Labour’s Housing Problem

ERNIE JACQUES argues that Labour’s ‘curate’s egg’ of a manifesto is a long way from being social democratic or balanced. It’s a confused approach exposed most clearly by its housing policy.

While there are undoubtably progressive nuggets in the Labour Party’s manifesto, which sets it apart from the nasty party, it is nevertheless remarkably timid and a long way from being anti-austerity, social democratic or balanced.

Housing picOf course, many argue that, given the size of UK sovereign debt and fiscal deficit, and the hostile political culture where attacking skivers and benefit scroungers is not unpopular, Miliband’s cautious policy trajectory is sensible and realistic. Rome was not built in a day, they say, and a change of direction takes time and is unachievable without widespread public support.

Yet, if the Labour party will not, or cannot, make the case for a change of direction and an alternative to austerity and unfairness, who will? Let’s take what it says about housing as an example.

A decent house is a fundamental human right from which almost everything else flows. Without a house to keep you warm and safe it is impossible to live decently, get a job, feed the family, send your kids to school, and be part of the local community.

Page 25 of the manifesto boldly state that Labour is intent on mending broken markets, but once you drill down below the headlines and sound bites, it is apparent that Labour’s housing policy is not just timorous but unbelievably regressive and prejudicial to the interests the most needy, vulnerable and excluded UK citizens.

There are ‘good bits’. Labour pledges to:

  • guarantee three-year housing tenancies with a ‘ceiling on excessive rent rises’
  • scrap housing benefit changes that penalise those with spare rooms (the bedroom tax).

But there are ‘bad bits’ too, for example, Labour says it will:

  • encourage the private sector to build 200,000 new homes a year by 2020, with ‘first priority [given to] local first time buyers’.

And then there are some down right ‘ugly bits’ such as Labour’s pledge to:

  • keep the household benefit cap, examine whether it should be lower in some areas, and cap social security spending as part of each spending review.

While the target of 200,000 new homes a year is better than Tory pledges, it is nowhere near enough to cope with demand for affordable and social housing, which is growing by the day due to the failure to match demand over the past 30 years, and unprecedented population growth and EU immigration.

Realistically, we cannot build houses for anyone who happens to turn up at any airport or on the back of a lorry. That way, no matter how many million-plus houses are built and green fields concreted over, demand will be insatiable and houses for all UK citizens unachievable.

Those who welcome the flow of cheap EU labour into the UK are usually the ones with money, the landlords, and those with assets – multiple houses, property portfolios and investments – who benefit at the expense of the poor while UK citizens cannot afford to buy and access decent housing. I do not think that in making this point I am straying into UKIP territory.

Labour’s plans to incentivise the private sector to build more affordable houses cannot work and is a classic cop-out in that so-called affordable housing is now deemed to be 80% of market price, and for the working poor and those most in need is completely unaffordable.

In this respect, the notion of affordable housing is political spin. Most young couples living in my home city of York are priced out of the house buying market and have little or no chance of accessing social housing.

Backing the benefit cap

The benefit cap is a central plank of George Osborne’s deficit reduction and austerity programme, and is helping to accelerate rent arrears, evictions, social cleansing and housing apartheid. When Labour signed off on Osborne’s £30 billion austerity reduction plan, it signalled that it had no plans to intervene and regulate the rigged housing market by capping rents and building millions of desperately needed social houses.

How could Labour do otherwise when it supports deficit reduction and continued austerity? If it was serious about mending the market it would have to rebalance the economy and challenge the vested interests of landlords (foreign and indigenous) who are (everywhere) gobbling up the housing stock as buy-to-let investments and pushing up rental income, while gratefully receiving billions in state handouts via housing benefit.

So doing little or nothing to fix a rigged housing market is not a sign of its cautious pragmatism and sensible economics, but of its lack of desire to seek real change. It is siding with private landlords who all too often prosper at the expense of poor and vulnerable tenants, many of whom live in sub-standard, Dickensian and third world conditions.

Over the past decade we have seen the social cleansing of working class communities as local authorities of all complexions encourage inward investment, private sector regeneration, gated communities and gentrification.

Meanwhile they struggle to house and re-house those who have nothing. At a hideous cost, they move local residents into dilapidated sink estates and houses of multiple occupation, sometimes hundreds of miles from family, friends, jobs and the communities they grew up in and love.

Joe Halewood, a housing consultant and welfare rights campaigner, who writes under the nom-de-plume SPeye Joe, has argued persuasively that the household benefit cap will result in upwards of one million men, women and children facing eviction from social housing and the private rental sector.

This is a process of social cleansing created, in part, by the bedroom tax, but primarily by the inexorable rise in property prices and rents, while the incomes of the working poor and benefit recipients are being ruthlessly squeezed by corporate Britain and the work of Iain Duncan Smith at the Department of Work & Pensions.

Things can get worse

The benefit cap – currently £26,000 per year, or £500 a week – consists of welfare and tax credits paid universally across the UK, whereas housing benefit is variable, depending on where you live. So, a family of two adults and two children living in three-bedroom accommodation in York is entitled to a monthly local housing allowance of £607.66. But rent for the average three-bedroom house exceeds £800, and the £200 shortfall is unaffordable to tens of thousands of York citizens working in retail, hospitality and leisure, where part-time, temporary, minimum-waged and zero hours contracts proliferate.

This is a problem which could become a whole lot more acute if the Conservatives win the election and cut the cap to £23,000 while extending right-to-buy to housing association tenants. Leaked papers suggest this cap will apply to London only, while those living outside the capital will be capped at £20,700, 10% less.

Unfortunately, if Ed Miliband triumphs it will make little difference given that shadow chancellor Ed Balls and shadow housing minister Emma Reynolds are fully signed up to David Cameron’s £30 billion austerity agenda, including the  benefit cap. Ever keen to re-assure markets and demonstrate their fiscal probity, they are threatening to go further and put an annual cap on social security spending.

When that happens SPeye Joe predicts that the numbers of tenants reliant on housing benefit, caught in the double whammy of rising rents and squeezed benefits, will snowball significantly. Along with right-to-buy, this is likely spell the end of social housing and will cost billions given the huge economic and social costs associated with homelessness.

So, overall, Labour’s housing policy seems to be the usual sticking plaster approach, which is wholly inadequate to the scale of the problem. Labour’s housing policy fails miserably to deal with the fundamentals of a broken housing market, which could spell the death of social housing.

How can you have an inclusive, integrated and balanced one nation society when millions of UK citizens are simply a heart-beat away from eviction and homelessness and are routinely denied access to decent housing?

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See also: ‘Judging Labour’s Manifesto’ by Harry Barnes.

15 Comments

  1. Harry Barnes
    28 April 2015

    Ernie: With nine days to go, what is the electoral advice which follows from your analysis? Is it to vote SNP in Scotland, PC in Wales, SDLP in Northern Ireland and Green in England? Alternatives could be to abstain or to vote Labour and hold our noses. After the election, which form of government will it be easier to press your housing (and other) points upon?

    I am not for giving up proper political thinking until the election is over, but I am for getting the best we can out of what is on offer, then immediately advancing the case for democratic socialist-style policy improvements – which I believe (although difficult) would be easier given a Labour government. Then immediately let us show what feasible impovements might be open for us. That is my overall approach. What is yours?

    I don’t underestimate the difficulties, but the position for Labour’s left is better than under Blair in 1997 and 2001 – the scope is based on your “progressive nuggets”. As long that is as the left does not shoot off on an emotional spasm. If New Labour truimphs, however, then I grant we have then to think deeply about how we next move – and where. But it should be Labour for now.

  2. Ernest Jacques
    29 April 2015

    Harry,

    I hope it doesn’t upset you too much, but surprise, surprise, I mostly agree with you. How shocking is that?

    Despite my sometime grumpy and jaundiced views, I cannot abstain and must vote Labour and do my bit to vote the nasty party out of office. So in that respect we are still on the same side even if you are a glass half full man whereas Mr Grumps here is more of a glass half empty disposition.

    Having said that, should Labour triumph in May, the fight is not over. We can have no illusions about the toxic and corrosive effect of the Westminster machine, establishment flattery and big money. And on issues like housing we (the ILP, socialists, trade unionists and all who seek fairness and social inclusion) have a right (no a duty) to oppose, as best we can, the nonsense spin about ‘making markets work’ when in reality markets cannot and do not work for those without assets and for millions of working class people.

    Wouldn’t it be great – Harry – if on 8th May Housing Minister Emma Reynolds was making a statement similar that made by Lewis Silkin MP, the Minister for Town and Country Planning in 1946, also a time of great austerity and sovereign debt?

    “The planning should be such that the different income groups living in the new towns will not be segregated, no doubt they may enjoy common recreational facilities, and take part in amateur theatricals, or each play their part in a health centre or community centre. But when they leave to go home I do not want the better off people to go to the right, and the less well off to go to the left. I want them to ask each other, are you going my way?”

    And if a Miliband administration was to act on it – as did the Attlee government – this Mr Grumps in York would be truly happy.

  3. Harry Barnes
    29 April 2015

    The difference between us seems to be that at the moment I don’t pull my hair out over Labour as much as you do. But then I am bald already.

  4. Ben Saltonstall
    30 April 2015

    I accept that Ernie is right to criticise Labour’s housing policy, which makes no mention of allowing councils to invest in council housing building programmes or allowing them to borrow to take an equality stake in first home purchases, to be paid back via rent.

    But I think it is helpful to keep in mind what the right wing think of Miliband’s programme before condemning it as compromised and muddled. This is a quote from advice to investors published today by Money Week. Just remember, this is what the ruling class think of Labour and the SNP – it’s worth remembering, particularly as all the policies they refer to are in the Labour Manifesto (as well as the SNP’s):

    “It’s 5pm on Friday 8th May, 2015.

    Ed Miliband and Nicola Sturgeon have just entered Downing Street for the first time as part of a new coalition government.

    As they stand on the steps of Number 10, arm in arm in front of hundreds of photographers and journalists, news of their agenda is already beginning to leak out…

    Reports suggest they’ll reverse the pension freedoms designed to give retirees more choice… increase income taxes to roll back the cuts of the last government… cap private profits in some areas of the economy.

    Behind the scenes, plans for transferring even more powers to Scotland have already been drawn up… as well as new property taxes for homeowners up and down the country.

    Both Miliband and Sturgeon grin as only the victorious can…

    Meanwhile, the pound has fallen.

    Business leaders are warning of an exodus.

    Markets have been hit hard across the board.

    The entire political and financial landscape has been turned on its head by the election result.”

  5. Ernest Jacques
    30 April 2015

    Reports in today’s Huffington Post and Independent newspapers spell out graphically what is happening in the rental sector and the devastating effect this broken housing market is having on the living conditions and mental health of hundreds of thousands of UK citizens.

    Unbelievably, 50,000 families have been socially cleansed from London alone and the silence from our political leaders is deafening. And no political party has anything meaningful to say that would help these most vulnerable, disadvantaged and excluded people.

    1. http://www.huffingtonpost.co.uk/2015/04/30/housing-mental-health-homeless-shelter_n_7178528.html?utm_hp_ref=uk&utm_hp_ref=uk

    2. http://www.independent.co.uk/news/uk/home-news/over-50000-families-shipped-out-of-london-two-women-affected-by-the-crisis-10213889.html

  6. Ernie Jacques
    1 May 2015

    Hi Ben,

    You are quite right to suggest that Ed Miliband has limited room for manoeuvre and that those who have money will say and do almost anything to frighten Armageddon in the event of a Labour/SNP/Green dominated Parliament next week. In this respect, it’s a re-run of the extraordinary establishment panic in the run-up to Scottish referendum vote, when it looked for a moment that change was about to happen and the union was lost.

    But if true to their words and there was a flight of capital abroad, would this be so disastrous and the end of the world as we know it? Hope so! Because the status quo where house prices and rents rise inexorably, with increasing levels of household income going on mortgage repayment and rent, must be unsustainable. Surely there has to be radical action to rebalance a rigged UK housing market (to meet need and not greed) along the lines suggested by yourself Ben? If not, when the housing bubble bursts, millions of UK citizens who are mortgaged up to the hilt, together with many pensioners who put their life savings into modest buy-to-let investments, will be the victims of the next credit crash.

    Incidentally, Miliband’s statement (in last night’s leaders’ debate) that he would rather let the Tories govern than do a deal with Nicola Sturgeon seems to me to be a rant of desperation from someone who has waved the white flag in Scotland. It’s fruit and nuts bonkers!

  7. Harry Barnes
    1 May 2015

    Ernie: Much of Labour’s electoral programme is inadequate, including the section on pages 45 and 46 which cover its main housing proposals. But what we need if Labour forms a government is at least to push it to deliver what it has promised, whilst also moving beyond it.

    It is a mistake (even as a joke) to say that a flight of capital abroad is to be hoped for. For if it is a “flight” rather than an adjustment, we just don’t have the values and understandings across society that will provide the pressures for the approaches we would then be seeking. The media would create turmoil and right-wing extremism would be likely to flourish.

    What we need to do is to hold onto and develop the best in our society (such as all those people donating to try to help to deal with the crisis in Nepal). Then we need to press other nations to join with us to control the powers and influences of capital. There is no magic wand which can achieve this; only a hard slog for those who have some inkling of the problems and the hard-to-be-fought-for possibilities.

    Labour has handled the situation in Scotland badly, but Nicola as the surgeon hardly solves our common problems. We need a Labour government which is open to being worked upon. The Scottish issue can be turned into something that is more positive if we look for a federal-style solution across the regions of the UK. Who knows, the SNP could even have a Blairite Clause 4 moment and remove its main aim of independence from Clause 2 of its own constitution. Hope so !

    .

  8. Ben Saltonstall
    2 May 2015

    I agree with Harry’s post 100%. Capital flight will undermine any left leaning government and lead to a further shift to the right. Even Syriza is trying to avoid this, even though, arguably, Greece is in such a state, a Grexit is about the only way of putting it on a just and even footing. Even so, going it alone would involve rationing of staples and medical supplies.

    As Harry said, the only way to control capital is through international agreement, though Labour could impose a Robin Hood tax domestically as other EU countries have done.

    Finally, I want to re-emphasis that the reason I quoted moneyweek is because it puts the true radicalism of what Labour under Miliband is suggesting in perspective. Miliband’s Labour intends to restrain capital and corporate culture to fund public services and rebalance the economy, so it achieves long term investment in companies and people. Sadly, he hasn’t got the message across very well. That isn’t all his fault. Sometimes people (like Green Party supporters) just don’t listen because they want easy answers. There aren’t any.

  9. Ernest Jacques
    4 May 2015

    Ben & Harry,

    Set against what the city, big corporations, bond and currency traders, foreign investors, money launderers and most readers of MoneyWeek want, it is undeniable that Miliband’s programme for change is deemed dangerously radical and unwelcome. No change there then!

    But in the context of Labour’s woefully inadequate housing plans and the funny money stoking up the property bubble and rents, this investment is hugely problematic and detrimental to balance and to the interests of millions of UK citizens, deprived neighbourhood communities and those on council housing lists. And when the derivative and bond markets go belly-up (classic Ponzi schemes kept afloat via Quantitative Easing) and the super-rich shift more of their money to tax havens, who is going to bail out the banks and who will our political leaders blame and punish when the house of straw and casino economy, they have built, falls down?

  10. Matthew Brown
    5 May 2015
  11. Harry Barnes
    5 May 2015

    Ernie: With less than 48 hours to go, who is offering policies which are directed to tackling the problems you list? And which feasible election result will offer people who feel as you do the best chance to advance their proposals? If we are lost whatever the result is, then how do we then push to tackle your concerns once the result is announced and a government emerges ?

  12. Ernie Jacques
    5 May 2015

    I don’t disagree with most of the analysis outlined in the New Statesmen articles signposted by Matthew insofar as the SNP manifesto, including housing policy, is ambiguous and contradictory in parts and hugely problematic in terms of economic and political challenges. And while I think Nicola Sturgeon has been the most impressive of all the leaders, I am neither a nationalist nor SNP fellow-traveller.

    I also agree with Harry insofar as the first priority must be to ensure Cameron and his nasty party return to the opposition benches. So come Thursday EJ will be doing a Russell Brand.

    But like others, no doubt, it will be a vote without anticipation that the new intake of Labour MP’s (aka Lucy Powell) will have the inclination or the bottle to assist Miliband to deliver on his Ed-Stone election promises

  13. Harry Barnes
    6 May 2015

    Ernie. The main purpose of the concrete block might be to hem in the Lucy Powells.

  14. Ernest Jacques
    8 May 2015

    So Cameron and his party of greed, fear and social exclusion won. So disappointed.

  15. Harry Barnes
    9 May 2015

    Matters would have been problematic enough even if Ed Miliband had made it to 10 Downing Street. Now , who on earth do we push to stand for leader and deputy? We need to press for the candidates to issue manifestoes for these posts. To see if they say anything we will later wish to try and bind them to.

    We face really huge issues. (a) Do we need a written constitution with a federal structure to hold onto Scotland, (b) how do we respect the rights of not only the SNP but of others such as the Northern Ireland Parties and Plaid Cymru who are also local to their own territories, (c) how fair is an electoral system which has resulted in the two main parties taking 87% of the seats with only 67% of the vote – whilst UKIP gets only one seat with an overall vote of 12.6% and the SNP get 56 seats with a vote of just 4.7%: which seems unfair even if we don’t like UKIP, (d) what is the future of the Labour Party, including who should be its new leader and deputy leader (and how will this help shape its ideological direction on key issues such as climate change and economic and a social justice) (d) how do we relate to the EU, (e) what will we do about the people who are drowning in the Mediterranean due to serious instability in their countries of origin (e) what avenues do we use to feed such concerns into the political process – is it via Labour, other or new parties, or (instead or as well?) via pressure groups such as (say) 38 Degrees? These and other issues need to be pursued with vigour; but what fruitful avenues can we use for this or what collectively can we help build?

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