Why Labour must start thinking differently about housing in Wales and recapture the confidence to be radical

By Huw Lewis

It is nearly a year since the collapse of Lehmann Brothers had politicians, economists and journalists speculating about the looming financial storm. Central to those concerns were how this macroeconomic implosion would impact on the “real” economy; those bread and butter components of everyday life – jobs, wages and housing. Some eleven months on, here in Wales the inability to get on the housing ladder is one of the most marked and obvious results of the banking calamity.

We should not be surprised. Consider the spark that lit the banking bonfire – the collapse of the unsustainable American ‘sub-prime’ mortgage lending schemes. Proof that current thinking about housing, and ownership in particular, had become totally detached from reality. The 125% mortgages here too were suddenly exposed as dangerous folly. Now, as the media focus shifts on to the need for better banking regulation and the bonus culture, it is my hope that that first immediate lesson of the crash is not lost – the need to start thinking very differently about housing.

Yes, the sub-prime market was driven by bankers’ greed and unacceptable risk taking, but underpinning it was an aspiration amongst ordinary, working people to own their own home and build a better life for themselves and their families.

Housing is not an issue that excites volatile political debate, it is almost impossible, for example, to imagine passions being raised to the level we have seen on the Tory splits on the NHS. And yet, everything starts with the home. If you get that right, every other element of social policy becomes easier. Get it wrong, and problems around anti-social behaviour, family breakdown, schooling and health can all become intractable.

Good quality, affordable housing provides the basis for strong communities, a society where people have the space to thrive and prosper, innovate and succeed. Access to decent housing is essential if we are ever to achieve Labour’s over-arching aims – a more socially just society, ending child poverty and building a healthier, happier and more equal Britain.

In Wales, the Labour-led Assembly Government has already taken positive action, recently releasing £42million for affordable homes from it’s Strategic Capital Investment Fund and supporting homeowners through their Mortgage Rescure Action Plan. These are welcome steps that will make a big difference to the families who stand to benefit, but it does not represent the necessary sea-change required in how people will access housing in the future.

The seemingly inevitable belt tightening, and restrictions on capital expenditure, combined with a risk averse and more tightly regulated approach to lending will lead to many more families and individuals being caught in the gap between affordable renting and ownership – the so called ‘intermediate’ market.

Helping these people – by delivering more housing, for less money, and finding new ways to break down barriers to access – should be at the heart of our agenda for the next decade. For the Welsh Assembly Government this will require a willingness to try something quite different in the future.

In particular, I believe we should embrace the co-operative and mutual sector and their models for affordable housing delivery. As I argued in a recent pamphlet on the subject I authored for the Wales 20:20 think tank, all too often simple, radical but workable ideas from our sister party are dismissed as too different, too difficult to implement. This owes, I think, to a historic misunderstanding of the Co-op Party amongst some in the Labour movement, a hurdle that shrinking budgets demand that we overcome. As Alun Michael put it in the foreword:

“Why treat the safest option as if it’s riskier than “commercial” alternatives?”

In Wales, I believe we are uniquely placed to be at the forefront of this new approach to housing. After all, a sense of fairness, radicalism and community – the desire to build a better society – are at the very core of the Welsh political character.

With this in mind, over the last few months I have repeatedly championed the Co-op Party’s housing policy ‘New Foundations’. It rests upon the principle of separating the value of land from the homes built upon it by taking the land out of the market via a Community Land Trust. Affordability for residents is guaranteed, as monthly payments are flexible and based on an affordable percentage of income. Furthermore – and perhaps crucially, given the economic backdrop – the structure of equity arrangements means that any public subsidy is ‘locked in’. In short, the housing will remain affordable for generations to come.

Wales has never been short of Labour politicians unafraid to rock the boat. Keir Hardie, Nye Bevan, James Griffiths, Jim Callaghan and Neil Kinnock each had a vital role in shaping the history and development of the Labour movement – they carved out those places in history because they were unafraid of change. Indeed they saw radical change as the only way to deliver a better deal for deprived communities.

And whilst the fire and the rhetoric of these political greats are well known throughout the movement, less talked about is the pragmatism at the heart of their work. The NHS, probably our party’s single greatest achievement, was partly inspired by Aneurin Bevan’s experience of the Tredegar Medical Aid Society and life in the South Wales of the 1920s and 1930s. Welsh Labour at its best has always allied steely pragmatism – a commitment to what works – with the argument for change.

There are already a smattering of small-scale housing pilots based on the community land trust principle up and running in parts of rural Wales, but we need to be much more ambitious than that. Examples from across the world demonstrate that this model can deliver housing on a much larger scale – and in urban areas as well as rural. In my view, as well as delivering more affordable housing, if implemented properly, such schemes have the potential to become a driver for the regeneration of whole communities.

It is right that we continue to draw strength and inspiration from achievements in the past, but despite our heroes and our history, recent election results in Wales have demonstrated that it is not good enough merely to bask in the glory of the past – we can once again become the ‘shop window’ for British radical Labour politics. A new direction in Welsh housing policy would be a good start.