Saturday, September 23, 2006


Parents of truanting children at 1,000 primary schools face “fast-track” legal action and fines of £50 after figures indicated that a rise in absences among children under 12 had helped to push truancy figures to a record high. Statistics published yesterday show that, despite government spending of £900 million since 1998 to reduce the number of unauthorised absences from school, 30,000 children still skip classes regularly. These regular absences account for a third of all truancies at secondary school. The truancy rate in primary schools, measured as a percentage of half-days missed per pupil, rose by 7 per cent last year to 0.46 per cent, while in secondary schools truancy rates fell by less than 1 per cent to 1.22 per cent. Overall, the rate rose from 0.78 to 0.79 per cent in the state sector, while private schools also experienced a rise of 0.14 per cent.

The figures for primary schools will be of particular concern for ministers, just a month after primary test results fell well below government targets. Jim Knight, the Schools Minister, said that although the majority of truanting still occurred in secondary schools more effort was needed at primary level to prevent children and parents developing bad habits. Under a new scheme, 1,000 primary schools with poor attendance records will be asked to draw up a list of persistent truants. Their parents will be given 12 weeks to improve their children’s attendance or face automatic prosecution and a 50 pound fine. If this is not paid within 28 days, the fine will rise to 100 pounds.

So far the fast-track scheme has been implemented in only 200 secondary schools, where it has resulted in a 27 per cent fall in persistent truants in a year, with 3,500 of the 13,000 worst offenders returning to class. Mr Knight said that there was no single reason to explain the rise in truancy, although a contributory factor may be the high number of parents taking their children on holiday during the school term to take advantage of off-peak prices. “We have asked schools to be much tougher about authorising holidays during term time,” he said. “There are cultural things going on with truancy. The rate has increased across the board, in independent schools as well as state schools. We have to shift the culture to break the truancy habit, particularly among younger children.” To reach this age range, the Government has set up a £40 million pilot scheme of parent support advisers to help the families of truants aged 8 to 13.

Chris Keates, the general secretary of the NASUWT, a union representing teachers and head teachers, said that parents who allowed their children to play truant were denying them access to an education and a decent future. “More work has to be done to discourage those parents who condone truancy by taking their children out of school for holidays, shopping trips or telling them to stay in and wait for the gas man,” she said. Mick Brookes, the general secretary of the National Association of Head Teachers, said that punitive initiatives such as the fast-track scheme could put a strain on the relationship between head teachers and parents. A better solution could be for holiday companies to work with schools to use newsletters to promote affordable holidays.

Nick Gibb, the Conservative schools spokesman, said: “We need to focus on the causes of truancy and disaffection — mixed-ability teaching, poor discipline and low levels of reading ability. That is why the Conservative Party is committed to setting children by ability.”



Housing prices forced up by shortage

When the American radical economist Doug Henwood met London Times editor Robert Thomson in 2003 he wanted to know what it was that kept the UK economy so buoyant in the face of its industrial downsizing. He was bemused by Thomson's answer: the housing market. To any independent observer it seemed obvious that the housing sector was in very bad shape. After all, house completions are at an historic low - 169,000 in 2002, compared with as much as 400,000 in the boom years of the 1960s. Yet on the narrow definition, the boom was a success: rising house prices meant an improvement in assets for homeowners.

How could so sluggish a sector produce such extraordinary growth? The answer is simple. The housing boom is not a housing boom at all; at least it is not a boom in new house production. Rather it is a boom in house prices. And the boom is taking place almost entirely in the second-hand housing market. As Shaun Spiers of the Council for the Protection of Rural England rightly says, the housing market is 'dominated by transactions involving existing, not new homes'. In the inverted world of housing, most houses are bought second-hand. It is as though Sotheby's shifted more units than Ikea.

The simple explanation for the rise in house prices is that it is caused by the shortfall in house completions. The supply of new homes is not enough to meet the demand, so the prices of the smaller pool of homes rise, dampening demand. But increased prices do not seem to have dampened the demand, and the market continues to boom. And worse still, developers have not responded to the higher prices by increasing house building, all of which seems to add up to a bubble in house prices.

In fact, house prices rose year on year from 1997 right through to 2003, by five, 10, 15 and even 20 per cent, only seeming to stop in August 2004, responding, perhaps, to the interest rate rises made by the Bank of England. The causes of the boom are debatable. On the most optimistic reading it is just the effect of rising incomes - a reading that is not without justification. Between 1985 and 2001 the UK workforce grew by a fifth, from 24 to 28 million. Each of these new incomes potentially represents an ambition to own. Economics commentator Heather Stewart argues: 'The number of households in Britain is rising; since the financial liberalisation of the "greed is good" 1980s, everyone wants to own their own home - and not enough houses are being built to accommodate them all.'

It is important to put the housing shortage in perspective - at least in its impact upon house prices. Houses are in short supply relative to the increasing number of incomes chasing them. And as Stewart says, the shortfall is in relation to growing expectations of home ownership that were fuelled in the 1980s. Homelessness, which was a re-occurring problem in the 1980s, has not become more widespread, as some expected it would. The Centre for Housing Research at York University found that there were around 44,000 rough sleepers in England between the ages of 16 and 24. Difficult as these circumstances are, they are not characteristic of the greater part of the population's experience of housing, 14 million of whom own their own homes outright (up by four million on 1991), and a further 27 million of whom have a mortgage, making more than two thirds of the country owner-occupiers.

The shortcoming of the explanation for the boom from incomes alone is straightforward enough: while average earnings are growing at around four per cent a year, house prices are growing at 20 per cent, pricing many out of the market altogether, as we can see from the rise in the rented sector. One might expect some lag between the rise in prices and producers reacting to increase supply, but in fact the lag has turned into a straight refusal. Now the difficulty is to understand why the sector has proved so unresponsive to the price signals that orthodox economics say ought to engender more output.

Embarrassed at the growing problem, the government has tended to blame the developers, accusing them of sitting on land-banks, speculating on future profits instead of meeting demand today. But the developers in turn have a more straightforward explanation for the non-appearance of new homes. They point the finger at the regulatory framework that holds back new growth: the planning laws, the green belt, the onus on greenfield developments, and so on. Alan Evans sets out the economics of the green belt and other controls on development in his Economics and Land Use Planning: 'The supply restriction means that prices rise will rise faster than they otherwise would.'

It is not just that the Town and Country Planning Act makes it difficult to begin building, though that is problem enough. When investors decide where to put their money, the prospect of a delay of years is good reason to put it elsewhere. In tying up capital, those delays increase costs, often prohibitively. But on top of that, the planning regime imposes additional costs. Section 106 of the Town and Country Planning Act allows local authorities to trade off planning permission against agreements on the part of the developers to make improvements to the site that might normally have been their responsibility. These can include road improvements, the provision of parks, capital improvements to local schools, and hospital or recreational facilities. Section-106 agreements turn planning permission into a tradeable commodity, with which local authorities can wring resources, 'planning gain', from developers over and above their commitments to local and national tax.

As Evans says, authorities 'came to realise they had something of value, which others wanted, and the result was, as an economist might expect, that local authorities tried to appropriate some of the profits for themselves'. Champions of civic responsibility will no doubt applaud the attempts to make the developers pay for the upkeep of the social fabric - but they ought to consider how this windfall tax can act as a disincentive to build. London's mayor Ken Livingstone has been aggressive in the use of Section 106 to achieve goals like the provision of social housing from developers, and most recently, from supermarkets. According to economic writer David Smith, the building industry 'argues that the government has loaded so many extra costs on to builders, including the requirement in many cases to provide social housing in new developments, that this has become a serious constraint'.

There should be no doubt that the restrictive regime of planning has limited development, and that this is a major cause of the housing price boom. However, we cannot be confident that even if the Town and Country Planning Act were abolished tomorrow that developers would meet the new demand. Smith acknowledges the developers are tied down by the obligations arising out of planning constraints, but insists that 'the problem is that private developers haven't filled the gap left by the public sector'. When annual house completions numbered 400,000 in the late 1960s, according to Smith, half were completed by local councils. 'That's not a plea for a return to large-scale council housing', he says, but it does raise the question of whether the private sector is in the right frame of mind to meet the shortfall.

Economic journalist Benjamin Hunt examined in detail the 'risk aversion' that he found endemic among corporate bosses, in his book The Timid Corporation. He identified shareholder activism and its demands to unlock value as one of the main constraints on longer-term investments, and argued that, against expectations, corporations were greatly influenced by the anti-growth mood promoted by environmentalists. 'Greed is good' meets 'the good life' in a mutual antipathy to long-term investments in development.

Certainly in 2001 the Department of Trade and Industry's investigation into competitiveness found that 'evidence does not suggest that the UK is over-investing'; in fact 'the UK remains relatively risk averse' and 'the UK's relatively more risk-averse approach contributes to lower levels of entrepreneurial activity'. In the construction industry, the problem of risk aversion is evident in the low level of building. After all, they make as much, if not more money selling a few over-priced homes as they do selling lots of realistically priced ones. No doubt they are pleased that the planning regulations make it possible for them to make money without having to take any risks or put in any effort.

In some quarters, developers are under fire for hanging on to land without building. Suspicions of gentlemen's agreements to moderate competition might seem like paranoia, but developers have agreed not to compete for labour - as was revealed when Laing O'Rourke outraged rivals by offering extra pay to recruit labourers to build terminal five at Heathrow. The government might find that it is not enough to lift the restraints on development, but will also need to direct investment, with subsidies, to persuade timid investors that their risks are worthwhile. In other words, there will have to be a revolution in attitudes to development on both sides.

Even after identifying the income-driven growth in demand, the regulatory limits on supply and the problem of risk-averse investors, we have not wholly explained the reasons for the house price boom. Economist Sabina Kalyan of the consultants Capital Economics Ltd argues that 'although the number of housebuilding completions has stagnated in the 1990s, the situation has not worsened dramatically - at least not enough to explain the current soaring house price inflation'.

Indeed. At least a part of the boom in house prices is part of a pattern that is nothing to do with houses. Instead of buying houses to live in, many people are now buying houses as a way to invest their spare cash. Of course, most of us generally talk about our homes as 'an investment', enjoying their climb in value, despairing if they fall. But that is not the same thing as the growth of the housing investment market. The Office of the Deputy Prime Minister notes the growth in 'the influx of new landlords due to the introduction of buy-to-let mortgages' and that the number of second homes owned principally as an investment more than doubled between 1994 and 2001. The Guardian's perspicacious economics editor Larry Elliott writes: 'Sadly the trend over many decades means that Britain's economy is now much better suited to buying and selling houses than making things.'

Elliott is right to put the housing boom into the wider context of speculative investments. For the past 15 years or so there has been a free-floating speculative bubble, which is largely indifferent to the sectors that it inhabits, taking a hold of them, not for the purpose of creating new products, but for realising profits on alienation, buying cheap to sell dear. The speculative bubble has wandered the globe searching for high returns, stoking boom and bust as far afield as Moscow's banks and Hong Kong's real estate. It has passed through East European and Thai economies - without apparently adding any positive improvements in the 'real' economy of material production. In time, the East Asian asset prices reached unsustainable levels, and investors withdrew their capital - just in time for the boom. As economist Phil Mullan explains: 'Surplus capital attaches itself to certain phenomena at different times, such as shares, bonds, commercial property, mortgages, or gold.'

Housing investments cushion a lot of people against insecurity, but the booming housing market - perversely - is not leading to the building of new houses. To achieve that we need to take the restraints off development, but also use government incentives to create new homes.


Police force admits it illegally discriminated against white men

Great when the cops break the law!

A police force that rejected 108 potential recruits because they were white men has admitted positive discrimination and agreed to pay compensation. Gloucestershire Constabulary said that it had been trying to increase diversity with its policy of selecting women and candidates from ethnic minorities. But at an employment tribunal in Bristol yesterday, the force admitted that its actions were unlawful and agreed to pay compensation to one potential recruit. Further claims from the other 107 men, who were told by the force that they had been "randomly deselected", could now follow.

Clive Tomer, chairman of the tribunal, said yesterday that Gloucestershire Constabulary had been "at the very least disingenuous and at worst misleading". He ordered that the claimant, Matt Powell, should be given 2,500 pounds for injury to feelings. The tribunal was told that Mr Powell, 30, had applied to join the force in October last year after seeing a job advertisement in a local paper. A month later, after being told that he had progressed to the second stage of the recruitment process, he left his job as an IT team leader at Filton College to concentrate on his application.

But in January he received a letter saying that he had been "randomly deselected". Despite repeated calls to the force's human resources department, he was never given an explanation for his rejection. In April the Commission for Racial Equality and the Equal Opportunities Commission started an investigation. They reported that the force had unlawfully discriminated on the grounds of race and sex. The tribunal was told that two thirds of white men who applied to join the force in last year's recruitment drive had been turned down. Every ethnic minority candidate who applied had been invited to an assessment centre.

Speaking at the tribunal, Mr Powell said: "I didn't come here for the money. I just want to be heard. I firmly believe a wrong has been done here. I was, I still am, desperate to be a police officer and they have unfairly discriminated against me." Nigel Tillott, his lawyer, said: "It is now clear how far public authorities can go in positive discrimination. What they cannot do is discriminate against white males."

Gordon Ramsey, the head of human resources, apologised yesterday and said: "We were trying to advance diversity in the force and we thought at the time that this was lawful, positive action. When we found out after an independent investigation by the Commission for Racial Equality that it wasn't lawful, we accepted that."



A British cancer research specialist has been jailed for three years for waging a campaign of sabotage and vandalism against companies linked to an animal testing laboratory. To his colleagues, Joseph Harris, 26, was an outstanding doctor who had a glittering career ahead of him in his specialist field of molecular biology. But in private he became ever more tormented by the fact that his research work on pancreatic cancer was leading to drugs being tested on animals. Faced with an increasing moral dilemma and the estrangement of his girlfriend, who despised animal testing, he turned to violent activism to help ease his conscience and at the same time please her.

Between last December and January he attacked three companies contracted to Huntingdon Life Sciences in Cambridgeshire, causing damage valued at more than 25,000 pounds ($62,000). None was directly linked to animal testing. He glued locks, slashed tyres and put hoses through letter boxes, flooding offices. Harris is the first person to be convicted under legislation designed to tackle harassment and threats from animal rights campaigners directly linked to economic sabotage. Judge Ian Alexander said the conviction would also damage the people he had been trying to help.

"I am sorry that your conviction and the sentence I impose will seriously damage what was a very promising career," he said. "It may well be that your future inability to continue your research into gastro-intestinal cancer will be a great loss to those who suffer that disease." The judge added: "It causes me great discomfort in seeing you before the court, having thrown so much away."

The court heard that Harris found details of his victims on the Stop Huntingdon Animal Cruelty website. All three companies have since ceased trading with Huntingdon Life Sciences. Rebecca Trowler, defending, told the court: "In that field, of course, there are experiments on animals. Inevitably, over time as his career progressed, he was coming under pressure to participate in these experiments." Harris had split up with his girlfriend, who could not accept his work and its tests on animals. Ms Trowler said: "The girlfriend had ended their relationship because of his continued work in the field of medical research because she disapproved of this activity. This put him in an increasing moral dilemma. Essentially he came to a crisis point and he took a very, very stupid decision."


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