Is Labour ready to go big on housing?

January 13, 2014 10:03 am

Talk of housing has acted like the drumbeat of Labour’s time in opposition. It has been their in the background at all times, occasionally getting louder only to fade away again moments later. Those of us who follow the ins and outs of the Labour Party, reading the runes (and the unspoken lines in speeches) can tell you that housing will definitely be part of Labour’s “offer” in 2015 – but how big that offer is, how meaningful and what impact that might have, seems still to be up for grabs.

I won’t repeat the arguments in favour of increased housebuilding here – except to say that in terms of growth, reducing overcrowding, tackling the “cost of living crisis”, avoiding the dangers of another housing bubble and allowing people to have a home of their own, it ticks most of the boxes I’m looking for in terms of policy.

It’s not the “silver bullet” – that’s education, and it always will be – but housing is pretty damn close.

So it was pleasing yesterday to see Shadow Housing Minister Emma Reynolds tell Andrew Marr yesterday that we need more council houses. Reynolds said:

“We’ve called on this government to bring forward investment in social housing. We want to see an investment programme in social housing … I want to see a council house-building programme because there is a very big shortage of council homes.”

That’s right. Council homes. Those words so rarely escape the mouths of senior Labour politicians so it’s worth taking note. Ever since the success of “right to buy” under Thatcher, Labour politicians have serially struggled to make the case for quality, affordable council housing as an alternative to the property ladder. At a time when many young people fear they may be trapped permenantly in expensive private rented accommodation, making the case for the alternative is incredibly important.

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And yet after Reynolds showed boldness, the partial row back wasn’t far behind. The Guardian reports that:

“It is understood Reynolds was not committing Labour to an expensive new programme of council house-building, but was instead highlighting the issue’s importance and saying that a new programme should be a priority if the public finances permit.”

Which sounds close to a verbatim quote from a Labour press officer to me.

This is not the first time we’ve seen Labour dance pretty close to an attractive housing policy, only to shimmy away again at the last minute. Ed Miliband’s conference speech appeared to commit Labour to a house building target of one million homes over the next parliament – a lofty goal but in the ballpark of what is necessary. Yet afterwards the Labour leadership appeared to row away from the target. It was an aspiration (which is political speak for a target that doesn’t carry a sanction if you miss it) or the aim was to be building 200,000 homes per year by 2020, which doesn’t seem as impressive at all. Imagine how many more homes we’ll need by 2020?

And yet it’s understandable why the party isn’t yet willing to make the big leap and commit to building the huge number of homes that are needed. Not because of the risk of deflating house prices (more of a Tory concern on the whole) but of how they will have to be paid for. The market is currently failing to build the homes Britain needs. And when the market fails, Miliband believes that the state should step in.

There can be few market failures as great or as damaging in modern Britain as that which we’re seeing in housing. So Labour must “go big” on housing, or we might as well all go home. If you have a home to go to that is, of course…

  • treborc1

    If and when and maybe sounds like a Policy to me.

  • FMcGonigal

    Some cynical observers will naturally ask why Labour did not build more houses when in office…

    • Holly

      We are also asking why they let so many into the country BEFORE having any plans to invest in the homes etc they would undoubtedly require?
      And why did they put in place so many building/planning regulations to stifle any private investors?
      The cynical observers have loads of questions to ask Labour.
      Hunt has just come out to tell us what we already knew…Labour’s education system WAS dumbed down.
      So after three years in opposition..Labour admit they ‘got it wrong’ on,
      Immigration,
      The economy/bankers/financial system, and now
      Education.
      Nothing too trivial then eh.

  • markmyword49

    Here we go again with an opposition giving the electorate half promises they know they won’t keep if they gain power. Labour had the chance when they were in power for thirteen years to provide “social” housing they didn’t then and they won’t if they get back in. How will they be paid for? Why ask such a stupid question. Housing is a capital asset. Only the stupidity of the UK financial system would regard them as anything but. Maybe it’s also that fact that a significant number of Labour MPs hold property portfolios. It’s hardly in their interests to deflate the value of housing.

    • Mark Reilly

      to misquote Keynes..”when the facts change, change your policies”

      There is no doubt in the 80s Labour found itself wrong footed by Thatcher’s council house selling program..also the long boom and easy credit from 93-2008 seemed to provide an alternative way for most people…as many more people could enter the mortgage market

      but things have changed, how ever we dress up the situation it is likely in the next 30-40 years owning a home will no longer be available to nearly as many people as it was before the 2008 housing crash.

      Left to it’s own devices the housing industry is incapable of providing a solution..we either get small city centre apartments for the buy to let market or high end “executive” homes, nothing for moderately waged families

      Recent revelations about that Landlord in Kent show that changes to the Housing Benefit system, rather than reducing rents, will infact simply exclude many working people from the private rented sector.

      So a change of policy on housing would seem to be a high priority, no matter what happened under Blair and Brown

      • markmyword49

        I agree that a change in policy is needed. However, I cannot see the Labour party being radical enough to change the system to one that provides the “social” housing of the size and type that a changing demographic of the future needs. They still fear saying public is just as good, if not better, in some cases than private.
        I don’t see a problem with landlords deciding not to have certain tenants as long as they don’t break the law. They are in that sector to make a profit and if changes of government policy make it unprofitable they are only doing what other private enterprise companies do.

        • ColinAdkins

          I agree with both of your comments but attitudes towards Right to Buy has also changed. In fact I even recall a right-winger Peter Hitchin saying on QT that the programme was a disaster.
          The equity in social housing was dispersed to lucky individuals who happened to be sitting in a council house at the time.
          But sureveys have shown that over time these people have realised their ‘profit’ and a large percentage of the former social housing stock is in the hands of private landlords who are increasing their rents.
          The ‘poster children’ for this process are that couple in Kent who are evicting all their tenants on housing benefit.

        • Mark Reilly

          It’s not so much a criticism of the Landlords – although I don’t think excluding people just because they claim HB is enlightened and could be considered as bigoted – the problem is that the majority of HB claimants are working and if these people are excluded from the private rented sector, and have problems raising deposits or simply do not have high enough wages for a mortgage, then you are creating a perfect storm

          and the only solution I can see is to bolster the stock of social housing

          • markmyword49

            More social housing is part of the answer. However, I’m in favour of Labour insisting employers pay a living wage. It would be a starting point to reduce benefit and other payments that are being used as subsidies by employers (and I blame Brown and Blair for not seeing what was happening). Housing Benefit could then start to be paid only to those in proper hardship.

          • Mark Reilly

            I totally agree with the Living Wage aspiration..but even at £11 an hour with two people working, the max sensible mortgage will be around £110K…which wouldn’t get you very far in the South East
            and if they demand a 20% deposit…you have a lot of people who can’t afford a family size home

          • Hugh

            That’s a joint income of £40k pa, and £20k of it tax free and before any tax credits or child benefit. Why £110k, given interest rates are so low? Even the French allow people to put a third of their monthly pay to service a mortgage.

          • Mark Reilly

            I was basing my estimates on what I believe to be safe multiples for buying a house, that were in use for around 100 years before the late 90s ie 3x single 2.5 x joint income.

            As for interest rates, can you guarantee they will stay low for the 25 year term of a Mortgage? When I bought my first flat in 1990 interest rates were 15%. It may be OTT slightly but when I move and get a new mortgage I always put in the 15% figure to assess affordability…just incase

            Surely we want a housing policy that delivers a stable mix housing market (privately owned/ privately rented & social housing) not the wild west of housing based on artificially low interest rates, unchecked income figures, high multiples of borrowing and rip of landlords…and yes a lot of this did exist under the Blair / Brown governments, but it doesn’t make it right or mean we can’t attempt to rectify it

          • markmyword49

            “Enlightenment” isn’t something the market and capitalism and it’s backers recognise. They only see profit as a motive.

      • Quiet_Sceptic

        So why is the housing market incapable of providing a solution?

        You can go into a shop and for most products, everything from washing machines to baked-beans, find a vast array of different priced and quality products.

        What’s so special about housing? What stops a business man or construction firm setting themselves up and building modest, affordable houses?

        That’s the question we need to answer.

        • Mark Reilly

          I would suggest there are three main reasons

          One is that housing is far from a “perfect market” there are lots of regulations on where and what you can build. Everything from Building regs to Green Belt

          The fact that there is a shortage of housing and suitable land to build it on, means that those companies in the Market can go for the maximum profit and if this can be obtained from city centre flats and executive detached housing then that is what they will build.

          Also house building is expensive, so the number of entrants to the market is small. So you have a small number of big players buying up the land (sitting on it if necessary) and then all delivering the same sort of housing.

          I think housing is a good example of a market that doesn’t work properly.

          • Quiet_Sceptic

            I agree with most of your points and I agree that the market isn’t working properly but I don’t think you can lay the blame wholly at the private sector, I think a good proportion of the fault lies with the state and the planning system.

            If land with planning permission is very scarce and hugely expensive then fitting in lots of homes by building high density flats isn’t only the most profitable action, it’s also the most logical action as it houses the most people in the least land – as demonstrated by numerous city centre council housing estates.

            I disagree that house building has to be some sort of natural oligopoly. Companies start small and grow, there’s no reason if the market was working well, that a small builder should start with small developments (1-2 homes) and grow into large companies building streets, even estates.

            The issue is land and planning, builders can’t get a steady supply of small plots with planning permission. The process is so long and slow that it’s only the big companies that have the time and the money, to sit and wait, to get developments through the system.

  • Grouchy Oldgit

    Council housing gave quality housing with security of tenure to millions of people. it worked well until decimated by Thatcher’s right to buy gave a windfall to a lucky few and misery for generations to come. Council / housing association housing should come back, and should be legally protected from being sold off.

    • ColinAdkins

      I agree entirely. When people bought for profit they were denying people an opportunity they were once given. They have since sold up and many former council homes are in the hands of private landlords.
      I recall once I lived in Willesden and I was in a pub when a fellow drinker was bemoaning the lack of council houses for his children. I asked him whether he had bought his own which he had and obviously didn’t see the connection. He also blamed immigrants which I thought was odd for someone of obvious Irish extraction!

      • treborc1

        I’m from German extraction what has that to do with it, I have lived in a council house for most of my life, my parents did not they bought, and while they struggled to pay for the house it was sold on after my mother died to pay for my old mans care.

        I believe in renting but I would have rather have been able to buy why not, but my wages were way to low as they are today, so we do nothing about low wages but promise affordable houses which are still to much for the poorest.

        but we better not forget who has taken the strain and that’s Housing associations.

    • Holly

      But it was working class people, probably from life long Labour voters, who bought their homes.
      Do Labour and their supporters really want the working class to aspire to anything?
      I know dozens of people, (who were usually menders, biscuit factory workers, TV assembly line workers, cleaners, or in some other dead end low paid work)who jumped at the chance to ‘move up a notch’, and more power to them for doing so.

      It has been the lack of new council houses that has caused a lot of the problems, along with unfetted immigration.

      Another one who air-brushes out that just over three years ago we had had a Labour government for over a decade.
      Slate Thatcher by all means, but don’t forget who was in power for long enough to fix the problem, but decided, we were not worth the effort.

      • Danny

        And you’re another one who air-brushes out that it was a Labour government that for over a decade offered a package remarkably similar to the neo-liberal agenda first set by Margaret Thatcher and continued by John Major.

        I’ve said it to you before, but I genuinely cannot understand how someone can be so passionately in support of Margaret Thatcher yet so vehemently embittered by an administration that she described as her greatest achievement.

        You are completely right to point out the gargantuan failings of Labour during their 13 years in government. You are emphatically wrong to solely blame the many, many faults with our country and our politics on Blair and Brown’s terms in office when they were an extension of Thatcher’s own, ill-founded and disastrous politics, something that she essentially confirmed herself.

        • Doug Smith

          There are a few people on both sides of the non-existent political divide who find comfort in believing there is a difference between the identical two main parties.

          I suppose if they like to spend their lives arguing in support of their respective imaginary alternatives it’ll keep ‘em out of mischief.

          • Danny

            Whilst I fear your correct with your oft-typed LibLabCon viewpoint, part of me is opening myself up to disappointment by erring towards the prospect that a post-2015 Labour administration might deviate slightly from the morally bankrupt politics that has plagued our country since before I was born.

            There is no doubt that there was little to choose between Thatcher/Major/Blair/Brown cartels and now you can chuck the Lib Dems into the mix through their cowardly propping up of a destructive government.

            However, a man who idolises a Marxist, (even if it is his Dad) who purports policies in support of small construction companies against the industry giants, to intervene with a corrupt and rigged energy market, lambasts the Daily Mail, criticises Murdoch and threatens to “land-grab” from developers hoarding land to line their already silk-woven pockets does not necessarily lend itself to the profile of another clone of the media-fellating, worker-loathing, banker-pawns that have been our Prime Ministers for every single day that I have existed.

          • Doug Smith

            Blair presented a radical programme in ’97, most significantly the promise of a ‘stake-holder economy’. He even tolerated talk of re-nationalisations. Opposed I.D. cards. Talked about an “ethical foreign policy”. It didn’t happen and today it all seems to be an impossible dream.

            And Blair won votes by the sackful.

            Miliband’s progressive ambitions are meagre in the extreme, if they exist at all. There is wishy-washy One Nation, which no-one understands. There’s Miliband’s intention to dump the unions – even Blair didn’t dare attempt this. The conference vote to renationalise the Royal Mail was immediately slapped down. And Miliband has already committed himself to a policy of military intervention.

            Well, yes, if you’re a political optimist, like me, you’ll be optimistic. But there’s no supporting evidence coming from Miliband’s direction.

          • Alexwilliamz

            Yep blair blew the best opportunity to change the culture and make up of the country for a generation. For that and the iraq war he has much to answer. The disaster of 2008 was the consequence of the wasted chances of those years. Despite that there were many progressive steps but the fundamental flaw was trying to prop up an unsustainable economic structure through public spending. Right wingers don’t get it but the prosperity and social stability we presently enjoy has been based on the very things they want to cut!

          • reformist lickspittle

            Well, I think I know who “Doug Smith” is now ;)

          • treborc1

            I see you made a spelling mistake and I’m loath to tell you about it but I will.

            But Blair won votes by the Lorry-load, surely you mean Tory load.

        • Holly

          I NEVER rated Blair, and I certainly NEVER rated Brown….
          But then again I DON’T rate Cameron, or many on his back benches either….

          And I am NOT blaming Labour, Blair, or Brown, for the many, many faults with our country…I am simply blaming them for the one’s that did not exist before they came to power, (but do now) and the faults that did exist, but they failed to fix, in thirteen years…..And a ‘boom’.

          ‘Gargantuan’, doesn’t come close.

      • ColinAdkins

        I wonder what there response would have been if when first seeking social housing they were told they couldn’t have one because they had all been sold and they needed to go into the private sector? Have does selling social housing at knock down prices differ from selling off the post office at a knock down price?

      • Mark Reilly

        The problem wasn’t that the people you know want to move up a notch, the problem was that they were sold council properties at reduced prices and the councils were not allowed to use the receipts to build more housing.

        The Thatcher sell off was aimed at reducing the number of council houses.

        The problem we have now is that many ordinary people cannot get mortgages to “get up a notch” and they will be the norm in the next few years.

        • Holly

          Well ask yourself, like I have done, why didn’t Labour sort this out, especially when they purposely added to,( the supposedly already existing housing shortage) when they sent out ‘search parties’ to get people from other countries to come here.

          The Thatcher sell off had an impact on hard working class, British tax paying Labour voters..
          The Labour sell off, also had an impact on hard working class British taxpaying Labour voters, they sold off our assets(gold) & gave away many of our jobs & houses to Foreigners, and… all our money to bankers

          It should be a slam dunk case of, who actually did the most harm to us working class Brits?

          • Danny

            There is a right answer to your question Holly. I think deep down you know what it is.

          • Holly

            I do.
            And looking at the state of the country today, it wasn’t Thatcher.

          • rekrab

            Holly I’m sympathetic to your stressful situation but don’t let it cloud you clarity, of course Thatcher was the instigator after all Blair followed her path as suggested in his memoirs.

          • treborc1

            The question is not that Blair followed her path but who’s path is Miliband now following and it’s looking a lot like Browns Blair’s so we’ve have had one massive long Tory fest. .

      • Monkey_Bach

        I can’t be bothered to write anything myself so here’s a URL instead to show why selling off massively discounted council houses to their tenants without building more than were lost has turned out to be a disaster for the nation although not for the profiteering.

        http://www.theguardian.com/commentisfree/2014/jan/14/housing-squalor-exploitation-where-labour-outrage-policy

        Eeek,

  • Mark Reilly

    Catch 22 if this is to be the major plank of the next election strategy, then going with it now will simply give the tories time to respond (and probably adopt the policy themselves…or something designed to sound the same)

    The Energy Price Freeze shows what happens

  • Colin McCulloch

    Looks good on paper, but Councils and Housing Associations will need to radically change current needs-based assessments for social housing back to choice-based lets, as the army of low-middle earners who would really benefit from the low rents in social housing will not benefit from a social housing boom under the current allocations rules.

    There’s no use building (for example) 500,000 social homes if they’re just going to go to current HB recipients only. We need affordable homes for all, not just the unemployed.

  • Quiet_Sceptic

    The fundamental issue which never seems to get asked or addressed, is why is the housing market broken? Most markets work reasonably well, why is housing so different, how does the planning system and land-banking distort the market? For all it’s good intentions, what impact does the state through the planning system have on pushing up prices and holding back real competition, stopping new companies entering the market?

    It would also, be nice to see something in our housing policies to check the growth of the private rental sector, perhaps reducing the tax allowance for mortgage interest?

    There seems something quite wrong to have a situation where at one end, a generation are priced out of home-ownership yet at the other, a growing number own several properties and build up property portfolios, buying up the properties that would have gone to young people and families.

    • Monkey_Bach

      What about some kind of private version of the infamous Bedroom Tax where under-occupying owner-occupiers pay higher rates of Council Tax based on how many spare bedrooms they have in their home and auxiliary properties?

      Just joking!

      (Far too progressive.)

      Eeek.

      • Quiet_Sceptic

        I support consistent and fair treatment, so yes if we keep the bedroom tax then I think similar rules should apply to OO who are claiming mortgage interest support.

        As for taxing owner-occupiers with empty rooms, well we don’t tax council, social or private tenants for empty bedrooms so no, don’t see why they should be singled out.

        • Monkey_Bach

          Bravo! Eeek.

  • Monkey_Bach

    I really hope that they mean whatever it is that Labour decides or ends up saying about housing this time around; it is incalculably damaging to political parties when politicians collectively and serially break their word about such important things. Shamefully Labour reneged on so many pledges during its time in government that before the last election the term “Brown promise” became synonymous with “lie”.

    Eeek.

  • Edward Carlsson Browne

    This is incredibly important. What’s more, it’s exactly the sort of proper Labour policy that is actually likely to appeal to the south. It’s too easily forgotten that housing need is greater here, because there’s less social housing available and we’re paying much more rent in the private sector. I think it’s an issue we missed in government largely because too many of our MPs came from areas with stable populations and large social housing stocks, so improving the stock was prioritised over expanding it. If we want to win and hold a decent amount of southern marginals, that order of priority needs to be reversed.

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  • http://dominicnaylor.com/ Dominic Naylor

    They have GOT to be decent homes, not the poor quality ‘shoe boxes’ that the House Building companies have littered our country with.

    They should have solar panels on them, well insulated, be environmentally friendly, spacious, decent sized windows at the right level so natural light can come in.

    They should have some decent character, be built in the right place, good transport links, schools, bike lanes.

    Green Space.

    And affordable.

  • swatnan

    At some point in time the Party is going to have to admit that The State can provide some services better than the Private Sector. And Housing is one of those services.
    That’s not to say that The Private Sector can’t build good Housing, they can, but its not affordable housing.

    • swatnan

      …. and I would disagree with some commentors here; it is not the job of Councils to build ‘people’s palaces'; the job of the Council is to provide affordable homes and in some cases flats, with basic ammenties, and to ensure that tenants keep them in decent order, and the Council duty to maintain repairs. If tenants want ‘palaces’ then tenants should look elsewhere and cough up the money and means themselves. Councils can also lead on design and sustainable materials and living, and safer homes, and provide community and social facilities. And basically set standards for good community housing estates.

  • Cllr Darren Price

    Yes, we need many more good quality homes, in the right places and built to suitably high standards. Sustainable homes in the widest definition of the term. We need them in all tenures too including council rented houses, RSL rented and shared-equity houses and private houses. However, this current Government’s ‘Help To Buy’ scheme is not the way to do this. Simply tickling the belly of the (Tory-funding) development industry and in re-inflating the housing bubble is not the way forward. We should really look at a proper commitment to repeal this damaging Tory policy. In my opinion it is the most damaging Tory housing policy since ‘Right To Buy’ – which incidentally we should have repealed in 1997 but never got around to.

    Instead, we need to develop a proper ‘Help to Build’ strategy, thinking in innovative ways how to tackle the shortage of housing; utilising brown filed sites and existing vacant buildings and above all else creating proper ‘places’ for people to live. Funding local authorities directly and bringing an end to land-banking and excessive profiteering in the private sector(whilst developing consistently poor products) . Incidentally what the private housebuilding sector needs least is another top-down reform of the planning system so we should tread carefully.

    Sadly, the lack of value that successive Government’s (including ours from ’97-’10) have placed on housing is illustrated by how many Ministers that there have been. It has been a revolving door department, a step up or down but not one to stay in for any length of time. I had a very positive chat on this very subject with Jack Dromey, the last shadow minister in Brighton, a couple of weeks later he was gone.

    I am passionate about good quality housing and placemaking, it’s my day job, but I also see the clear political value in addressing this pressing issue in a real and joined-up way. C’mon this is real Labour Party stuff! I don’t know Emma Reynolds, I have no idea of her experience in the area but I hope that she is here to stay for a while. :-)

    • rekrab

      Some positive stuff there Cllr Price, however like most you tend to follow the popular way! by inciting inclusive for all houses? the real problem is the severe lack of affordable renting homes, according too the BoE chief interests rates will rise when unemployment touches 7% meaning it could be sooner rather than later and an interest rate move will affect many peoples ability to afford mortgage repayment resulting in the need for more affordable rented homes.

      You rightly raise the question of the last labour governments inaction on this issue, please don’t push the mix bag message, we need over 1 million rented homes, traditional built to last and incorporated in the old-adage that every one deserve a decent home which is affordable.

  • robertcp

    Yes, we need to build more council houses. The housing market in this country is insane! Thankfully, I bought my flat during a brief period of sanity.

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