The Socialist 11 April 2012
Rage against austerity
WANTED - decent affordable housing!
Photo Paul Mattsson
For generations tenants and other activists have fought to win new housing with security of tenure for working class people in Britain's towns, cities and rural areas. However, these measures of social housing have almost been obliterated during decades of neoliberal governments.
Paul Kershaw explains why housing is still a decisive political issue.
Rising private rents, declining real wages and unemployment are creating impossible conditions for wider and wider sections of society. Five million people, two million households, are desperate for social housing. Thatcher's Tories promised a 'home-owning' democracy but that pipe-dream now lies in tatters.
In London, where rents are highest, a recent Ipsos Mori opinion poll shows that voters see reducing private rents as the most important issue in May's mayoral/Greater London Assembly elections.
Housing charity Shelter's new research shows that renting a two-bedroom home in London is unaffordable for families earning under £52,000 a year. In eight London boroughs families need to earn more than £60,000 a year to rent a two bed flat. The typical family income in London is £35,000.
According to the Resolution Foundation, the proportion of low and middle income earners aged under 35 and renting has more than tripled from 14% in the late 1980s to 47% now. This reflects the lack of social housing and first-time buyers' difficulty in finding mortgages.
Nationally, evictions by private landlords have risen by 17% since the 2007 crash and these could spiral up. The number of people accepted as homeless and the numbers of rough sleepers are both rising. 350,000 families are on London's housing waiting lists, but the latest six month figures available show that just 56 new social homes were started.
Candidates for May's election from the established parties make concerned noises about the problem but who trusts them to fight for a solution? The major parties' policies directly led to this crisis.
In the 1980s the Thatcher government abolished rent control; arguing openly that this would make it more profitable to be a landlord and increase the size of the private rented sector.
In 1991, the then Tory housing minister, Sir George Young, told parliament what the government would do about unaffordable high rents. "Housing benefit will underpin market rents", he said, "If people cannot afford to pay the market rent, housing benefit will take the strain."
This policy promoted an enormous subsidy to private landlords and helped drive rising house prices. Now, hypocritically, the Con-Dems try to blame tenants for high rents and are introducing benefit caps and cuts that will force thousands to move or face homelessness.
The government denies this will result in homelessness, but a leaked letter from the office of Eric Pickles (cabinet minister for 'communities') showed that a potential 40,000 people could be made homeless.
Labour failed to oppose benefit caps going through parliament, merely calling for regionally set caps. During 13 years in office they failed to reintroduce rent control and were drawing up plans for benefit caps before the 2010 election.
Previous Tory governments also reduced security in the private rented sector, making it easy for landlords to boot out tenants. Labour did nothing to reverse this. As for conditions, the latest English Homes Condition Survey shows 1.5 million fail the decent homes standard and 971,000 had serious 'category one' hazards.
Rent control could be reintroduced as an emergency measure immediately. The old legislation with its provision for rent tribunals was not perfect but it remains on the statute book. It is still applicable for some older tenancies and could be brought back into action for current tenancies.
Benefit caps and cuts which hit low-paid workers, unemployed and disabled people must be reversed immediately. Councils should use their existing powers imaginatively, challenging substandard accommodation and combating evictions.
The election of Trade Unionist and Socialist Coalition (TUSC) candidates, linked to a fighting campaign by the trade unions, could spearhead a fight against cuts and falling living standards and also for the immediate introduction of caps on upwardly spiralling rents.
Trade unions should fight low pay and the freezing of the minimum wage for young people and link this to a campaign for decent affordable housing. Anti-cuts TUSC representatives could have enormous impact if they took up these questions, linking up with tenants' campaigns and trade unions.
Why big business will not build for need
This year, construction firms returned to fat profits, increased margins, reduced debts and big shareholder dividends. They have many advantages; tight control of costs (such as wages), building on land acquired in the past at lower prices and producing upmarket houses in the south east where demand is strong rather than building cheaper properties, or in the north.
But still these profit-hungry companies won't build housing for need. Their 'sensible' strategy may maximise profit, but it doesn't meet people's requirements! Their own reports show they aren't moving to building on a big scale. Taylor Wimpey says: "Our priorities remain value creation and margin improvement ahead of volume growth".
Just 109,000 homes were completed last year but there were 240,000 new households created on top of the existing housing gap. There is no sign that private construction will fill the gap left by huge cuts in social house-building over the past decades.
The government has a range of policies to boost home ownership. But the building firms see that insecure jobs, falling living standards and the banks' woeful lending record show there is no prospect of a boom in home ownership.
In the US there have been nine million foreclosures (home repossessions) since the 2007 crash. Britain has avoided this scale of catastrophe but many home owners are on the edge and rising interest rates or increased unemployment would push them over.
'Right to buy'
The Con-Dems increased the discount for 'right to buy' social sector houses. But with stagnant prices this may not be a good bet for many tenants; many will still struggle if they do get a mortgage. The government claims that every home sold off will be replaced with an 'affordable' home so, unlike in the 80s right-to-buy spree, the stock of affordable housing won't be depleted.
That is false. The key problem lies in defining 'affordable': the government says that rents of 80% of market levels are affordable; tenants probably won't agree!
The government also introduced a scheme called 'NewBuy' that uses government money to guarantee mortgages on newly-built houses worth under £500,000 built by some members of the Home Builders Federation. Firms are not asked for assurances that they will build more, they can simply use the money to subsidise their existing plans. The scheme is a subsidy for house-builders and mortgage lenders.
After the industry called the planning system a 'brake on construction'. eco-standards have been relaxed. So have requirements under 'section 106' which can range from building social housing to providing infrastructure and social facilities for new housing development.
From 2006-2009 these changes were worth £9 billion. So the builders will benefit from spending less to meet these requirements and from increasing the value of their landholdings as a result of the changes. But still there is no sign they intend to start a crash programme of house-building!
In most cases the firms were sitting on large land banks with planning permission, waiting for the market to reach a favourable stage to make a killing. Taken together, this represents a corporate welfare package worth several billion pounds.
Speculation by home builders and other developers lies behind the clamour for relaxed planning regulations. A debate on planning that plays off those in need of a home and those concerned to preserve the environment misses the corporate interests that really rule the roost.
The hidden subsidies to builders and banks should be stopped. Development land and the big building companies should be nationalised with compensation paid only on the basis of proven need.
What the Socialist Party stands for
Liverpool - Labour leader backs Tory policy
Tony Mulhearn, Liverpool mayoral candidate
A fierce debate is raging in Liverpool around a £5 billion housing scheme, mainly among big business people and the neoliberal Labour council's leader Joe Anderson. The Liverpool Waters/ Peel Holdings saga started when the Liberal Democrats controlled Liverpool council.
The scheme to regenerate 60 hectares of the city's dockland was approved by the council's planning committee. Allegedly, it will include 9,000 homes, plus commercial development, a cruise liner terminal, hotels, shops, restaurants and leisure facilities.
But will the 9,000 homes be available to the 30,000 working class families on the housing waiting list at affordable rents? Who will occupy the offices when already office blocks remain empty? Will the thousands of jobs which Anderson promises be trade union labour with a good percentage from Liverpool? In previous schemes, contractors came in from outside and only 2% of the construction workers were Liverpudlians. It is unlikely that Anderson will pressure the construction companies to act any other way.
Anderson said: "Today's decision to grant planning permission for Liverpool Waters is one of the most significant and far-reaching in Liverpool's recent history." It's not the first time that such glowing claims have been made.
Anderson proclaimed Peel's breakthrough for the city on the day he drove through another £55 million of cuts. He also paid a glowing tribute to Tory millionaire grandee Michael Heseltine when granting him freedom of the city. Anderson said Heseltine "sowed the seeds of Liverpool's long-term revival, the fruits of which we still see today.' But Heseltine was part of the anti-working class, anti-union Thatcher government that slashed £30 million from Liverpool's budget and put the boot into the miners, printers and dockers.
Seeds of revival?
As for Heseltine sowing the seeds of revival, two years after the riots in 1981 not a single council house was built and council rents were the UK's highest outside London. Anderson and his cronies have lost touch with reality.
They have declared the privatisation of care services on which the most vulnerable people depend. On top of the chronic shortage of affordable houses, Liverpool has the highest number of families in the UK without a wage earner, and ten young people chase each job.
A socialist challenge to Anderson, in the battle for the newly created mayor's position, has become vital and the Trade Unionist and Socialist Coalition will provide it.
In the 1980s Liverpool Labour council, led by socialists, refused to implement cuts demanded by the government and instead forced £60 million out of Thatcher. This extra funding enabled the council to carry out its electoral programme which included the building of 5,000 houses.
6,300 families were re-housed from tenements to flats and 7,400 houses and flats were improved. In the three years from April 1983 to May 1985 it was estimated that 6,489 jobs had been generated in the private sector as a result of the housebuilding programme.
Defend the homeless - not bankers
London's Tory mayor Boris Johnson and Cameron's government have announced that work with London's rough sleepers will be funded on a 'payment by results basis.' That's the method lying behind the scandal at A4e, the workfare provider accused of fiddling the figures to maximise its income - and paying its boss an £8.6 million bonus to get unemployed people to work for no pay.
At their union branch, outraged homelessness workers called on Greater London Assembly candidates to oppose the plan.
They said: "The growth in rough sleeping reflects deep social problems flowing from the economic crisis, the decline in housebuilding, and the growth of inequality.
"Since the financial crash London's bankers have been bailed out while the mass of the population has been made to pay. Politicians should be addressing these problems rather than applying a grotesque ideological gimmick to one of the most extreme expressions of the crisis."
In this issue
Vote TUSC in May
Socialist Party news and analysis
Socialist Party feature
Socialist Party workplace news
Socialist Party youth and students
Socialist Party reports and campaigns