth mobility scheme.”
Deputy chief executive of campaign group the European Movement, Emma Knaggs, told The Independent: “It’s encouraging to see more data being shared about the cost of the UK’s exit from the EU. However, we remain in the dark about the full extent of the impact of leaving the EU and its repercussions on areas such as the economy, the NHS, the cost of living and UK businesses, to name just a few. We need an independent, forward-looking inquiry on the UK’s relationship with Europe to identify those opportunities and rebuild those closer bonds.”
Despite this Labour are still sitting behind their red lines of not rejoining the single market or the customs union, a position that is doing irreparable damage to the UK economy and its future prospects.
Starmer's ambition to rebuild public services on the back of sustained economic growth will prove almost impossible unless he carries out a u-turn on that position.
Monday, October 21, 2024
The need to regulate AI
They say that Chi Onwurah, who chairs the science, innovation and technology committee, has told the paper that the “creativity and focus of criminal enterprises on adopting technology is unimaginable”.
They add that the Labour MP has stressed that AI should not simply be seen as a force for harm, saying when used correctly it can be a “transformative technology that can really improve people’s lives:
It comes as new research, shared with The Independent, found that AI platform ChatGPT can be manipulated to show users how to launder money, evade sanctions and acquire weapons.
With basic manipulation, the platform provides detailed instructions on how to create front companies in neutral or unsuspecting countries that aren’t directly involved in sanctions enforcement, such as Latvia, Lithuania, or Belarus.
The research, conducted by anti-money laundering company Strise, also showed users how to use cryptocurrencies to circumvent traditional banking systems.
Ms Onwurah said: “Criminals are always early adopters of technology and we need to have the defence of public security in mind.”
Her warning comes just days after William Hague said the UK was facing “an all-out assault on truth” by hostile states attempting to use misinformation to destabilise the West.
Writing in The Times, the former Conservative Party leader warned that “cognitive warfare” could “fatally weaken the West”.
He said: “We have to wake up to it, understand it and appreciate that a modern adversary might not attack us with tanks and aircraft, but by getting inside our brains and those of our friends around the world.”
In October, Ken McCallum, the director general of MI5, said Russia’s intelligence agency has been on a mission to generate “sustained mayhem on British and European streets”.
Giving his annual update on security threats faced by the UK, Mr McCallum said GRU agents had carried out “arson, sabotage and more dangerous actions conducted with increasing recklessness” in the UK, after the UK backed Ukraine in its war with Russia.
Speaking at the UK’s International Investment Summit last week, Sir Keir Starmer said Britain “needs to run towards” the opportunities offered by artificial intelligence.
Addressing investors, alongside former Google CEO Eric Schmidt, the prime minister said AI would create “incredible change” in the next five to 10 years, and that the government would seek to embrace it.
On the plus side, the technology secretary Peter Kylehas called for decisive action to use technology for the public good. He believes that adopting it across health, education and policing could boost productivity by almost £24bn a year.
It is important that we get regulation right to protect the public from the unscrupulous use of this technology, but as the minister says, this needs to go further. We need to ensure that there is investment by both the public and private sector to add value to our economy and to improve our public services.
Leaving it to the private sector will not achieve that result, there needs to be proper direction and government buy-in, if AI is to fulfill its full potential.
It comes as new research, shared with The Independent, found that AI platform ChatGPT can be manipulated to show users how to launder money, evade sanctions and acquire weapons.
With basic manipulation, the platform provides detailed instructions on how to create front companies in neutral or unsuspecting countries that aren’t directly involved in sanctions enforcement, such as Latvia, Lithuania, or Belarus.
The research, conducted by anti-money laundering company Strise, also showed users how to use cryptocurrencies to circumvent traditional banking systems.
Ms Onwurah said: “Criminals are always early adopters of technology and we need to have the defence of public security in mind.”
Her warning comes just days after William Hague said the UK was facing “an all-out assault on truth” by hostile states attempting to use misinformation to destabilise the West.
Writing in The Times, the former Conservative Party leader warned that “cognitive warfare” could “fatally weaken the West”.
He said: “We have to wake up to it, understand it and appreciate that a modern adversary might not attack us with tanks and aircraft, but by getting inside our brains and those of our friends around the world.”
In October, Ken McCallum, the director general of MI5, said Russia’s intelligence agency has been on a mission to generate “sustained mayhem on British and European streets”.
Giving his annual update on security threats faced by the UK, Mr McCallum said GRU agents had carried out “arson, sabotage and more dangerous actions conducted with increasing recklessness” in the UK, after the UK backed Ukraine in its war with Russia.
Speaking at the UK’s International Investment Summit last week, Sir Keir Starmer said Britain “needs to run towards” the opportunities offered by artificial intelligence.
Addressing investors, alongside former Google CEO Eric Schmidt, the prime minister said AI would create “incredible change” in the next five to 10 years, and that the government would seek to embrace it.
On the plus side, the technology secretary Peter Kylehas called for decisive action to use technology for the public good. He believes that adopting it across health, education and policing could boost productivity by almost £24bn a year.
It is important that we get regulation right to protect the public from the unscrupulous use of this technology, but as the minister says, this needs to go further. We need to ensure that there is investment by both the public and private sector to add value to our economy and to improve our public services.
Leaving it to the private sector will not achieve that result, there needs to be proper direction and government buy-in, if AI is to fulfill its full potential.
Sunday, October 20, 2024
Brexit effect worse than feared
Michael Mainelli said Dublin had gained most, attracting 10,000 positions, while cities such as Milan, Paris and Amsterdam had also benefited from jobs migrating from London after Britain voted to quit the EU trading bloc in 2016.
"Brexit was a disaster," said Mainelli, the ceremonial head of London's City financial centre, which stretches over a square mile including the Bank of England, international banks and insurers. "We had 525,000 workers in 2016. My estimate is that we lost just short of 40,000."
The tally by Mainelli, who spent years charting the fortunes of Britain's financial centre before becoming Lord Mayor and has contact with hundreds of City firms, is far higher than the 7,000 jobs that consultants at EY calculated had left London for the European Union by 2022.
But he said the City of London was growing, including in fields beyond finance, with new jobs that compensated for the fall-out of Brexit. Worker numbers have swelled to 615,000 as insurers and data analysis sectors grow, he said.
Nonetheless, his estimate underscores the scale of the fall-out, as Britain seeks to rebuild bridges to continental Europe.
"The City voted 70-30 to remain. We did not want it," Mainelli said, adding that he had redoubled his efforts to "engage more" with Europe, making nine visits to countries in the region this year.
His push to bolster relations with the continent comes amid a wider economic slowdown in Britain, which has been riven by disagreement over its departure from the European Union.
Although some hoped that Brexit would give London the freedom to reduce immigration, ditch large amounts of EU regulation and bolster the economy, immigration rose, regulation proved hard to untangle and the economy slowed.
Keir Starmer, Britain's new prime minister, has sought to rebuild relations with continental Europe, damaged by years of fractious Brexit negotiations.
Starmer wants to remove some blocks to doing business with EU countries, including a mutual recognition agreement of professional qualifications, but has ruled out a return to the bloc's single market.
Mainelli said "there's a lot more we could do on visas" to help the City. "We're also working on bilateral trade deals with Germany," he said.
Long the jewel in the British industrial crown, the country's financial sector has also been in decline.
Economic output in the heart of Britain's financial sector, including banks and wealth funds, has fallen by more than 15% since late 2019, just before the UK formally left the EU.
Overall, financial services output in Britain has fallen by 1% since late 2019 — a stark contrast with France and Germany, where it has increased by 8%, and Ireland's 18% growth, national account data shows.
British financial services exports have been overtaken by other business services, such as law or advertising.
Britain's official budget forecaster said in March that its prediction Brexit would cause trade volumes to shrink by 15% was "broadly on track".
Most Britons think Brexit has been a failure so far, according to recent opinion polls, but proponents say Britain has greater freedom to pursue its own path outside the EU. They point to Germany's economic downturn and political turmoil in France as evidence of the bloc's shortcomings.
Surely, it is time for this new Labour government to start repairing the damage by rejoining the single market.
Saturday, October 19, 2024
Budget row highlights holes in Labour's housing plans
The paper says that as housing secretary, Raynor has been pushing Reeves for billions of pounds more for affordable housing, which she argues will be needed to hit Labour’s target of building 1.5m new homes across five years. However, the Chancellor has made it clear that there will not be enough money available in this spending review for an immediate cash injection:
The standoff is the latest sign of the tensions across cabinet over both the budget and spending review, with several cabinet ministers yet to sign off on their individual departmental settlements.
Rayner is understood to have stressed to the chancellor that social housing should not just be seen as do-gooding but as a key part of the government’s growth agenda.
She told a panel during the Labour conference last month: “I actually think it’s a moral mission with the Labour government to recognise the problem and to build the social housing we need … But hopefully at the spending review, you’ll see that this government is really serious that we’re going to build those houses we desperately need.”
Treasury sources say, however, that they are not able to accommodate every department’s demands given the tight spending constraints.
...
Sources have told the Guardian that Rayner had asked for an immediate top-up to the affordable homes programme, a government scheme which allocates £11.5bn to local authorities and housing associations over five years.
The programme is due to expire in 2026, but sources in the housing industry said it was already running out and needed an immediate boost of up to £2bn. They pointed out that Michael Gove handed back nearly that amount to the Treasury last year after struggling to find projects to spend it on.
Kate Henderson, the chief executive of the National Housing Federation, said: “To deliver affordable and social housing at the levels needed, at the autumn budget we need … an urgent top-up in affordable housing funding, and commitment to a new multi-year affordable housing programme which prioritises funding for social rented homes.”
Polly Neate, the chief executive of Shelter, said: “This government was elected on a promise to deliver the biggest increase in social housing in a generation. The only way to do this is through serious investment and by recognising housing as fundamental to communities and growth and counting it as critical infrastructure.”
Government insiders said that while the chancellor had ruled out an immediate top-up to the programme, she had not made a decision on how large it should be after 2026.
Housing industry groups say that hitting the government’s annual housing targets would mean building 90,000 social-rent homes a year for the poorest households, at a cost to the government of about £11bn. However, lobbying groups admit they would be happy to settle for closer to £4bn a year – double the current allocation.
When I wrote about Labour's housing targets back in August I said that the real issue is affordability, something that ministers cannot rely on the private sector to enable. I added that if Labour are serious about providing homes where they are most needed then they will need to provide significant amounts of public subsidy and ensure that local councils and housing associations are sufficiently resourced to build the social housing that is required. They will also need to invest in infrastructure. This target cannot be met on the cheap.
IF they don't bite that bullet straight away then they may as well say goodbye to meeting their targets.
