Friday, February 08, 2008

Gardiner's Lane South plan B

In 2003 Basildon District Council published a Supplementary Planning Guidance for Gardiner’s Lane South. This built on the 1992 Local Plan and designated the 90-acre open space for a large commercial and a limited housing development. So, far, so good, but despite a planning application for the site being passed in 2005, it hasn’t proved possible to design a project to actually get anything built. The sticking point has been the identified need for a bridge and junction over the adjacent A127 to take the traffic from the commercial development, which has a price tag of the order of £45m. No government cash has been forthcoming for that, and that upfront cost made a project unattractive to the private sector, despite the boom in commercial property that has only just come to a stuttering halt. What does a Council do when faced with such a situation? Well there is the option of working with the landowner, English Partnerships, an arm of the government, to somehow, some way get a development started on the original plans. That is certainly what the local Labour Party said we should do. Or, we could recognise that if we couldn’t get the development going in the most benign of markets then it certainly won’t happen during the current slowdown, and then think of something else. Because we are sensible people, we have gone with option 2, and we will be working with English Partnerships on a predominately residential alternative, which doesn’t have anything like the same heavy transport impact. That also means that there is a green field somewhere that we won’t have to concrete over to meet the government’s housing targets for Basildon District, which is also a good thing. The only real concern would be if the loss of potential employment land could damage the local economy, but we are confident that our other regeneration projects and developments like the huge London Gateway port just 7 miles down the road will provide the commercial space, and employment, that we need.

The Labour Party was still upset though, because the original proposal was largely their idea. Frankly, they shouldn’t be so defensive. No-one has torn into them about the viability of the original scheme, and anyway that is not the point. What matters is what works for our community not the egos that have been invested in glossy site maps. Housing on Gardiners Land at least has some prospect of actually being built.

Saturday, February 02, 2008

Egg sacks 7% of its customers

Credit card provider Egg, now part of Citigroup, has stopped the credit cards of 161,000 of its customers, about 7% of its entire base. Apparently this is because they are 'high risk' and it the straightened economic climes represented an exposure that the financial institution was no longer willing to accept. However, many of their understandably miffed ex-customers do not seem very high risk. In fact they seem to be the sort of people who manage their money well, and who pay down their credit card debt entirely every month. This gives us a clue as to what is really going on. No doubt some of those dispensed with are generating too-high credit risks, but some are probably the opposite, generating no actual credit at all, and hence generating no profit for Egg. Instead of coming clean that people who pay in full every month actually cost it money because of the expense in servicing their accounts, Egg is instead trying to pretend that it is acting solely as the soul of prudence. That this means putting all of the blame on its customers and worrying people all over the country. Egg's new management must know that brand damage can stick, and Egg cards might be a tough sell after this. The only conclusion is that a mix of poor cost control and poor risk management has put Egg into a very bad place indeed.

Let us hope that this is the only card issuer that finds itself in this sort of bind. Otherwise it would be an indicator of a much wider economic malaise.

Tuesday, January 29, 2008

Derek Conway Out

What a Contrast. Peter Hain is found to have undeclared donations of over £100,000 via a sham think tank and he hangs on for weeks until the police are about to call before resigning his post while Gordon Brown dithers. Derek Conway, a Conservative MP, is found to have put his sons on staff and paid them thousands for doing nothing and David Cameron sacks him the parliamentary party the day after the story breaks. Indecision on the part of the Prime Minister versus decisiveness and leadership from the Leader of the Opposition. Cameron has clearly done the right thing, and his firmness about a misuse of the public purse contrasts with Labour's unwillingness to deal with borderline corruption.

Conway, on the other hand, is beneath contempt. We had him on the shortlist for the Billericay selection some years ago, but he fell by the wayside when the selection committee checked his references. Though personally plausible, no-one who had worked with him had anything positive to say about his personality or his abilities. Pity Bexley weren't so thorough.

Thursday, January 24, 2008

Peter Hain resigns at last

Peter Hain has resigned. This is not shock news, what is a shock is that up until today he was still in office. The man failed to declare over £100,000 in donations to his campaign for the Deputy Leadership of the Labour Party which were routed via a fake think tank that seems to have served no other purpose, and which therefore suggests a degree of premeditation at least. His defence was pressure of work, or as Gordon Brown put it ‘incompetence’, neither of which would be allowed by any judge in the land as a reason for breaking the law. Sill, he clung on to office, despite little or no support from within the Labour Party, never mind from anyone else. Brown, typically, couldn’t decide to sack him, so he limped on until today when the Electoral Commission’s decision to refer the matter to the police finally convinced him that the game was up.

The declaration of donations and the associated administration has become something of a stick used by politicians to beat each other, but the law has a serious purpose. Without transparency on where a politician, and an officeholder in particular, obtains the funds for political purposes then there is always the danger that a decision can be taken to favour a party for reasons other than the public good. More than £100k from anonymous donors hidden behind a front organisation would have meant that there were people to whom Hain was beholden unbeknownst to anyone but Hain and his funders. This is not a technical breach and he should never have made such an arrangement and should have been turfed from office as soon as the scheme was uncovered.

A criminal investigation could be bloody, especially as the police are so keen on Labour at the moment.

Sunday, January 20, 2008

Public Finances gutted to support Northern Rock

So, for all of the tough talk the government have caved in and have now offered an absurd level of public financial support for a private sector bailout of Northern Rock. Let us not forget that an offer by Lloyds TSB when the crisis first broke was rejected out of hand, even though it entailed a much lower level of public risk than what it is now on offer. Now they are going to guarantee all of the Rock's exposure to the Bank of England as some sort of long-term bond issue, which drops it neatly on top of Britain's existing public debt. This was already running perilously close to the limits set by the government and this breaks it completely. So what? Well, it will affect Britain's sovereign debt position, because the cost to our country of borrowing money is very much dependent on the UK's existing level of indebtedness. That means a bottom-line cost to our taxpayers, and for years. More public debt also reduces the government's room for manoeuvre in the short-term, and let us not forget that we have a real danger of either reduced growth or outright recession in 2008. Basically, the government position means that of all of the other potential commitments for public money, it has decided that Northern Rock is the most important. That is patently absurd. What is really going on is that Gordon Brown has bottled it again. This time he is too scared to take on Northern Rock and shut it down, which is the only way the public's financial position can be safeguarded. What they are proposing makes no sense in business or public policy terms, unless you want to avoid short-term political pain. Once again the country's interests are sacrificed to manage tomorrow's headlines. And Brown was meant to be different.

Thursday, January 17, 2008

Radicals on the Internet

The internet is a wonderful thing. It allows social networks to form that bring small numbers of interested people together in ways that were impossible before. So, new mothers with twins, or cancer patients, or coin collectors can virtually meet and converse in a community, representing a real change to the way that people with the same issue or outlook or hobby organise themselves. Unfortunately, this also applies to suicidal people, anorexics, or those deluded by the half-truths of bogus science. It also applies to terrorists. Now, this social shift happened years ago and it has taken years for the government to belatedly wake up to the new dangers of an interconnected world. Some wannabee terrorist can put up a load of inflammatory material on a website, moderate a forum for violent nihilists from across the country and recruit and indoctrinate the vulnerable by remote control. At last something is being done about it, with an announcement by the government that what action can be taken will be taken. Regulating the Internet is very difficult because it crosses frontiers and material that is illegal or offensive in one jurisdiction can be sited in another, and so evade legal action. However, difficulty is no excuse for doing nothing. Let's hope the government doesn't get so far behind the next technology and social trend.

Tuesday, January 15, 2008

Northern Rock Nationalisation Endgame

Some time I blog posted that Northern Rock has been effectively nationalised by the extension of huge government loans to prop it up. Now, it looks like the de facto nationalisation will be formalised in a week or two. The chances of a private-sector rescue for Northern Rock were always pretty low because of the fundamental state of the business. With a damaged credit rating and a low-margin loan book, Northern Rock would always struggle to be profitable without the cheap finance that was available before the credit crunch. Then there is the business logic of buying into a business with a mortgage book secured on UK houses just as house prices start to slip. It is no surprise that institutional investors are reluctant and so the final consequence of the the government's blundering is likely to be a giant liability in the form of the wreck of a middle-sized financial institution. One thing is not clear, however. What will the government do with the Rock if they get it? There are two options: one is run the business down, fire most of the staff and sell of the assets to refund the public loans. The other is to try and run it as a bank, hoping that it can turn a corner and pay back the taxpayer when the now successful company is sold. Option one, break up and asset realisation, is probably the most sensible. It is also immensely politically painful and that is why the government will probably go for trying to keep the business going. This would be a mistake. Northern Rock is finished in its current form, the market is saying so by refusing to fund a bailout and, for once, the government should listen.

Sunday, January 13, 2008

Sporting Village Pre-Qualification Ends Successfully

We have just finished the pre-qualification stage in the procurement of the Sporting Village for Basildon District. This will provide our community with absolutely top-notch sporting facilities for sports from casual use all the way to elite sports of the highest standard. The Council is currently engaging in the process to select a development partner to build and operate the Sporting Village, a process which is dictated by EU regulations and which is rather long and tortuous. This is first stage where companies who want to be a part of the project have to more than just express an interest, they have to provide reams of information for evaluation. So, that cuts it down the field to those with a serious interest. While there will be an official Council communication later, I can say at this point that we are pleased with how things have gone. The project stays firmly on track, with a timescale that, if everything works out, will see Basildon with the facilities to support the London Olympics in 2012.

The Sporting Village will make Basildon the hub for sport in South Essex, and one of the key locations for sport in the East of England, if not England itself. This is good for our young people and good for our community, and a credit to our partners, including Essex County Council and the Department for Communities and Local Government as well as the officers of Basildon District Council, who have worked so hard get us to this stage.

Friday, January 11, 2008

John Baron MP: Welfare reform needed to tackle long-term poverty

MP backs plans to help people get back to work in Billericay and District

John Baron MP today added his support for calls to reduce long-term welfare dependency, tackle long-term poverty and re-create stable families. The policy ideas entitled “Work for Welfare” were launched by Conservative leader, David Cameron. They aim to help people find fulfilling jobs, while continuing to support those who genuinely cannot work. Currently across Billericay and District, there are 3,550 people on Incapacity Benefit and 970 on Jobseeker’s Allowance.

John said:
Labour’s old politics on welfare reform simply are not working. Despite the New Deal costing the taxpayer more than £3 billion, it is has become a revolving door back on to benefits with nearly 50% of young job seekers leaving the New Deal ending up back on benefits within a year. Someone on Incapacity Benefit for more than 2 years is more likely to die or retire than get a job.

People need better opportunities to take responsibility for their own success rather than being dependant on Whitehall handouts. The existing benefits system does not do enough to help people find work. Higher numbers of Incapacity Benefit claimants and high youth unemployment show that the policies of the last ten years have failed.

The Government boasts about the millions of new jobs it has ‘created’. But official statistics clearly show that 4 out of every 5 new jobs have gone to migrant workers in the past ten years despite having nearly 5 million people on out of work benefits.

Real welfare reform will help reverse the disastrous rise in family breakdown under Labour and tackle the persistent and often hidden poverty that shames our nation.
Under the new Conservative proposals:

Respect for those who cannot work: Recipients of Incapacity Benefit who really cannot work will receive continued support and will remain outside the return-to-work process.Employment for those who can.

Employment for those who can: Every out-of-work benefit claimant will be expected to work or prepare for work. There will be a comprehensive programme of support for job seekers including training, development and work experience. Welfare-to-work services will be provided by the private and voluntary sectors on a payment by results basis.

Assessments for those claiming benefits: There will be rapid assessments of all new and existing claimants for out-of-work benefits.

Limits to claiming out of work benefits: People who refuse to join a return-to-work programme will lose the right to claim out-of-work benefits until they do. People who refuse to accept reasonable job offers could lose the right to claim out-of-work benefits.

Community work: Those who claim for more than two years out of three will be required to help out on community work programmes.

End Tax Credit discrimination: The savings from these reforms will be used to end the discrimination against couples in the Tax Credits system.

Thursday, January 10, 2008

Conservatives on Welfare Reform

Why do fit and able men and women choose to stay on the dole instead of going out to work? The short answer is because they can. Of course, unemployment and incapacity benefits exist for very good reasons. People do find themselves out of work through no fault of their own. People do get sick and a society that has any sense of solidarity looks after its members who fall on hard times, but that is not going on here. Every calculation, and plenty of direct evidence, suggests that there are large numbers of people for whom benefits have become a way of life, despite the fact that they are perfectly capable of providing for themselves. This is bad not only for public funds, but for wider society and the individuals themselves. Work brings order and stability to lives that can otherwise drift into the chaotic or criminal. It also, on average, brings a better standard of living over the medium and ling term. Put simply, if you live on benefits then you are likely to be poor, remain poor, bring up your children in poverty and have a much worse quality of life.

Tony Blair talked tough on this, but did more or less nothing about it. In fact the hidden unemployment of the benefit-dependent has grown sharply under Labour. Gordon Brown has belatedly started to talk about this issue, but it is the Conservatives that are making the running. Drawing on the US experience, where sharp curbs on welfare have reduced unemployment and all of the related social problems. The Conservatives have proposals to make Incapacity Benefit more rigorous, to stop the benefits of people who refuse to take a job that they are offered and to require that the long-term unemployed work in the community instead of sitting around at home. There are also proposals to contract private companies to find people work on the basis of no jobs, no fees. All in all this is first fresh thinking on this issue since Frank Field was sacked by Tony Blair for actually trying to reform the system. If I was Brown then I would be worried by all of this. A rule in politics is that you don’t hand the initiative to your opponents. Now, anything that he proposes will be measured against the Conservative proposals, and because they got in first he will seem like a copycat.

One good thing for the country though is that people are at least seriously thinking about benefits reform. A policy bidding war in this area is no bad thing.