Tony has pointed out that amongst the soggy canapés there are loads of meetings and discussions about housing at this year’s Labour conference. Tomorrow we will find out
what if anything about housing makes the Leader’s speech, but today two of Ed Balls’ key initiatives involved housing: a specific commitment to use a repeat Banker’s bonus tax to fund affordable housing and a new commitment to reduce VAT on maintenance to encourage owners to repair homes.
One meeting Tony didn’t highlight attracted my attention and I went along to a meeting sponsored by New Statesman and the National Landlords Association on the future of the private rented sector. Although I don’t always agree with what Caroline Flint has to say about social housing, I thought she was spot on in her analysis of the PRS, the need for regulation and how it might work. I had forgotten that she was Minister when the Rugg Review was commissioned, so she has some background in this issue. She also rather shamelessly plugged her chapter in the so-called purple book just published by Progress, in which she evidently sets out her views on PRS reform.
Although the NLA seems to favour accreditation rather than registration as the basis of a regulatory system, there was a surprising degree of consensus in the room about what a regulatory system should seek to achieve: an expanding and increasingly professionalised PRS, support and help for good landlords who want to meet good standards, and strong enforcement against bad landlords who exploit tenants and refuse to bring their properties up to scratch. Despite the presence of several landlords and landlords’ representatives, there was no support from anyone for the current government’s laissez-faire (or is it couldn’t care less?) approach.
I was particularly impressed by a letting agent present in the audience who spoke strongly in favour of registration as the way forward, and there were good contributions on how to achieve longer tenancy terms, especially for families needing security and stability, how to control subsidy flowing to bad landlords through housing benefit, and enforcement by environmental health officers.
Sometimes a discussion hits the right tone of seriousness without ladles of rhetoric and generates more light than heat. Here was one and I hope there will be more, especially during the housing debate scheduled for Thursday morning – housing was one of the four issues chosen through a ballot of delegates for debate on the floor of the Conference.
The considerable presence of housing associations at the Labour Party Conference I described in my last post has, I hear, been replicated at the other party conferences. What explains the new-found interest in public affairs from our big housing associations?
Housing Association Chief Execs assumed the ‘mad’ and ‘disruptive’ policies that would ‘never work’ coming from Policy Exchange and Tim Leunig and others would be dropped as Ministers got into office and saw how things really worked.
As it is, they find themselves with the New Homes Bonus, a planning system being ripped up, being pressured to conform to Freedom of Information and having their pay publicly condemned – not to mentioned affordable rent, welfare cuts and fixed term tenancies. And they labour under the misapprehension (in my view) that a few housing associations who engaged early with the Tories in opposition and quickly in government helped design the current framework.
This time they don’t want to be left out of the game and it’s a matter of extreme self-interest to be part of Parties’ policy-making.
Despite the considerable sums they are collectively splashing on warm white wine, soggy canapés and sponsoring think tanks in Birmingham, Liverpool and Manchester, it’s a good thing for them to be more involved.
I’m spending a few days at the Labour Party Conference this week and it’s remarkable how much focus there is on housing. Over the coming days delegates and visitors can attend:
- 2020 Vision: Housing, with IPPR and Family Mosaic
- Are we still in it together: Welfare and Housing Reform Strategies, from Moat
- Homes For The Future – reviewing possibilities for Labour’s housing policy from the Labour Housing Group and SERA
- Housing Associations and Local Government: Partnerships for Change, from the Smith Institute and L+Q.
- Housing the Nation- Making the case for better homes, from Places for People
- Building our future: Will planning and housing reform deliver the communities we want? from the TCPA
- A Tale of Two Cities: The impact of housing reform in Liverpool and London, from the Peabody Trust
- Social Housing: Fixing the current mess, from Policy Exchange.
- How will we deliver affordable housing in the future and improve people’s lives? From Hyde Group
And these are just the events going on during the few days I’m here and don’t include planning related events. I don’t envy Caroline Flint and Alison Seabeck who are succeeding on covering all of these – all credit to them for engaging with such a wide range of topics, organisations and members.
Conference delegates have also just voted to make housing one of only four motions to debate this week.
As I said, you can’t move for housing policy at this conference.
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LibDems in denial
They say politics is a rough old trade, but any hope that there might be a frank debate on housing during the Party Conference season were dashed immediately at the LibDem conference in Birmingham. The line was just to deny that their policies have any downside at all.
LibDem President Simon Hughes MP knows that attack is often the best form of defence.
He set the tone at the start of the week by giving the impression that the worst thing happening in housing at the moment is that Frank Dobson MP is a council tenant, or as Inside Housing quoted Hughes as saying, he lives in ‘a bloody Camden Council flat’.
Then we had Andrew Stunell MP’s subterfuge: trying to pretend that ‘affordable rent’ homes are social housing, stretching credulity to the limit. He also made much of the Coalition’s efforts to bring empty homes back into use without mentioning Eric Pickles restrictions on the use of Empty Dwelling Management Orders to protect property owners’ ‘fundamental rights’.
Finally we had Pensions Minister Steve Webb MP. Surely a man with such expertise in
the field of tax and benefits would have something intelligent to say about the housing benefit reforms. None of it. His line was that while Labour accused him of adopting a policy akin to the slaughter of the first born, the truth was that cash spending on housing benefit at the end of the Parliament would be the same as at the start, around £22bn. So
all is well, he is just ‘reigning in the remorseless growth in spending’. No mention of rent inflation, or of policies, like affordable rent, that are driving up housing benefit costs, or of the increasing caseload of private tenants having to share the available cash, or of the policy of pushing homeless families into the more expensive private rented sector. And certainly no mention of Boris Johnson’s description of the policy as ‘Kosovo-style cleansing’.
Never can a LibDem audience have been so supine. It looked to me like they think that
the only hope of political survival is to keep their heads down and claim that they are having influence. In housing they have nothing to show for their efforts because they have gone along with the Tory agenda in its entirety – the end of social rent, moving towards market rents, reducing tenants’ rights, laissez-faire in the private rented sector.
It will be interesting to see how the Labour Conference pans out. We are told that there will be honesty about the record in office, which should start with an admission that far too few homes were built. But this has to lead to new policies that will produce many more homes – market homes and genuinely affordable homes. There will need to be a radically new approach to capital investment, so I will be paying as much attention to Ed Balls as I will to Caroline Flint.
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Stunell's subterfuge
Andrew Stunell seems such a nice man, and he’s a Methodist Lay Preacher to boot.
But an observer of his speech to the LibDem Conference yesterday might be forgiven for thinking he was stretching the truth just a little. Given the LibDems good track record in
supporting social housing over many years, and their general embarrassment over the housing policies of the government, I can only assume he was struggling to find anything to say that shows that the LibDems have some influence over Pickles and Shapps.
He started off in the right territory by calling housing the ‘Cinderella’ policy. “It is one of the most important issues facing the entire country” he said. “The record of previous governments on social housing was nothing short of a disgrace……Social Housing just wasn’t important enough for the last government.” Now I agree that far too few social homes in particular were built under Labour, but surely Mr Stunnell realises that you can’t build more social homes with a 60% cut in funding?
But then comes the subterfuge. “That’s why we’ve introduced the Affordable Rent programme…. we’re on course to build 170,000 new social homes in the next four years…… thanks to Liberal Democrat influence in government, we have a social housing target that we can and will meet…. ..the first government to deliver an increase in social housing during its term of office for more than thirty years.”
So affordable rent is the new social rent. Despite the fact that they bear no relation to each other at all. The rents are much higher, up to 80% of market rent, and the terms are not secure. Not only are new homes to be let at ‘affordable rent’ levels, but many re-lets of existing social rented homes are going to be as well.
Boris Johnson is the expert at smoke and mirrors in terms of housing statistics. He is
very clever about including almost everything built under the much abused term ‘affordable’. But even he hasn’t had the gall to claim that affordable rent and social rent are the same thing. At least not yet.
In advance of the Mayoral Election next year, the London Labour Housing Group has put together a panel of speakers available to visit CLP and Labour Party meetings to speak on housing in London and the ways to campaign on the issue.
Housing will be a major part of the Mayoral Election, with the desperate need for more affordable and social housing becoming ever more acute, deteriorating conditions in a stretched rented sector and house prices that bar all but the very wealthiest from owning their own home.
The mayoralty is gaining more power and more direct access to investment at the same time as we have an incumbent notoriously unwilling to use the levers of his office and organisation to deliver real change for London.
The last general election showed that campaigning on housing can have a decisive effect on keeping London Labour. In Westminster North, Hammersmith and Eltham (to name but three) marginal Labour seats were held on the basis of vigorous campaigning on housing issues.
If your members want to understand the issues better, convince more people on the doorstep and learn some of the most effective ways of winning people over and getting out the vote, then email us on [email protected].
In this Mayoral Election every vote counts – and votes for us even in the most Tory of areas can contribute to a Labour win.
Just to let you know:
- We’ll do our best to attend every request, but can’t promise we can provide someone every time.
- All speakers on the panel are available in a personal capacity and do not represent Ken Livingstone’s campaign or the London Labour Housing Group.
Information for all Constituency Labour Parties and delegates attending LP Conference this weekend.
The Conference Arrangements Committee met earlier today to consider the contemporary resolutions submitted by CLPs and affiliates. The CAC decided that the resolution submitted by Labour Housing Group counts as contemporary and will go forward to the Priorities Ballot on Sunday 25 September.
The Labour Housing Group is asking CLPs and their delegates to Party Conference to vote in favour of having Housing as one of the Contemporary Resolutions to be debated. The Resolution submitted by LHG is below. The Resolution is ‘contemporary’ because the Government’s relevant figures on the increase in levels of homelessness and unemployment and the dramatic fall in home building were not published until either August or start of September, making the issues ‘contemporary’ according to Party Conference rules.
Tackling the Housing Crisis
We note with alarm the recent sharp jump in unemployment by 80,000 to two and a half million people, the sharp fall in house building to just 23,400 homes last quarter – the 18% jump in homelessness over 12 months and the £1.3 billion pa rise in Housing Benefit payments.
Together, these figures are an indictment of a Government which is ideologically obsessed with cutting investment but is blind to its inevitable consequences – increased homelessness and joblessness, rising market rents, and the inability of young and middle aged households the opportunity to either buy or rent a decent home.
We ask Conference to call for an emergency programme of investment in quality new homes, which will provide employment, generate tax income, reduce homelessness and the cost of emergency accommodation, and reduce expenditure on unemployment and housing benefits.
A tax of £1bn a year from Bankers bonuses would cause little hardship to the recipients, and yet could fund around 50,000 extra new homes every year which could be available at well below market rent levels.
Given the huge increase in housing benefit going to fund private landlords, we also call for regulatory change to shift the financing of private sector landlord investment away from purchasing existing second hand homes (in competition with first time buyers), and towards investment in New Properties. This will result in an increase in quality supply, and better opportunities for younger and middle aged families to purchase a home.
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Housing to the rescue?
A new guest poster for Red Brick, Dee St. Holmes, argues below that by tackling the housing crisis, we tackle many more social and economic ills beside. Hearty agreement with that here. She argues that the coalition for fundamental change in our housing system is growing, as housing problems spread – affecting more, richer and more influential parts of society.
Our society is becoming one of ‘haves and have not’s’ at a worryingly fast pace. Public services that were fought for and implemented after the Second World War as a way to ensure everyone’s basic human needs were met, are being ripped up, none more so that housing.
After the war, when this country was on the brink of bankruptcy, the Government committed to a public house-building programme that dwarfed anything before or since. Political will, based on the threat of riots (or indeed a revolution after all, the ‘masses’ had returned from war and knew how to get hold of and use arms) ensured money was committed and used for the common good. People were proud to live in the new houses and a Conservative Government-commissioned report in the 1970s proved that council house tenants had the fastest growing ‘social mobility’ rates out of any other group of people.
Fast forward to today and we have a radically different picture. Social housing (as it’s now commonly known largely due to the large-scale transfer of stock from councils to housing associations) has been residualised to a shadow of its former self. The language of Government when referring to social housing tenants is one of feckless, criminal, anti-social, undeserving, people who should count themselves lucky to be in a tax-payer provided benefit. The recent riots illustrate this to a shameful degree. Housing as a human right seems to be a concept becoming relegated to history. Are we witnessing the final days of any form of publicly subsidised housing? The tide against it seems unrelenting.
However, I’m forever the optimist and one thought has crept into my mind. Everybody needs housing. No two ways about it. When people on £40K, £50K, £60K cannot afford a home in our capital city, the problem of housing starts affecting people who have higher voting levels and hence people who have political power. The housing problem moves beyond the realms of the poor and the homeless, where it stays on the margins, and into the realms of the very middles classes. Now it most certainly should not take this to make housing a national priority, but I think is happening.
Housing is receiving significant media attention and the Housing Minister is increasingly looking shallow and nervous as his headlines are exposed as just that with no substance behind them (house-boats being the latest example). However, make no mistake, the consistently stagnant economy will turn the Government’s eyes to house building as a way to stimulate growth and there will then be of plenty of spin for them to reverse their narrative on housing.
Labour should therefore get on-board now and shape the debate. Housing is an issue that has been relegated to the private realm for decades but it is pushing its way back into the public realm – and Labour should be the party associated with championing people’s housing concerns. Waiting until ‘an election year’ is no good – people need a political party that starts fighting the issues at local and national levels now. Labour can be people’s voice on housing; from the grassroots to the ‘squeezed middle’ it seems slightly fixated on. It is a uniting issue and one that has the power to win or lose the next national election. Labour has a lot to be proud of on housing, but it could have done a great deal more when it was last in power. Now is the time to make-up for that – millions of people are looking for answers and the coalition Government has none, yet, so why waste time? Make housing the priority it needs to be and the public policy that can restore the equal foundations of our society.
The Guardian has made a brave attempt at recording and analysing the riots and their
aftermath. But looking at their ‘reality check’ feature following Iain Duncan-Smith’s claim that ‘housing estates’ were one of the major factors that contributed to the rioting, I think they are still some way from hitting the nail on the head.
As always, IDS says things that seem to make sense until you look at them properly. Personally, I find his concern for the poor totally false. His prescriptions always seem to
involve taking money away from them, as if they can be punished into behaving more as he would like.
The problem with his latest utterance is that he switches between ‘areas blighted by welfare dependency’, ‘underprivileged communities’, ‘housing estates’ and ‘grim council estates’ as if they were one and the same thing. He warns about social segregation and ghettoisation when most commentators feel his policies will drive us faster in that direction. And he sees the problem of unemployment as being entirely the failure of ‘benefit dependent’ people to get jobs rather than a statistical deficit of jobs in the market, again made much worse by his policies.
Even so the Guardian took up his theme that housing estates were to blame for the riots, concluding that “It appears there is emerging evidence to support Duncan Smith’s claim that there are links between estates, the people that live on them and this summer’s violence.”
Like IDS, the Guardian’s analysis also switches between deprived areas, estates and council estates without differentiating between them. Deprivation in some places is increasingly a feature of the private rented sector, and we are often reminded that half the poor are home owners. They don’t consider the differences between housing association and council estates – does a council estate that has been transferred to a housing association suddenly become less prone to riots?
Nor do they look at the composition of a modern council estate. Especially in London, where most of their analysis is done, ‘council estates’ are not mono-tenure anymore, they are broken up with a large number of flats sold and now occupied by home owners, a burgeoning number of private tenants, temporary accommodation and, in some places, large numbers of students. Most housing managers will say that a disproportionate number of the problems they have to deal with arise from the more transient residents who are not secure tenants or established lessees. All of these points should be considered before generalisations are thrown about.
The Guardian’s analysis shows clearly enough that ‘deprivation was certainly the
unifying factor’. They quote Alex Singleton at Liverpool University (one of those who analysed the data): “These limited data and analysis seem to suggest that those people who have been appearing on riot-related charges (typically young males) live in some of the most deprived areas of our largest cities, and in neighbourhoods where the conditions are getting worse rather than better. Rioting is deplorable, however, if events such as this are to be mitigated in the future, the prevailing conditions and constraints effecting people living in areas must form part of the discussion. A “broken society” happens somewhere, and geography matters.”
Now I don’t disagree with that. But the Guardian then moves the point along with some case stories, particularly about Pembury in Hackney. Now, Pembury is not a council
estate, but from some reports it sounds like world war 3 broke out there. The Times says the average family income on Pembury is £9,000 compared to £46,000 in neighbouring mortgaged street properties, so it is a prime candidate. But there has been a lot of dispute about what actually happened there, most notably by the Chief Executive of the Peabody Trust that runs it. Many people have complained about the mischaracterisation
of their areas in the media.
A mapping exercise done at University College London (my old Geog Dept I assume) discovered that in north London 84% of verified incidents occurred within a five minute walk of both an established town centre and a large post-war housing estate. Now there’s a shock, I’m not sure there are many parts of Hackney and Tottenham where this doesn’t apply. In south London it was 96%. UCL identify a slightly different factor: built form rather than tenure: “it’s not an argument that social housing is connected with crime, but that a certain type of post-war large housing estate is.”
So does it matter if it isn’t clear if we’re talking about people or places, and which tenure they’re in? Well I think it does. Iain Duncan Smith is a highly political man who arrives at highly political conclusions. His think tank friends want to create the opinion within the public that not only is there a link between living in council housing, sloth, and criminality but there is a causal correlation (ie the tenure causes these defects). Then they can promote free market solutions and argue that collective provision should be removed. We are experiencing a skirmish in their propaganda war.
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What goes up won’t come down
The changes to Local Housing Allowance and the rest of the Housing Benefit system have been covered frequently on Red Brick. We don’t think much of them.
But one argument that the government deployed seemed logical to a lot of people. That was the common Ministerial assertion that, because LHA claimants make up as much as 40% of the private rented market, the level of LHA payments must be a big factor in the rise in private rents over recent years. And the corollary was that cuts to benefit, and hence to tenants’ ability to pay, would inevitably lead to a fall in rents, which would be a good outcome.
In my old economics textbook I find some support for this in theory: if supply is constant and effective demand falls, then the price should fall as well. Cue much Tory-speak about the good old market mechanism.
However in the real housing market demand is in such excess over supply that the neat little supply and demand chart really doesn’t work. If you reduce benefits so that tenants in high demand relatively expensive areas have to move out, there are many people willing to replace them at the same price. The price will not fall. Yet in the cheaper areas where the tenants are expected to move to, there will be more people chasing the small proportion of homes that become available at or below the 30% percentile (the new cap) at
any one time: the price is likely to rise.
A new report ‘Leading the Market’ from the Chartered Institute of Housing and the British Property Federation pours more cold water on the ‘LHA causes high rents’ argument.
They conclude that
“The increase in average rent levels during this period (2008-2010) is entirely due to a shift in the relative distribution of the caseload from the North and the Midlands towards London and Southern England. After adjusting for this ‘caseload effect’ average housing benefit rent levels fell by 1% (instead of the reported 3% rise).”
“We found no evidence for a relationship between the LHA inflation rates and the proportion of the market that is let to housing benefit tenants.”
“There is no evidence to support the contention that the LHA is inflationary or produces a feedback loop.”
“Our findings call into question the Government’s strategy that it can use its power as a bulk purchaser to force landlords to reduce their rents. If LHA rates do not contribute towards rent inflation then conversely they cannot be used as a tool to force rents down.”
In short the policy is not just wrong in principle: it is wrong in theory and it is wrong in practice.