It’s been more than a rocky few weeks for David Cameron. The Prime Minister hoped the parliamentary move away from tax and towards housing would grant him some relief. However, this could not be further from the truth.
Cameron has been forced to backtrack on crucial elements of his ‘Housing and Planning Bill’.
Britain is gripped in a housing crisis at present and a long-term plan is vital. Currently, if you earn the national average salary of £26,500, 91% of England and Wales would be beyond your income.
The government insists its bill will “help anyone who aspires to own their own home achieve their dream”. But really, it would only exacerbate the housing crisis in a wealth transfer to the rich.
Peers from across the House of Lords have told the government that they must think again on their housing plans which will sound the death knell for new genuinely affordable homes, and are set to be a big let-down for those who want to own a home.
Branded as affordable, Starter Homes allow rich developers to delve deep into the public purse, to the tune of £20bn, and grab public land. They are defined as affordable, yet a family earning Osborne’s supposed ‘national living wage’ will not be able to afford one in 98% of the country.
Starter Homes will only exacerbate the housing crisis because without affordability, an increasing supply only takes up space that could be used for genuinely affordable housing. At £450,000 in London and £250,000 in the rest of England, these new houses are anything but affordable. Instead of using public land to build public housing, space will be further depleted by developments for the well- off.
On Thursday, the government’s bill suffered a series of forced changes at the hands of the Lords:
- There will now be local government control over how many Starter Homes can be built in an area.
- Sold-off council homes must now be replenished one-for-one. The Tories remembered to put this in their manifesto, but not the law itself.
- There will be more protections for vulnerable people facing eviction.
- The government have been forced to consider giving local governments the power to reject rural building.
- On Monday, they were defeated on letting well-off buyers pocket £100,000 from the taxpayer – which was through a 20% discount on Starter Homes.
Let’s build social housing
While any positive changes should be welcomed, let’s bin the whole bill.
In order to solve the housing crisis, it is estimated (pg 4) that 200,000 new homes must be built per year this parliament.
This is not only possible through social housing, but a brilliant investment for the nation. The Tory narrative is that we must make huge cuts to public spending with a current public debt of 80% of GDP. We don’t have enough money for the NHS, welfare or housing because of this debt. Considering this, it seems odd that Clement Attlee’s post- war government managed to construct over a million homes, 80% of which were social, with a public debt of 225% of GDP. Almost three times what it is today. 1945- 1970 saw an average of 170,000 social houses built every year. What’s even stranger, is that by 1980 public debt was down to just 45% of GDP.
This is because the Tory narrative is bogus.
Public debt did not decrease in spite of investment in social housing. Rather, the investment was a big reason it decreased. Constructing social housing is jam-packed with economic benefits. When you build a social house the money does not just disappear; the costs are returned to the state through rent payments.
Further, the taxpayer does not just break even in providing security for families with an affordable home. Social tenants will be freed from parasitical landlords charging huge rents. This means they will have significantly more disposable income, which they will likely pay back into the economy. Construction also stimulates the economy through increasing demand for jobs and supplies.
As well as being a great macroeconomic policy, it is also a logical way to reduce the welfare bill. The Treasury saves £4.5bn annually in housing benefit, for the £1.25bn annual grant for social housing.
We are not restricted by land, either. Data taken from the Land Use Database (pg 7) shows that only one tenth of England’s surface area is developed at all. There is enough for Cameron to give it away to rich developers for free in his slippery ‘starter home’ scheme, after all.
The Housing Bill is still moving through the Lords. And the government’s defeats so far are a victory for those who want a cohesive housing policy.
However, replacing starter homes with social housing is how we really provide security for Britons. At present, Cameron and the Conservatives are dropping a huge snake on the property ladder. It will only exacerbate the crisis.
Join the People’s Assembly “March For Health, Homes, Jobs And Education” on Saturday 16 April.
Featured image via ResoluteSupportOffice.