The Tories like to keep their traditional supporters content. So when they are doing things that cause upset (eg no referendum on Europe) they find it necessary to have a countervailing policy that will please the Mail and the Telegraph. Unfortunately Eric Pickles and Iain Duncan Smith seem to be particularly adept at coming up with policies that fit the bill. To get a few cheap tabloid headlines people deemed to be dependent on benefits are often the target, and so are social tenants.
I think this is where the policy to criminalise squatting comes in. Squatting is not a huge issue in this country – in fact the Government cannot even estimate the size of the problem – and existing laws seem perfectly adequate to deal with abuse. It’s the failure to
implement them that seems to be the problem.
But the Government sees a chance to stimulate the juices of Tory supporters by tackling the supposedly ‘soft-touch’ laws that allow decent people’s homes to be taken over by people who have no respect for property rights. And they’re probably foreigners to boot – like in the Mail splash story of the Latvian who travelled 1,500 miles to squat a £6m mansion.
Enter Ken Clarke, pushing through an amendment to his Legal Aid etc Bill which will
criminalise all residential squatting with punishments of up to a year in jail or a £5,000 fine. The homelessness charities have expressed alarm and see squatting largely as a symptom of the worsening housing crisis, mostly done by people who have no alternative other than to sleep rough with all its attendant problems.
Virtually all the respondents to the Government’s consultation on squatting were against the change, arguing that existing powers were adequate. The Law Society, the Criminal Bar Association and the Met all supported the position that the Government should focus on enforcing the current laws rather than creating a new offence.
In its briefing, Crisis said: ‘Whilst we of course have every sympathy with someone whose home is squatted, under the current law it is already a criminal offence for a squatter to refuse to leave someone’s home or a home that they are about to move in to. The new amendment will therefore largely affect empty homes, of which there are over 700,000 in England alone, including many that are dilapidated and abandoned.’
After the Government rushed its new squatting clause into the Legal Aid etc Bill, ameliorating amendments were put down to the effect that the new offence would not be committed if the property has been empty for six months or the squatter is a previously homeless person. On November 1 the key amendment, tabled by John McDonnell MP, attracted only 23 votes, mainly Labour and a few LibDems. The Labour front bench supported criminalisation but wanted better consideration of the Government’s clause, therefore abstained, and the 300 votes against were all Coalition members.
During his speech, John McDonnell said: ‘Everyone in the House has to support evidence-based policy making. From all the evidence and information to hand, including from the Government’s own consultation and impact assessment, we must conclude that there is no evidence of a problem on any significant scale, that there is conjecture that it exists and that in the judgment of practitioners—not just the advocates, but the law enforcers—the existing law is sufficient.’
‘I have looked at the statistics cycle over the past five years and found that, on average, between 650,000 and 700,000 residential properties stood empty during that time. Most are private properties, and 300,000 have been empty for more than six months. When there are 40,000 homeless families, 4,000 people sleeping rough in the capital, and 1.7 million households on waiting lists, desperate for decent accommodation, it is immoral that private owners should be allowed to let their properties stand empty for so long. My amendment could force those irresponsible owners to bring their properties back into use. More importantly, it would mean that desperate people who need a roof over their heads would not be criminalised for resorting to occupying a property that was being wasted by its owner.’
In an interesting contribution, Jeremy Corbyn MP offered some historical context: ‘This country has a long and chequered history when it comes to squatting. It goes back to the Forcible Entry Act 1381, which became law during the Black Death. The issue has arisen time and again during periods of great stress: it arose at the end of the Napoleonic wars, at the end of the first world war and at the end of the second world war, when there was widespread squatting because of a terrible shortage of housing….. The Criminal Law Act 1977… was introduced after a great deal of consultation by the then Labour Government. There was a fair amount of opposition to the legislation, which distinguished specifically between the act of taking someone’s house when that person was occupying it and the act of occupying a property that was being kept empty.’
As a recent post by our guest blogger Monimbo argued, media influence means that politicians bend towards what they think are popular sentiments, which are often simply the views promulgated by the tabloids. I suspect if it wasn’t for the tabloids nobody would be much bothered about squatting, nobody would confuse it with the St Paul’s anti-capitalist encampment or with Dale Farm, and the public would think the current law is balanced and sensible, but that it should be properly enforced. Instead, we are fleeing in
front of an opportunistic display of prejudice and media misinformation yet again.
A better target for media outrage would be Westminster City Council, exposed last week as having kept four properties empty for years at a cost of over £100,000 in lost rent.
Where are Messrs Pickles, Duncan Smith, Shapps and Clarke on that one then?
Categories
Second home owners aren't evil
People who own second homes aren’t evil. I agree with the Telegraph on that. If you’ve got the means and can afford a home on the coast, why not? And it would seem perfectly rational behaviour during the last decade as you felt confident that increases in house prices would make your holiday home a decent investment too.
There’s nothing wrong with someone buying a second home, but that doesn’t mean it’s good public policy or that it should be encouraged or subsidised by the government. So, it’s good to see second homes getting the same council tax treatment as any other home. The government proposes to give councils the power to abolish the council tax discounts on second homes, which currently are between 10 and 50 per cent. Of course, it will be up to individual council to take up those powers.
Should a government go further than that and tax second homes at a higher rate, perhaps to reinvest into new housing? That’s a move the Telegraph would definitely call evil and unjust.
But it’s also pretty unjust that there are more 50-59 years olds with a second home (17%), than there are people in their twenties with one home*.
Until we have enough homes the distribution of the homes and who gets access to them matters and not just in the social sector.
(For an unexpected champion of the intergenerational cause, you may want to check this out by Jeremy Paxman in, of all places, the Daily Mail.)
*I feel sure this is right and have written it elsewhere. But I’ve completely lost the source. Any better informed readers than I may like to stick it in the comments. Otherwise, I fear that I’ll have to stop quoting it.
Our regular guest blogger, Monimbo, reflects on Malcolm Dean’s new book ‘Democracy under attack – How the media distort policy and politics’ to be published on 9 November by The Policy Press.
Malcolm Dean, who for many years edited the Guardian Society section and wrote social policy leaders, has a new book out this month about the way the media distort social policy.
Interwoven with the story of policy-making – mainly during the Blair/Brown years – he shows time and again how politicians bent policy towards what they thought were popular sentiments, but often were simply the views promulgated by the tabloids. They sometimes did this even when there was clear evidence of public support for different policies. Regrettably, as the recent excursion of John Humphrys into welfare benefits shows, the malign influence continues, even post-News of the World.
Dean’s chapter on housing is rather different. Here is a story of not-so-benign neglect, as
the media got rid of specialist housing and planning correspondents and consigned housing stories to the business or personal finance pages. We all know why: Britain had become a nation of homeowners, and those who’d failed to jump on the bandwagon weren’t people to whom advertisers wanted to get their message across. If social housing was mentioned at all – and this is a story that goes right up to the recent riots – it was in the context of policy failure not success.
Those of us who work in social housing are rather reconciled to this, and in part are relieved that the sort of hostile attention suffered by social workers is largely avoided by housing officers. But it does mean that government targets and policy changes, with the partial recent exception of the housing benefit cuts, are largely unexamined. One downside is that if the government actually achieves something – for example, Labour’s
near-completion of the decent homes programme, in which a remarkable £37bn was
invested over a decade – it is ignored.
Even more important is that the press simply doesn’t do its job of keeping the government on their toes. Where are the articles pointing to the waste involved if decent homes aren’t maintained after this money was spent on them? Where are the stories about the virtual
extinction of inner city regeneration programmes – barely mentioned even after the riots? Or how can the almost complete silence about policy towards private renting be justified (with the exception of the admirable Dispatches programme)? Homeownership has been
falling since 2004: it has taken rather a long time for the press to catch on. As Dean points out, given that they hardly covered the sale of 2.5m homes under the right to buy, or the transfer of another 1.2m council homes to housing associations, how can they be expected to be up to date?
Now that housing is becoming an unavoidably bigger issue, the press is playing catch-up. But with the exception of one or two reporters like Peter Hetherington, it has few commentators who know about anything more than house prices, mortgages, or doing up your house, at a time when these are of declining relevance. There are several snags to this. One is that affordable rents, Supporting People cuts, ending of tenure security and a host of other crucial policy changes are analysed in Inside Housing but not in the Mail, Telegraph or even perhaps the Guardian. The other is that, despite the effects of the credit crunch, housing issues are still usually looked at only from the single-issue perspective of whether or not they will restore house price inflation.
Labour can’t do much about this, especially in opposition, but can at least try to turn media unawareness to its advantage. There is simply no reason to play the media’s
game of criticising the government for letting house prices stagnate, as shadow minister Jack Dromey did this week. Let’s put this down to early nervousness and hope that the Benn-Dromey team can come up with something more robust.
After all, the government is a sitting target on the real housing issues, without having to blame them for a pause in house-price escalation. And you never know, things might be about to get so bad that the press won’t be able to avoid paying attention.
In 2009 Inside Housing magazine celebrated its silver jubilee by nominating its ‘Hall of Fame’, the 25 people who had most influenced the housing sector over the last 25 years. One of the 25 was Julian Ashby, and it appears that he had only just got started. Last week he was designated to Chair the Regulation Committee of the Homes and Communities Agency. If that doesn’t sound like the highest of achievements, it effectively means that he will be the new regulator of social housing in England as the Government closes the Tenant Services Authority and transfers its diminished regulatory functions to become just one of the many roles of the HCA.
Julian is exceptionally well qualified for the job. He is deputy-Chair of the TSA (CLG under Pickles call it chairman but I’m not capable of stepping back into the last century), and has a hugely impressive track record in the sector, including advising the Cave review which recommended the TSA/HCA split in the first place. He has been on the TSA since its inception and had a significant influence over the comprehensive regulatory system that the TSA drew up.
As Chair of the steering group setting up the National Tenant Voice at the time, I know it was a system that was welcomed and supported by the national tenant organisations, and their views were influential in its detailed design. In addition to ensuring financial viability the TSA established a set of standards for services that would have helped the sector, housing associations and council landlords, to improve their services by giving tenants a profoundly more important role in holding landlords to account.
I think Julian Ashby knows how proper regulation should be done, but in his new role he will have to sew a silk purse from a sow’s ear. The new system is not in my view fit for purpose. In its announcement of Ashby’s appointment, CLG describes the HCA’s regulatory role as ‘economic regulation and backstop consumer regulation’ ‘with a higher legal threshold for regulatory intervention’. Grant Shapps led his comments by talking about reducing red tape. In theory more emphasis will be placed on local scrutiny but few tenants will have the resources necessary to do the job properly and it appears they will only be backed by the regulator in the most severe of service failures.
With the TSA and its comprehensive national standards gone, the National Tenant Voice gone, the Audit Commission Housing Inspectorate gone, my fear is that the sector will fail to continue the improvement in service delivery that it has achieved over the past ten years. Despite Julian’s best efforts, hubristic landlords will feel that no-one is looking over their shoulder, tenants will be unable to hold them to account locally, and both the HCA and the larger landlords will revert to the bad old days of the Housing Corporation when development was king and the management of services to tenants and residents was an unavoidable by-product.
If Julian Ashby can prevent this happening there is little doubt that he will deserve to be in Inside Housing’s Gold Jubilee list when the time comes.
John Humphrys evidently gets paid around £375,000 a year to be rude to people on the radio in the mornings, around £2,500 a show, and another £250,000 for presenting
Mastermind. Evidently he charges the equivalent of a year’s Jobseekers Allowance for an after dinner speech.
Radio 4 is intolerable in my view when he is on. I suspect the ancient Greeks invented the word hubris with Humphrys in mind. But for some reason he and the BBC feel that he is particularly well qualified to spend a year researching and then presenting a documentary on the welfare system and the ‘benefit dependency culture’. No doubt he has some insight because he is dependent for his enormous income for doing next-to-bugger-all on the licence fee; it takes many people on very low incomes to fund his grand lifestyle.
Humphrys trails his views in advance of the programme, which goes out tonight, in the
Daily Mail, well known for its balanced view of welfare recipients. With the kind of originality and sublety that Humphreys himself is noted for, they give the article prominence by including a large picture of the Gallagher family and the headline ‘Our Shameless society’.
His basic premise is that a ‘dependency culture has emerged’: ‘A sense of entitlement. A sense that the State owes us a living. A sense that not only is it possible to get something for nothing but that we have a right to do so.’ He travels the country searching out people who are happy not to work. And he visits Iain Duncan Smith’s Centre for Social Justice, no doubt to get a balanced view (why not Child Poverty Action Group?). And then he goes for single parents, with no context, no information, no acknowledgement that most single
parents exist because of failed relationships rather than ‘Shameless’ families.
Cutting benefits evidently works in Poland and in the USA – our hero visits the USA (at our expense) and talks to Larry Mead, the ‘godfather of workfare’, who tells him cutting benefits works. To give him credit, he does note that destitution and hunger are also rife in the USA.
Humphrys writes about the Ipsos Mori poll done for the programme which showed that 92% agreed that there should be a benefits safety net, but that ‘only’ two-thirds* think it is working effectively. Only? I’d like to see the questions and the figures, but evidently people were ‘particularly suspicious’ about sickness benefit and ‘pretty hawkish’ about housing benefit, with a lot of support for forcing people living in expensive areas to move to cheaper accommodation.
At least Humphrys offers more balance than is normal in the Mail, by saying: ‘The problem is, for every claimant who makes you want to scream in frustration because they’re perfectly happy to be living off the State, you meet another who makes you want
to weep because they are so desperate to find work. Any work.’
But he ends firmly in Mail territory: ‘Beveridge tried to slay the fifth evil giant (idleness) and, in the process, helped to create a different sort of monster in its place: the age of entitlement. The battle for his successors is to bring it to an end.’
For a genuine counterpoint, I strongly recommend Declan Gaffney’s retort to Humphrys on Left Foot Forward. Gaffney is a real expert and doesn’t need to spend a year and a lot of licence fee payers’ money to find out about the welfare system. He destroys Humphrys’ use of the statistics of modern worklessness, incapacity, and single parenthood, and demonstrates that ‘welfare dependency’ has not, in fact, grown. He demonstrates that areas with concentrations of benefit recipients, like Humphrys’ birthplace Splott, which he revisits, are ‘highly responsive to labour market conditions: the opposite of what is
suggested by the ‘welfare dependency’ theory’.
I have argued before that debate about welfare policy and housing policy has become dominated by right wing language and stereotypes of the Shameless type, talk of chavs and the rest. It is so pervasive that Labour often falls into the Tory trap: attacking the unemployed is so much easier than attacking unemployment.
But the welfare system is viewed differently from the rest of the welfare state. As Declan Gaffney argues: ‘When there is a major scandal in the NHS, this does not lead people to question the principle of healthcare free at the point of delivery; when schools send young people out into the world without qualifications, pundits don’t line up to argue it’s time to drop the idea of universal education. But any evidence, however anecdotal, of failure on the part of the social security system leads to calls for its very existence to be put into question.’
I hope Humphrys’ programme isn’t as prejudicial as his Mail article and that the presentation is more balanced. I guess I’ll have to force myself to watch it to find out. And I hope to hear Declan Gaffney on Newsnight and the Today programme putting him right.
*Update – some people might notice that the figure used in the documentary is different from the one I have quoted here (two thirds). That’s because I used the figure quoted by Humphrys in his Mail article. Either the Mail article or the film must have been wrong. Shoddy – like the rest of it.
Categories
Lessons from Newcastle?
Yesterday, I went to the launch of ‘Homes for Citizens’, a pamphlet from the Fabian Society, supported by Crisis and the housing association Moat.
Like all housing associations Moat are trying to pick their way through the government’s ‘affordable rent’ package and assessing what their role should be.
They are maintaining security of tenure for their tenants. However, they propose housing should be made more flexible by allowing landlords to change how much people pay for their home depending on their level of income. Tenants could also change their tenure to one of shared ownership if they could sustain those costs.
There’s plenty that’s attractive in this vision. In all cases, the tenant stays in their home as long as they wish. A scarce resource (homes with low rents) is more efficiently distributed and those who pay higher rents provide extra revenue for the housing association to invest. It seems a fair way to expand social housing to those not in the categories of greatest need so that it serves a wider range of people.
The operation of this however sounds like a nightmare and it’s a brave housing association who’d take it on, even if the law allowed it. Brian Johnson, Moat’s Chief Exec, said rent re-appraisal would be done on a periodic basis, perhaps every 2-5 years and could go up as well as down. This would risk mirroring the work disincentives of Grant Shapps’ mad plan to expel the employed from social housing: if you get a job, we’ll hike up your rents. And it would significantly change the relationship that a housing association has with their tenants. They’d need to assess household finances, means test and work out who was hiding income.
It did remind me however of a conversation I had with an area manager of a housing association in Newcastle. That’s Newcastle Australia. She described visiting her tenants on a regular basis to check the condition of the property, provide information about work and training and ask about any repairs that needed doing. She also calculated their rent while she was there, which was 35% of household income (so no work disincentive cliff-edges). If their income had changed since the last visit, she’d recalculate and that would be the rent until the next visit or unless the household notified her of a change.
I’m sure in Newcastle plenty of people try to hide income to keep their rent down and the arrival of your local housing officer after someone in the house has just found a job isn’t entirely welcome. But, secure tenure in a home, with finances that flex with your circumstances isn’t impossible to do and has a lot going for it.
Categories
Housing horrors
A new campaign launched by Ken Livingstone
Rip-off agency fees. Deposits lost unfairly. Rogue landlords evicting tenants with little notice and hiking rent with no warning. Smashed windows, faulty locks and broken fridges not being fixed for weeks or months. Rodent infestations. Damp and mouldy bathrooms being left to rot.
These are just some of the housing horror stories Londoners renting in the capital have told me about in recent months. But I am under no illusions that there are many more out there.
Hundreds of thousands of people live in the private rented sector across London and I am determined to stand up for ordinary Londoners and improve housing for all.
In the coming months I will be setting out ambitious plans to improve the private rented sector which will be shaped by the experiences of Londoners.
I’m urging people to tell me about their housing experiences so that if elected I can take action to improve housing for all.
You can leave your story on my website (click on the link at the top of the page), or get in touch on my facebook page, or on twitter using the hashtag #housinghorrors
Ken Livingstone
Categories
Eric's troubled families
By our guest blogger Monimbo
The latest Pickles obsession is troubled families: 120,000 of them costing the state (or is it the overall economy? – that’s a bit vague) at least £8 billion per year.
This sounds like a lot of money, and while the usually diligent Fact Check has looked into it, I’m not convinced that they have demonstrated that it’s anywhere near accurate. A small part of the cost is attributable to services that all low-income families receive, while most of the cost is based on a global figure of £2.5bn which relates to a smaller group of 46,000 families considered by the Department of Education. These 46,000 families are the ones where, in addition to their other problems, the children are in trouble with the law. The £2.5bn is the cost of the ‘reactive spend’ these families require, such as children going into care, hoax emergency calls, vandalism and a range of other things which look very difficult indeed to measure in terms of incidence let alone cost.
What is a ‘troubled family’? Apparently it is one where ‘no parent in the family is in work; the family lives in poor quality or overcrowded housing; no parent has any qualifications; the mother has mental health problems; at least one parent has a long-standing limiting illness, disability or infirmity; the family has low income (below 60% of the median); or the family cannot afford a number of food and clothing items’.
The strange thing is that this says nothing about the ‘problems’ the family causes. The Guardian said that one Salford family required 250 interventions in one year, including 58 police call-outs and five arrests; five 999 visits to A&E, two injunctions and a council tax arrears summons. This sounds horrendous, but there must be many families that fit the Cabinet Office definition that aren’t causing this sort of mayhem.
Well, I’m sure it’s right that some families do cost a lot of money because of their anti-social behaviour and crime, but the Pickles approach suggests a fixed, potentially manageable social malaise which can be ‘solved’, which is the kind of problem beloved by civil servants and ministers but which often hides a range of more complex and challenging issues where the remedies require co-operation between different agencies.
What’s striking about the presentations on the scheme on the Department of Education website is not only how many agencies might be involved, but how – service after service – these are ones being affected by cuts in local authority and other budgets. When times are harsh, it’s precisely the ‘extra’ services like Sure Start and the additional help which failing pupils get in schools that are likely to be affected.
So, as in other areas of government, Eric will give back with one hand what he first took away with the other one.
Almost at the time of the announcement, indeed, there was a report of how 73% of a sample of 22 family intervention projects have seen their budgets cut and have had to reduce the services they provide to over 1,100 families. It is a fair bet that many of these feature in the 120,000 national ‘total’, and of course family intervention, promoted by Labour, has been shown to work in many cases.
Another characteristic of Eric’s announcements is to blame problems on the failure of local authorities to realise that the issue (in this case, troubled families) is complex and requires multiple interventions. It is almost as if behind each family is a set of blinkered council departments who have no idea that the family is demanding the attention of different agencies and are incapable of picking up the phone to discuss the issues with colleagues. In Eric’s ideal world, local authorities would have staff who are as bright as he is and would see the virtues of joint working, or at least know how to phone the police. In reality, I know most housing officers would say that they do try to co-ordinate action but when budgets are being cut so drastically it is extremely difficult.
The Daily Mail, of course, loved this story and signed up to the government’s simplistic approach. It said that ministers want one dedicated official to turn up at people’s homes to
get them out of bed for work, make sure their children go to school or ensure alcoholics or drug addicts go to rehab.
Do not despair! – that apostle of joined-up approaches, Louise Casey, will bang heads together and make them see sense. She has been appointed as the Tsar that will sort everything out, set tight targets and ensure they are complied with. Now Louise is a sensible person who has a track record of tackling these issues, so her appointment is
certainly not a bad one but she – more than anyone – must realise the complexities of the issues involved and the even greater difficulty of tackling them in a time of deep spending cuts.
She must also know that local agencies often do collaborate to find solutions, otherwise family intervention centres wouldn’t exist. She is also aware of the pressures on many
agencies not to solve the problems but to pass them on, by excluding children from schools or evicting difficult families from social housing (something on which Eric’s colleague, Grant Shapps, favours tougher action, of course). But this only sends them into the private sector where they’ll get less help.
As a point of reference, Tony Blair in a speech in 2007 said that 2-3% of families had deep and persistent problems, so perhaps Pickles could have made a passing acknowledgement of the previous government’s success in reducing the numbers so radically. Of course, in 2007 the government had no more idea of the real magnitude of the problem than it does now, but I do wonder whether the scale has been brought down to a more manageable 120,000 for political reasons.
Times are harsh and public money is scarce. If a smaller number of families are causing mayhem (even being blamed for the riots), at previously uncalculated and enormous cost, then perhaps Eric (aided by Louise) has more chance of riding to the rescue and sorting them out. When he has, no doubt we will be given the evidence of how much money has been saved when the families are eventually put on the path of rectitude.
I’m sure we’ll read about it in the Daily Mail.
The prospect that the UK economy will enter a long period of stagflation – low or no economic growth combined with high inflation – has increased markedly in the last few months.
An excellent report commissioned by Shelter on housing investment and economic growth, produced by a global economic consultancy, FTI Consulting, and written by eminent economists Vicky Pryce, Dan Corry and Mark Beatson, published last week, considers the arguments for an economic stimulus to promote growth led by an increase in housing investment.
The report makes a strong general case for an economic stimulus, showing how prospects for growth have diminished over the past year and arguing that the Bank of England’s quantitative easing of the money supply is insufficient and needs to be matched by further action in fiscal policy. It argues that the markets are now even more concerned by the threat of slow growth than the need for fiscal retrenchment.
The report concludes that “Action to increase investment in housing has attractive properties in terms of increasing growth quickly”. Housing investment in current market conditions would not add to inflationary pressures: there is spare capacity in the industry, unemployed skilled builders and outstanding planning permissions waiting to be built. And housing construction has a relatively low propensity to consume imports. The authors repeat the argument from the Barker report that construction is highly cyclical: it is often the first sector to go into a recession and the first sector to come out, so it is known to have economic leadership qualities.
Housing investment is a good stimulus for a number of reasons. Compared to many capital projects, it could be got underway quickly with early benefits. As an intensive user of materials and equipment, it has a strong beneficial impact on the supply chain, boosting jobs down the line. The report suggests that every £1 of demand for construction activity generates £2.09 of economic output as the effects ripple through the economy. It is labour intensive, bringing unemployed people quickly into jobs so they stop requiring benefits and start contributing taxes.
There is a debate as to the best method of undertaking a housing stimulus. Boosting private sector supply would only be effective if there is effective final demand, and there are problems with both mortgage availability and general affordability. A boost would therefore have to be either through direct public investment or through a subsidy to final private sector demand. It seems likely from the thrust of the evidence in the report that direct investment would be a stronger and more reliable option.
As the Chancellor’s Autumn Statement approaches, the case for additional housing investment should be made loud and clear. In making the case for extension of the right to buy to fund additional investment the Government has partly accepted the case. Ed Balls’ call for a repeat bankers’ bonus tax to fund an additional 25,000 homes puts Labour in a strong position, but there seems to be scope for a much more radical and far reaching plan that will tackle housing needs as well as providing a welcome boost to the wider economy.
Underoccupation of housing is clearly an issue in a country where many people are grossly
overcrowded and others homeless.
But the Government’s hypocrisy on the issue is demonstrated by their response to two
events – their hostile reaction to the publication today of a report on underoccupation amongst home owners; and their refusal to accept a Labour proposal in the House of Lords to soften the impact of housing benefit cuts on social tenants deemed to have more space than they need.
In the Lords, an amendment to the Welfare Reform Bill by Labour’s Lady Patricia Hollis proposed a modest change to the effect that the regulations governing the removal of
housing benefit from social tenants with one or more spare rooms should take into account the availability of suitable accommodation to which the tenant might move. The Minister, Lord Freud, refused to accept the amendment, despite the fact that hundreds of thousands of tenants will face a benefit cut with no reasonable prospect of being able to take avoidance action by moving to a smaller home, arguing that it was not ‘fair’ for social tenants to have properties that are larger than required whilst others are overcrowded. Tenants, unable to move, will face what is in effect a fine for something over which they have no control.
The report by the Intergenerational Foundation argued that even if you allowed home owners a spare room there are 18 million unoccupied bedrooms across England. More than half of over-65s are in homes with two or more spare bedrooms. They say that the tax system encourages home owners to ‘hoard’ space and that there are few if any incentives to downsize. As a result, housing resources and housing wealth are increasingly concentrated in the hands of existing, often elderly, home owners while younger people, often with families, are increasingly excluded from being able to buy family homes.
IF argued for a series of changes including abolishing stamp duty for downsizers, increasing the supply of appropriate homes, especially bungalows, for downsizers, introducing a property value tax, and abolishing council tax concessions for single occupation.
The report deserves to be debated seriously. There has been some (deserved) criticism for its tone, the simplistic notion of one generation stealing from another, and the use of words like ‘hoarding’. I think there is also some deficiency in analysis and in particular around the assumption that older home owners being taxed or incentivised to downsize would automatically benefit young families and get them a suitable home. The market mechanism would not necessarily achieve this and the core problem of house
values being too high in relation to incomes would remain.
Serious debate was the last thing on Grant Shapps’ mind. He was quick with a damning quote, telling the BBC “Whilst this report makes interesting reading, we do not agree that people should be taxed or bullied out of their homes.”
The difference between Lord Freud’s attitude to tenants and Grant Shapps’ attitude to
home owners is stark. Any attempt to make home ownership fairer by addressing its tax advantages over other forms of investment and other forms of tenure is seen as bullying, whereas anything goes in relation to tenants.
The truth is that it is social tenants who are about to be bullied out of their homes. The change in housing benefit rules for social tenants with a spare room is one of the more callous and coercive elements in the Welfare Reform Bill, but there is still very limited awareness of its huge potential impact.
An excellent piece on the same topic by Patrick Butler in the Guardian can be found here.