A debate in the Labour Party on the need for a fundamental change of direction by the government, has broken out in public
The recent disastrous Parliamentary by-election and local election results have opened up an unprecedented debate in public, in the Labour Party, as Labour MPs have broken cover. South Shields Labour MP Emma Lewell spoke for many when she said “It is tone deaf to keep repeating we will move further and faster on our plan for change. What is needed is a change of plan.” Others who have been supportive of the leadership have called for a change of direction. Without it then the government is opening the door to Farage and a very right wing government, whatever its composition.1
The Labour leadership, which has sought to turn the Labour Party into a political monolith and operated an autocratic regime, can no longer keep a lid on discussion. Unsurprisingly the focus of the discussion that has erupted, has been on reversing attacks on the poor, in particular the means-testing of the winter fuel payment and the proposed cuts to ill-health and disability benefits. There is widespread outrage at these proposals. We share it. We have called on Labour MPs to vote against the latter if the government does not withdraw them. A council tenant activist who is currently on PIP, because of multiple health reasons, but likely to lose it, summed up the sense of betrayal: “We voted Labour because we thought they would improve things. Instead they’ve cut us off at the knees.”
But as yet, there has been no focus on Labour’s housing policy. We need to put that right. We hear much of the cost of living crisis, which is nothing but growing poverty. One of its key drivers is the cost of housing, resulting from the acute shortage of council housing and private rents outpacing earnings. Yet the government has refused to take any action on rent controls for the private sector. The insecurity of tenure in the private sector is a great disruptor of peoples lives and a constant source of anxiety. As we know the poor quality of much of this housing can ruin people’s health as well.
Although council and housing association rent is lower than the private sector, increases are none the less impacting on ‘social tenants’. The government has proposed to continue with Tory rent policy – at least five years of above inflation rent increases. As we have previously said, above inflation rent increases won’t resolve the council housing financial crisis. Council rent arrears have doubled since 2015 to nearly £400 million. Above inflation rent increases will drive them up further.
Recent news highlights the acute nature of the housing crisis.
- The latest Temporary Accommodation statistics show a further increase, with 127,890 households in it, including 165,510 children.
- 21% of social workers surveyed report children being removed from their families because of poor housing conditions.
- The Guardian reported councils being ripped off by private providers for Temporary Accommodation, charging 60% above market rents.
- London Councils have warned of a deficit of £330 million for placing people in Temporary Accommodation. The cost of providing it is driving councils to the financial brink.
- More than 150 organisations have signed a letter to the government warning them of the danger of the loss of 70,000 supported housing units, which would have consequences for the NHS and local authorities.
Austerity by another name
Despite the government saying there will be no return to austerity, they are in reality continuing with it. That’s not only shown by their benefit cuts. They have kept Tory housing policies which were introduced as part of their austerity programme.
- The Chancellor has maintained the freeze of Local Housing Allowance which gives councils only 90% of the 2011 rate for tenants in private rental. The growing gap between the actual cost of TA and what the government gives them is driving councils to the financial edge. It is hardly surprising that dozens of councils fear bankruptcy.
- The government has continued with the Tories “Exceptional Financial Support”. 30 councils have been granted ESF, which in reality offers no support, only allowing them to take on more debt and make more cuts. Collapsing councils will not be focusing on building council housing. ESF is just austerity by another name.
- It is keeping the Tories hated bedroom tax, which still impacts on more than 100,000 households. Even those who want to move to a property with less bedrooms are stopped from doing so by the shortage of available properties.
- The government has kept the Tory definition of “affordable housing”, which includes unaffordable “affordable rent” (up to 80% of market rents) which was designed to make tenants pay more to facilitate a 60% cut on social housing grant. It’s surely time to end the charade of “affordable housing”. All the funding should go to social rent homes.
- It is continuing grant for “affordable private rent” which is also at 80% of market rent.
Affordable Homes Programme
The government has announced £2 billion for the first year of their new Affordable Homes Programme starting in 2026/27. This is said to fund 18,000 homes. Angela Rayner has described this as a “down payment”, with more expected in the Spring Spending Review, delayed until June. How much more is another matter, with the Chancellor imposing widespread ‘savings’ across the public sector.
The new chair of Homes England has said that 60% of the £800 million top-ups to the existing Tory AHP is funding social rent homes. If the same was applied to the £2 billion that would mean 10,800 social rent homes, be they council or housing association. With Right to Buy still in place, albeit with reduced discounts, that 10,800 would be reduced. With 1.3 million households on the housing waiting lists and 127,000 in temporary accommodation this scale is completely insufficient to begin to cut these numbers.
Shelter and other organisations are pressing the government to fund 90,000 social rent homes a year for 10 years. We have campaigned for 100,000 social rent council homes. The average grant for those 18,000 works out at £111,111. We think that would be inadequate, but if that grant level was maintained then you would need £11.11 billion to fund 100,000 social rent homes a year. There is obviously a huge gap between £2 billion and £11 billion. The main obstacle is the self-defeating fiscal rules and the grim determination of the Chancellor not to tax wealth.
Despite all the talk of “social and affordable housing” the government’s policy is one of reliance on the market to resolve the housing crisis. They believe that by making it easier for builders and developers to push through planning permissions that this will produce a big increase in house building. But there are already an estimated 1.4 million plots of land with planning permission which have yet to be built on. The housing market is dominated by an oligopoly of large volume builders who build at a pace and scale to maximise their profits and the dividends of their share holders. They are not going to build on a scale which will lower prices and profits.
In any case the households in temporary accommodation and on the waiting lists are not going to be liberated by speculative builders building homes they they cannot afford to buy. Only a large scale council house building/acquisitions programme will provide them with secure and affordable housing.
Recently Angela Rayner was asked how many of the 1.5 million homes that the government says will be built would be social housing. She said that (giving a number) was “like nailing blancmange to the wall”. This ignores the reality. The government cannot control the housing market, it can only control what it funds. It can have some element of control of how many council homes councils build by determining how much grant it gives them. Therein lies the problem. The Chancellor and the Prime Minister do not see council housing as a priority.
Ironically, the government managed to find £6 billion to buy privatised ex-MOD housing without even making an estimate of how much it would cost to bring the homes up to a decent standard.2 Soldiers shouldn’t have to live in poor quality housing, but neither should anybody else.
Squalor
Beveridge, a Liberal, (the author of the famous Report on vanquishing the ‘five giant evils’ that included squalor) wrote that “good housing – far better than housing we have at present – is the indispensable foundation for health, efficiency and education. It is a waste of money to build hospitals to cure disease if families are forced to live in houses that breed disease. It is a waste of money to build schools for children who must return each night to squalid, crowded, unhealthy homes.” The same can be said today.
The problem we face is not the lack of money in one of the richest countries in the world, but government policy, which remains tied to the outlook that gave us the Great Crash of 2007/8; its refusal to focus on the redistribution of wealth. The market cannot give us clean water, clean rivers and seas. Private companies play a parasitic role in the NHS, fleecing it by extracting large profits. The speculative builder cares not a fig for the housing crisis.
If the government does not make a decisive break from the philosophy which imagines that private finance offers the road to salvation, then a right wing government, whatever its make up, is likely to form the next government.
Of all the material problems of the working class (in work or not) and the poor, the housing crisis is one which impacts on the quality of their lives in a fundamental way. If you have a secure home, with a rent which you are not struggling to pay, it transforms your life, gives you stability. You can relax to some extent. Yet today millions live under constant stress because of their housing situation and their poverty.
Given the deteriorating international situation, unless the government breaks with its current economic strategy, it will have to deepen cuts across the public sector, and will limit the amount of investment available for council housing. There are plenty of means of raising the funding which is required for a renaissance of council housing (charging capital gains tax at the same rate as income tax, reducing tax relief for pension contributions to the basic rate of income tax are the most obvious). It only has to be treated as a priority.
The growing criticism in public from MPs, the Wales Labour Leader and others is not just calling for a U-turn on the winter fuel payment and the benefit cuts. It is challenging the economic strategy of the government – the fiscal rules and the refusal to tax wealth. It is these same policies which are an obstacle to resolving the housing crisis. If the leadership of an impoverished country, coming out of a world war, could fund a large scale council house building programme, so can this government, in economic circumstances less severe. It is a question of priorities and political will. The Spring Spending Review expected now in July will determine the direction of the government for the remainder of its time Parliamentary term. In the time that remains until then the message that funding 100,000 council homes a year should be the key housing priority, needs to be amplified.
Leeds North West CLP’s resolution sets an example for others as we try to step up the pressure in the run-up to the Spring Spending Review.
Martin Wicks
May 8th 2024
1That’s not to say that Labour voters have gone over to Reform en masse. Polls show that far more of the 2024 Labour voters are likely to vote Green or Liberal Democrat.
2Asked in a Freedom of Information Request if they had made an estimate of the cost of bringing these home to a decent standard the MOD admitted that a review is only taking place after they have bought the properties.
Labour Campaign for Council Housing 