I liked Ed Miliband’s speech today. Responsibility, reward for contributing to society, reciprocity and ‘doing your bit’ have always been part of the Labour tradition and it’s good to hear the Labour leader putting it to the fore. For too long it’s been territory we surrendered too easily to the Tories. A
nd, it’s right for Ed to draw the dividing line between us and the Tories: Labour believes everyone has responsibilities, at the top and the bottom. The Tories however care a lot about benefit cheats, but have little to say on the spiralling pay of Britain’s wealth-wrecking bankers and chief executives.
His decision to draw on housing as an example was good too. If we are to maintain the legitimacy of public housing, it needs to be a more universal good – available to support working people on a range of incomes. If it becomes housing of the last resort and for the poorest only, the political argument to sustain it becomes ever harder.
It’s the same argument for the Labour Party really: at the last election, as Ed says, we became seen as the party for those on benefits and out of work – the social housing position on the political landscape. It’s hard to sustain a political party on that basis. For legitimacy, you have to make a universal offer that the majority can buy into – the NHS position on the political landscape.
Ed’s argument would see Labour move away from a position which privileged need as the main factor in getting social housing to a system where people’s contributions through work, caring, responsible behaviour were recognised in getting public help with your housing.
As readers of this blog will know – this isn’t a problem free, ‘motherhood and apple pie’ policy – it has tough consequences. There is only so much housing and the more you allocate on a contributory principle, the less there is for those in need, for whom alternative provision will need to be made.
However, I think that passes the public’s fairness test and provides a future Labour government with a strong foundation to invest in social housing and make the case for why.
The choice isn’t between social housing for the working versus social housing for the poorest, but social housing as a more universal offer, or no social housing for anyone.
Labour’s housing policy will help lead the country out of the ‘turgid economic trough’ being created by the Tories, Ken Livingstone told a packed London Labour Housing Group conference on Saturday. ‘Investment to create 100,000 new homes would create three-quarters of a million jobs’ the mayoral candidate told the conference, called to debate housing policies for London to be included in next year’s manifesto.
Describing the fight for the mayoralty as a ‘mid-term election’ Ken argued that Labour needed to redefine housing policy as a key part of economic policy as well as being important in itself in meeting the housing needs of low and middle income Londoners. One of the jobs of the new mayor will be to draw up a major programme of housebuilding ready for the return of a Labour government.
The Tories have abandoned the idea of mixed communities in London, he said, but Labour will always build a mix of homes for a mix of people on a wide range of incomes, just as it had done in the past. Ken also reminded the conference that effective campaigns on housing had forced major u-turns from both the Heath and Thatcher governments and could do so again with the coalition.
Karen Buck MP, shadow minister for welfare reform, told the conference that the Tory government’s policies in the Localism and Welfare Reform Bills would have a huge impact on London and could force tens of thousands of people to move – all searching for cheaper areas. The policies would also be counter-productive – leading to higher rents in all tenures and far greater homelessness – making it impossible for them to make their savings.
Karen said that the policies directly contradicted the Tories’ claim that they wanted to incentivise people to get back to work. They had almost completely forgotten that housing benefit is also an in-work benefit – over 40% of people receiving local housing allowance were in work in some boroughs – the losses would make it impossible for many of them to remain in work.
Setting the context for the conference, Nicky Gavron AM, Labour’s housing and planning lead on the London Assembly, said that more and more people were seeing housing as a key battleground for the mayoral election. The difference between the two mayors could not be more stark. Ken’s legacy was strong, Nicky argued. There was a strong planning framework, the best housing record since the 1970s, the highest level of capital investment ever and a massive land bank ready for development. Johnson had squandered this inheritance and virtually all his housing claims could be dated back to Ken’s administration. He was undermining the planning system, scrapping Ken’s targets especially the 50% affordable target and the emphasis on social rented homes. The government’s own inspector had criticised Johnson’s polices, saying his targets were too low, he should keep the 50% London-wide affordable housing target, and should support social rented housing provision. Johnson caved in to his Tory friends in the boroughs, allowing them to cut affordable housing. Only the Labour boroughs are keeping London’s affordable housebuilding going.
The conference, with representatives from all areas of London, inner and outer, debated a series of detailed policy proposals for the manifesto, including policies to increase housing supply, to meet the needs of the poorest and most socially excluded households, to help the ‘squeezed middle’, and to guarantee the future of social housing in the capital. The policies will be developed further before the manifesto is published.
Labour Party members interested in joining the Labour Housing Group should follow this link. London members interested in the work of London LHG should contact steve@hilditchonline.com
Categories
The ‘Warehouse' of Mum and Dad
I still have loads of junk in my Mum’s house. It fills the shed in large boxes and tumbles out of less used cupboards. And it seems I’m not alone. According to the Telegraph:
“Now the younger generation – not wanting to mess up their own, often small, living space – are increasingly relying on the old family home to store their share.”
In my case, I’d have to say that the remaining junk is due to my own lack of organisation and a case of ‘out of sight, out of mind’.
But this amusing life-style story (planted as insurance company PR by the looks of it), reflects a reality about housing for the younger generation:
Far more people find themselves renting and sharing with friends for longer than in the past -because buying’s impossible, there’s little chance of social housing and the cost of private rents means several people sharing is the only option. And, as the article suggests, the homes younger people are renting or buying are getting ever smaller – the newest are the smallest homes in Europe.
It’s no wonder, when parents finally get rid of their kids from the family home (at an increasingly later age), that half their stuff stays behind.
So it may be a pain, when you’re pottering at home in your retirement*, to constantly come across boxes of CDs of angry teenage music, old tennis rackets and bin bags full of WWF magazines 1990-1994 (Sorry Mum – they’ll be worth something on eBay one day), but it’s nothing compared to the pain many have of trying to afford a decent place to live.
*To avoid the risk of unfairly characterising retirees, my co-Blogger spends his retirement making up for my lack of posting, running the London Labour Housing Group and fighting the good fight. I think he’s busier than ever.
The Tories are moving forward their plans to gerrymander equalise the number of constituencies. The aim is to have the same number of registered voters in each constituency. Of course this will mean vastly different numbers of people in each constituency: those who aren’t registered will be invisible to this process. And those who aren’t registered are disproportionately the young, the mobile, people who rent, lower income groups – basically Labour leaning groups.
Consequently, it is due to remove more Labour seats than Tory seats, though recently it seems the hapless Lib Dems may be on the sharp end.
One thing the Tories haven’t considered and perhaps the Boundary Commission either, is how they equalise constituencies in the south east when housing changes bite. High ‘affordable’ rents, cuts in housing benefit and the introduction of the benefit cap will cause lots of people to leave expensive areas and move to cheaper ones. The Boundary Commission is going to be playing catch-up from the start, trying to equalise constituencies as significant numbers of people are forced to move.
One report already has 82,000 people leaving London for the surrounding towns and that’s ignoring the movement within London which is due to lose 5 seats in the review. When Central London’s larger less well off families end up in outer London and surrounding south eastern towns, how will the Boundary Commission keep tabs on them?
If they don’t, it’s important the Labour Party does, or people already uprooted from their communities will continue to find themselves disenfranchised. Local Labour parties should try to engage with people early, tackle the concerns that new arrivals (from anywhere) can bring and, importantly, get them registered to vote.
With many less well off voters heading out of central London and with real reasons to be angry with the Tories, perhaps MPs in places like Enfield, Barnet, Thurrock, the Medway Towns might regret supporting their party’s housing and benefit reforms.
It’s possible that even the gerrymandering won’t be enough to help them.
Categories
Time to say goodbye
Love it or loathe it, the Audit Commission Housing Inspectorate will be missed after it closes operations this month.
I have a long list of irritations with how it went about its work. Number one is probably the poor quality of some of the inspectors, who sometimes failed to follow their own guidelines about transparency, feedback and having ‘no surprises’ in their conclusions, or imported their own views about how something should be done and turning it into a supposedly objective judgement. Having experienced inspection outcomes that were both significantly higher and significantly lower than the service being inspected justified, I’m left with the nagging feeling that some were preordained and that political fixing could make a difference. Some services seemed to get stars simply because of their previous reputation and sometimes there seemed quite a gap between the evidence and the conclusion.
All of this would be denied by the AC of course and the upside of its achievements comfortably exceeds my annoyances. Most importantly, there is evidence that after decades of flatlining, housing management standards really did pick up and improve during the period that the housing inspectorate was active. The first series of inspections of housing association services burst the balloon that their chief executives had been blowing up about the quality of their own services. Shining a light into a few dark corners brought significant improvement to the sector, in both councils and housing associations. The weight given to the experience of tenants increased as the regime was refined and improved. The set of KLOEs (key lines of enquiry) that the AC produced was a brave attempt to provide a template for a good service, even if they were then rather slavishly followed. Whilst the industry of pre-inspection consultancy prospered, the ideas of regular service review, external challenge and constant improvement became endemic, driving service improvement and a focus on tenant satisfaction.
There were a couple of areas where I am happy to own up to just being wrong in my early views on the inspection regime. One was that the traffic light system was superficial and trivialised important judgements – in fact it was a great success and an effective communication tool. Second that introducing the link between inspection outcomes and funding in the ALMO programme wouldn’t work. In fact it was a great motivator and became an important driver of service improvement and tenant engagement, helping to restore the credibility of council housing.
Maybe I’ll be wrong again but my view even before the Election was that the inspection element of the new TSA regulatory regime risked not being comprehensive and rigorous enough to keep standards improving and that some organisations would slip back into bad old ways. Since the Election, the changes made by this government convince me that it will be far worse than that. Even if the TSA (whilst it exists) and the HCA, as the new regulator, ensure the financial viability and probity of the sector, they will be toothless tigers in relation to service quality. I would welcome the emphasis on local tenant scrutiny if I didn’t know that it will be hopelessly under-resourced and open to manipulation by landlords of all types wanting to talk a good service instead of delivering one.
One of many challenges facing landlords will be to put sufficient effort and resources into making tenant scrutiny work and to maintain the tradition of external rigorous challenge based on the methods developed by the Housing Inspectorate. I hope they will but I fear they won’t – and the industry will take a step backwards.
The idea of evicting social housing tenants on higher incomes emerged in Westminster, based on some very dodgy statistics about how many tenants earned over £50,000 and £100,000. It appears that after years of saying soial housing had too many poor people, now the Tories say it has too many rich people as well. I suspect they just don’t like social housing. Now that Grant Shapps has taken up the attack, it has become a national story. The original story was broken by the Leader of the Labour Group on Westminster, Paul Dimoldenberg. In a guest blog, he accuses Shapps of tabloid-style reasoning. No surprise there then.
So Grant Shapps MP thinks it is a ‘no brainer’ to evict Council and Housing Association tenant families who between them earn £100,000 a year. He reckons that there are 6,000 such families across the UK who he says are rich enough to be able to buy their own home and should be evicted so that they can make way for a family who is in more serious need of a home.
Well, I certainly have a number of serious concerns about this proposal which has emerged out of the blue without any consultation or thought to the consequences.
In typical tabloid-style reasoning Mr Shapps raises the spectre of RMT trade union leader Bob Crow who earns £130,000 a year but still lives in a council house in north London. Interestingly, Mr Shapps can name no other high-earning individual or family to make his case and his argument rests entirely on the personal circumstances and choices made by Government ‘hate-figure-in-chief’ Mr Crow.
But the facts of these so-called ‘high-earning’ Council tents are a million miles from the isolated Bob Crow example.
A more typical ‘high-earning’ family is the one living in Grant Shapps’ constituency in a 2-bed Council or Housing Association flat where the parents both have middle income jobs earning £25,000 each and their daughter and her fiancee, again both earning £25,000, are saving for a deposit on their first home. Does Mr Shapps really think that this family is ‘rich’?
Does Mr Shapps really expect Council and Housing Association tenant families like this to reveal their incomes if it means that, by doing so, they will be evicted if they are thought by the Government to be earning too much? And how many people will decide not to work overtime or go for promotion if it means that they will creep over the £100,000 threshold and face eviction?
If Council and Housing Association tenants have to reveal the income of all family members living in their home, will it include the state pension of an elderly grandparent living with them? And will the meagre earnings of the teenage daughter with a Saturday job also be required to be included, too? Real life is very different from Mr Shapps’ easy headline grabbing and ill-thought out policies. So far he has failed to answer any of these points.
Or will local Councils and Housing Associations be told to make assumptions about their tenants’ income and then to evict those families who they estimate to be ‘wealthy’?
Mr Shapps says a family with a combined income of £100,000 should be able to buy a home of their own, but this will be different across the UK. In London, the South East and South West, a young couple with a combined income of £50,000 and living in a Council flat with mum and dad will not be able to get on the home-ownership ladder if that family is told to move out and buy their own flat. They will end up in private rented accommodation paying a lot more in rent.
And how did this £100,000 figure come about? Was it the result of research or is it a convenient figure that will guarantee tabloid headlines?
Posted on 6 June 2011. Later Paul added:
Housing Minister Grant Shapps’ plans to evict Council and Housing Association households with a combined income of £100,000 unravelled today on the BBC Radio 2 ‘Jeremy Vine Show’ when he contradicted statements he made over the weekend and now claimed that his new policy would mean that families with four or more people on average incomes would not be evicted if their combined household income is more than £100,000.
In a bizarre example of ‘policy making on the hoof’, Mr Shapps told BBC Radio 2 listeners that
- The £100,000 income threshold only applies to individuals and couples with a combined income of £100k
- Other family members’ income (e.g. children, granparents) will not be counted
However, Mr Shapps’ claim that this new policy would mean that people with high incomes would move out and allow people in housing need to take their place, was immediately in tatters when he revealed that if the high earners paid the market rent then they could continue to live in their Council or Housing Association property as now.
Mr Shapps failed to spell out how Councils and Housing Associations would gather the information on ‘high earning’ tenant incomes or how much the Town Hall bureaucracy would cost to set up, run and police. Mr Shapps also failed to answer how he would stop high earning individuals declaring that their income was £95,000 or stop the two person household declaring that they earned £45,000 each in order to dodge having to pay market rents.
By introducing a new policy of letting high earners stay if they pay market rents, he will provide very few new homes for people in housing need. And much of the extra cash generated by increased market rents will go topay for an army of Town Hall snoopers whose job it will be to set up a new bureaucracy to find out tenants’ income and enforce the new red-tape regime introduced by Mr Shapps.
Last month, Westminster’s Housing Cabinet member Philippa Roe claimed that the Council wanted to increase rents for high earners by “a little bit more”, but now Grant Shapps has revealed the truth and tenants will face a 400% increase in rents as they go from their current level of around £110 a week to market rents of £450 a week or more.
The answer to local housing shortages is to build more homes for social rent, not to divide the community and set middle earners, the low paid and high earners against each other. Giving Councils like Westminster Council the power to set their own rent levels will mean that Council rents will go up for everyone, not just those on over £100,000.
This is an addition to my previous post really about how we get ‘generation rent’ into homeownership, if indeed we should. There’s a paradox that the measures you take to ensure ‘responsible’ lending from banks are the measures which prevent more first-time buyers form getting a property. Opening easy credit again could be seen as one answer to the problem of younger people being unable to buy.
That would be the wrong lesson to draw from the financial crisis and its aftermath.
There are some people at the moment who can sustain a mortgage but to whom banks won’t lend. But that’s not really the issue. Looser lending may help in the short term, allowing some more people to buy a home. But in the long term, it’s cheap credit which fuelled the housing boom, drove up prices and locked most first-time buyers out. It’s not something we want to repeat.
As a colleague put it to me once: ‘house prices in Britain rise to the level of available credit in the economy’. More lending means higher prices.
That’s why the IPPR are right to say that there should be limits which ensure lenders act responsibly. I don’t know whether that’s a certain loan to value ratio as they suggest or something else. But, I do think the timing’s important. If limits like this are going to prevent another bubble, they need to be imposed before their effects bite, during a slack period. Once the housing market begins racing away, it’ll be difficult and unpopular to draw it back again with borrowing limits. Better that when it grows again, it does so under more sustainable rules.
After a long lie-in on Tuesday (I had a day off), I found myself surprised by the rarest of things – a front page housing story. Nope, not asylum seekers jumping the queue into council housing, or a big family in West London claiming 50k in housing benefit. But, a story about homeownership in the Independent and a serious one at that. It was followed-up with coverage by Sky and the BBC.
It seems people are waking up to something aspiring first time buyers have known for a while: if you haven’t got parental help, owning a home for most people is a distant prospect.
House prices and deposits for mortgages are so high that it feels (and indeed is) an unrealistic goal for people to achieve.
We either accept that many people will become renters in the long term and put renting on a more equal footing with owning your own home. That means greater security for tenants and ensuring higher standards, with better ways to enforce tenants’ rights. It also means providing renters with tax-efficient ways to build assets and save in the same way owner occupiers build value in their homes and benefit from prices rises.
Or, we need to do something to keep house prices lower compared to earnings, so younger people can afford them in the future. That means limiting the real-term rises in house value the older generation may be relying on – to fund later care perhaps or provide their pension. It means making homeownership once again the goal of public policy, but a reformed homeownership, which is about a secure place to live and not a financial investment.
In both cases, it’s about transferring wealth from an older generation to a younger one, to those who own assets to those who do not – whether they are housing assets or take a different form.
The problem is what will convince the baby boomer generation to back reforms that do this? Only, I suggest, the realisation that their children will never realise an aspiration which the post-war generation came to take for granted. And that’s why this debate is a good thing, because at least it’s happening beyond the ranks of the housing professionals and creating wider awareness of stark housing choices.
Categories
That vile word
I was once in a meeting of a housing association which was discussing buying land and developing homes in Stevenage. “I’ve been there” chirruped the Chief Executive, “it really is chavland”. I have been in plenty of other meetings where senior housing folk have talked about their clients in disparaging terms. I can recall one Housing Director in the north responding to a presentation on the Decent Homes programme by saying “There’s nothing wrong with our houses, it’s the people that need fixing”. Fortunately most people who work in the profession are more enlightened and have a more balanced view and a better choice of words.
As a fan (mildly obsessive) of EastEnders I get outraged by every story line that involves any character visiting a council estate. They are always the same. High blocks, lifts not working, rubbish strewn everywhere, hoodies gathered menacingly outside, drug dealers hovering, noisy music blaring, people shouting, and in the middle of it some poor EE character suffering terrible deprivations, and desperate to get back to the square where decent folk live (now there’s the joke). I used to start talks by asking people if they knew where the Jasmin Allen estate was. Invariably they knew it was a bad bad place where police only went in big groups because it was run by gangs and the residents appeared to throw rocks at them on every visit. Everyone thinks they’ve heard of it and the penny eventually drops that it was in The Bill, and was fictional. I believe the filming was done on an estate in south London famous for being visited by Tony Blair on his first day as Prime Minister.
I was got going on this topic by Polly Toynbee’s piece on ‘the vile word’ chav. How right she is that the use of the word chav is just one part of a sustained effort to ‘foster the loathing of a feral underclass’ thereby diverting public resentment about economic and social failure from the rich to the poor.
Polly quotes Baroness Hussein-Ece – a LibDem Equality and Human Rights Commissioner no less – who tweeted: “Help. Trapped in a queue in chav land. Woman behind me explaining latest EastEnders plot to mate while eating largest bun I’ve ever seen.” And then of course this week we have Iain Duncan Smith, hand wringing in public and in private getting his department to place stories in the media – and picked up endlessly by the BBC – about the ‘top ten’ most ridiculous stories told by some benefit scroungers.
For this government (LibDems should look suitably ashamed, I expect it from the Tories) and their supporters this is all part of the softening up exercise for the cuts. Everyone’s on the fiddle, no-one wants to work, they’re breeding like rabbits, they get subsidised housing and don’t even pay the rent, so we should take their benefits away from them. Even decent politicians run in fear from the stereotype and feel it is necessary to back some variant of ‘welfare reform’.
The outcome is that it is so much easier to make cuts that really hurt people. We have blogged about some of these before. The latest news this week, from the heads of Britain’s main charities dealing with mental health, concerns the ‘devastating effects’ welfare reform (ie cuts) is having on the mental health of hundreds of thousands of people.
The long title of Owen Jones’ book ‘Chavs’ being published this week is ‘the demonization of the working class’. That’s what is really going on and council tenants get the worst of the stigma. Some politicians and housing professionals need to read it and begin choosing their policies and words more carefully.
Categories
Generation rent
I was suitably riled listening to Grant Shapps on World at One at lunchtime today, failing to answer sensible points and questions about the housing market from Tony Dolphin and Owen Hatherley. His ability to avoid any question and reply in ludicrous blandishments never ceases to amaze me.
According to Shapps, house price inflation only occurs under Labour. He must have been too young to remember the boom under Thatcher – and even worse the bust when home owners were abandoned with vast amounts of negative equity, a huge number of repossessions – and no government help. At least when the bust came in 2007 – and never forget it was an international banking bust whereas Thatcher’s was home grown – the Labour government took a series of important steps to protect tens of thousands of home owners, and the tenants of home owners, from foreclosure and homelessness.
Shapps simply fails to deal with the issues raised by two important reports today. The first, the one that grabbed the headlines, was from the Halifax who coined the phrase ‘Generation Rent’ to show that people no longer feel that they will be able to buy and that half of 20-45 year olds now think renting is the norm, similar to much of the rest of Europe.
The second, Tony Dolphin and Matt Griffith’s serious piece of work for IPPR, Forever Blowing Bubbles? takes a long hard look at housing’s role in the UK economy with a proper historical perspective. It makes a series of recommendations for mortgage regulation and the importance of stopping borrowers from thinking that housing market is a one-way bet. They also make a strong case for reform of the private rented sector to provide a real alternative choice for those who need to hedge their move into home ownership. As they say, “tenure rights are weak and the sector is poorly prepared for larger families and their needs. The professionalisation of the sector is much needed to make it the natural choice for those who wish to sidestep the risks of the owner-occupied housing market.”
At one level it seems obvious, but they demonstrate the importance of looking at the housing market as a single entity and not two markets of different tenures, arguing for “reform of the PRS to make it a less destabilising influence in the UK housing market. As we have seen, BTL (buy to let) investment has too often been speculative, volatile and a cause of pro-cyclical price pressures in the housing market. Worse still, it appears to have cannibalised existing housing stock, led to a weak response in total housing supply, distorted existing supply incentives to encourage the overproduction of small city-centre flats, and driven out large institutional investors by pushing prices up beyond sensible yields.”
Owen Hatherley, whose interesting article on home ownership and renting is also published today, put it to Shapps that people who could no longer afford to become home owners were left at the mercy of the unregulated and insecure private rented sector, and therefore faced no real choice at all. And that secure public sector tenancies should be a genuine option. Exit stage right for the Minister, off on another ramble about some excruciatingly complex shared ownership option he’s invented (effectively a cut-back and rebranded Labour scheme).
The Government avoids the big questions in housing policy today, especially how the housing market – and the vast majority of people live and will continue to live in market housing – can be made to work for people on low and moderate incomes. There is a real opportunity for Labour to build on these interesting reports and come to some radical but sensible and appealing policies of its own as the Housing Policy Review takes shape.