Last week Tony Blair challenged the Labour party to consider ‘the case for fundamental reform of the postwar state’. He laid out seven questions which he hopes will guide discussion of this reform. The first question was: ‘What is driving the rise in housing benefit spending, and if it is the absence of housing, how do we build more?’
It’s good to hear Blair talking about housing policy. As I wrote last week, the death of Margaret Thatcher reminds us that she was the last British prime minister to have a truly popular housing policy. Even Blair’s strongest supporters would not say that he had any housing policies that really wowed the electorate.
The actual wording of Blair’s question is slightly strange. It is clear, as Ian Mulheirn of Social Market Foundation has shown, that the rise in housing benefit spending is largely a result of the increased number of people who are out of work because of the recession. If these people were all to find work, the amount that the government spends on housing benefit would rapidly decline. (Although, there is some truth in the implied answer that a lack of supply of new housing has been part of the reasons rents have increased in London).
Nonetheless, it’s heartening for those of us with an interest in housing that Blair is discussing the issue in such a prominent manner.
He’s not the only one. On Saturday the London Labour Housing Group brought together shadow ministers, backbench MPs, London assembly members, councillors and others for an animated discussion on future Labour housing policy.
It’s fair to say that the conversation was a bit broader than the questions that Blair set the party. Topics discussed including the introduction of a land value tax, increasing housebuilding for all tenures, reform of the private rented sector and, in particular, letting agents, reforming housing associations and improving standards for workers in the construction industry.
Jack Dromey, shadow housing minister, drew heavily on recent work from Shelter which makes the case for the introduction of more stable, secure tenancies for people renting privately. It seems clear from the statement the party put out at the end of last year that the private rented housing sector will be getting a lot of attention in Labour’s 2015 manifesto. As a complement to this perspective housing activist Jacky Peacock gave a more grassroots perspective on working with and organising private tenants.
Currently, much of the energy in the Labour party around housing policy is coming from local authorities. James Murray, from Islington, Steve Bullock, from Lewisham and John Gray from Newham, all provided that mixture of hard headed realism and campaigning passion that is becoming commonplace among Labour’s housing spokespeople.
If you don’t keep up with what Labour-controlled councils are doing around housing, you may not be aware that, for example, Islington council is battling Boris Johnson to win the freedom to develop their own social housing or that Newham council has introduced a registration scheme for all private landlords in the borough.
It is heartening to see this dynamism from the party when talking about housing given rising homelessness, a decline in rates of homeownership and the news that eight million people are one paycheck away from losing their home.
Much of the discussion on Saturday was on the need to build more social and council housing in London – it was a London Labour Housing Group meeting after all. Giving local authorities the freedom to borrow against their existing assets and the introduction of a mansion tax were just some of the ways suggested for funding this. Such a promise would undoubtedly play well in a number of London boroughs in the 2014 local elections and 2016 mayoral election.
However, for the 2015 election Labour will need a broad message on housing, including policies that make it easier for people to buy their own homes. The Tories, who are presiding over a decline in the rate of homeownership and a startling reduction in the number of homes being built each year, have already sketched out their response to this challenge, including mortgage guarantees. Labour needs to come up with a powerful answer of their own, partly by answering Blair’s second question ‘how do we build more?’
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Tom Neumark is a former Labour councillor and blogs at Dream Housing
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Really hope what happens in London doesn’t dictate policy for the entire Nation
The problem is: what happens elsewhere in England currently dictates housing policy in London.
I speak as a private tenant and care worker. Starter house prices are 130000 in Bristol that is 8 times my wage. The legal advice I have is the short term tenancy is not worth the paper its written on and now I do nt have one. The landlord “trusts” me and it costs 150 pounds every 6 months to renew it; so I do nt. That is the “New Labour” legacy after 15 years of Tony Blair that and a UK housing sector “overpriced ” by 30% by the IMF. Tony Blair speculated on multiple flats here in Bristol and did nt have a housing policy apart from a Conservative one of encouraging private landlords. He was effectively a Tory. I am very angry with him as I had to move maybe 8 times in 15 years of his tenure of office; I work and have always paid my rent.
Blair drove up “rents” in public housing estimating that the private sector had a better evaluation of “cost” this was his fundamental flaw. How dare he so influence the low paid ? The rich hypocrite. He ignored 3 resolutions on Council housing and that in the end broke Brown’s legacy for competency as the “Boom” driven by the housing market multiple mortgages partly corrupted the City.
In the South it is private landlords that have driven the housing market post 2002 and the private sector debt in 2008 was 50% of GDP and the private sector debt was 400%; here in Bristol private rents are far higher than the mortgage and returns are 11% for landlords. This is iniquitous and is Blair’s housing legacy as To let boards equal For Sale.
I am in favour of a Fair Rent Act set at 5% return or 70% of current rates (to reflect IMF valuation) to restructure the housing market towards the next generation and the speculative excesses of private landlords, rebalance the economy and incentivise work and reduce the landlord subsidy of HB. This would be fair; as private sector landlords return the housing market to real terms growth for the next election the spectre of another “Bail Out” is raised..
In the next bail Out one mortgage per person is my “suggestion” in this instance. The right to land at agricultural rates for local people who have worked, developers can put in drains and roads and this is the sole “planning gain” ie the right to a plot so we can self build or buy kit houses off the internet and break the monopoly of land that the big builders have by referring them to the OFT as against the national interest for they control supply and thereby price and releasing their land banks in fines to community trusts and self build.
It is the rent or the mortgage that is the largest “Bill” today. This has to be reduced.