Policy Exchange’s latest idea would make the UK a more miserable place


5:03 pm - August 20th 2012

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contribution by Paul Sellers

The Policy Exchange report “Ending Expensive Social Tenancies” is in the news this morning. The basic premise is that ”selling expensive social housing as it becomes vacant could create the largest social house building programme since the 1970s.”

They add: “The sales would raise £4.5 billion annually which could be used to build 80,000-170,000 new social homes a year and create 160,000-340,000 jobs a year in the construction industry.”

There is widespread concern that such a proposal would be a disaster, creating mono-cultural communities, making low paid employees travel further to work, and perhaps opening up local authorities to allegations of seeking electoral advantage – and most damningly, singularly failing to generate much in the way of new social housing.

First, this report begs the question “why does a Conservative think-tank suddenly seem to be enthusiastic about social housing?”

One does not have to look far for a clue, as the report goes on to say that such a proposal would be ”extremely popular with all sections of society. 73% of people including social tenants think that people should not be given council houses worth more than the average property in a local authority. By 2:1 voters agree people should not be given council houses in expensive areas.”

Frankly, I simply don’t believe this polling. I think that the answer is very likely to be strongly influenced by how the question is framed. Housing minister Grant Shapps has already told local authorities that they should sell off their most expensive social housing, but there is a real difference between asserting that councils should sell the very small number of properties worth more than £1 million and advocating that the most expensive 25 per cent of social housing must go. The latter would be a policy entirely tailored to appeal to the right wing of the Conservative party.

Reasons why this policy would make the UK a more miserable place:

  1. There is compelling academic evidence that mixed communities are more at peace with themselves. Put in simple terms, it becomes harder to stereotype the Porsche-owner when you see them working long hours, or perhaps the one-parent family down when you know that they are better off without their abusive partner. This kind of real understanding is fostered when people live together in the same street.
  2. Segregating communities means that those engaged in service occupations have to travel further to work. This makes low paid workers poorer and increases emissions and congestion.
  3. when social housing is sold, there is an absolute guarantee that all the money will not be re-invetsed in social housing. First, the Government itself always takes a percentage of all sales revenue. Second, Government policy continues to be that local authorities will use a percentage of the revenue from sales to support their general activities. This means that the sale of an above-average property does not generate enough money to build a below-average replacement social housing unit. For example, the Regulatory Impact Assessment accompanying the Governmnt’s “Reinvigorating the Right to Buy” consultation suggested not a one-for-one replacement, but a ratio of about one new social home for each four sold!
  4. Most worryingly, there is a concern that such proposals could be used to generate electoral advantage by moving opposition voters. This proposal would need a rigorous political impact assessment in order to ensure that it would not open the door to a wave of Westminster-style social-cleansing scandals.

It is the business of think-tanks to think the unthinkable. Often it is the business of the rest of the UK to tell them why the unthinkable remains just that.


crossp-posted from Touchstone blog

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Reader comments


1. margin4error

Ten years ago Ken Livingstone did something brilliant in London. He said that if you want to build a bunch of flates or houses – the development had to have 30% affordable (primarilly social) housing. If you wanted segregation, by putting the social housing elsewhere, the ratio rose to a prohibitively expensive 50%.

Fir the first time in history homes for rich and poor were being built in the same place. Appartment buildings had wealthy owner-occupiers and relatively poor social housing tenants passing through the same lobbies. Soocial barriers were thus changes and maybe we did just a little to bridge some of the biggest divides in our society. Maybe some of those poor kids saw wealthy neighbours who went to university and thought maybe they’d give that a try. Maybe some of those wealthy residents saw how little their disabled neighbour’s kid had and supported a charity in response.

Of course Boris has got rid of all that. And this policy suggestion seems to want to create more northumberland parks where rioting can start and grow out of control. Cos that’s part of a cohesive big society.

The social cleansing side is thoroughly pernicious, of course.

But yes, that really is Policy Exchange, the trading name of Michael Gove’s office, proposing that money from the sale of council houses be used to build up to 170,000 new social homes per year, the largest programme for the construction of social housing since the 1970s, which in turn would create as many as a third of a million jobs.

The Coalition will never do it. It would entail the ultimate repudiation of Thatcherism, her assault on council housing being the one thing that her supporters still feel able to defend unconditionally. In reality, it created the Housing Benefit racket and it used the gigantic gifting of capital assets by the State to enable the beneficiaries to enter the property market ahead of private tenants, or people still living at home, who had in either case saved for their deposits. What, exactly, was or is conservative or Tory about that? Or about moving in the characters from Shameless either alongside, or even in place of, the respectable working class?

And now, the doubts are being expressed even in the belly of the New Right beast. If Labour promised to build 170,000 new council homes per year, the largest programme for the construction of social housing since the 1970s, thereby creating a third of a million jobs, then what would the New Right think tanks and their in house newspapers have to say? “Vote Labour”? If not, why not?

Ed Miliband, Jon Cruddas and Maurice Glasman, over to you.

1

You are probably a lot younger than me and I have never lived in London, but your comment about neighbourhoods where there is a good social mix was the norm where I grew-up

I lived on a council estate and attended the local grammar, three of my teachers lived on the same estate, and when I left school I chose to work down the pit.

The fact is, this notion about the merits of social mobility and the idea that home-ownership is good and renting from the council is bad is a product of thatcherism which, in itself, stigmatized council tenants, hence making social housing in more expensive areas an easy target for this government.

Dame Shirley Porter was able to pull-off the homes for votes in Westminster by exploiting the underlying culture of consumerism for symbolism, which, IMO, is more to do with the recent rioting than the concentration of certain social groups in one area.

The silly places to be are pushing all or nothing policies. For fortuitous reasons, some councils have acquired some costly, large residential properties and it doesn’t make sense for councils to hang on to ownership of all of those regardless.

The issue that needs to be forcefully pressed is the priority of getting more social housing built at a time when house building has been running at the lowest rate since the late 1920s, excepting the war years, while houses are less affordable than 50 years ago or so to buy.

The average rent paid by private tenants in England and Wales reached a new record high in July, of £725 a month, a letting group has said.
http://www.bbc.co.uk/news/business-19288208

I’ve previously suggested that the BoE use new QE money to buy Housing Corporation bonds to enable the Corporation to lend on the money to housing associations to build social housing. By recent press accounts, the government is reportedly willing to bring in a scheme to guarantee loans made to housing associations to facilitate borrowing and reduce borrowing costs.

We need to keep watch to see whether this is happening.

@OP, Paul Sellers: “when social housing is sold, there is an absolute guarantee that all the money will not be re-invetsed in social housing. First, the Government itself always takes a percentage of all sales revenue. Second, Government policy continues to be that local authorities will use a percentage of the revenue from sales to support their general activities. This means that the sale of an above-average property does not generate enough money to build a below-average replacement social housing unit.”

This argument is thirty years old. The financial policy on council house sales of the Thatcher government is/was indefensible, so why was it not sorted out by New Labour governments?

Sadly, the self-styled left in Britain has often seen council housing as virtually the only acceptable way for achieving a better residential social mix. Other countries have not been beset by this benighted vision.

In mainland western Europe, with the challenge of making good bomb damage from WW2, the private sector was often left to make a large if not the major contribution to rebuilding. In Germany, some 60 pc of housing is still rented as a result. Not so in Britain where continuing rent controls on private rented housing for decades made it an unattractive legitimate investment proposition so crooks like Rachman stepped in to make up for the gap.

One of the many consequences of council housing is that councils liked to build large estates, for reasons of scale economies, as well as, very often, to build high even if there was no need to do so. In contrast, private development of rented housing tended to be smaller in scale and mixed in with other development because private investors were limited in how much finance they could raise for one development. With access to public borrowing, councils didn’t face such limitations and compulsory purchase orders could usually be used to ensure large sites for redevelopment. As a result, unfortunately, council housing estates were all too often easily recognisable as council housing estates while private sector developments are more varied and range from social through to affluent accommodation.

Before the debate proceeds in its usual fact-free way, try this research report from the LSE:

Towards a sustainable private rented sector – The lessons from other countries
http://www2.lse.ac.uk/geographyAndEnvironment/research/london/events/HEIF/HEIF4b_10-11%20-newlondonenv/prslaunch/Book.pdf

The Tories will not rest until London is a rich mans haven !

If the Tories get their way and their evil plans blossom they will then make it law that you need papers to enter London stating purpose of visit.

This is expanding their social cleansing by yet another route. In addition to this, it was only a few months ago that Cameron and company were saying that council and housing associations should one day raise their rents by 50% or more, so what the hell are these Tories really upto ?

I’m starting to believe that the Tories are deliberately inflicting fear, stress and total misery upon the lower classes, if you can call them that. I call them victims !

Oh I can believe the polling. Ask someone if it’s OK for someone else who earns less to get a bigger better more expensive house to live in and the vast majority will say no. Because they will have worked hard to afford the mortgage to get their own house and when they see someone who has made no real effort get a better house then it is not fair. It’s basic human nature. Jealousy.

However if you ask if someone should be put out on the streets or have their family split up because there isn’t a large enough house to home the whole family then they will accept that they deserve a large house which by implication will be expensive.

Surveys should always be ignored because it it so easy to create the questions to get the answers you want.

On to the points.

1. Social mixing of extremes doesn’t happen naturally. People will stick to their own group, be it social, relgious, class, colour, nationality, monetary, etc. Any attempt to subvert human nature by dictact never ever works. It always causes problems in the end.

True social mixing can happen but it takes a long time. When people have lived near to each other for many years and got to know each other then they will mix even though they might not be of the same wage group (or other criteria) because circumstances change but the people don’t. But it can’t happen if a large group comes in. It can only happen when the incoming lot come in dribs and drabs and integrate and merge. That’s why the tower blocks of the 80s were utter failures, they broke up groups and imposed a new unnatural order. This is also why multi-culturism doesn’t work because it’s a clash of cultures not a merging.

I doubt that it is hard to stereotype a porsche owner when you hardly ever see them because they are working so hard and are hardly seen. Out of sight doing what? Working hard or driving around doing nothing. How can the poor person tell? And why would the porsche driver want to keep his pride and joy which he worked really hard for (or go off daddy’s trust fund) in a place where there are envious people? Nope, not likely at all.

There is a mix of groups in the big cities, but it’s the very poor in subsidised housing with the very rich who can afford to buy. The middle classes do not mix. They are the ones who live away from the cities and commute in because they can’t afford the expensive houses and don’t get the benefits either. But this mixing is not homogenous. It’s on an area by area basis.

2. Service occupations are needed but the travel to work is not a reason to “segregate” them. They can commute just like anyone else. Rich people do need their cleaners, but if all of them don’t live nearby then they either have to pay more or accept that they won’t get anyone. As for emissions and congestion, seriously? There are millions of people who commute to work, service occupations are not a major proportion to make much difference. And what’s to say that the rich and poor areas are segrated by only a few miles. Not a huge distance to walk. The areas will arise naturally as those who want servants live close to those who want to offer their services. But it never happens by planning.

3. Here I can agree. But bear in mind that the Labour government didn’t allow money from the sale of council homes to be used to build new homes either.

4. As for political impacts. The left are not alone in carrying out policies for their own side which is not far off gerrymandering if not as blatant as Westminster Council’s in the 80s. But this is not social cleansing. Even after all the changes, there will still be people on benefits living in London. Just not in the expensive areas.

Finally which is best? To allow a small number of people on benefits to live amongst the rich at great cost to society, or allow all poor people to have a good roof over their heads but not in the area where they were brought up all their lives. It’s not like people don’t move home due to changes in their job or family status.

Being on benefits doesn’t mean you have an entitlement to stay where you are.

It’s like smokers being denied heart operations or alcoholics being denied new livers. Society doesn’t think it right to waste money on those who don’t change their ways. Similarly, society doesn’t think it right that money should be wasted on families who through no fault of their own are allowed to stay in their expensive and very costly homes.

They’d sell the houses all right, but anyone who believes they’d use the money to build affordable homes for working class people is living on another planet.

On London house prices and housing rents:

“In London, average houses prices are 51 pc higher while private rents are 64 pc higher than the rest of England according to the Greater London Authority (GLA). ” [BBC website 24 April 2012]

“House prices fall £3,500 for every mile when leaving London towards Manchester, explained estate agent Henry Pryor. ”
http://news.bbc.co.uk/today/hi/today/newsid_9741000/9741737.stm

Reuters: “The ONS said that the [recent] decline in unemployment was largely due to falling jobless numbers in London, where also almost half of the new jobs were created, adding to signs that some of the labour market improvement was due to the Olympics.”

Why should I subsidise people to live in an area that could could never afford to live in? What benefit should accrue to those who have to pay for this peculiar idea?

11

There are issues about where transport workers, non-clinical NHS staff, shop workers, hotel and catering staff working in London would live if they are squeezed out from living in London but that is sometimes overdone. This news rather surprised me:

Tube drivers’ salaries to rise to more than £50,000

New deal negotiated by unions will mean some staff will end up with a 20% pay hike over four years
http://www.guardian.co.uk/uk/2011/oct/03/tube-drivers-salaries-50000

The hike in rail fares as the government withdraws rail subsidies will make commuting to London at peak times much more costly while the rises in the pay of most are very “subdued”.

The other news that has surprised me are continuing reports about how relatively prosperous London is becoming as compared with most of the rest of Britain. The initial news as the financial crisis broke was that London would be disproportionately hit because of London’s dependence on banking and financial services. In the event, London seems to have emerged from that crisis better than elsewhere. The higher rents and higher house prices couldn’t be sustained if there wasn’t the demand.

13. Richard Carey

The roots of the housing problem lie in state intervention. Read what Ernest Benn says back in 1928 – chapter XII Housing:

http://library.mises.org/books/Sir%20Ernest%20Benn/The%20Return%20to%20Laisser%20Faire.pdf

@ 6 Bob B,

you make some good points.

14. Shinsei1967

1) A good social mix doesn’t just occur when poor people are subsidised to live in rich areas.There’s also the process of gentrification whereby educated professionals move into poor areas.

2) Living near work ? Is there any evidence that this is the case. If you are talking about cleaners working in the City or Canary Wharf then it is actually quite a commute from the expensive areas of west London we are talking about. There are cheaper and nearer places than Notting Hill. Or NHS workers. Aren’t most large London hospitals not in the centre. The doctors I know in central London commute OUT to go to work.

3) Why would it increase emissions or congestion ? The properties being sold will still have people living in them and going to work. Net/Net there is no increase in emissions.

4) There is the issue of parallel communities. Being a poor pensioner is not necessarily much fun if you live in Notting Hill and your local shop is an expensive Waitrose and your local pub is full of international banker types paying a fiver for a lager.

So, none of you have noticed that this report is not based on any kind of research nor does even mention a methodology.

@ 13

Ah, the Ludwig von Mises Institute. The think-tank that hides its racism behind laissez-faire rhetoric. As for state intervention causing the current housing problems, that’s patently barking.

15 – well that’s just nonsense. Its methodology on “expensive” houses is set out at page 8:

To be able to sell off expensive social properties when they become vacant, a definition of expensive is necessary. We use the median. This is the ‘half-point’ of all properties, the ‘average’ property with half of properties being cheaper than this point and half more expensive.

A national median (£177,000) keeps expensive housing for the North East (median £119,000), but sells almost all of London’s stock (median £290,000). Local authority medians keep too much expensive stock (Kensington and Chelsea, median £791,000).

We use a regional median – the North West or South East – to avoid both
problems.

Expensive areas are close to cheaper ones across the country. House price variation within regions is also limited. The South West, England’s largest region, has a median local authority house price of £190,000, with a standard deviation of £31,000. 70% of properties are in one standard deviation of the median, in a narrow band round the average.

This all suggests new tenants would be housed close to where they want – near friends and family. As a safeguard, if no social housing exists within 30 miles of a local authority with valuable stock, and replacement stock could not be built within 30 miles, stock should be retained. We believe no such cases should occur in reality.

We can use the English Housing Survey (EHS) 2007/8 data to get an idea of how much stock this affects. The EHS contains 16,000 valuations, and prices today are similar to what they were then.

We cap the value of social properties at four bedrooms, we do not use the median for 5+ bedrooms as these would be too expensive. There is a cap for housing benefit at four bedrooms, and it seems right to expand this principle.

17. Shinsei1967

“The Tories will not rest until London is a rich mans haven !”

What an irrational prejudice. Look at the evidence.

Do Tories live in poorer areas of London ? Yes. Gentrification isn’t just by Guardian-reading types.

Do Tories avoid mixed residential areas ? No. Ever been to a village, there’s about 10,000 of them in the UK. Tory in big house or weekend cottage, poor people in small houses. All just yards from each other.

“There is compelling academic evidence that mixed communities are more at peace with themselves.”

That’s absolutely amazing. For we’ve Wilkinson and Pickett telling us, and every lefty worth the name agreeing with them, that inequality produces a worse society.

I’m afraid that it’s not possible to have it both ways: either inequality is a bad thing or it’s a good thing. You’re saying here that it’s a good thing. Excellent, let’s abandon redistributive taxation and really crank up that Gini.

@ 16

That isn’t a methodology, dude.

But what’s worse is that they use old data. I don’t suppose you have any comment for that?

“We can use the English Housing Survey (EHS) 2007/8 data to get an idea of how much stock this affects. The EHS contains 16,000 valuations, and prices today are similar to what they were then”

Why not use 1977/78 data?

20. margin4error

steve b

Sadly I’m probably a fair bit older than you imagine – but I was not politically aware before the 80s and have little knowledge of the London you describe sadly.

I suspect it is fair to say that there are and always have been places where there is some degree of mix. But with some areas growing into gated communities by the 90s, and with other areas being left to social ruin too – the policy Ken put forward was a genuinely positive step to reverse that trend – whether it started with thatcher or not.

The fundamentals are:

– The gap between the number of houses being built a year and the number of new households being formed:

“Politicians and industry leaders have claimed the UK is building only half of the 240,000 homes it needs every year. ”
http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/9099117/UK-housing-market-heading-for-lost-decade-warns-Collins-Stewart.html

– Despite that gap, house prices have been falling – except in London – and prominent forecasters are saying the decline is likely to continue:

“Despite sharp falls in property prices following the banking crisis, the IMF believes they are still too high and could drop by a further 10-15pc relative to Britons’ salaries. ” [Daily Telegraph website 19 July 2012]

These fundamentals are not new and the origins preceded the general election in May 2010. The policy issue is what to do about it. Sticking pins in images of Conservatives won’t resolve the housing problems.

Some (eminent) commentators claim that the main fault is with the town planning system which is restricting the amount of housing land becoming available – hence the government’s new policies of “localism” alongside local authorities being required to make “a presumption in favour of sustainable development” when determining planning applications for housing developments. The Royal Town and Country Planning Institute (RTCPI) disputes claims that the planning system is at fault saying the leading house builders have ample untapped land banks which they are not developing. FWIW I’m inclined to believe the RTCPI.

What is constraining house builders is a fear that news houses won’t sell because: (a) house prices are falling so many potential buyers will prudently wait until the market has bottomed out; (b) for many potential buyers, houses are unaffordable and/or they can’t raise mortgage finance; (c) Britain’s economy is in a double-dip recession so potential buyers are fearful about job prospects and their ability to make mortgage repayments if they were to take out a new mortgage.

Hence my earlier suggestions that the BoE should use new QE money to buy government-backed Housing Corporation bonds so the Corporation can lend on to housing associations to enable them to build new social housing.

22. margin4error

Tim W

Been a bit strtrange findg out bits about you this last couple of weeks of reading on LC.

So along with making up statistics that are easilly proved to be lies – and making up results from analysis that you don’t actually have – it seems you are also deliberately stupid.

If you are incapable of recognising that the line “mixed communities are more at peace with themselves” in an article condemning economic segregation reflects a comparison between mixed and segregated communities – rather than a comparison to societies with no inequality at all (a strange notion that doesn’t exist and never has) – you are profoundly stupid and probably need to go back to school.

A liar and stupid – in one week – remarkable!

23. margin4error

Bob B

The problem with not sticking pins in tories (overlooking that not doing so is less fun than doing so) is that the record of the people proposing a policy – in terms of their past policies and actions and criminality in this policy area – is extremely valid.

Remember – Labour came up with a massing plan for house building across the country – and the tories opposed it with everything they have. So their commitment to get house building under way is at best, less important to them than something else (that something else, in that case, being to protect the value of existing housing stock in areas with predominently tory voters)

Also remember – Tories have in the past engaged in social cleansing to shore up tory voting support in key constituencies (a certain Dame who fled to Israel springs to mind). This suggests there may also be other motives at work, or at least worthy of investigation, when the tories propose a programme that would result in social cleansing.

Likewise – the proposal that more social housing will result raises questions on past performance when social housing has been dealt with by the tories. They did when last in government oversee policies (notably the right to buy) that significantly diminished the social housing stock. Likewise their proposals for reinvigorating right to buy – with proceeds of sales used to build more social housing – have proven weak under analysis with so much of the money clawed back by the treasury and restricted by other rules that 1 for 1 replacement is implausible under the policy. Likewise their shift away from requiring affordable housing as part of rules on new developments – though framed in terms of the need to get housing building under way again when margins are tight – were well trailed by the same party when house building was booming. This suggests their commitment to get houses built may not in fact be their driving motive when claiming a policy will result in new social housing.

Of course the tories may have completely changed. Past performance is not an absolute indicator of future performance. But our experiences shape our analysis – and intelligent people consider a wide pool of evidence when presented by a policy – so as to understand well the likely consequences of it.

The trade off – therefore – between social segregation and more houses – does require some sticking of pins in tories, in order that the balance of the outcomes is well understood.

M4E

What we need now is practicable policy proposals to alleviate housing problems, not pin-sticking, obfuscation and fudging.

The facts are that the roots of both the crisis in the housing market and the financial crisis go back to the time of the Labour government. That was the time of the 100pc and better loans-to-value mortgages, the ensuing house-price bubble, the collapse in house building back to 1920s levels excluding the war period, the build up of the £1.3 trillion consumer debt mountain, and the banking crisis of 2007/08.

25. margin4error

Bob b

One could of course argue that the problems go back to the last Tory government and its selling off of social housing, reducing construction of social housing, and inflating of a housing market through poor supply and growing buy to let potential.

The cause though, is less of an issue than the problem as it stands.

What we need now are practical policy proposals to alleviate housing problems, not social cleansing and potential for corruption justified through a false pretence that it will alleviate housing problems.

Hence the pin sticking.

A liar and stupid – in one week – remarkable!

Don’t be concerned about being called stupid by M4E.

It is shorthand for him saying he doesn’t agree with you but can’t think of a argument to justify his position.

27. margin4error

pagar

funny – i don’t agree with bob b – or chaise, or Sunny, or lots of other people on lots of other things – yet I’ve only called you and Tim W stupid. And even then I called Tim W “deliberately stupid” as I assumed he was posting something stupid to try to make some fatuous unrelated point – rather than because he’s actually that dumb. Mostly I disagree in what is hopefully a relatively civilised way. (Maybe bob b will agree I’ve not been at all uncivil towards him or suggested any lack of intelligence on his part).

You on the other hand – following past conversations and your nicely demonstrated inability to identify patterns of behaviour and trends and to work out from them a basic cause and effect – makes me think there is nothing very deliberate about you.

28. MarkAustin

@18. Tim Worstall

It has never been argued that absolute equality is required (other than a handful of nutters). The Spirit Level argumenrt was that when inequality passes a certain level, the effects hit all members of society. Within a framework of relatively low inequality (and, indeed perhaps in cases where inequality is higher) a social mix in an area is beneficial to all.

@21. Bob B

To add to your points, another reason why builders are not building is that by keeping the supply below the demand, they raise prices, and hence their profit. Polly Toynbee quoted one builder who told her he could build twice as many houses as he was, but that, if he did (and presumably everyone else) his margins would halve, so there’s be nothing it it for him.

I fully support the idea of Bonds for Housing Associations, but would add one twist, first proposed by Jane Jacobs I believe, in “The Life and Death of Great American Cities”. Link the rent to income, and if and when the rent rises above the cost of the housing, convert to a mortgage. This means that money could be put back in the system

Quite apart from the concern that there would be tremendous pressure from grassroots Tories / councillors to declare entire Boroughs and districts “expensive” and therefore out-of-bounds to all social housing, I simply don’t believe that they’d use the money to build meaningful social housing anyway. It’s anathema to them. They’d at best build ‘affordable rented’ housing, much of which would be too expensive for unemployed or low paid people to live in anyway.

margin4error: “Ten years ago Ken Livingstone did something brilliant in London.”

Except that building a fixed percentage of social housing in every new private development wasn’t a policy only found in London and it certainly wasn’t Ken Livingstone’s idea. It was introduced in 1990 by… Margaret Thatcher’s government!

Amazing how far the Tories have moved to the right since Thatcher. Back then the idea of a universal right to housing was just an unquestioned part of the furniture, and the desirability of mixed communities seemed obvious. Now the entire concept of subsidised housing for the poor seems to be considered by the Tory base to be obsolete Marxist dogma foisted on hard-working Britons by crazed leftists pandering to scroungers who obviously don’t deserve decent housing. If they did deserve it, clearly the ineffable market would provide. And as for mixed communities – that’s surely a sneaky leftist plot to put their chav types disturbingly close to my residence, isn’t it?

Governments prior to Mrs Thatcher felt they had an obligation to provide decent housing for everyone. Why do they think it’s no longer their responsibility to provide housing for people who will never earn enough to buy their own home? Only government can do this and since Thatcher all of them have opted out of building new homes!

The tories are saying that they can only build more houses if they can sell off council property in exspensive areas. Bull! They should be building houses because they are morally obligated to house people.

30

Agree with all you have written, particularly with the lack of moral obligation you identify which is a product of market ideology (morals only being a human concept) and ultimately thatcherism.

6

I have only quickly perused your link, but it’s telling that within the first few paragraphs the article has identified the problematic nature of viewing home-ownership as superior to all else, not only has this created a social divide, it’s probably one of the major causes for the credit crunch. As the article suggests, re-education is probably the only answer as so many people will now never be able to afford a house purchase.

32. margin4error

jungle

Agree about the sad demise of the post war consensus. And it would be great to know where the rules for Ms Thatcher’s equivelent are. Might make a fascinating read to see the scope and ambition of it. Ken only had the capacity to introduce that for London, and in much of the country it doesn’t seem to be being done – which raises the question of who got rid of thatcher’s rules?

33. gastro george

@6 Bob B
“In Germany, some 60 pc of housing is still rented as a result. Not so in Britain where continuing rent controls on private rented housing for decades made it an unattractive …”

Are you trying to tell me that there are no rent controls in Germany? I think you might be mistaken.

33 Gastro: “Are you trying to tell me that there are no rent controls in Germany? I think you might be mistaken.”

By accounts on the web, there are housing rent controls in Germany but the point I was making is that Germany is unusual by west European standards because of the relatively high percentage of rented housing, most of which is not provided by governmental institutions. The result is the absence of those instantly recognisable large council estates which grace many of our urban landscapes as well as a wider variety of smaller housing developments with social mixes more representative of the wider population.

Harold Macmillan laid the foundations for his Third Way Conservatism (*) by being appointed housing minister in Winston Churchill’s first government after the elections in 1951. Macmillan promised a million new houses and that is what we got. Unfortunately, that also started the focus on council housing, as the means for reaching the target, whereas mainland Euopean countries relied more on private sector developments. That is not incompatible with rent controls – what matters is how the controls are applied and whether there is scope for private landlords to earn returnr on housing on par with what they could earn from other commercial investments after adjusting for risk differences. Btw Sir Keith Joseph as a later Conservative housing minister introduced subsidies to councils for building high-rise flats because the development costs were greater than for low-rise housing developments.

(*) Harold Macmillan was the author of a book published in 1938 with the title of: The Third Way. It was his attempt to convert his Conservative colleagues to Keynesian policy prescriptions for reducing unemployment by spending on public works.

35. gastro george

@34 Bob B
“Germany is unusual by west European standards because of the relatively high percentage of rented housing”

I think you’ll probably find that it’s the UK that is unusual with it’s high percentage of home ownership.

But I think we’d both agree that building policy over several decades has been prone to short-termism and fads. A lot of council estates were developed as a result of “slum clearance” – but while they might have had good intentions, they were never really well thought through.

35: Gastro: “I think you’ll probably find that it’s the UK that is unusual with it’s high percentage of home ownership.”

Try Wikipedia on home ownership rates:
http://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

By that, the UK isn’t especially unusual.

@11 Falco

Why should I subsidise people to live in an area that could could never afford to live in?

Simple answer is you’re not.

Grow up and think for yourself rather than being easily manipulated by idiotic rightwing thinktanks.

@18 Tim Worstall

“There is compelling academic evidence that mixed communities are more at peace with themselves.”

That’s absolutely amazing. For we’ve Wilkinson and Pickett telling us, and every lefty worth the name agreeing with them, that inequality produces a worse society.

Jesus wept. That’s poor. Even for you.

There can’t be anything less equal than dumping one poorer socio-economic section of society into one town and another more wealthy one into another wholly separate one.

Can’t Libertarians think?

39. gastro george

@36 Bob B

Well, not if you look at *Western* Europe. Belgium may be higher, but Germany, Netherlands, Denmark, France, Sweden and Austria are all considerably lower.

39: Gastro: “Well, not if you look at *Western* Europe. Belgium may be higher, but Germany, Netherlands, Denmark, France, Sweden and Austria are all considerably lower.”

I question whether “considerably” is apt. I looked into the difference several decades back and asked around then including with French friends. Part of the explanation is the greater historic ease and the terms for raising mortgage finance in Britain because of the, as then, mutual building society movement in Britain, the origins of which go back to the 19th century. In France, mortgages were typically through banks, often several mortgage loans were necessary for a one home, and the terms were much shorter than the typical 25-year mortgage available from a building society in Britain. That and the tax allowance for mortgage interest then available is what pushed up the home ownership rate in Britain.

By accounts in the news, raising mortgages in Britain is more difficult now for several reasons and the home ownership rate has dropped from a peak of 71 pc to 69 pc in a few years. The reasons include: banks are deleveraging to meet higher capital requirements and are more risk averse – I wouldn’t qualify with my own bank for age reasons. With the double-dip recession and low growth in prospect next year, borrowers are worried about meeting mortgage repayment commitments.


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