Nick Clegg has a new regular Evening Standard column and in the latest edition, he talks about housing.
After a look at the history and importance of housing associations, Nick writes about how he and Danny Alexander secured assurances that housing associations would receive support to continue building more houses for rent. These assurances have now been trashed now the Tories have a majority:
Five years ago I dissuaded the Conservatives in Coalition from fiddling with social rents to cut the housing benefit bill because it would have had a disastrous effect on the ability of housing associations to raise the money to build new homes, which was the key priority at the time. A few years later Danny Alexander and I agreed to a cut in social rents — obviously welcome to those paying rent — as long as associations were given a clear guarantee of rent levels for the next 15 years so that they had a stable revenue stream from which to borrow the millions of pounds needed to build new homes. It was, like so many deals struck in the Coalition, a sensible balance in the end. Yet within weeks of assuming power this year the Conservatives tore up that “guarantee”, undermining their financial stability.
Nick ponders why the Conservatives have turned their backs on the housing associations that Margaret Thatcher helped to create:
The answer, I fear, is base politics. A senior Conservative once asked me, genuinely perplexed, “Why are you so keen to help housing associations, they just house Labour voters?” This crude political calculation is coupled with a sincere, and in many ways admirable, belief in the virtues of home ownership. That is why the Government’s housing announcements over Right to Buy, starter homes and so on are all aimed at helping those on the verge of home ownership but do nothing for the millions who have no chance of buying their own home.
For all I know it may be true that families who live in socially rented accommodation vote more for Labour, and those who own their homes vote more for the Conservatives. But this issue is too important to be decided on one of Lynton Crosby’s spreadsheets.
He concludes that the Conservatives’ assault on housing associations is as “egregious” a betrayal as that over tax credits.
You can read his whole article here.
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9 Comments
I’ve said it before and I’ll say it again. The Tories are basically as much of a class war party as the old SWP. Most of their housing policy is driven by undisguised gerrymandering and a desire to punish perceived enemies.
So why just housing association tenants being allowed right to buy? Why not all privately renting tenants?
My Housing Association manager will be shaking his head in disbelief at this one. Not only was Mr Clegg the Deputy Leader in a government which – as one of it’s very first acts in the October spending review – saw the demise of the capital grant supply subsidy for social housing and instead replaced it with the responsibility to raise much of the cost of new builds through a rise in social rents to 80% of the market equivilent, his government also oversaw the introduction of the bedroom tax.
It’s not a betrayal if your party would all vote for it if you were still in coalition or in any way still relevent.
If your remaining MPs vote against it, then you can complain against it.
@A Social Liberal
“and instead replaced it with the responsibility to raise much of the cost of new builds through a rise in social rents to 80% of the market equivilent”
So long as there is still Housing Benefit, what’s so wrong with social housing rents being increased but still being at a 20% discount to market rents?
The only tenants who will have seen any significant increase in net rent (i.e. net of HB) will have been those on good incomes. It’s not clear to me why people on good incomes should enjoy subsidised rents, much as they may like it.
Simon what’s wrong with social housing rents 80% of “the market rate” is that is an entirely phony concept foisted on housing associations and councils by central government . It just adds to an overly inflated housing costs, which will pop eventually. If social housing can be rented cheaper than private housing then that is the market rate not a subsidy, plus what’s so good about lumbering the tax payer with higher housing benefits costs.? A better question is why do the Tories complain about housing benefit costs then push the price up and encourage profiteering. But what do you expect from same class war tory party who decided rooms were also being “subsidised”. . I can understand why a Lib Dem might defend this nonsense in government on the grounds that we had to work with the hand dealt to us, but out of government. No. IMO the Tories are basically interested in clearing London and punishing people they suspect aren’t Tories, plus where housing costs are cheaper they are trying to get the better off social housing tenants to buy rather than rent by artificially raising rental costs and heavily discounting sales. Fundamentally they do not believe in social housing and would rather have slumlords and homelessness than state ownership or co-operatives .
@Glenn
When I asked “So long as there is still Housing Benefit, what’s so wrong with social housing rents being increased but still being at a 20% discount to market rents?” that was (mainly) a genuine question, rather than being asked rhetorically.
To be honest, I’m not sure I find your response convincing. When you say “what’s so good about lumbering the tax payer with higher housing benefits costs” I’m assuming that the 80% of market rent approach saves the stste money overall. It wouldn’t do that if all social housing tenants were on such low incomes so that they received maximum HB. For them, they might have to pay £50 more per month in rent, but they would receive £50 per month extra in HB – overall a rather pointless paper exercise.
However, on the basis that not all social housing tenants are on very low incomes, there WILL be a saving to the state. Tenants on moderately good incomes will receive only (say) £20 per month more in HB, so they will have to pay net £30 per month more for housing. Those on good incomes will receive no HB and will have to pay the full extra rent of £50 per month in full. For the latter two groups of tenants there will be a saving to the state. Isn’t that fair?
From memory (happy to be corrected) the 80% definition for “affordable” rule was introduced by Labour under John Prescott. It was pointed out the time that it certainly wasn’t genuinely affordable for a lot of people.
Simon Shaw.
It’s ok I’m so sure I find your argument that convincing either. The market rate approach doesn’t save money it merely expects tenants to pay more which in turn drives up housing costs up over all. The point is that why would say a tenant on a higher income not choose to buy under right to buy if it works out cheaper than renting and thus takes more homes out of the public sector meaning more people have to rent privately which in turn adds to the housing benefit bill! My basic point is that the market rate is different for different products So the notion of a subsidy is baloney. It’s like say mushrooms and truffles should have a fixed cost because they are both fungi and therefor mushrooms should cost 80% of the price of truffles. Why not just accept that council houses are cheaper to rent because that’s the nature of council houses which is one of the reasons some of us would build more council and housing association homes. They save the public purse money in the long run.