Where is Labour going on housing?

27th September, 2014 12:30 pm

If Labour Conference was great for the Health Service, it was something of a disaster for housing. Statements by the Treasury team will make it very difficult for Labour to meet its own target of 200,000 new homes a year.

The house building figures are well known and they are truly dreadful. We have failed to build enough homes for a generation and now we face at least another five years of inadequate supply even if Labour wins.

It is well known that the private sector and housing associations could do more, but not enough to be transformative. There is no silver bullet, as Labour’s Lyons Commission on housing delivery will show when it reports shortly, but it is widely accepted that it is only by unleashing councils that real inroads can be made into the problem of housing supply at affordable prices.

New_House_Building_on_Priestgate_-_geograph.org.uk_-_333665

Most people went to Labour Conference expecting to hear a confident message that Labour would lift the Tory ‘cap’ on borrowing for council house building. But the opposite was the case, with Ed Balls and Chris Leslie toughening their fiscal policy and ruling out any increase in borrowing, even for council housebuilding.

Of course it can be argued that ruling out extra borrowing that adds to government debt or has to be paid for from taxes is a rational policy, but council housing investment needn’t do either. Councils have substantial potential to finance new investment from their rental income. The Treasury Team seem to have forgotten that new council houses – as opposed to, say, hospitals or schools – are funded from charges (rents) not taxes. And the borrowing only counts against national debt because of specific and restrictive Treasury rules which no other country uses – one of the reasons why they perform better than us in producing social housing. New council housing also saves money year on year in housing benefit compared to private rent levels.

Putting housing investment in competition with health and education misrepresents housing’s unique case. Of course, new schools and hospitals are highly desirable, but because they provide services that are free to the public, the investment inescapably boosts government debt and adds to taxes. Housing is different.

Labour must have a decent housing offer at the election – and the Treasury team must revisit this issue.

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  • Leon Wolfeson

    Yup, absolute disaster. Back to the drawing board.

    I suggest –

    * Temporary rent caps (to be revisited in 5 years), based on beds and room area, and energy efficiency (to encourage improvement of housing stock). These are necessary only so long as we have a significant shortage, and can probably be slowly eased and removed over a few decades as we build houses.

    * Significant taxation on empty houses
    * Significant taxation on empty brownfield land, this tax to be based on the number of tax years the land has been empty. There should always be an option to surrender the land to the local authority in lieu of payment.

    * Planning permission to be time-limited, with suspension of the “brownfield land” tax, but that tax to become due at the end of the period unless the property is in use.

    * Massive council house building programs on brownfield land. Mid-rise permanent housing in the main, but with some high-rise for younger people, on 3-year fixed leases.

    • gunnerbear

      Hellfire…..I can see lots of old firms going ….”Yep….have the land….” leaving local taxpayers with huge clean up costs.

      • Leon Wolfeson

        But, the taxpayer gets the land. And that’s an asset.

        (Also, sure, if there was say something toxic there like asbestos, it could be worded such that the Council could just bill the former owner for it)

        • gunnerbear

          And the firms would tie the Council up in the Courts for years pointing out that they were ‘managing the land issue’ for ages prior to the Council coming along and demanding unsuitable polluted land for housing.

          • Leon Wolfeson

            Eh? The firm would have chosen to surrender the assets in lieu of tax.
            The council discovers problem, calls in assessors, levies a charge according to the law on the firm.

            No council “demands” for the land, no lawsuits.

            Primary legislation can be very clear on this.

    • gunnerbear

      Why high rise? People want good ‘ol’ fashioned Council House semis’ – not rabbit hutches or high rise? Would you live in a highrise?

      • Leon Wolfeson

        Read again. I didn’t suggest widespread building of high-rise (mid-rise, yes, there’s plenty of evidence you can have decent communities there).

        I suggested that there be a high-rise *element* for younger people, on 3 year short-term fixed leases. We’re critically short of that sort of housing – you could even have i.e. shared kitchens for cheaper units.

  • Daniel Speight

    Unfortunately it’s now fairly obvious that Douglas Alexander is leading the Labour Party into next year’s election with the ‘limited offer’ or 35% strategy. That he denied he would do this just a few months back just goes to confirm the public perception that he like other politicians is a liar.

    The shame is that if it all goes wrong next year the originators of this idea will not take the blame and they, the Blairites and Progress wing, will quite happily blame Ed Miliband and anyone who tried to turn back the drift to the right of the party.

    Maybe it’s not too late to change and for the party to offer the public real change from the Westminster consensus. Unlikely I know, and far more likely is UKIP and the SNP will do well offering fake change.

    • treborc1

      UKIP and the SNP well ask the people who are sick disabled or paying the bedroom tax if they see the SNP as fake, labour’s offer of getting rid of the bed room tax to me is just as fake because they did not tell us how they intend to cut welfare. Labour are the one who are not telling us the truth. in Scotland the students, the sick the disabled, and the poor are getting something they are not voting labour..

  • mollie collins

    until conference I had heard Ed Balls denouncing Tory austerity and claiming investment in ‘housing’ and infrastructure would promote growth in the economy and that austerity was only increasing the deficit. I believe that to be true. I worked in a local authority housing department where until Thatcher council housing was a win win policy. Her ideological dislike of council housing was demonstrated when she moved tenants out of Westminster, converted their housing into yuppie apartments thus ensuring Westminster as a Tory seat. The rental income to councils on property acquired in the 30’s has been lost to councils since the sell off to tenants. Those houses were fully paid for way back so were the nations asset, sold off like railways, energy, water, railways and hospitals for the mentally ill and those with learning difficulties. I am alarmed that the Labour front bench, with the exceptions of Andy Burnham and Sadiq Khan failed to demonstrate any understanding of their constituents needs and how remote they seem from the electorate. The Westminster game they all play alienates most of the electorate from voting at all ( a good 30%) and leaves the bulk of old Labour voters no choice but to vote for the socialist policies of the Green Party. .

    • gunnerbear

      Err…I don’t think that was Mrs. T. I think that was another ‘Tory Woman’ who eventually did a runner to parts foreign.

      • mollie collins

        Shirley Porter was in cohoots with Margaret Thatcher. I was working in a London local authority at the time. Eventually Shirley Porter was fined for her illegal activities but not sure s he ever paid up. Margaret Thatchers ideology was to disappear council housing, miners, unions. Any organisation that had a potential to give labour votes.

    • Leon Wolfeson

      No, there’s plenty of choices other than a party with some “socialist” policies, but who are centralist and have some very nasty anti-science policies.

      In fact, most people who Labour left behind are in that category called “not voting”, or will vote for local parties.

  • Wolves_Phil

    Despite their lack of plans for housing capital investment, it’s not true that Labour doesn’t have any significant plans for public sector capital investment in general. They’re quite happy to go along with Osborne’s plans to commit £50bn to HS2.

    What sort of priorities are those?

  • MrSauce

    There really are a lot of empty houses up North.

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