Tuesday, 3 January 2017

#RailFail and #HousingStockFail: How Do You Solve Such Modern UK Millennial Problems?

2017 seems to have started on rather an optimistic note for Mrs May and the Conservatives. Opinion polling from YouGov shows that support for the Tory party hasn't slumped much even though the expressions of sheer pure clean Brexiteer joy in June have diminished somewhat, (voter support is currently at 39% compared with 41% in early Dec) and Labour sits rather a distant second with seemingly little hope of sporadic revival if the grim report released by the centre-left Fabian Society is anything to go by. The first few days of ideological discussion have centred on two topics close to the hearts of many working class families across the UK, rail fare increases and housing stock, so I thought for my first blogpost of 2017 I'd discuss my initial thoughts on the issues below.

#RailFail?

Labour have focussed much of their attention on criticising the Government for presiding over "a 27% increase in rail fares since 2010", something which the social media whizzes at party HQ have turned into the witty hashtag #RailFail. Rail fares, both regulated (e.g. season tickets) and unregulated (off peak single tickets) have been increased on average 2.3%, supposedly to help cover infrastructure maintenance. The increase does differ among railway operators, with East Coast Virgin Trains fares up an eyewatering 4.9%! If you are only earning just above the National Living Wage (NLW) such an increase is very hard to budget for, hence why some young people in rural areas who are talented graduates or who have completed their apprenticeships are reluctant to take jobs that require a return train journey. In fact, just today the Action For Rail Campaign has said that workers are now spending 14% of their wage on a monthly season ticket. That's an absolute scandal.

There has to be an overhaul of the fare system to make railway travel more affordable for working and middle class commuters. For example, the Government currently deems 40% of train fares as "regulated",including most season tickets and some off-peak return tickets on long distance journeys (doing this by using the previous July's Retail Prices Index (RPI) measure of inflation to set the fare for the next year  which was 1.9% in July 2016) but rail operators set the other 60% of fare prices pretty much according to their own rules of competition. Would it be better for the Government to regulate all train fares or no fares at all?

Most commuters are willing to pay for improvements to railway carriage stock, electrification and updating of ticketing systems; the Railway Delivery Group (RDG) has recently stated that roughly 97p in every £1 by passengers goes back into running and improving railway services across the UK. Transport Secretary Chris Grayling has backed up RDG's sentiments, adding that money generated from fares is being spent as part of the Government's "£50 billion plus Railway Upgrade Plan to give people new trains". However, passengers regularly comment on the variability of train services, overcrowded train carriages and are not particularly happy about bonuses being paid to managers when the system appears to all intents and purposes, inefficient.

Labour's answer to solving such inefficient management of the railway system whilst stabilising, or even reducing rail fares is to re-nationalise the system. It's rather amusing for me to see people's reactions whenever nationalisation is mentioned in polite conversation. The term seems to conjure up
images of petulant militant trade unionists constantly being on strike to "bully the management" into getting a pay rise and causing subsequent mass cancellations of railway services and degrading of railway stock without staff blinking an eye to care. At least this is the image perpetuated by right wing/ Conservative cynics who believe that Corbyn's socialism represents a move back to the more turbulent times of the 1970's. I think we need to have a sensible, reasoned debate on the downsides and benefits of renationalisation of the railway system. That means Labour presenting a convincing, cost-benefit analysis to cynics so that they can see a Labour Government could make the railways sustainable whilst still upgrading carriages, repairing railway track and paying staff a fair living wage. Such an analysis needs to be presented ASAP so that potential voters know that they have a bold choice to make at the ballot box when it comes to the next General Election, whenever that happens to be.

#HousingStockFail?

Meanwhile, Theresa May has used the start of the New Year to focus on the monumental task of address the UK Housing Crisis. Yesterday, Mrs May announced that 14 new villages of between 1,000 and 10,000 dwellings will be built outside existing settlements in England with a 3 towns with more than 10,000 homes to be built outside Aylesbury (Buckinghamshire), Taunton (Devon) and Harlow and Gilston (Hertfordshire). The Garden Village and Town project is seen as part of Mrs May's housing strategy, which includes a promise to build 200,000 "well-built homes with gardens" by 2020.

One of the garden villages is expected to be built in Lincolnshire, named Spitalgate Heath and located near the southern edge of Grantham. The development will have up to 3,700 homes which is great news for growing families looking to find a permanent home in the local area but the scheme will only work well if there is enough investment in local infrastructure to support an increase in the population. A few weeks ago I blogged on the current fight to get Grantham Hospital's A&E service open 24 hours and ensure that it isn't closed under any future Sustainability and Transformation Plan (STP) proposed by United Lincolnshire Hospitals Trust (ULHT). If the population continues to grow due to Spitalgate Heath and any other Garden Villages that may be proposed (around Sleaford or Boston, for example), a fully functioning Hospital needs to be maintained in those area, and that includes having an A&E department that can be accessed when needed. So the Government has to make sure that ULHT is funded enough to keep Grantham and Boston Hospitals open, as well as making sure that GPs are encouraged to set up practices near to Garden Villages to serve those villagers rather than overwhelming already overstretched local GP surgeries.

Equally of concern is the feeling that such Garden Villages may become "commuter dorm towns" for London based middle class professionals. Since Grantham has adequate transport links to London, such professionals may be tempted to buy a property up here to save money in the longer term. Naturally locals are worried that this could lead to local working class families being priced out of the Garden Village housing market. Such fears could be allayed by local Conservative MPs and housing developers and by advertising such houses in local publications such as the Lincolnshire Echo before they are advertised nationally. Time will tell as to whether the Garden Villages have been a success but at least they seem to be a step in the right direction.

Mrs May's second announcement is intended to help first time buyers between the ages of 23 and 40 by offering them a 20% discount on new homes which will be capped at £450,000 in London and £220,000 outside. The houses are to be built mostly on brownfield sites, with construction commencing early this year with those houses available to purchase next year. 1/3 of councils have expressed an interest in the project, using funding from the £1.2bn Starter Home Land Fund, which was created in April 2016. At first glance this seems very good for Millennial voters, especially if you happen to be one who has managed to save up enough money to put down as a deposit in the area you are wanting to live in or have been lucky enough to have inherited some money from a relative. Quite rightly the Government should be helping aspirational Millennials who want to secure themselves for the future or to get a house where they can start raising a family....a 2:4 children ideal is what some people in the UK aspire for. I am a bit sceptical of rules forbidding buyers of starter homes from being unable to sell their home for 5 years; after all, what if they need to sell the home to release capital to rent/buy a home abroad should they be offered a promotion by their company? What if the buyer loses their job, they don't find a job for a year and get to the point where they need to get out of their mortgage payments before bankruptcy proceedings start? If the person in question has spent all of their savings on scraping enough together to get a deposit to afford the house in the first place, does the Government think they'd have enough to keep paying the mortgage using their benefits? What if the next job they get is significantly less than their previous one? Imposing such a condition on first time buyers shows that the Government hasn't really been thought through the proposal very well. Back to the drawing board, perhaps?

As you can see, I am rather sceptical of current Conservative housing plans, mainly because the party hasn't really delivered on such bold policy announcements in the past. Indeed, I'm more of the persuasion that the  UK needs to build more low cost (affordable) homes and increase social housing stock so that those who cannot afford to privately rent a flat or home (maybe because they have been previously homeless) are protected. It's alright providing housing for aspiring working and middle class first-time home owners and the Right-To-Buy proposals work well for those who wish to buy their housing association flat or home within the next few years of May's Government, but not everyone is in a position to buy or to pay high levels of rent. There has to be more emphasis on gentrification of existing housing stock and more effective proposals to help encourage landlords to sell empty properties or to rent to those on benefits or minimum wage. So Mrs May's renewed commitment to scrap the requirement for property developers to build low-cost affordable rental homes (i.e. Section 106 agreement) is not particularly welcome.