"Fixing the broken housing market - Local Government leading the way" Labour conference 2018 fringe

Will be there.

Is it time for a Progressive Alliance to defeat the Tories? Newham Compass with Neal Lawson & Sian Berry

While a very,very worthy aim I don't think it will work nor is it necessarily the right thing to do. What about a progressive alliance within the Labour Party instead?

But I hope to attend and listen to the arguments.  

Newham Full Council Meeting 17 September 2018 (my twitter feed)

A busy evening. Confirmed new Chief Executive. Passed motions, submitted petitions, deputation that schools should have ballots before deciding to become academies, Councillor questions, public questions, Mayor and CEO report.

At @NewhamLondon Full Council meeting in historic Stratford Town Hall. Delegation speaking to meeting on anti-academy campaign, just moved petition on behalf residents from #BrassettPoint about repairs & #ASB (@WestHamBLP Cllrs have been #walkabout with residents)

His first speech to Full Council, Cllr @danielblaney speaks about how we need to change traffic management and support the near 50% of residents who do not have a car. “The roads belong to all of not just cars”@NewhamLondon

If this was a unison conference or TUC we would clap first time speakers :)

Now Cllr @labourpartyCTN Shaban Mohammed moves motion on #Academisation ballots calling for all schools considering becoming a #academy to hold a ballot. @CllrSarahRuiz seconds @NewhamLondon

#Cllr @rkdasgupta moves @CoopParty sponsored motion against #modernSlavery . I spoke about ensuring that the £1.4 billion @NewhamLondon #pension fund takes action to ensure that we do not allow such exploitation of workers in companies we invest in

Council meeting over. Now presentation by @LGBCE on electoral review of @NewhamLondon for 2022 elections. #SaveWestHam ward @WestHamBLP

Picture of #Newham @UKLabour & @CoopParty councillors supporting campaign and @NewhamLondon motion on #modernslavery

TUC Congress 2018: Tuesday Day 3

Still catching up on posts about last week's TUC Congress. After a "late night" on the Monday following the UNISON TUC delegation social (and aftermath) I was in Congress for the 9.30am start on the Tuesday but a little slow on "twitter" for some reason.  

I was really pleased at Congress for the support for "Show Racism the Red Card’s Wear Red Day, which this year will be on 19 October.

Lunchtime, I went to the "digital transformation for unions" fringe where Chair, Jenny Andrews, of Unions21 made it clear that we have to learn from Darwin survival of the fittest theory and as a movement either "adapt or die" to digital change (I sort of agree but not totally). 

Alison Charlton from UNISON digital team spoke about the quote that when digital transformation is done right, it is like a caterpillar turning into a butterfly but when it is done wrong, all you get is a really fast caterpillar.  She also made a really important practical point that don't just ask what people want from digital - but instead ask what is the problem & what do they want to achieve?  Her role as a professional is to provide the digital solution.

Ali Melanie from the NUS said the next big human rights issue will be on our data rights. People are still trying to grapple with the concept of "Ethical digital". He answered my question to the panel on how to deal with all the digital "babble" out there by saying we need to try and compartmentalise the information that unions send out to make it relevant. 

When an assistant general secretary from a more "traditional" union (who many years ago I was on an WEA Employment rights course with him) asked how he can digitalise union circulars sent out to members? Ali asked in apparent all seriousness "what is a circular?". 

I was interviewed by Dr Jeong-Hee Lee, a researcher from the Korean Labor Institute about collective bargaining in Local Government! We also discussed the UK Labour manifesto on this topic. She interviewed me a few years ago when she was researching her PHD. I was given a lovely gift for taking part in the survey. A traditional Korean image on a USB stick (see bottom right on college).

Shadow Chancellor, John McDonnell MP, received a standing ovation after announcing to Congress on how he will be able to pay for nationalisation & public services. He has found the Tory Government Magic Money Tree in the Cayman Islands. He will dig it up and bring it back to UK to be planted!

In the evening I went to the "People's Museum" for the Daily Mirror fringe on the fantastic "Wigan Pier Project". It tracks where the author George Orwell went in the 1930s when he was researching his famous book "The Road to Wigan Pier". George wrote about the hunger and poverty he found at this time, while the project has followed in his exact footsteps and compare his findings with the dreadful child poverty, homelessness and unemployment in modern day Tory Britain. 

Lehman Brothers collapse - 10 Years on

10 years ago  "The filing for Chapter 11 bankruptcy protection by financial services firm Lehman Brothers on September 15, 2008, remains the largest bankruptcy filing in U.S. history, with Lehman holding over US$600,000,000,000 in assets".

The former head of Lehman Brothers, Richard Fuld, (see picture) “earned” $300 million in the previous 8 years.

While The Independent reports "Average real earnings – adjusted to take inflation into account – for employees are 3 per cent below where they were in 2008. 

Thank you Cllr Veronica Oakeshott - Boleyn Ward

This is simply a lovely photograph of Newham Council Executive Mayor, Rokhsana Fiaz, presenting flowers to Councillor Veronica Oakeshott, who has announced her resignation in order to move closer to her family outside London.

Veronica has been a fantastic and effective Labour Councillor and campaigner for Boleyn ward who was also instrumental in the successful campaign to keep the World Cup Champions Statue in her ward.

She was a ferocious advocate of her constituents and the interests of all residents in Newham. Veronica will be missed and we have lost a talented Vice Chair of our £1.4 Billion Pension Investment & Accounts Committee.

hat tip photo Ali G

Red Brick - "The Help to Buy Gravy Train" by Steve Hilditch

A fascinating discussion yesterday evening with London Labour Housing Group on "Policy & Practice". Some great ideas and presentations.

I was a little late and missed items on policy context and improving the private rented sector but was there for - delivering new Council homes, working with with Housing Associations and best practice on community led housing. Chaired by lead GLA housing spokesperson Tom Copley

See below yet another superb article on "Red Brick" about the "Great British Housing Rip Off" by Steve Hilditch.

"Some people suffer because of the housing crisis, others do quite nicely out of it thank you. Land owners are perhaps the best example of those who have traditionally coined it in. Nothing much has changed since Winston Churchill, way back in 1909, called land ‘the mother of all monopolies’, criticising ‘the enrichment which comes to the landlord who happens to own a plot of land on the outskirts of a great city, who watches the busy population around him making the city larger, richer, more convenient, more famous every day, and all the while sits still and does nothing.’ And still they do.

But attention has been drawn more recently to another group of people who have been achieving great riches from the miseries of others – the housebuilders. You might say that at least housebuilders produce something of use, unlike the landowner, and the point is valid. But recently the vast profits being made by the volume housebuilders have been substantially donated by the government, free gratis and for nothing.

The housebuilders’ own special magic money tree is called Help to Buy. In an excellent article in the Times on 8 September, Property Correspondent Tom Knowles showed how the average profit made by housebuilders on each home has doubled since the scheme was launched. Knowles’ analysis showed that ‘the top five builders in Britain are making an average profit of £57,000 on each house they sell, compared with a mean average of about £29,000 in 2007’.

On Red Brick we have criticised Help to Buy from the time it was launched in 2013 because it is a subsidy on the demand side of housing – it enables people to spend more on housing without necessarily increasing supply. A little bit of economics tells us that in the longer term it is likely to be self-defeating because more demand with no more supply will lead to price increases. Far better, we have consistently said, to apply whatever public finance is available to boosting housing supply not demand.

At the launch of Help to Buy the argument was made that the scheme would boost supply by giving developers confidence that they would have buyers for their output – after all, no-one builds what they cannot sell. Yet Knowles confirms that the total number of new houses being delivered is much the same as it was ten years ago. He uses Barratt as evidence: profit per house has doubled since 2007 (he uses that date because it was the last full year before the global crash), but it is building only 411 additional homes. He provides a fascinating chart to illustrate the detail, repeated below.

Knowles quotes analysts who confirm that the largest driver of today's profits is Help to Buy. One assesses that housebuilders would be making £22,000 less profit on each house built for first time buyers if Help to Buy was not in place, and concludes that ‘someone is gaming the system’.

One of my favourite analysts, Neal Hudson, who puts good stuff on Twitter @resi_analyst, is quoted saying that shareholders had become ‘the main priority’ for housebuilders since the financial crash. ‘The over-arching factor has been big pressure from the City,’ he is quoted as saying. ‘The priority for them is profit margin not the number of homes built.’

One housebuilder chief executive was paid £75 million in a bonus last year, putting even bankers to shame. I suppose you could argue that no-one would turn down a nice earner, even if it is on the back of a government scheme designed to tackle the housing crisis. And, of course, it is government policy that is to blame. Since 2010 housing finance policy has been turned on its head. Instead of providing grant to enable genuinely affordable homes for those on low and medium incomes, Government help is now aimed at supporting the private housing market – and not very successfully it seems. The Chartered Institute of Housing’s Housing Review estimated that support for the private market is taking nearly 80% of current investment compared to just over 20% going as support for affordable housing.

At local level, the riches flowing into the pockets of the housebuilders should stiffen the resolve of councils who are fed up with developers pleading that schemes are ‘unviable’ due to modest requirements that a proportion of new homes should be affordable.

In this debate, profits per home of around 20-25% of the cost are taken almost as a given, a fixed cost. I can remember a developer telling me that the rule of thumb in building costs was ‘one-third for land, one-third for construction, and one-third profit’. In our Brexit-dominated world, construction costs are likely to inflate rapidly in the near future. So, if anything is to be done it must be to bear down on the other two elements: land and profit. We have posted a lot recently about land and taxation: another good step would be to tackle the Help to Buy gravy train.

Let your voice be heard: Stratford & West Ham Citizen's Assembly

Trade Union Congress finished a little early today (we worked through the lunch break to finish business.Not something that trade unionists would normally encourage in the workplace!). I will post further on the TUC.

So I was able to get a train home from Manchester to be in time for the inaugural Citizen Assembly for Stratford & West Ham Community Neighbourhood.

I am a Newham Councillor for West Ham ward.  Citizen Assemblies are intended to achieve newly elected Mayor, Rokhsana Fiaz, commitment to :-

"Putting Newham Residents at the Heart of Everything We Do.

During September 2018 there will be the first in a series of Neighbourhood Citizens’ Assemblies taking place across the borough in each Community Neighbourhood.

What Neighbourhood Citizens’ Assemblies

Neighbourhood citizens’ assemblies are large open meetings where you and others from your Neighbourhood decide how to improve your area.

The assembly is your chance to:

• set the priorities for the Community Plan
• discuss and work together with others to find solutions to local problems 
• connect with other local people and share knowledge
• set up local projects
• find out what is happening in your local area 
• give directions on how funding available to your area is spent

There will be a daytime and an evening assembly session in each Community Neighbourhood which will last approximately 3 hours, including a break and time to meet and greet others".

I had heard that the morning meeting had gone well with around 90 residents attending. We had about 70 plus residents in the evening. It was by far the most successful community participation event, I have ever known, either as a Councillor or a Housing officer. Residents were thoughtful, constructive and genuinely wanted to understand problems while keen to contribute to possible solutions.

Certainly, a number were quite forthright about about the serious issues that we all face and there was some difficult conversations but there was very little of the negativity and self interest that I have found in other community consultation events I have attended over the years. It showed to me what you can get if you treat residents as grown ups - treat them with respect and make it clear that you are actively listening and really want to involve them. 

The meeting decided and voted upon what would be the Stratford & West Ham priorities and I did a random drew in front of everyone to pick 4 volunteers from each ward to be part of a working Group.  The working group will meet next month and the next Assembly will take place in November.

While I have no doubt that it will not always be sweetness and light I am really excited about our Citizen Assemblies and look forward to the next one. 

TUC Congress 2018: Day 2

A somewhat random selection based on my tweets from Monday.

Frances O'Grady TUC leader in her speech to Congress calls for a 4 day working week for 21st Century. Just as in 19th century the TUC successfully campaigned 8 hour day & in 20th-century for weekend off & annual leave.

Also, she told Mrs May. "If you won't give us the New Deal that working people demand, then stand down. And take your ‘do nothing’ government with you. Give us a General Election. And we’ll do every thing in our power to elect a Prime Minister who will".

UNISON leader, Dave Prentis, while moving composite 7 "Public Services Outsourcing - Lessons from Carillon calls for an end to privatisation and making demands of Labour too. A day one commitment to abolish the divisive, destructive, disastrous policy of privatisation. No reviews, no reports but an immediate end!

Lunch time I went to "Show Racism the Red Card" fringe. Chaired by UNISON Liz Snape & 1st speaker UNISON Roger McKenzie. Last speaker UNISON Liz Cameron. The meeting was packed. Sign of times with growth of racist football lads alliance?

Finished off with evening fringe at Midland hotel on pensions chaired by Henry Tapper. First a short history of pensions then some home truths about the appalling miss-selling of unsuitable investments to British Steel pension holders. Surely this fraud this must be a criminal offence?

While fascinating presentation on new pension scheme for Royal mail workers based on dutch and Canadian models.

UNISON delegates had their delegation social later.  A good time was had by all.

Local Government Chronicle Investment Summit 2018

Last week I went to this summit in South Wales on investment in the Local Government Pension Scheme. There was around 250 Councillors and Council pension staff from all over the country.

I am particularly interested in the latest ideas on Risk, Asset allocation, ESG (Environmental, Social, Governance - also known as socially responsible investment), investment in housing and infrastructure.

The opening speaker John Roe from Legal & General gave his perspective on the UK and global economy. He argued that he did not think that the equity market was expensive and made an observation that rising income inequality had led to the rise of fascism and the anger that caused Brexit. I asked him in the Q&A what was the solution and he said greater taxation of the international elites and an open debate on immigration. Not often do I hear calls for greater taxation in such conferences (I agree totally with him on this point)

Next we were invited to visit different briefing sessions. I went to the one on "Fixing our broken housing model". Which turned out to be an introduction to the merits of pension funds investing in purpose built private sector rental but not alas, fixing the complete and utter mess that UK housing is in.

Back in the main hall we heard of research by Hymans Robertson that following the changes in the LGPS in 2014 some scheme members had actually seen their future pension entitlement rise by 24%.  Which is mainly due to rubbish pay in the local government in recent years which has failed to match inflation.

In a focus session on ESG investing there was some compelling evidence from MSCI that good ESG is "material". Good ESG investments tend to have better cash flow, be less risky, result in greater dividends & make it 3 times less likely to suffer serious incidents such as the Volkswagon fraud and BP Deepwater disaster.

At the next focus session, Abbie Llewellyn-Waters, from Jupiter gave evidence that ESG can deliver "Alpha" performance. Also, with regard to the S (social) in "ESG", she was clear that “the better that companies treat their workers, the better the companies financial results.....without a shadow of a doubt”

Roger Phillips, chair of  LGPS National advisory board spoke to a meeting of Councillors only on its annual report. Membership of the LGPS had increased to 5.6 million members, had £263 billion in assets, 1700 different employers and enjoyed in 2017,  a 19.5% increase in investment performance. However funds need improve their data management.

At the session on “Infrastructure, urban regeneration & real estate”, to wake everyone up, I asked the panel who had spoken about the investment opportunities on investing in this asset class about the statement by Sir Howard Davies, Chair of RBS who said on Question time early this year that “PFI was a fraud on the people”.  He had argued it was always cheaper for Governments to borrow money than private organisations to spend on infrastructure. How do you respond to this statement?

The response was that Government does not want such debt on its balance sheet. Which is an argument post 2008 crisis and post quantitative easing that I have not heard for many years.

In the last session of the day with the Pension Regulator & the FRC, I asked both speakers why was it that in private defined benefit schemes, up to 50% of trustees were nominated by beneficiaries but in the LGPS, a public defined benefit scheme, there was no obligation whatsoever to have any beneficiary representation on its boards?  The regulator replied that they did support member nominated representatives in the private schemes because they can challenge "group thing" but they also have pension trustees boards that only have professional trustees on it.

I note that Labour is committed to make 50% member nominated representation compulsory in all pension schemes.

At the summit dinner the guest speaker RH Lord Winston of Hammersmith, who was as entertaining and as "nice" in real life as he appeared on the telly.

In the morning after more presentations on successful partnership working (Pooling) and protecting your equity portfolio from a future crash (which I am sure is coming sometime soon) I went to a briefing session on "Is sustainable investing just a romantic notion?" session with Newton.

Who pointed out that some $300 billion was invested in alternatives to carbon in 2017. They also compared modern day oil reserves with the 19th century slave ships which became "stranded assets" when slavery abolished

Secretary to the National LGPS advisory board, Bob Holloway, reflected on 35 years involved with local government pensions and announced a meeting with the minister for council pensions committee chairs on 15 November 2018.

In the last session on Devolution and Regionalism, Dawn Turner, CEO of the Brunel Pension Partnership talked about not investing infrastructure because the Government tells us to do it but if it fits our needs & purposes. Also, we are not impact investors but should be aware of any positive or negative impacts from our investments. Not just globally, but in the UK as well

Final speaker was Paddy Dowdall, from Greater Manchester Pension Fund about their investing in housing... “Council provides the land and the Pension fund provides the capital” also “by definition residential housing is local & who knows more about local than councils”. For many years they have invested a percentage (5%?) of fund locally and managed to avoid any "moral risk" by making sure that the actual investment decisions are made independently.

Overall, a very informative and useful summit. It has now been running for 30 years but will no doubt have to change in the future when the pools take on investment decisions from local funds even though funds will retain responsibility for liabilities and asset allocation.