Tory dogma fuelled rough sleeping from Mrs T to Cameron – but Labour can help

After seven years of Tory failure, a change of direction in housing provision is desperately needed. Last week official figures showed an appalling 134 per cent in rough sleeping since 2010. Fortunately the Labour party is not only aware of this but has developed plans to build more new homes.

No more will all the emphasis be on owner-occupation. Instead council and housing association homes, as recommended by the Lyons Report, will have equal importance. Already Labour councils are typically building 1,000 more homes than Tory controlled neighbours.

Labour will not only build more but will insist on higher standards both in size and quality. To avoid the current urban sprawl, a new department of housing will promote a new generation of new towns.

There will also be a clampdown on the regular escalation in leasehold ground rents; the Land Registry will not be privatised; and the decision to abolish housing benefits for 18-21-year-olds will be reversed.

While developing these plans it became clear that the current crisis has been coming for at least 30 years. During this time the emphasis on owner occupation has created enormous disparities in individual wealth. But it has also meant that a vastly disproportionately investment has gone into largely unproductive private housing and has left lenders with an unpaid mortgage debt of £1.33 trillion, according to The Money Charity, and house prices – which represent the banker’s collateral – are so high that only the most affluent can afford to buy.

Our highly profitable construction industry cannot supply the 240,000 new homes needed annually because it makes its money supplying luxury apartments. These are not primarily homes but rather speculative investment tokens often bought by foreign millionaires – and some of them with dodgy money looking for a reliable laundry.

Another reason for the inability to deliver is the fact that the industry is dominated by about 40 large companies who operate what has been seen as a “semi-cartel”. These companies and the banks funding them will never jeopardise their profits or the banks’ security by allowing supply to meet demand.

These companies demonstrated their grip when Ucatt and other unions took them to court for forcing 3,213 skilled craftsmen onto the dole because their names appeared on a blacklist. The brutal efficiency of this list was demonstrated when in June 2015 eight of the largest of these companies, including Sir Robert McAlpine, Balfour Beatty and Costain, settled out of court a sum variously estimated at between £30m and £75m to compensate the men whose careers they had ruined. The chances are that these workers were not replaced and this is why these same companies now complain of a shortage of skilled craftsmen.

The control these companies exercise was made possible after right-to-buy (RTB) effectively halted the building of council houses (168,000 delivered in 1983 and just 1,320 in 2010). But that was not the only bread and butter work lost by small-and-medium-sized building firms (SMEs). There was also VAT on repairs and maintenance while new-build homes were VAT-free. Now the self-employed, for whom the tax often did not apply, could undercut the SMEs, resulting in a further loss of regular work and a huge reduction in small builders.

Both these actions also suited Margaret Thatcher’s promotion of the property owning democracy POD, but there were still the rent acts, which in one form or another provided tenancy agreements for mansion flats in Kensington and rent books for tenants of single rooms in Victorian conversions and every other form of dwelling in between. Tenants could not be sacked unless suitable alternative accommodation was provided and the free rent tribunals were always there to adjudicate on their suitability as well as on rent increases where thought to be unreasonable.

To Mrs T and her POD this was anathema and the rent acts were duly repealed in 1988. Now even the most affluent can only enjoy lifetime security of tenure while burdened with huge mortgages and repayments over 35 years taking at least 40 per cent of income. For the lucky few social housing can provide secure homes but private renting, now by force of circumstance the fastest growing form of home tenure, needs controls backed by free tribunals.

The City’s immediate reaction to Ed Milliband’s proposal for three year tenancies, with rent increases restricted to CPI inflation, saw £200m wiped in total from the shares of Barratt, Wimpey and Persimmon. Clearly there is no support for this solution from the square mile, probably taking in most Tories as well.

Homelessness and rough sleeping have doubled since 2010, which Shelter tells us, left 120,000 children with no secure home over Christmas. Fortunately Labour’s new department of housing will concentrate resources on social housing and more security for private tenants. Also the new Homes and Communities Agency will ensure that local people are first in the queue for new housing, which will also comply with certain minimum standards of insulation and room sizes.

Besides which sales under right-to-buy will be suspended unless the local authority can prove they will replace like for like. By concentrating on homes rather than house prices it is to be hoped that this sixth most prosperous country in the world will be rid of the dehumanising experience of homelessness and rough sleeping.