Housing: of course there are more questions than answers

Earlier today, m’learned colleague Sara Bedford penned a piece responding to David Cameron’s off-the-cuff policy-making on the issue of tenure in social housing.

Her piece has unreasonably taken flak from our valued community of commenters for asking more questions than she answered.

But housing is one of the thornier issues facing any government, and like so many big problems, of course there are more questions than answers.  No-one disputes that were we are now is not ideal. There aren’t enough homes. People are overcrowded. Others are overhoused. Houses cost too much more than most people earn for many people to be able to afford to buy one. But houses are also most people’s only major asset so there is no appetite for making them less valuable.

Everyone disputes the destination. Do we build more homes? Existing homeowners don’t want the supply of housing diluted, thus devaluing their own investment; nor do they want any new council housing to be built anywhere near the most expensive thing they own. Existing council tenants unsurprisingly love the Right To Buy, which is by far the cheapest way of acquiring a house. Similarly those tenants with no intention of converting their secure tenancy into a tangible asset rather like the fact that the house they were allocated in their teens when they had young children is still theirs to allocate as they please in a whole new world fifty years later.

In a context where no-one knows where we’re going how is it surprising that there are questions to answer about how we get there?

And how, in all the hours of debate there have been on this topic in the last 24 hours, have so few people remembered that this too was floated as Labour party policy in very recent past? Ruth Kelly mooted it as a possible solution in 2007. (My google-fu is failing me today, and I can’t find what ultimately happened to her idea.)

And what has Labour contributed to the housing debate over the last thirteen years in power?  So little progress was made under Tony Blair in tackling many of the major issues that Gordon Brown had to make housing the major focus of his years in Number 10. And his major focus seems to have achieved little more than Tony before him.

The major plank of Labour’s attitude towards council housing was that it should end.

Labour might have made a substantial carrot available to fund “Decent Homes” improvements, but this money was only available to councils that stopped managing their housing stock themselves and farmed the responsibility to an often remote Registered Social Landlord, an Arms-Length Management Organisation or undertake a Large Scale Voluntary Transfer.

The complexity of each of these options was so huge that vast sums of money intended for improvement of council housing and investment in tenants leaked away in the creation of new bureaucracies. Tenants organisations demanded the “fourth option” which was to be allowed to have the money without wasting millions transferring homes – and Labour spent 13 years resisting that path.

Not, of course, that that stopped some local Labour parties from mendacious attempts to campaign on the issue. In Chesterfield for years, Chesterfield Labour accused the Liberal Democrats running the council of wanting to sell off the council houses over half of the town’s residents lived in when the only people wanting council houses sold were the Labour government!

And for all of the last thirteen years, the stocks of council houses have declined as many thousands of people exercised their right to buy.  Under Thatcher, councils were prevented from using the money raised to build more council houses; under Labour these rules were supposedly relaxed. That so few councils have built more homes is testament to the failure of this policy.  Labour could find millions to invest in starting ALMOs, propping up RSLs and encouraging LSVTs, but when it came to building new houses for council tenants, the coffers were bare.

Labour’s record in council housing was terrible.  The waiting lists doubled; housing was compulsorily removed from accountable local authorities and fewer new social homes were built than under the Conservatives.  It’s no wonder it’s now time for a new approach.

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  • Erm…

    So you believe a valid answer to Sara’s many questions is to slag off Labour?

    The Liberal Democrats are doomed. The crime is that you just don’t see why.

  • @Alex Foster.It was beckett who muted the idea in 2008 but it was kicked into touch because the recession happened .http://www.timesonline.co.uk/tol/news/politics/article5120047.ece

  • FFS when will you realise that it’s not all about Labour anymore – they are NOT THE GOVERNMENT.

    Time to take some responsibility and show some leadership.

  • Hughes has apparently changed his tune. Knobbled by the leadership or was he misrepresented first time round?

  • The response of Labour supporters who post on this site is typified by Joe: “FFS when will you realise it’s not all about Labour anymore – they are NOT THE GOVERNMENT.”

    I think we realise that actually, but we are discussing problems which, for the most part, have not arisen in the three months since the Coalition has been in power. It is perfectly legitimate for us to contextualise the problems which we are facing today, and the context is that we have had 13 years of a Labour government which despite its achievements in implementing the national minimum wage (a Liberal idea), independence for the Bank of England (a Liberal idea), tax credits (a Liberal idea, though not the way Gordon Brown implemented it), and improving the NHS, nonetheless failed to achieve much in other areas including the one under discussion here, housing.

    Every time there is a change of government the incoming government spends its first term blaming its predecessor for all the problems it has to tackle, and with some justification. So, Labour trolls, by all means attack us for things we are responsible for, like the Referendum Bill (which I mostly agree with you upon), but washing your hands of the problems that developed over your time in power isn’t going to convince me.

  • Tony Hill: Nonsense. I have to go soon and don’t have time to check whether the Lib Dems supported some of those policies as well as Labour at the time, but I know for certain that the Lib Dems opposed the minimum wage.

    I agree that Labour took too much from liberalism, though. Far too much, just not the things you’re trying to pass off as liberal.

  • Mark Wilson 4th Aug '10 - 6:53pm

    Can I commend Alex’s full and rounded piece about Social Housing . I have been and am still involved in all aspects of Social Housing whether that be freom the Councillor’s perspective, Housing Management and even directly involved in Consultancy Work on Housing Options Appraisals. I think the only issue I would take with Alex is that it does not help the debtate by identifying hypocrisy from any Political Party involved in this issue, simply because the issue is complex and cannot be addressed by soundbites.
    If we genuinely want blue sky thinking on this issue and I thought that’s what Liberals are about then we should be addressing the obstacles to Housing Reform and come up with answers to them.
    1, Can a “Social Housing Policy” be expected to meet the demands of an increasing population however that increase comes about?
    2. How should the issue of the “Green belt” be addressed to meet just the demands of Local Housing Policies irrespective of the demands of National Policy?
    3. Should London Borough’s share responsibilities for Social Housing, or is the answer to increase the pressure to get rid of London Weighting and it s effects on property prices?
    4. Private Landlords must agree to longer tenancies if they are to get any help at all from Housing Benefit Claimants, or must consider submitting themselves to “Rent Control” arrangements as in the US.
    Answers please? The we mightn start making some progress on this issue

  • I’m genuinely a bit baffled by all of this. I am a Lib Dem, but don’t want to be making this party political because I’m genuinely just unsure about the policy issues here. Would welcome any clarity anyone offers.

    There are a few different issues with what Cameron said that would seem to me to need clarifying.

    1. Would there be an effective rubber stamp on tenancy renewals if it was clear no circumstances have changed? If so, then the claim of homelessness creation – heavily hinted at by reactions to the comment – would be invalid.

    2. Could there be any misincentivisation? For example, would there be any danger of a parent not seeking work six months before their tenancy is up for fear of upheaval that could be avoided if they remained unemployed?

    3. Would those with oversized housing (ie, parents whose children have moved out) only be made to move if smaller housing was made available?

    If these could be cleared up then perhaps there might not be such vociferous opposition. The fundamental question I have asked, and have yet to be given an answer, is this: If there is a shortage of family homes and there are people living in family homes who could live in a bungalow or a flat, on what grounds can we justify keeping vulnerably housed families waiting while individuals or couples live in family sized homes?

    Any answers to that question would be very much welcomed.

  • While social housing undeniably withered under Labour (though continuing an inherited downward trend) it has been on the up in recent years and has held up in the recession while private sector building fell off a cliff.

    So when Grant Shapps talks about the lowest house building since 1924, it is worth keeping in mind what he actually means.

    See this article for more info http://bit.ly/dphyVR

  • Mike…”I know for certain that the LibDems opposed the minimum wage”. LibDem Manifesto 1997: “Encourage a flexible labour market , while protecting the low paid with a regionally variable, minimum hourly rate”.

  • @tonyhill: I think it’s clear from the comment of yours that I was replying to- “national minimum wage (a Liberal idea)”- shows that I was referring to the national minimum wage, not a regionally variable minimum wage that the Lib Dems wanted. They called the national minimum wage “misconcieved” and said it “sets a dangerous precedent” so to look back and call it a “Liberal idea” is nonsense.

  • Okay, rather than “misconcieved” it was probably “misconceived”.

  • Christine Headley 4th Aug '10 - 11:13pm

    “Labour might have made a substantial carrot available to fund “Decent Homes” improvements, but this money was only available to councils that stopped managing their housing stock themselves and farmed the responsibility to an often remote Registered Social Landlord, an Arms-Length Management Organisation or undertake a Large Scale Voluntary Transfer.”

    This really surprises me. I admit that, for a number of years, I wasn’t actively involved in politics and I wasn’t paying attention to the minutiae of what was going on in social housing. However, I am now on Stroud District Council. We still own our housing stock, and we are putting a lot of effort into Decent Homes.

  • I think that is splitting hairs Mike – it was the Tories who opposed the idea of a minimum wage as such; Liberals and Liberal Democrats tend to believe that a regionally variable minimum wage would deliver a more effectively egalitarian outcome than a national minimum wage that does not take account of local circumstances, such as the higher costs of living somewhere like London.

  • Alex – your basic point that we are a long way from where we want to be and that we need some real thinking is sound. Imagine that we restricted the amount of cookers available so that many people didn’t have one, but that those who did owned something worth a fortune. Surely we would prefer to move away from that world to one in which cookers were cheap and everyone had one? Isn’t it the same with housing? If prices fall by 2% in nominal terms each year there are no issues of negative equity, but over 10 years or so the ratio of housing costs to incomes would fall dramatically. All we need to do is build more houses – my centre forum paper sets out how to get local democratic support for this.
    Best wishes, Tim (Columnist, Inside Housing magazine)

  • Personally, I think the whole brouhaha has been beneficial for highlighting a real issue which has long been neglected. If it spurs some new thinking, that would be great although I am with those who believe that the fairly simple option of building more homes has to be a key part of any development.

    For example, one point which I was not aware of was the fact that children can inherit tenancies. Whilst I am sceptical of the merits of fixed term tenancies in practice, it seems completely wrong that children can inherit tenancies….. creates completely the wrong incentives and something which I would hope we could all agree should be abolished.

  • if people talk like a tory behave like a tory and have the same values as a tory then they are a tory

  • Some of the comments on this issue have been mind-boggling. I did not know the Lib Dems viewed council house tenants quite like this. I agree there are many questions about housing – I did not expect all of them to focus on how to get council house tenants out of their properties when The Man in Whitehall deems they’re too good for them. I thought some might have looked at the inequity of the private housing market too (as if the issues can be separated!), and the overall shortfall.

    If you want a conversation about the fairness of inheritied tenancies (would love to see your stats on how much that takes place) and ‘over-housing’ in the social housing sector, wouldn’t it also be interesting to have one about the fairness of asset inheritance and ‘over-housing’ in the private sector? Or is the ‘private good, public bad’ ideology of the Tories already fully absorbed?

  • One of the problems with fixed term tenancies is that you will have cases that challenge the fairness of the essential arrangement. For example, everyone says that it is unfair for tenancies to be passed on to children, however, what if the child is 18? Would we all want the home taken away from the child in that case? I would hope not. So, if fixed term tenancies are to become policy, we MUST have safeguards and balances to allow flexible solutions to individual situations.

    As a side note: I think the attraction of lifelong tenancies is that it solves an individual’s housing situation, once and for all, in the simplest possible manner. As such, it is highly effective at permanently removing the possibility of homeless destitution from a family. Just a thought.

  • not many people inherit a tenancy – you have to be formally living there at the time of the principal occupent’s death. I am sure some people manage to scam it, but basically it is to stop orphans losing their home. It also protects those who have cared for an elderly or disabled relative as a live in carer.

  • It’s amazing how much upset there is about this, and what kind of issues are deemed unacceptable for council tenants, when people who have to rent in the private sector have to deal with it every day.

    Has anybody ever worried about people thrown out of their homes or having their rent raised to unaffordable levels by private landlords?

    If just a little bit of all this energetic outrage were invested in reforming laws controllinjg private letting, people might not be quite so fearful of losing a council house.

    We have an awful two-class system here among those who don’t own their house: those who have council houses and those who don’t.

    I’d like to see a right to guaranteed long-term tenancy (circumstances permitting) introduced to private letting – many continental countries do this, and no, it’s not a raving left-wing policy if drafted correctly.

    Somebody should also look at the sort of reasoning that can be used to raise rents for private accommodation.

    I am really annoyed that most people don’t seem to see that this needs to be tackled in concert with council housing shortages.

  • Peter Venables 5th Aug '10 - 11:35am


    I agree with your post, the debate around this and other social issues has become-my life is shit, why shouldn’t their life be shit also. It’s hardly the inspiring, progressive politics of hope. Build more homes, introduce European style rented property rights, and stop this poor versus the even poorer politics.(and yes, also reform social housing)

  • Matthew Huntbach 5th Aug '10 - 12:32pm

    I agree the line “FFS when will you realise that it’s not all about Labour anymore – they are NOT THE GOVERNMENT” is not a good one. That style of government-opposition where the opposition party acts as if everything difficult the government has to do is done because of a personal malicious nature of the individuals in the government and their political party is enormously damaging to the development of decent policy and to democracy itself. For myself, I have always believed in and actually practiced constructive opposition. That means if you are the opposition, you look at what the government is doing and you say to yourself, “OK, what would I be doing if I were in their place?”. If you can see the reality of the situation is that it would not be that much different to what the government is doing, then you do NOT issue screaming abuse at the government, making out all they are doing is due to their evil nature. One of the reasons I despise the Labour Party is that my experience of them is that this sort of screaming abuse is very much the style they tend to adopt in opposition, particularly when they get beaten in places where they have come to assume they had a natural right to be the lords and masters. That is why some of the nastiest political situations are where the Liberals or LibDems now have taken on and beaten Labour in their heartland. Trying to avoid this happening was very much part of the style I adopted when I was active in LB Lewisham.

    Given that it was only three months ago that Labour was in government, we don’t even have to ask them “What would you do to solve the housing crisis?” because we know from what they were doing then, basically f*** all.

    In many ways, housing is the root of the British social and economic crisis. The unaffordability of housing for anyone who has just their own income to buy it is a huge contributing factor to social problems. The idea that housing is an “investment” rather than a place to live has hugely distorted the market, leading to this unaffordability, and to the mortgage lending boom and bust which leaves our economy in its current state. Those with housing wealth passing it on down the generations and excluding those without it from having a chance of decent housing is the biggest cause of the growing divide between rich and poor in this country. The anxiety over having to take on an uncomfortably large mortgage and the fear of what happens to it if one loses one’s job is a major cause of unhappiness, depression, family breakdown, and poor productivity. Yet those who are securely housed have come to look on it as a cash cow, and they are supported to the hilt by all the major newspapers, meaning that the merest hint of an adjustment to turn housing back into somewhere to live by reducing its cash-cow nature is electorally impossible.

    If we are to get out of this, we need government and opposition over it to be constructive. With destructive opposition, government will stick to the safest option, which is to let things drift and this WILL as it has been doing for 30 years carry on the destruction of our country.

    Yes, the fatal move in this was made 30 years ago by Mrs Thatcher’s government. The destruction of council housing without any planned replacement led to what we have now. Mrs Thatcher has been put forward, for example in a Guardian comment article just a couple of days ago by someone who didn’t think he was endorsing her lying propaganda but was, as all abut “reward for hard work”. Nonsense, she was about the exact opposite – the centre piece of her approach was that money was made not through work but by gambling, whether on home ownership of share ownership. That is what “Tell Sid” privatisation and the sale of council houses was all about. Get everyone hooked on this gambling, and the small fry who think it is helping them will stand up and defend the big pots who make their millions from it. So, our economy and our social life have been destroyed. 30 wasted years of Britain being run down with our colonial masters, the international money men, now ready to cut and run if we dare challenge them and ask for our country and decency like family housing for families and fair reward for real work back.

  • It doesn't add pu... 5th Aug '10 - 12:39pm

    Congratulations to Alex for some honesty. As I wrote elsewhere, Simon Hughes could have responded something like this:

    “I can understand exactly the problem Cameron was seeking to address – there are lots of similar situations in my own constituency. It’s not the only problem left behind by Labour’s approach to social housing. We in the Lib Dems have thought extensively about these problems, and I’m sure that we will influence the policy in this area. For example….”

    Looking at the replies and Sara Bedford’s piece it seems the reason he was unable to respond in that way is that he couldn’t complete the example. Contribute to the debate – it’s not fundamentally ideological unless you are a Labour supporter. There ought to be lots of Lib Dems with the practical experience to be really helpful in framing sensible policy. Cameron would be sufficiently pragmatic to endorse it too, I suspect: he’d rather have policy that works at the end of the day..

  • Matthew Huntbach 5th Aug '10 - 12:51pm

    Tim Leunig

    Imagine that we restricted the amount of cookers available so that many people didn’t have one, but that those who did owned something worth a fortune. Surely we would prefer to move away from that world to one in which cookers were cheap and everyone had one?

    OK, but imagine cookers lasted for ever or at least could be easily repaired and made to last for ever (like houses – much of the cost is the land, so demolition and rebuilding is the “repair”). And imagine the raw materials for making them were quite limited, so the more you made the less of it there was, so the cost of cookers naturally tended to rise over time. Cookers would then be a very good investment. You might find then there were people who owned dozens of cookers as an investment. It would be no good trying to make more cookers to “meet the demand” because you would keep making them, and they would keep being bought by those investors. Those who had no cookers might find themselves priced out because they would not have the money to pay for them that these investors were willing to put forward. The investors could, of course, rent out use of their cookers at a price. The government might feel it had to pay cooker benefit to those who needed to pay rent to use them so that they could at least have hot meals. This would be wonderful for the cooker investors, they could raise the price of renting them more and more, so making even more on their investment. And if anyone were to say “All this is rot, what sort of country are we living in that allows this inequality to happen?” we could be sure the Daily Mail, the Daily Telegraph, The Times, THE sun, would accuse this person of being an enemy of enterprise, an enemy of aspiration, someone who wanted to bring down the wonderful cooker-based economy which makes so much money for the nation, an enemy of good home-cooked food, a marxist who wished to return us to the days when bodies laid on the streets etc.

  • @tonyhill: It’s not splitting hairs at all. You’re trying to say that the national minimum wage was a Liberal idea when the Liberals opposed the national minimum wage.

    If you support a regional minimum wage instead then say so- call that a Liberal idea if you like- but to try and say the national minimum wage was a Liberal idea is ludicrous. To take a party that supported a regionally variable minimum wage (so explicitly not a national minimum wage) and called the national minimum wage “dangerous”, and try and say after the fact that not only did they support it, but that it was *their* idea not Labour’s is not honest.

  • Matthew – I am sorry, I don’t understand your point. Daily Mail might oppose allowing more cookers to be made, but my point is that the LibDems should support more cookers. I am sorry if that was not clear.

    It isn’t very hard to build houses – 87% of England (and more of Sc,W & NI) are not built on, and bricks, glass etc are not in short supply.

  • Matthew Huntbach 9th Aug '10 - 11:27am

    Tim Leunig

    Matthew – I am sorry, I don’t understand your point.

    I think it is perfectly clear and yu haven’t addressed it at all.

    Why don’t you come and do my job as a Computer Scientist since, sorry this sounds very rude, but I seem to be able to do your job as an Economist better than you can? I.e. I have given a very obvious flaw in your argument, and you don’t seem even to be able to understand it let alone give a remedy for it.

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