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The reinvigorated Right-to-Buy policy championed by this government has proved something of a damp squib. While sales have doubled, they have done so from such a low base that this is nothing like the second home-buying explosion the policy was sold as.
A recent article on Conservative Home bemoaning this fact, and suggesting a further raising of the discount, made some rather spurious claims about the policy that are accepted as fact on the Tory right but deserve challenging by the reality-based policy community.
The principle claim made in the article is that receipts from Right-to-Buy will be recycled back into “new affordable homes for rent”.
There are a number of problems with this claim.
The first is that the term “affordable” has become highly charged politically. Affordability is – of course – a subjective concept. In this case, it means local authorities and housing associations charging up to 80% of local private sector rents.
In many areas – particularly those with the highest housing needs – these rents are extremely high, and even with a 20% discount, the new “affordable” rent will be significantly higher than traditional “social” rents.
This makes it harder for those with low incomes. Housing thus becomes the preserve of either those who can claim 100% of their rents through housing benefit, or those who can afford the higher rents.
Combined with moves to end lifetime tenure, it makes social housing a significantly less attractive longer-term option than the previous scheme, thus making it harder for families to stay in one area along with their developed support systems.
The second major problem with this scheme is the way it has been sold as replacing housing stock and therefore helping to alleviate the housing crisis.
Again this comes down to some very Orwellian language. The government are selling the scheme as offering one-for-one replacement. They do as little as possible to dispel the general myth that what they mean is like-for-like replacement, but in fact they don’t: not at all.
There is nothing in the regulations or advice to local authorities that says a unit must be replaced with a unit of the same size. So a social housing provider could sell a four bedroom home and use the receipts to build a one bedroom flat.
Also, the scheme is a national scheme. So if a council in a high rent area decided it cannot afford to build based on the proceeds of the sale, the money is returned to a national pot and used to subside “affordable” rent schemes being built elsewhere.
This hits those who live and rent in high rent areas twice.
First councils cannot afford to replace their much needed stock so must fund schemes elsewhere, and secondly it discourages councils in high rent areas from building at all (as they would lose both stock and proceeds if the stock were bought, which could happen after just five years).
Right-to-buy is not a policy that is designed or intended to do anything about housing. That may sound a little odd, but it’s true. It is primarily a policy that allows Tories to tie themselves to one of Margaret Thatcher’s policies.
Once so popular in the county, it’s lacklustre uptake now is not the point for those Tories who push it. For them it is a dog whistle to the Party faithful. That’s why Grant Shapps considered it a great success – it got him where he wanted to be. The rest is mere frippery.
This post first appeared on Left Foot Forward.
The Bedroom Tax is this Government’s sickest joke. It is also a perfect example of exactly how they do business. It is based on both a twisted truth and a false premise, it categorically will not achieve its stated aim (which is well understood within Government as its real aim is quite, quite different) and it hurts the poorest and most vulnerable.
The Bedroom Tax is also the perfect case study for this Coalition government.
First, you need a crisis – real or imagined (so far we’ve seen this applied to the real crisis in the economy, a largely confected crisis in welfare spending, a misunderstanding of the nature of the NHS sold as a crisis… The list goes on), in this case, the very real housing crisis.The crisis is vital. the crisis lets you act radically, no questions asked. The crisis allows the Lib Dems to suspend their morality “in the national interest”. The crisis means you have to act fast, act now and ignore all the experts telling you how wrong you are. The crisis is the Government’s invisibility cloak, it’s Get-Out-of-Jail-Free card.
It helps if the crisis has – at least in part – its roots in a failing by Labour. It is arguable that the Thatcher and Major governments did far more to cause the housing crisis than Labour. It is unarguable that Labour did little to ameliorate it and failed significantly to change or regulate the housing market or to invest in social housing adequately. It was our biggest domestic failing and the lesson that most needed learning. Indications are that it has been. But we must prove that when next in Government.
Being able to blame Labour is really important to this coalition. Hatred of Labour is the glue that binds them. If you can convince yourself something is Labour’s fault, then you can also deflect all criticisms of your solution as partisan tribalism. Lib Dems and Tories can convince themselves that the Bedroom Tax is only being opposed by that nasty Labour Party and their allies because it is them imposing it. not because it is the wrong solution – even when it is their own people coming out against them.
The Bedroom Tax was mooted to solve the problem of people “under-occupying” their properties. The theory is that people will vacate large properties they no longer need and make these available for families who need these larger homes. The people vacating will move into smaller places. The reality is – of course – quite different.
the truth is that there are not anything like the amount of smaller social home available for people to move into. Because of the aforementioned failure to build enough social housing (one of the mooted reasons for this tax remember) these homes don’t exist in anything like the number of those who will be affected by the Bedroom Tax. But the Government know this. Their own impact assessment shows that they expect people to stay in their larger homes and to find the extra money. This blows out the water the argument that this is about the sensible reallocation of stock. It is about two things – raising money on the back of the poorest and most vulnerable people (two thirds of those who will be affected by the Bedroom Tax are disabled) and ideology.
Social housing is one of the most concrete examples of the welfare state in action. But it is one of the most vulnerable to attack. Like the NHS and state provided education it has been denigrated and run down by the Tories and right wing commentators for years. Sadly, unlike the NHS and State education, it was not revived by the Labour Government. New Labour learned most of its lessons in the early 80s. What started as a sensible project to learn to once again become electable became at times a calcified dogma – as stuck in the politics of the 80s as the Tories now seem to be. And little in the early 80s was more iconic than the sale of council houses. Because of that sale and the overwhelmingly positive reaction to it from the public, Labour no longer looked upon building social stock as important socially or electorally. Now however, the Tories try to recreate that moment to little effect. When Grant Shapps was serving as Housing Minister and running for Party Chairman he announced the return of right-to-buy. It did the job he wanted it too – it made him popular with his Party. No one else really noticed.
The idea of Social Housing being a home for life is completely anathema to the Tories. For them the Welfare state should be nothing but the very, very bare safety net. A home for a life encourages someone to have a relationship for life with the state as provider. For the champions of small state, private equity “I’m alright Jack” economics, it makes no sense for them to encourage that. That’s why we’re seeing “Any Qualified providers” snatching as much of our NHS as possible. It’s why Free Schools are being forced into education against the will of parents and teachers. At every opportunity, the Tories and their Orange Book ideological partners will weaken the social bonds between people and state.
If those forced to are not able to cover the extra costs of the Bedroom Tax they will be forced to move to smaller accommodation in the Private Rented Sector. Because of the current differential between rents in social housing and the private sector (though through the Orwellianly named “affordable rent regime” means this differential won’t remain in place for long) their housing benefit will likely go up. The scheme will probably not save as much money for the Government as they are estimating as a result.
But that’s not important. Because this was never about better stock allocation. It was only peripherally about saving money. The Bedroom Tax is about the same thing that is at the core of every policy introduced by this gang of radical headbangers. It is about enforcing a retreat of the state’s support for its people.
The Bedroom Tax probably won’t be the thing that this Government is remembered for. It probably won’t become the shorthand for this Government’s failings (I suspect the words “Triple” and “Dip” will feature there). But it is – for me – the clearest and most obvious example of this government’s priorities and their desire to let’s their overweening ideology do its worst – with no thought at all to the human cost. And I will remember them for it.
This is a moment Ed needs to grasp. Cameron’s ratings are slipping and Labour’s lead in the polls is stabilising, but we need something big to really start to build positive Labour support.
Ed has so far been clear that he doesn’t want to over-promise and under-deliver, and I agree that Labour cannot and should not promise the earth. But we do need one issue with which we can demonstrate the scope of our ambitions for a future Labour government and a Labour Britain. One in which we can demonstrate how a promise made by the UK government can be delivered by devolved governments in Wales and Scotland, and by local authorities. One which can and will provide a rallying cry for Labour activists.
We need a clean break with the biggest mistakes that Labour made and an offer that clearly defines us against the small and mean-minded instincts of the coalition.
We need an issue that speaks to the squeezed middle and the battered base. That speaks to the aspirations that people have for themselves and for their families while also speaking to Labour’s intrinsic values and theme of fairness.
We need something that helps us fight the Tories, but one that also shows those who are disillusioned with Labour in urban communities – where we may face a threat from local insurgencies – that we are listening to their biggest concerns. An issue which clearly demonstrates how a national Labour government will support local Labour and community ambitions.
Ed Miliband needs a bold, clause IV moment, but one that talks not of the Labour party but of the aspirations of a future Labour country.
Labour have an ambition to fulfil the British promise – that each generation is more successful than the last. To achieve this, Ed Miliband should promise that a Labour government will solve the housing crisis within a decade.
When Labour made its historic pledge to end child poverty, it was a remit that worked across every department and reached into every aspect of proactive government. Labour made huge strides towards achieving this target. But as I am sure we were warned at the time, this simply wouldn’t be achievable without tackling housing.
We live in the seventh richest nation in the world, yet some people live on the streets. We talk endlessly of property prices, yet so rarely of the cost of poor housing.
Good housing affects every other area of our lives. Evidence suggests that poor housing is detrimental to our physical and mental health and to our educational attainment. Housing needs to be rethought, redeveloped and redesigned. It must help us grow properly as children and to live into our later years with dignity and independence.
Housing contributes to a quarter of our carbon emissions, but solutions to this problem have themselves the ability to contribute to a new wave of development in manufacturing and technological development. New housing development will need to be planned to ensure not just good quality houses, but bonded, well-functioning communities developed around successful jobs and transport hubs and links.
Sadly instead it took Labour far too long to wake up to what was urgently required on housing. We had so many ministers responsible for housing, few lasting longer than a year, that it was never championed or properly understood in government. It was only at the end, when Labour realised the desperate need for the kind of economic stimulus that a building boom can provide, that we started to get our policy right.
Housing policy under the coalition has been dominated by the most ideological housing minister the country has seen since the 1940s. But Grant Shapps’s vision is not for a housing policy where all live in and are proudly stable in the kind of tenure that suits them well. His vision is of the cleansing of the inner cities of those with the cheek to be poor enough to live in social housing. His vision is of the diminishing of the stock available at a social rent until it become truly housing of last resort, and the ghettoisation of those who live in a socially rented property.
Shapps cut the affordable housing grant by 63% then devolved the blame for the Orwellian-named ‘affordable’ rent to councils and housing associations who have to balance the desperate need for new homes with their inability to build at anything lower than 80% of market rents.
It was Labour’s lack of any narrative about housing that has allowed this to happen. Too dependent on the feel good factor of the housing bubble and too scarred by our failure to understand the political success of Thatcher’s original ‘right to buy’ policy until it was too late, housing was an area we left deliberately ideologically free. We thought we were being clever, but instead we were creating a vacuum ready for Shapps to walk right into and drag the whole housing debate miles to the right, with no established counter-balanced argument from the centre-left.
And what of those people who benefitted from the housing boom. Those who we worried would see us as too old Labour if we intervened in the market? Well, when the market crashed, many had their own homes saved by just such a market intervention. Now they watch their own children completely unable to do what they took for granted and get a foot on the housing ladder. The narrative of the housing crisis is just as much about their children’s futures as much as it is about those in chronic need. Housing for all is a slogan that many will respond to just as well in the affluent south as in the Labour heartlands.
Ed doesn’t need to make lots of unachievable promises. He needs to make this one big promise an achievable focused and vital goal central to the Labour offer. That makes the promise of a Labour future something we can all fight for.
This post originally appeared on Shifting Ground.
On Saturday I attended the always excellent Fabian New Year Conference. This was a particularly interesting year, being Labour’s first in opposition for some time. There I had the opportunity to pitch an idea to the “democracy Den”. Based on Dragon’s Den, with Dragons Mehdi Hasan - political editor, New Statesman, Deborah Mattinson - author of Talking to a Brick Wall, Mary Riddell Telegraph Columnist and chaired by Sadiq Khan MP . The idea was to present one radical idea that would also win the votes of the progressive majority.
I was up against Claire French who proposed a register of media interests, Simon Norton who proposed that we ask Nick Clegg to name his price to break the coalition (this was the idea rejected by the Dragons as being undemocratic and unworkable), Maurice Glasman who proposed a democratisation of the corporation of London and Sunder Katwala who proposed a 20% tax on Public School fees.
We each had a minute and a half to pitch our ideas and were then grilled by the audience and each dragon in turn. I was delighted to not only get unanimous approval from the dragons, but also to win the vote in the hall.
reproduced below is my initial pitch (this first appeared on Next Left)
In 1997 Labour imposed a windfall tax on energy companies which raised £5bn. I propose that in 2015 we propose a windfall tax on the banks designed to raise £7bn.
This money should be ring fenced, and used to build 100,000 social homes, bringing further investment from social housing providers and kick starting a moribund construction industry which is likely to suffer from the Tory cuts disproportionately as infrastructure investment is slashed.
This could be the start of a re-balancing of the economy from an over reliance on a London based financial services industry to a broad based construction industry bringing much needed jobs and investment as well as desperately needed homes.
This should come on top of increasing a commitment to building more social homes every year, reversing the disgraceful 63% cut to the Governments housing budget brought in by the Tory led coalition.
There are currently 4.5 million people in housing need and we are building fewer homes than at any time since the Second World War.
Housing was barely mentioned during the election campaign, but we know that it is a massive issue for voters. This policy would give us a positive way to counter anti immigration sentiment, which has at least in part been cause by a lack of affordable, decent housing.
This is not just the right thing to do; it will also be electorally popular in areas Labour need to win back. Seats like Harlow, for example, where there were 6,165 people on the housing list in 2009, and the average house costs 9.7 times the average local salary.
It will also be populist, with banks seen as not giving back to the people whose taxes bailed them out. This would be a quick, simple measure to ensure that the banks are putting something back into society and helping those in need.
So popular, affordable and the right thing to do – how can you refuse?
The CSR was an attack on the most vulnerable in society along with the squeezed middle. It will completely redefine the welfare state not as an indicator of our civilisation, but as a Victorian squalor provider, hidden from the view of the rich who caused the problems in the first place.
Because it’s an area I know about, I will exemplify what I mean by talking about the cuts to social housing, which are appalling. a 60% cut to the budget for building desperately needed new properties is expected to be made up by charging new tenants up to 80% of the market rent. This is not affordable housing by any stretch of the imagination, particularly in areas where the market rate is ridiculously over inflated. There will then be a split in social housing providers between those who build and those who house the poorest, which will mean over time that we end up with ghettos rather than vibrant mixed communities.
This is just one way to examine what is clear. This budget is deeply unfair. When the budget for local authorities are cut by twice as much in percentage terms as the money given to the richest woman in Britain, that’s not fair.
When the poorest suffer as the second most impacted group (after the very wealthy who can – of course – bear the impact far better), that’s not fair.
A final thought for you. On the Guardian Website, they ran an interactive feature called You Make the Cuts. In the cuts options offered for the Department for Transport, one option is to privatise 10% of the road network and introduce charging. This would generate £75 Billion. Not a single other measure would have to be taken. Not a job lost, not a university place unfunded, not a social house unbuilt. There would even be money to invest in public transport to alleviate the suffering of those who would be worse off.
Not even considered.
Labour should have ruled out raising VAT altogether. That we didn’t was a huge mistake. That the ConDems have raised it is a bigger one.
VAT is a horribly unfair tax. Office of National Statistics stats show the richest 10% pay £1 in every £25 of their income in VAT; the poorest 10% pay £1 in every £7 as VAT. Those who can least afford it will be badly squeezed by this measure alone.
Unemployment is going up, and cutting 25% of each public service is only going to exacerbate this further. Not just because a possible 1 million of them could lose their jobs, but because the many businesses who trade with the public sector will also suffer. So this is a terrible time to actively reduce the funds available for those who can’t find work. But the CPI linking of benefits – as opposed to the more realistic RPI does just that.
I work in housing, and what I found most distasteful in the budget was the cut of 10% of Housing Benefit if people have been unemployed for a year. This combined with the destructive strategy being enacted bty Eric Pickles in the DCLG of telling councils that Regional Spatial Strategies have been abandoned without putting anything in their place (which has already led to at least 40 local authorities putting a moratorium on house building) means that we will have less and less affordable housing built every year. The differential in the Housing Benefit caps will also lead to a further abundance of single bedroom properties in the private sector with affordable properties for families becomes rarer than ever.
This was not a budget of necessity. Cuts to not need to be this severe or this unbalanced. When part 2 kicks in on the 20th October, and we see what the departmental cuts will entail, people will know this is not a case of cutting waste but cutting vital services.
Labour and the left believe that it is essential in our society that we provide for our weakest members. The Conservatives believe that in so doing we weaken our society. No one is really sure what the Lib Dems believe other that that they should be in the Cabinet no matter what. With this budget – more ideological that anything Thatcher ever passed – the Tories will have the chance to test their economic theories – and we will see the damage their trampling of the state will cause.
There is a lot of talk among the Labour candidates on how we need to be listening to our lost voters, centered around immigration. I think that while this is true, we need to be very clear on two matters: Firstly we must ensure that we know what the result of “listening” can and more importantly can’t entail; and secondly we need to ensure that we are not listening without hearing, and understand what it is that people are really saying to us.
First we must separate those who are simply a little xenophobic from those who have a more substantial beef with being left behind by the forces of globalisation of which immigration is a part of the story. Labour must never become a party that even considers pandering to xenophobia, however much we are told that this is the attitude of our lost vote. That doesn’t mean we can’t address the issues that underlie the public’s worries on immigration and we should cast off the timidity of our past to do so.
What does this mean in practical terms? It means a strong a directed argument in favour of government intervention in two key areas: Housing and Employment.
Labour must set out a national and regional strategy to build many, many more houses, at least 100,000 a year, and at least half of these must be affordable housing (affordable both to rent and to buy – there must be a revolution the funding of social housing provision working both with councils and with Housing Associations). Given the cuts the ConDem government have already unleashed in this area, this will be a policy that will offer voters a distinctively different offer. The case needs to be made that building is not just good for those who need the homes, but for our economy too.
Secondly we need to offer to close the employment loopholes that exclude agency workers from fair deals and protect the employment rights of all workers – immigrant or not – so there can’t be a financial incentive to employ and abuse immigrant workers.
We need to be clear that this won’t stop immigration, and that stopping it is not our aim, but it should alleviate some of the negative effects that are felt by the working class.