The Government’s intention to have the biggest Council House building programme since the 1940s and 50s will give immediate hope to the 134,210 homeless households, including 176,130 children, living in temporary accommodation and the 4,793 people sleeping rough. And as the “right to buy scheme” still, at the time of writing, applied in England (but not in Scotland or Wales) could get them on the housing ladder. …Although former Council Houses have been notoriously difficult to sell.
The programme will create work for some of the 1.01 million young people between the ages of 16 and 24 who are not in education or training, thereby also boosting the economy. It will divert public funds through Housing Benefit from unscrupulous landlords with houses of multiple occupation to Local Authorities at reduced cost. Therefore, economically it is a win win.
Although very much needed, is it a medium-term quick fix which could perpetuate the stigma and labelling associated with Council Houses? In recent times so called social housing (a dreadful term) has been included within new developments in search of integration but this has still attracted similar stigma and labelling.
Therefore, is this another case of addressing the symptoms and not the cause? Widening income inequality and increasing poverty are the great social evils of our time and the root cause of so many of today’s problems.
When I married in 1965 my wife and I were on low starter salaries and yet were able to save up for the deposit on a house (no financial help from our parents) by not going out during the year of our engagement and obtain a mortgage to buy a new two bedroomed semi-detached Wimpey House.
The average wage in 1965 was £800 per year and the average house price £3,500 which was 4.3 times the average salary (ours was £1,100 – 1.3 times the average salary). By 1980 the average salary had increased to £6,500 and the average house to £23,288 (3.5 times the average salary).
The average full-time salary in the UK in 2026 is £39,039 per year with a median salary of £31,584 including part time workers and the average cost of a house £270,000 – which is 8.5 times the median salary. And therein lies the problem.
In 1965, the chief executives of the UKs top hundred largest companies earned an average of roughly £18,000 to £24,000 per year which was 22 to 30 times average earnings. By 1980 the average earnings had increased to £6,500 and that of a Chief Executive of a top hundred company to £117,000 per year.
By 2026 the median pay package for a FTSE 100 CEO had grown to between £4.4m and £5.89m. This is 186 times median earnings.
This widening income inequality has escalated since the economic policies of the 1980s. As a first step perhaps, Government could consider raising the tax-free personal allowance to 60% of median household income (which would currently be £22,022) so that no one living in poverty ever had to pay income tax again.
Given there are 31,000 people in the UK being paid over £1m per year and the top tax band cuts in at £125,140 per year, there is room to make this cost neutral.
However, one cannot address this widening income inequality via income tax alone. Steps need to be taken to restrict excessive profiteering (most of the increased prices at the pumps and on utility bills manifested in increased profits for the companies) and tackle income inequality at source. Those at the top could still have their million-pound salaries if they paid those on whose hard work they depend proportionately.
According to Oxfam in its report “Takers not Makers” global billionaire wealth increased by £1.5 trillion in 2024. Elon Musk became the first trillionaire in 2026.
Unless Government addresses pay differentials, so that all employees get a fair and proportionate reward for their endeavours, chasing inward investment in search of growth will make the rich richer and create low paid jobs for the masses as it has for over forty years. The Resolution Foundation anticipates that if the economic forecasts and policies remain unchanged, an additional 1.5 million people, including 400,000 children will be in relative poverty in the UK by 2029 /30. Morris Pearl, Chair of the Patriotic Millionaires said: “Rising and extreme inequality threatens everything we hold dear: our democracies, our planet and our broader society”.
According to a recent study by Christopher Hoy who interviewed 9000 people in 8 countries who grossly underestimated the ratio of Chief Executives pay in the larger corporations, banks and utilities to the average pay of their employees believing it to be 18 times higher and wanted it to be 5 times. When told it could be as much as 269 times higher surprisingly it was the far-right voters who altered their views about redistribution the most. Even in Japan with the lowest ratio of 59 times, people thought it was 8 and wanted it to be 5.
Frequent surveys by The Equality Trust have shown there is growing recognition that the economy is a human made system and, as such, could be changed.
Income inequality must be central to Government Policy.
These ideas are developed further in my latest book A Better World.
* Chris Perry is a former Director of Social Services for South Glamorgan County Council, a former Director of Age Concern Hampshire, a former Non-Executive Director of the Winchester and Eastleigh Healthcare NHS Trust and a former presenter of an award-winning public affairs programme on Express FM.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
Dr Who or Terminator
Olly Lambert's The Devil in the Family: The Fall of Ruby Franke
Cystatin-C some thoughts and some references
Could water companies put up prices to pay for drought?
Like Trump, Farage cannot understand democracy
John Hann
Peter Wrigley
Jana
Peter Hirst
22 Comments
“ Government could consider raising the tax-free personal allowance to 60% of median household income (which would currently be £22,022) so that no one living in poverty ever had to pay income tax again”
This proposal would not remove a single person from poverty (using the current definition) since their income would still be less than 60% of median income, even though they would have more take-home income. However, increasing their income by the amount of income tax they would pay on their salary up to 60% of median income would remove people from poverty using the current definition.
It is time we had a measure of poverty that was linked to the cost of buying basic necessities rather than being linked to other people’s incomes.
I don’t care what it is called – clearly there is a need for new homes (not necessarily houses).
However, is there really any clear analysis of where the homes are really needed? All too easy for government to saddle areas with home-building requirements, often way out of scale with any existing or prospective infrastructure in terms of roads, health, transport and education. They carry on as if these issues are irrelevant. It’s a disaster.
If it were ‘homes for local people’, what would the requisite patterns of development look like?
Some great statistics followed by a confused muddle of non -answers. CEO pay isn’t the primary problem. You can’t tackle wealth inequality by twiddling with income inequality.
We live in a mad world where a wealth tax wouldn’t even make the richest worst off, and yet it is avoided like the plague by so called parties of the left. Billionaires have sucked all the growth out of capitalism. If Burhams £45 off your electricity bill has transformed your life, then lucky you, in the real world, people are stuffed. What level would https://www.libdemvoice.org/author/chris-perry like house prices to be ? 6 times average salary? 3.5 times? What are the implications of such a switch ? Just raising personal allowances will likely fuel house price inflation.
@Jana
The “basic necessities” include housing too. You might want to take a look at rental prices in your area and calculate what a young person would need to earn, after tax, to keep themselves above the poverty line.
You might well end up thinking the 60% of median incomes level is too conservative.
@Chris Perry “In recent times so called social housing (a dreadful term) has been included within new developments in search of integration but this has still attracted similar stigma and labelling.”
That assumes, which I don’t think is necessarily a valid assumption, that council housing will inevitably be stigmatised. Public housing is not uncommon across Europe and it is not always an option of last resort, as it wasn’t here until Thatcher deliberately sabotaged it; tenants were from a fairly wide spectrum of society.
I agree it will take a while for the stigma to change, but that doesn’t mean it shouldn’t be done.
@Jana. Actually it would take a number of people out of relative poverty according to current definitions because tax thresholds are personal while the poverty definition is based on median equivalised net household income. Those taken out of poverty would be two earner households.
Of course, the other taxes that would need to be raised would reduce the median net income sufficiently to take a number of single people out of relative poverty too. it still wouldn’t take many single earner couples out of relative poverty.
You are right though that greatly increased tax thresholds don’t help the poorest earners. For that you need UBI.
The amount of new houses built each year (council and other types) has hardly changed over many years – despite promises from the various political parties. Labour don’t seem to have made any progress in their first two years, why should we believe them now?
As a council tenant myself, I do sometimes take umbrage at the language used about us on here by perhaps upper middle class commenting rather than seeing us as residents in the same way that owner occupiers are etc. I am proud to be a council tenant and have no problem with the term ‘social’ housing. It’s called this because some tenants rent housing association properties not just council homes so it has a wider meaning.
Believe or not, council tenants are ‘still’ from a wide spectrum of society and different backgrounds today. Some in my block work full-time or part-time and some don’t. Where we all have common ground is on repairs being done on time, properties being kept in good order, and maintenance of estates as well as preserving our green spaces. The latter is very important as so many of us do not have sole use of gardens.
One of the main benefits of being a council or social housing tenant is the affordability of the rents compared to private housing – beyond the reach of many people in London.
And it can take years on the housing list before an applicant is allocated a council home. There are still many developers sitting on so may empty properties so councils should be allowed to seize them for social housing if they are left idle for a certain time.
I’m a little sceptical when the government announces what someone else is going to do. In this case, council house building requires the active participation of councils. Given that most are broke and / or in the middle of another round of disorganisation, I doubt it will happen.
Jason Connor as a council tenant i do take umbrage at the language used. And rightly so renters .council ,social , or private are a significant part of our adult population and deserve respect regardless of the form of their tenure . i said previously in another article by Vince Cable that many of the more affordable homes are rarely on the market for long swallowed up by buy to rent landlords and converted into houses of multiple occupation HMOs putting well beyond the need for family housing this leads to many tenants ending up in overcrowded and sadly in some cases poorly repaired property . I do not believe in this service led economy wages will every really catch up so that lower income households can fairly compete in the housing market ,social housing be it council ,housing association or local housing trust with mixed forms of tenure is the only way to practically fill the gap .
This debate is rather academic so long as the construction industry’s skill shortages remain unsolved. This report last year from a large social landlord throws some light: https://www.placesforpeople.co.uk/pfp-thrive/insights-tools/the-uk-construction-skills-shortage/
@Peter Martin
“ You might well end up thinking the 60% of median incomes level is too conservative”
You make my point for me. A definition of poverty based on an average of what other people are earning does not tell us whether individuals are able to afford the basics of life or not. It also means that is we could quadruple everyone’s income while leaving prices unaffected, the number poverty of people living in poverty would be completely unaltered though everyone would be massively better off, including those ‘living in poverty.’
When poverty is defined as incomes less than 60% of the median income, the official rate of poverty can be reduced by cutting the incomes of everyone above 60% of the median income, even though those ‘in poverty’ would have exactly the same income to spend.
@Peter Martin and Jana
I think I’m with Jana on this one. The real test of a satisfactory level of income/resources should surely be an amount, taking taxation into account, that allows individuals not to be enslaved by poverty, conformity or ignorance. That’s not a relative amount, but an absolute one.
@ Jana and Tristan,
You’re right to suggest that using a 60% of median income level to define poverty has its flaws. It ignores ownership of assets with housing being the main one that comes to mind. It also ignores regional differences. It’s possible to live better on a given income in a less affluent area.
The last point also shows why the relativity of income can’t be totally discarded from any formula used to calculate poverty. People, for example can be worse off in London than if they lived in Middlesbrough because others will have higher income there. So they will be more likely to be outbid on available accommodation and everything else too. Prices will be generally higher because other Londoners have more spending power.
In other words, Jana’s argument of ” it also means that is we could quadruple everyone’s income while leaving prices unaffected” is unrealistic. Prices would still be affected even if the change was far less than a factor of 4.
I would not be surprised if the ‘NEETS’ are steered into the construction industries.There are many jobs in the field from labourer to architect. The social stigma mentioned has to be combated cos, as said, it is an accepted housing style in Europe.
Putting aside all the financial discussions regarding income and wealth redistribution, and the sheer cost of building those 1,500,000 new homes, which issues are crucial, I fully agree, we are also faced with two immensely practical problems.
1. Where do we get the trained artisans (bricklayers, electricians, plumbers, architects, etc) to physically undertake the design, construction and fitting out of that vast number of new properties; and it we need to train extra people for these roles (in their thousands), where do we get the trainers and to fund the practical abilities to train them?
2. Exactly where are we going to build these additional homes? Agreed that freeing up and reforming the planning system (and that means also increasing the capacity of planning authorities) will help immensely. But we still face massive opposition from nimby residents and environmental protectionists who for entirely understandable reasons do not wish to see their own communities, or farming and recreational land built on, or see national park and other protected spaces taken over. But inevitably the massive housing projects involved (including the essential publlc infrastructure to accompany enlarged communities) is going to change the nature of the communities involved. With this in mind, I ask again – where (precisely where) are we going to locate these new or massively expanded cities. towns and villages?
Prefabs?
“where (precisely where) are we going to locate these new or massively expanded cities. towns and villages?”
It would make sense to firstly make better use of the housing stock we have. Currently there are more than a million empty homes. Parts of London are becoming depopulated as residents move out and leave their homes vacant rather than renting them out or selling them.
https://www.actiononemptyhomes.org/
@Jason Connor
“There are still many developers sitting on so may empty properties so councils should be allowed to seize them for social housing if they are left idle for a certain time.”
This sounds reasonable. However there might be situations where there are problems e.g. possibly long delays in dealing with the estate of a deceased person.
e.g. if the deceased had just purchased a new property but has not left a valid will and there are difficulties in tracking down anyone entitled to a share of the estate according to the rules .
https://www.gov.uk/applying-for-probate/if-theres-not-a-will
Housing is the symptom, not the disease. But the money at the top isn’t sitting in payslips but in assets, and homes are the favourite. An average home in England now costs 7.6 times a typical salary. In London it’s 10.6, and in 19 of our 33 boroughs it’s over 12. You can’t fix that through income tax, because the wealth isn’t in income. Tax the wealth parked in bricks, not the work – and build. Isn’t that where the inequality debate should start?
Much of the stigma surrounding council homes rests in the design of such properties and tower blocks in particular. Building tower blocks addresses housing shortages in high-density, expensive cities by providing more homes per acre. However, they risk poor social cohesion, high maintenance costs, and significant safety concerns. Proper management and resident-focused design determine whether high-rises succeed. Post- Grenfell, i hope developers take seriously the need for well designed, energy efficient homes for the less well off.
A wealth tax would increase the income of the Government but not of the lower paid and would be dealing with the symptom and not the cause. In 1980 the average chief executive of the top 100 companies was paid 18 times median earnings. In 2026 it is 186 times. This is what has enabled them to invest in property and fuel wealth. A wealth tax would not stop this and might even accelerate it.