Category Archives: ISSUE 3

WHERE WILL PEOPLE LIVE?

The Housing Times Issue 3

THE HOUSING QUESTION IS STILL UNANSWERED:  WHERE WILL PEOPLE LIVE?

“The so-called housing shortage, which plays such a great role in the press nowadays, does not consist in the fact that the working class generally lives in bad, overcrowded and unhealthy dwellings. This shortage is not something peculiar to the present; it is not even one of the sufferings peculiar to the modern proletariat in contradistinction to all earlier opposed classes. On the contrary, all opposed classes in all periods suffered more or less uniformly from it. In order to make an end to this housing shortage there is only one means: to abolish altogether the exploitation and oppression of the working class by the ruling class. What is meant today by housing shortage is the peculiar intensification of the bad housing conditions of the workers as the result of the sudden rush of population to the big towns; a colossal increase in rents, a still further aggravation of overcrowding in the individual houses, and, for some, the impossibility of finding a place to live in at all. And this housing shortage gets talked of so much because it does not limit itself to the working class but has affected the petty bourgeoisie also.”

The writer adds that “The growth of the big modern cities gives the land in certain areas, particularly in those which are centrally situated, an artificial and often colossally increasing value; the buildings (that were already) erected on these areas depress this value, instead of increasing it, because they no longer correspond to the changed circumstances. They are pulled down and replaced by others. This takes place above all with workers’ houses which are situated centrally and those rents, even with the greatest overcrowding, can never, or only very slowly, increase above a certain maximum. The result is that the workers are forced out of the centre of the towns towards the outskirts; that workers dwellings, and small dwellings in general, become rare and expensive and often altogether unobtainable, for under these circumstances the building industry, which is offered a much better field for speculation by more expensive houses, builds workers dwellings only by way of exception.”

The only way of knowing that the above quotation didn’t come from someone who has written to a newspaper in their exasperation about the way the current Conservative government has allowed the richer sector of society to take advantage of the poorer sector of society as regards the provision of housing is the archaic language. It was in fact written by Frederick Engels in 1872 and taken from a series of articles he wrote for a journal in Leipzig. The series of articles were in response to a series of articles written by a follower of the French revolutionary socialist Pierre Joseph Proudhon. Proudhon and Engels had been colleagues but had gone their separate ways as to how the changes they wished to see being achieved. Proudhon said, “I am a revolutionary who is profoundly conservative” and set out to foster a social revolution by non political means and without recourse to violence, propagating his views through the means of newspapers – he was a compositor by trade as well as a writer – to get workers to withdraw from the state and organise themselves into bodies somewhat akin to trade unions or mutual societies. The three articles were translated into English and reprinted in a booklet, cost two shillings and sixpence, in London in 1887 and given the title of The Housing Question.

The differences between Engels and Marx, and Proudhon were philosophical; both wanted to see the working class become the ruling class as it was they, the workers, who were in the majority and who produced the goods from the factories upon which society depended. Both agreed on the ends but not the means. As Edward Hyams in his biography of Proudhon writes, “Their points of view were far apart, Marx being dedicated to the idea of political revolutionary action while Proudhon thought that property could be destroyed only by an economic association of the workers which, by taking the task of production away from the proprietors, would cause property to wither away of neglect.” The issue of ownership of property had long been central to Proudhon’s beliefs. It was the subject of an essay he wrote in 1840 which asked the question ‘What is Property?’ which concluded that property is theft. (Proudhon’s essay arose as the result of his local Academie asking for entries as to how the cause of the continuously increasing number of suicides and how might they be halted)

Also to be taken into account was that Engels was German and Proudhon was French and there had recently been a war between their two countries. So when articles began to appear in the Leipzig journal by an unknown supporter of Proudhon a response from Engels was almost guaranteed especially when the anonymous writer of the articles to the Leipzig journal put forward views as to how the housing shortage, caused by an influx to cities of people to work in factories, could be solved in accordance with the beliefs of Proudhon. Engels in his response believed that the writer of the articles was using the housing shortage as an opportunity of “enlighteninghe differences between Engels and Marx, and Proudhon were philosophical; both wanted to see the working class become the ruling class as it was they, the workers, who were in the majority and who produced the goods from the factories upon which society depended. Bothhe differences between Engels and Marx, and Proudhon were philosophical; both wanted to see the working class become the ruling class as it was they, the workers, whohe differences between Engels and Marx, and Proudhon were philosophical; both wanted to see the working class become the ruling class as it was they, the workers, who were in the majority and who produced the goods from the factories upon which society depended. Both agreed on the ends but not the means. As Edward Hyams in his biography of Proudhon writes, “Their points of view were far apart, Marx being dedicated to the idea of political revolutionary action while Proudhon thought that property could be destroyed only by an economic association of the workers which, by taking the task of production away from the proprietors, would cause property to wither away of neglect.” The issue of ownership of property had long been central to Proudhon’s beliefs. It was the subject of an essay he wrote in 1840 which asked the question ‘What is Property?’ which concluded that property is theft. (Proudhon’s essay arose as the result of his local Academie asking for entries as to how the cause of the continuously increasing number of suicides and how might they be halted) were in the majority and who produced the goods from thehe differences between Engels and Marx, and Proudhon were philosophical; both wanted to see the working class become the ruling class as it was they, the workers, who were in the majority and who produced the goods from the factories upon which society depended. Both agreed on the ends but not the means. As Edward Hyams in his biography of Proudhon writes, “Their points of view were far apart, Marx being dedicated to the idea of political revolutionary actionhe differences between Engels and Marx, and Proudhon were philosophical; both wanted to see the working class become the ruling class as it was they, the workers, who were in the majority and who produced the goods from the factories upon which society depended. Both agreed on the ends but not the means. As Edward Hyams in his biography of Proudhon writes, “Their points of view were far apart, Marx being dedicated to the idea of political revolutionary action while Proudhon thought that property could be destroyed only by an economic association of the workers which, by taking the task of production away from the proprietors, would cause property to wither away of neglect.” The issue of ownership of property had long been central to Proudhon’s beliefs. It was the subject of an essay he wrote in 1840 which asked the question ‘What is Property?’ which concluded that property is theft. (Proudhon’s essay arose as the result of his local Academie asking for entries as to how the cause of the continuously increasing number of suicides and how might they be halted) while Proudhon thought that property could be destroyed only by an economic association of the workers which, by taking the task of production away from the proprietors, would cause property to wither away of neglect.” The issue of ownership of property had long been central to Proudhon’s beliefs. It was the subject of an essay he wrote in 1840 which asked the question ‘What is Property?’ which concluded that property is theft. (Proudhon’s essay arose as the result of his local Academie asking for entries as to how the cause of the continuously increasing number of suicides and how might they be halted) factories upon which society depended. Both agreed on the ends but not the means. As Edward Hyams in his biography of Proudhon writes, “Their points of view were far apart, Marx being dedicated to the idea of political revolutionary action while Proudhon thought that property could be destroyed only by an economic association of the workers which, by taking the task of production away from the proprietors, would cause property to

wither away of neglect.” The issue of ownership of property had long been central to Proudhon’s beliefs. It was the subject of an essay he wrote in 1840 which asked the question ‘What is Property?’ which concluded that property is theft. (Proudhon’s essay arose as the result of his local Academie asking for entries as to how the cause of the continuously increasing number of suicides and how might they be halted) agreed on the ends but not the means. As Edward Hyams in his biography of Proudhon writes, “Their points of view were far apart, Marx being dedicated to the idea of political revolutionary action while Proudhon thought that property could be destroyed only by an economic association of the workers which, by taking the task of production away from the proprietors, would cause property to wither away of neglect.” The issue of ownership of property had long been central to Proudhon’s beliefs. It was the subject of an essay he wrote in 1840 which asked the question ‘What is Property?’ which concluded that property is theft. (Proudhon’s essay arose as the result of his local Academie asking for entries as to how the cause of the continuously increasing number of suicides and how might they be halted) German workers on the miraculous efforts of Proudhon’s social panacea”. Not only did Engels object to the contamination of German workers of Proudhon’s panacea but his solution to the housing question which was that workers should become homeowners. Such a proposal did not spring from “the womb of the revolutionary idea” but from the ruling class.

Engels quotes at length from an article which appeared in a Spanish newspaper on the subject. “The cleverest leaders of the ruling class have always directed their efforts towards increasing the number of small property owners in order to build an army for themselves against the proletariat.” (Engels quotes also from a letter written by Eleanor Marx in 1886 of a visit to Kansas and what happened to some workers who bought their homes in pursuit of the American. She writes, “We saw some miserable little wooden huts, containing about three rooms, still in the wilds; the land cost 600 dollars and was just enough to put the little house on it which cost a further 600 dollars, an hour away from town, in a muddy desert.”)Engels adds that in this way the workers would be burdened with heavy mortgage debts in order to obtain even these houses and thus they became completely the slaves of their employers; they were bound to their houses, they cannot go away and they are compelled to put up with whatever working conditions are offered them.”

It was a scenario that was all too prescient considering what has happened over the past thirty-five years since the introduction of the right to buy legislation of 1980 by the Thatcher government and its proposed extension by the current government to housing associations. The mention of having to accept working conditions dictated by their employer is resonant about the way workers in recent years have been subjected to zero-hours contracts and is proof of the triumph of capital over labour since the rise of the neo-liberal agenda in the 1980s with the election of Margaret Thatcher as Prime Minister as well as Ronald Reagan as President of the United States. The triumph of capital over labour has been exhaustively documented by Thomas Piketty in his defining opus Capital. He writes that the shocks that buffeted the global economy between 1914 and the end of the Second World War, along with the consequent advent of new regulatory and tax policies reduced capital’s share of income to historically low levels in the 1950s. The reversal of this reduction, along with other geo-political events, such as the collapse of the Soviet Empire, in the 1980s titled the balance in favour of capital where it remained until the financial crash of 2008.

Although the sell-off of council housing wasn’t part of her manifesto, Margaret Thatcher had council housing in her plans from the time she was briefly housing minister in 1974. (In her first speech as leader to the Conservative Party conference she declared her belief in a “property-owning democracy.) Simon Jenkins, former editor of the Times and the Evening Standard, in his book Accountable to None tells the story of the occasion when he invited to the House of Commons to see Margaret Thatcher following a number of articles that he had written on London housing estates. She began their meeting by saying “I want you to show me these terrible council estates”. Jenkins responded by saying there were good ones and bad ones. After a cup of tea Simon Jenkins left by himself. Twenty years later in her memoirs she was just as ‘opinionated’ about council housing. In the Downing Street years she wrote, “The state in the form of local authorities has frequently proved an insensitive, incompetent and corrupt landlord.”

The right to buy legislation forced local authorities to sell their housing stock. By doing so she set out to break what she believed was a way of life that was diametrical opposed to her belief of a property owning democracy, not one that was subsidised by the state. As Jenkins writes, council housing “symbolised the enslavement of the individual to the state. Council housing was a challenge to Thatcher’s belief in a home-owning democracy build on private savings and initiative.” To Thatcher helping people to buy their home was part of a political crusade. “Thatcher was unconcerned at the planning or investment of her policy. She simply wanted council houses sold and no more council houses built. Right to buy meant that central government breaking a local contract between landlord and tenant, and turning the landlord into a forced seller. The 1980 Right to Buy Act, followed by a housing act almost every year for a decade, asserted central power over local authority housing sales.” Central government also kept the estimated £18 billion receipts from the sale of nearly two million council homes.

It was James Callaghan; former Labour Prime Minister, who when asked to explain his defeat to Margaret Thatcher in the May 1979 general election best summed up the zeitgeist of the times. He believed, he said, that there was a “sea change” taking place public attitudes to politics as well as in other fields of public life. The post-war consensus was fracturing and being replaced by a new political discourse. That discourse centred on the writings of the political economist Frederick Hayek who believed that capitalism worked best when free from government interference.

Andrew Gamble in his book The Spectre at the Feast writes, “What as surprising given the intellectual and political self-confidence of the Keynesian generation was the speed with which the ideas of neo-liberalism jumped the barrier into practical politics.” He adds that “By the end of the 1980s, with a speed which breathtaking, neo-liberalism had successfully redrawn the terms of the debate. The political message of neo-liberalism was that the outcome of Keynesian political economy was accelerating inflation and growing state intervention. To achieve her objection meant being prepared to take on politically all the vested interests which had helped perpetuate the policies which were tying down capital in increasingly ossified economic structures. Margaret Thatcher summed up her objection in an interview with the Sunday Times in 1981; “economics are the method, the object is to change the heart and soul.”

Council housing was the first to receive the emotional and mental make-over. Stuart Hodkinson in his article the Neo-liberal project, privatisation and the housing crisis, writes that Thatcher brought a “clever, divisive and thoroughly dishonest discourse to the table, encompassing processes that were not solely about selling public housing to private owners, but generating a change of ethos, culture or organisation along private or market lines.” So successful was Margaret Thatcher in this regard that in 2002 she was able to tell diners at a dinner in her honour that her greatest achievement was Tony Blair.

With the return of a Labour government in 1997 it was hoped by many of its traditional supporters that it would mean the return of council housing. They were not only to be disappointed but to be betrayed. Shortly after the 1997 election visited the Aylesbury estate in Peckham to tell the residents that they had not been forgotten. Sadly over the following decade any hopes they had of any improvement in their homes were to be dashed when the price for the repairs to the estate was to be transferred from council control. When Labour MP Ken Purchase asked Tony Blair in the House of Commons about allowing local authorities to restart building homes to provide for the million of people on council waiting lists he was told that Labour would provide the opportunity of a million more people to own their homes during his premiership. So, as Stuart Hodkinson writes, far from disowning the neo-liberal policies of Margaret Thatcher his “government embraced them, blocking new council house building, introducing a market consumerist approach to social housing, and seeking to transfer 200,000 homes a year to the Registered Social Landlord sector a year under the cover of bringing all social rented homes up to a (very) minimum standard by 2010.

Whilst at the same time as the waiting list for homes was increasing the Labour government embarked on a multi-billion scheme called the Housing Market Renewal Pathfinder programme to demolish thousand of homes in a number of towns and cities in the north of England with the aim of tackling ‘areas of market failure.’ As Anna Minton in her book Ground Control writes, “Pathfinder started as a response to a market phenomenon of low prices and continued despite the improved market which came with boom times. With the economic downturn, the programme is now being scaled back, showing that it’s not the policy which has the impact on the market but the market which calls the tune. The problem with the policy which displays an excessive reliance on the market is not only that it disregards people’s lives but that when the market is down, it all but grinds to a halt.”

When it became clear to Labour that housing associations were unable or unwilling in the case of some sections of the private sector to fill the void left by local authorities Gordon Brown turned to the economist Kate Barker to provide a solution to the growing housing crisis. She recommended increasing the supply (In her interim report she blamed house builders for deliberately constraining supply but it was omitted by the Treasury, in her final report). Unfortunately by the time Gordon Brown agreed to build a million more homes, events overtook his plans with the financial crash caused by the sub-prime housing crisis in America. Labour’s last chance to redeem itself as regards came as he prepared to fight the 2010 general election. As William Keegan, associate economics editor of the Observer in his booklet ‘ Saving the World’ – a reference to Gordon Brown’s slip of the tongue in response to a question about his attempts to refinance the banks – writes his social goals appeared to have clashed with the desire to continue riding on the crest of a wave of well-being associated the asset price boom. Thus, he writes, “at one meeting under Brown as prime minister to discuss the general scene, one aide suggested that there was a serious housing crisis and an urgent need to build more social housing. To which someone who at the time was a trusted, if controversial, aide, riposted: ‘If we did that it would hit house prices and we should lose the election.’” (At the same time a consultation paper was circulated about offered to cut stamp duty for buy-to-let investors)

Lose the election they did and if the Conservatives didn’t win the election outright, they were able to form a coalition with the Liberal Democrats. It is said that politicians campaign in poetry and govern in prose. More accurately politicians make promises before elections and break them after they win. This was certainly true of the promises made by David Cameron as regards housing. As Stuart Hodkinson and Glyn Robbins in their essay the return of Class war Conservatism? Housing under the UK coalition government, write, “Amid speculation that a Conservative government would end council tenants’ security in England, a week before the May general election Cameron gave his personal assurance that social housing would be safe in their watch.” He said, “The truth is that in the last few years, it’s been Labour minsters who have thrown social tenants’ right of tenure into question, and it’s been this Labour government which forced up social rents for councils so that they’re in line with housing associations rents. The Conservative position … is very clear: we support social housing, we will protect it, and we respect social tenants’ rights”. (As part of the Coalition agreement the Liberal Democrats dropped one of their two housing promises in their election manifesto. The second promise made it into the agreement, but instead of scaling back on support to home owners they agreed to support the ‘Help to Buy’ scheme which did the opposite. It failed to receive as much coverage as the broken promise over student fees.)

After the Comprehensive Spending Review in October 2010 the “clear” promise had given to proposals to scrap the statutory right to life–time tenancies for new social housing tenants in England and Wales with only two year “flexible tenancies” guaranteed. The amount of money allocated to housing was halved from £8 billion to £4 billion for the following four years. In the week following the Comprehensive Spending Review the front cover of Inside Housing magazine showed a picture of Lord Beveridge and George Osborne. Its headline was “THE END OF SOCIAL HOUSING 1945-2010”. Its editorial summed up the impact the review would have on social housing. “This is a bleak week for social housing. What became known as social housing was conceived by Liberal peer Lord William Beveridge in 1942 and brought to life by

Clement Attlee’s Labour’s government in 1945. The hundreds of thousands of homes built in the following decades formed the backbone of the welfare state, offering a safety net that lifted people out of squalid, overcrowded slums. The new rows of social homes frequently acted as a springboard to a better life- council tenant made good’ tales are hackneyed but true. The reforms (sic) by the current government would end this.”

Rebecca Tunstall, professor of housing at York University’s Centre for Housing Policy begins her review of the Coalition government’s record on housing by stating that the Coalition’s housing policy changes have all further reduced the extent of the UK’s central government involvement in housing, the ‘wobbly pillar’ of the welfare state as well as extent of contribution made by the public sector through local authorities. (Whilst the Attlee government brought under public ownership a variety of essential services, council housing, Cole and Furbey write, was relegated to a second-class service, meeting residual rather than universal needs, marginalised by economic pressures and political priorities and largely discredited as an efficient or equitable tenure. As a result council housing was an easy target for the Thatcher government during the 1980s. As Cole and Furbey in the book the Eclipse of Council Housing, write “There was one omission from the services undergoing sweeping post-war legislative reform: housing. The future role of public housing was never subject to the radical reappraisal accorded to education and health. As a result, council housing missed the boat.”)

This seems hard to explain in a post-war Britain as housing in the major cities had suffered heavily from enemy bombing but even harder to explain in a post 2007 world. (There was nobody “whose passion it was to do housing”, said Hazel Blears, former Cabinet member whose department included housing, as to why it was treated so poorly by her government when Owen Jones interviewed her for his book Chavs. Nye Bevan had responsible for housing in Attlee’s government but his passion was to establish a national health service.) As Ben Marshall, research director of the polling agency Mori writes, “Housing is central to health, well-being, prosperity and aspirations. There are significant economic, social and political returns to expanding and improving housing stock. Conversely, the housing market can play a destabilising role in the wider economy and disrupt public policy intentions. Recognition of this, and a growing sense of crisis, has seen housing return as a key issue again.”(The housing economy: boom, bust and consumer sentiment, 2012) For ideological reasons Margaret Thatcher by introducing the right to buy legislation wanted to offload lessen the influence of local authorities whilst at the same time create a property owning democracy: similarly Tony Blair’s government wanted to transfer what remained of the housing stock to housing associations as part of his belief that it could be managed better in the culture more akin to the private sector and, as in the Attlee government, education and health were considered more important.

The Coalition government continued in the same vein of loosening even further the link between central government and local government as regards housing by passing in 2011 Localism Act. This would mean the end of central government ‘creaming off’ a proportion of a local authority rental income. Following a settlement local authorities were to become entirely self-financing and from the government standpoint subsidy-free. As Professor Tunstall comments, that the Coalition by not seeking to dictate the diverse housing system it affected its ability both to achieve its immediate policy goals and to address structural issues, such as the failure to build sufficient homes to meet the demand. It made the decision to “reinvigorate” – offering substantial discounts – right to buy all the more inexpiable.

In conclusion Professor Tunstall writes, “By 2014, towards the end of the Coalition’s government’s term, the problems identified and acknowledged by the Coalition, remained unresolved. Mark Carney, the Governor of the Bank of England said that he felt that the housing market still had “deep, deep structural problems”. In 2014, demand ran even further ahead of supply; there were still affordability problems, and tenure and spatial polarisation. The fragmentation of governance of new housing development and fraying of welfare safety net had been increased intentionally by the Coalition in the name of localism, economic goals and restructuring. Lenders had reduced their risks through demanding larger deposits, but this created knock-on problems of access to housing. The individual and systematic risk relating to home ownership remained, and additional risk had been transferred to households and social landlords.” The ‘wobbly pillar’ has become even wobblier.

Tax – was the one word that Carney failed to mention in his interview with Sky news in May 2014 but was mentioned by Polly Toynbee and David Walker in their book Cameron’s Coup. They write, “How property is taxed in the UK is a dysfunctional absurdity – and everyone knows it, but no party dares touch it. Capital gains from homes went untaxed, yet to mention it brought apoplectic Daily Mail splutterings about an Englishman’s home”.

It was not only a capital gains tax that was unmentionable it was the introduction of a land tax. The idea of a land tax has been mooted for mooted for than a century. In 2011 Sir James

Mirrlees, the economist and winner of the 1996 Nobel Prize for Economic Sciences led a review of the UK tax system for the Institute of Fiscal Studies. The final report from the review, Tax by Design’ set out a picture of coherent reform with the aim of identifying the characteristics of a good tax system for any developed economy and recommended how the tax UK system might realistically be reformed in that direction. Mirrlees’s review noted the ‘perverse’ incentives provided by the current system that can encourage demolition or vacancy when reduced rates or zero rates are applied to empty or derelict land. Mirrlees writes, “If property is subject is subject to tax and land is not, then, if the property is not being used, a tax incentive for demolition is created. If empty or unused property is taxed at a lower rate than property being used, then a tax disincentive to use is created. A Land Value Tax avoids these problems.” (Mirrlees review, the taxation of land and property, chapter 16, page 376) The Mirrlees review concluded: “The economic case for a land value tax is simple, and almost undeniable. Why, then, do we not have one already? Why, indeed, is the possibility of such a tax barely part of the mainstream political debate, with proponents considered marginal and unconventional?”

For academics Hodkinson and Robbins the failure to introduce such measures as a land tax are deliberate. Housing policy, they state, “is being used as a strategic intervention to unblock and expand the market, complete the residualisation of social housing and draw people into an ever more economically precarious housing experience in order to boost capitalist interests. For them the Coalition government’s housing policies reflect a radical resurrection of the Thatcherite agenda, or what Ralph Miliband called “class war conservatism”. They see the ongoing global economic crisis and the apparent need to reduce the public budgetary deficits incurred by the measures to recapitalise the banking sector as an opportunity by the Conservatives within the Coalition to complete the unfinished neoliberal revolution started by over three decades ago by the Thatcher government. Their essay revisits the main ideological contours and materialist drivers of Thatcherism, and discusses the centrality of housing privatisation and related welfare restructuring which it entailed. Hodkinson and Robbins’s position is that “privatisation of housing was undoubtedly a central foundation to Thatcher’s strategy for hegemony.”

Achieving her objective required the spread of individual property rights through privatising the public rental stock and the development of a policy discourse in which individual self-reliance and private market provision were constructed as morally and economically superior by the state as she explained in an interview with the Daily Telegraph in 1974. She said, “Conservatives believe that the right way to meet our housing needs is to spend money on helping more and more families to become home owners rather than to subsidise them indefinitely as council tenants … three families can be helped towards home ownership at the same cost to public funds as it takes to keep one family in a council house … Council housing creates its own demand. It can also create homelessness and bad housing.”

George Osborne’s attempt to increase home ownership was the Help to Buy initiative aimed at first-time buyers. The Help to Buy initiative whereby the state underwrote the mortgages of first-time buyers was of limited appeal and was extended to include not just to new properties but to any properties worth up to £600,000 and not just to first-time buyers. It was a modest success outside of London due to the high cost of getting on the property ladder. Figures released by the Department of Communities and Local Government showed that the scheme has assisted 1,758 households with a combined income of over £100,000 since its inception in 2013 even though they are among the richest ten per cent of earners. As Martin Wolf, chief economic commentator of the Financial Times, in 2014 wrote it was the signal it transmitted to people trying to get out on the property ladder. George Osborne admitted to cabinet colleagues that a little “boom” in house prices before the 2015 general election would do no harm.

Hodkinson and Robbins conclude that the Coalition has continued the broad direction of travel taken by Thatcher and New Labour. George Osborne in his post-2015 general election Budget finally got his chance to introduce what has become known as the ‘pay to stay’ proposal whereby council tenants earning above the average annual income would be required to pay a significantly higher weekly rent. Savills, the property consultants, found that in a study they commissioned that the majority in London of those affected by the proposal would be neither unable to afford the cost of the market rent of their home to buy their home.

Although commenting on housing policies of the Coalition, now that they governing without their Coalition partners, George Osborne latest proposals have speeded the direction of travel of the Conservatives as regards social housing. As Hodkinson and Robbins write, “We are not just witnessing a continuation of neoliberal policies but a radical intensification of their logic wrapped up in a far more overt class politics. Regardless of tenure, renting housing will be more expensive than ever before, less regulated and more precarious for all tenants. Such a strategy works hand in glove with welfare reforms that will gradually expel 100,000 of low income households out of their neighbourhoods into cheaper, lower quantity housing in areas where employment is impossible to come by, paving the way for a new wave of gentrification that will further enrich property owners. Such measures will only worsen the real housing crisis”.

Hodkinson and Robbins on the thirtieth anniversary of the Right to Buy Act organised a conference held during the summer at Leeds University to discuss the impact the Right to Buy Act and whether it can be seen as a major cause of today’s housing crisis heralding as it did the start of the neoliberal agenda and its emphasis upon home ownership. Two of the speakers were Peter Malpass, housing academic and author of many books on housing including Housing and the Welfare State, and Sarah Glynn, author of the book How the other Half Lives. It would be amiss to end and not include their views on the merits of the welfare state, home ownership and social rented housing. Their views are taken from Sarah Glynn’s book and provide the prefect riposte to the neoliberal agenda for housing. She writes, “Peter Malpass has shown how the shared prosperity of the welfare state actually provided a golden age for the growth of homeowners, but now that home ownership is being forced on those who have not yet bought, and can often least afford to do so, more and more people are facing an insecure economic future where home ownership becomes an additional burden.” So, as Sarah Glynn writes, the ability to rent good quality, secure and genuinely affordable homes is not just a housing issue. “More, and better, social rented housing would also allow fewer people to become effectively mortgage slaves, working long hours and not daring to do anything that might upset their employer and put their job at risk.” Echoes of what Engels wrote.

COSY CARTELS AND COURTESY

Issue 3 The Housing Times

“(Tax) policy is determined through committees and consultation processes in which the tax avoidance industry’s repre-sentatives dominate, before being nodded through by parliament without proper scrutiny. This cosy cartel urgently needs dismantling. Taxation needs to be reclaimed from the vested interests by public and parliament.”

The Great Tax Robbery by Richards Brooks

Following George Osborne’s first spending review in October 2010 a group of guys met in the Nag’s Head pub in Islington for a drink, and being Islington; they discussed the impact of the measures he had announced. The review planned to cut half a million public sector jobs and £7 billion from the welfare budget to pay for a crisis that was not of their making. A few weeks earlier Vodafone, the mobile phone company, settlement with the Inland Revenue was announced. The reason why their tax bill hit the headlines was because the offshore tax avoidance scheme it used to vastly reduce the amount of tax they paid to the government. Later that evening, “when we were all a bit tipsy”, recalled one of the group that they decided to target a Vodafone store. To attract other like minded people they chose the hash tag ‘UK Uncut’ on Twitter to announce their formation. The following week seventy people gathered at Vodafone’s Oxford Street store to highlight the inequity of the company’s tax settlement. On the following Saturday thirty Vodafone stores had to close their doors after being targeted. The group cannot have imagined that their boozy night in a pub about how unfair it was that half a million people were to lose their jobs in order to reduce the debt left by the 2008 crash was to raise questions about the body responsible for collecting the revenue to reduce the debt as well as revealing that it was actively colluding with companies like Vodafone to make that job harder.

Further enquiries were to reveal that Britain’s third biggest company had reached an agreement with the Her Majesty’s Revenue and Customs which saved the company several billion pounds over the previous decade but which potentially fell foul of British anti-tax avoidance laws. The investment bank Goldman Sachs was another high profile company, where bonuses in billions are annually shared among employees, which had reached a deal with the HMRC in settlement of a tax demand. To avoid paying millions of pounds in national insurance contributions the bonuses the bank had a scheme whereby they were paid by way of an offshore offshoot of the company. As part of the settlement reached with the HMRC the company was “excused” interest charges of around the same amount it tried to avoid – £20 million.

In December 2011 the public accounts committee published what it called a “damming indictment of HMRC and the ways its senior officials handle tax disputes with large corporations.” The report concluded “The department (HMRC) is not being even-handed in its treatment of taxpayers.” Richard Brooks in his book published the findings of a report – Being Bold, a radical approach to raising revenue and defeating the deficit, complied by the Association of Revenue Customs Officers in September 2010 which showed the imbalance in prosecutions for benefit fraud compared to fiddling your income tax return. Brooks writes there is plenty of prejudice behind the imbalance; the poor make easier targets than the rich.

A report from the Organisation for Economic Cooperation and Development on the causes of the greatest financial crisis since the 1930s listed several “tax policies as exacerbating factors” as responsible for the crash of 2008.Despite the crash that nearly collapsed the world economy, governments are still giving what Brooks calls “tax advantages to economy swamping levels of debt and bankers’ bonuses based on illusory profits that conceal sometimes cataclysmic risks. What’s more, they are being sharpened by the British government.”

Richard Brooks writes that the tax avoidance issue is a political one. Something that Gordon Brown recognised when he became Chancellor. In July 1997 he said that the government would be “committed to the proper funding of public services will not tolerate the avoidance of taxation and will be relentless in its war against tax avoidance.” Brooks comments that over time observers learned that such language merely to be an example of the usual Brown bluster. He concludes that over the last few years the British government has ripped the guts out of laws that protect the country’s corporate tax base. In doing so it has turned Britain into a corporate tax haven, inviting multinationals to shelter income offshore and encouraging them to place real business overseas. In doing so Britain has become a more unequal and meaner place to live. In recent years there have been many examples of cosy cartels between vested interests and publicly accountable bodies. Perhaps the most insidious, infamous and indefensible was the one that existed between the Metropolitan Police and Murdoch newspapers. The police also failed to live up to the standards that are expected of them in numerous cases involving vulnerable children.

Standards of courtesy also seemed to have dropped in recent years. Following the publication of the first issue of the Housing Times I sent copies to a number of newspapers and television networks. Since it was the first issue I enclosed t-shirts and mugs with the front page headline emblazoned upon them. Suffice it to say that the response has been somewhat similar to that of the parable the Good Samaritan. The editor of the Evening Standard, its chief leader writer and City Hall reporter were all given copies, mugs and t-shirts. None responded. Same outcome as regards the BBC’s Politics Programme and the BBC London’s political editor. I am still waiting for an acknowledgement from the chief executive of the Chartered Institute of Housing (now received). I left a copy and t-shirt for the editor of the Observer with the guys in the post room at the Guardian’s offices. The editor of the Morning Star is in receipt of a copy and t-shirt. It was pas de response from Paul Mason, now ex-economics editor at Channel Four. It was the same from the editor of Guardian Housing Network, Jane Dudman.

Honourable mentions go to Danny Dorling, Becky Tunstall and Anna Clarke from academia. Martin Wolf replied by email as did Susan Emmett from Savills. As in the parable of the Good Samaritan there was only one person who had the courtesy to call and thank me in person – Helen Lewis, deputy editor of the New Statesman. Now about that write-up….

Terry McGrenera