The Tories’ Wretched Housing Bill is Passed; Another Step Towards the Death of Social Housing

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The Tories’ Wretched Housing Bill is Passed; Another Step Towards the Death of Social Housing

Sadly, I never seem to run out of opportunities to berate the Tories for their cruelty and stupidity, and latest example came on Wednesday evening, when Parliament passed the Housing and Planning Bill, which will do nothing to ease Britain’s chronic housing crisis, and, in fact, contains several developments that will continue the Tories’ malignant obsession with destroying the provision of social housing. This can have only one end result — contributing further to the scale of the housing crisis, which is already unprecedented in my adult life.

During debates on the bill in the House of Lords, Baroness Hollis of Heigham described the “skeleton Bill” as the worst she had seen in 25 years. “This is a half-baked, half-scrutinised, quarter digested Bill that is not fit for purpose,” she said.

The housing crisis is particularly severe in London and the south east, where house prices have reached stratospheric levels that would be blackly hilarious were they not so chronically unfair and divisive. This insane housing bubble has been fuelled by banks and politicians keeping interest rates close to zero, so that house price inflation has become the main focus of the economy, by the relentless wooing of foreign investors by estate agents, banks and politicians acting as pimps (and whose actions, moreover, betray the British people), and by a persistent under-investment in housing.

As a result, not only is the dream of ever owning a home receding from the aspirations of an ever-increasing number of hard-working people, but rents — completely unregulated by the government, of course — have also spiralled out of control, leaving an ever-increasing number of people paying far too much of their income in mortgages or rents, while those fortunate enough to have got lucky in the housing casino — those, essentially, who bought property in the 20th century — are rewarded with an increase in the value of their homes that bears no relation to any sense of proportion or fairness.

As the new online newspaper The Canary described it, “to buy a terraced house in London you now need to earn £142,000 a year; rental prices continue to increase at a rate one percent higher than wages do, and homelessness has more than doubled since 2010 – with rough sleeping rising by a third in the past year alone, while funding to prevent this has been cut by 45%.” The Canary also pointed out that “1.5m households (yes, households – not people) are on council waiting lists for accommodation” and that “the ‘bedroom tax’ [a charge on what the government considers an extra room for those in social housing who receive benefits] still continues unimpeded with three-quarters of people affected cutting back on food to pay for it.”

The most responsible answer to this crisis would be a massive social homebuilding programme, addressing the chronic shortfall in the building of homes in the last three decades — essentially, since Margaret Thatcher began the rot by selling off council houses while refusing to let councils build any new homes with the takings, a position that no subsequent government has reversed. A massive social housing programme would, in turn, puncture the housing bubble, allowing prices to settle to rates that would actually be affordable for ordinary hard-working people.

Instead, however, the government is trying to paper over the crisis by offering incentives to those who are already wealthy enough to contemplate buying a house, while simultaneously attacking social housing on a number of fronts as a result of the Tories’ ideological obsession with destroying social housing.

The bill, largely forced through the House of Commons despite persistent opposition in the House of Lords, introduces the concept of “starter homes,” whereby, as the Guardian described it in an editorial in January, “all new homes priced at £450,000 in London, or £250,000 in the rest of England, will be classed as affordable. Buyers under 40 will enjoy a 20% discount paid for by the taxpayer; after five years they will be able to sell on the properties at full price and pocket that 20%.”

The Guardian also stated:

These are not “affordable’”homes. They are worth up to 17 times the national average wage. For the government claiming “there is no money left” then to find billions to hand over to developers to knock up such expensive homes is an outrage. At a stroke, ministers have redefined affordable so that in the capital it now means nearly half a million quid. As the Highbury Group of housing specialists points out, that will enable big building firms to ride roughshod over the needs of local communities and the demands of local councils, and just throw up the most expensive flats they can get away with.

This is terrible policy and stupid politics.

The ill-conceived extension of the “right to buy” to housing association tenants

Another absurd policy in the housing bill involves extending the “right to buy” to housing association tenants, which will have the effect of reducing the stock of social housing when it is desperately needed. To pay for this, the government intends to force councils to sell-off high-value properties when they become vacant, further reducing available social housing. So ill-thought out is this policy that, in an unusual move, Parliament’s Public Accounts Committee heard evidence on the policy prior to implementation and published a damning report on April 29.

The group of cross-party MPs stated:

The policy of extending Right to Buy discounts to tenants of housing associations, funded by the sale of high-value council housing, has potentially significant impacts for both local authorities and tenants of social housing, especially in areas where house prices are high.

Despite the implications and complexity of this policy, the Department has not published a detailed impact assessment to inform Parliament’s consideration of its legislative proposals.

Many key policy details have not been clarified, with the Department offering only vague assurances as to how this policy will be funded, without producing any figures to demonstrate that additional funding from central or local government will not be required.

Other concerns remain, including the extent to which the new homes funded by this policy will be genuine replacements for those sold, and whether there will be sufficient controls to prevent abuse of the scheme given the significant discounts proposed for housing association tenants wishing to buy.

Meg Hillier, the Labour and Co-operative MP for Hackney South and Shoreditch, and the chair of the PAC, issued a statement that pulled no punches in condemning the policy. In a key passage, she stated, “there are no costings or workings out. We are not talking about a ‘back of an envelope’ calculation — there is no envelope at all.”

Her full statement was as follows:

The Government should be embarrassed by the findings of this Report.

Extending Right to Buy will affect many thousands of people yet the Department has failed to provide basic information to support its stated aims. Instead we have heard vague assertions about what it will accomplish and how.

The approach to paying for this policy seems to be entirely speculative. On the basis of evidence heard by our Committee, there are no costings or workings out. We are not talking about a ‘back of an envelope’ calculation—there is no envelope at all.

Similarly scant regard appears to have been paid to the practical impact on social housing tenants, the long-term knock-on costs of the loss of social housing and potentially of a change in the mix of housing types.

We can form our own views about the Government’s motives for this but Parliament and the public are being asked to take a leap of faith about how this will stack up financially, and that is completely unacceptable.

The Department has not made a diligent and credible case for this policy. The PAC follows the tax pound and so far all we have are assertions that it will be fiscally neutral.

We urge the Government to address the very serious concerns highlighted by our Committee as a priority.

As is typical, the government’s response, as usual when it is criticised, is to ignore the criticism. As I have always maintained since this particular branch of the Tory Party took power in 2010, elected by a minority of voters, every policy seems specifically to have been dreamt up only when those involved were certain that anyone with any intelligence was not in the room.

The end of lifetime council tenancies and the disgraceful introduction of “pay to stay”

At the same time, the bill ends lifetime council tenancies, and introduces “pay to stay,” both efforts to insist that social tenancies must be means-tested rather than being available to all. New council tenancies are only supposed to last for a maximum of five years (although concessions introduced by the House of Lords have extended this), while the appallingly named “pay to stay” will see council tenants who, as a couple, earn the median income — the amount that 50% of people earn less than, and 50% earn more than — forced to pay something close to market rents, doubling, telling or even quadrupling what they pay in rent.

Apart from the problem of how this will be implemented, as legislation will be required to compel the Inland Revenue to provide details to tenants’ income to councils — and, in both cases, the blatant and stupid disregard for how many people’s incomes fluctuate significantly — it is a major disincentive to hard-working social tenants, thoroughly undermining the government’s claims to support hard-working families.

The threshold for this unprecedentedly massive and unjustifiable rent hike is just £40,000 a year in London, and £31,000 elsewhere, and yet, when the idea was first floated, disgraceful media outlets like Sky News described it as a “Crackdown On ‘Rich’ Council House Tenants,” despite the fact that it is patently untrue to describe a couple on the median income as “rich,” and completely ignoring the injustice of, essentially, being mugged at one’s front door by George Osborne.

When the housing proposals were first floated, “pay to stay” was supposed to apply to housing association tenants as well, but the housing associations refused to play ball, and secured the right to only implement rent hikes on a voluntary basis, with most if not all, unwilling to engage with it at all. In years of discussions, ignored by the government, those involved in social housing have only ever expressed an interest in a “pay to stay” policy that begins at £60,000 a year, not £40,000 or £31,000 , and have generally spoken about how its introduction would need to be tapered.

Writing in February about what “pay to stay” will mean for council tenants, the Observer stated, “Tens of thousands of hard-working families will be forced to leave their council homes and find themselves unable to afford a local alternative as a result of government plans to restrict social housing to the poorest, according to research obtained by the Observer. The devastating figures – in a report commissioned by the Local Government Association – show that almost 60,000 households in England will be unable to afford to remain in their council properties from April next year.”

The report also found that “214,000 households across England will be hit by the policy and that in London most of the 27,000 households affected will be unable to afford to rent privately or buy in the same area.”

The crossbench peer Bob Kerslake, the “former head of the civil service and until last year the most senior mandarin working on housing policy,” as the Observer described it, “called on ministers to put the plan on hold,” so that pilot schemes could be implemented.

Kerslake led resistance to the housing bill in the House of Lords, where 13 amendments were passed, but almost all were wiped out in the Commons this week as the government pushed the bill through before the end of this particular Parliamentary session. Back in February, he told the Observer that, on “pay to stay,” he “would table amendments to place the scheme at the discretion of local authorities and ‘provide adequate protection for tenants on the amount of rent they have to pay compared to their income.'”

“When this was originally discussed in the coalition government,” he said, “it was intended to deal with the very small number of high earners on over £60,000. The current proposals will affect a lot more households with earnings of half that.

He added, “Pay to stay needs to be seen alongside the forced sale of council housing to fund right to buy for housing associations, the ending of permanent tenancies and the almost total end of funding for new social housing after 2018. Together, they threaten the future of social housing as we have known it.”

Further criticising the proposals, Peter Box, the LGA’s housing spokesman, said, “A couple with three children earning £15,000 each a year cannot be defined as high income. Pay to stay needs to be voluntary for councils, as it will be for housing associations. This flexibility is essential to allow us to protect social housing tenants and avoid the unintended consequence of hard-working families being penalised, people being disincentivised to work and earn more and key workers, such as nurses, teachers or social workers, having to move out of their local area.”

In addition, the Resolution Foundation “found that a household with two earners in Oxford which took on one hour more of paid work a week, tipping joint earnings over £30,000, would see the rent increase by more than £4,000 a year.” Laura Gardiner, senior economic analyst at the Resolution Foundation, said, “Enforcing near-market rents for council tenants earning over £30,000 risks creating strong disincentives to earn more. Families on the cusp of the £30,000 cliff edge could find that securing a pay rise or working a few extra hours leaves them thousands of pounds worse off as a result of far higher housing costs.”

Writing of the housing bill in the Guardian last week, Bob Kerslake described the House of Lords’ struggle with the House of Commons over the bill as “an unequal contest. The Lords can test, challenge and amend but in the end the government will prevail. This is particularly the case for proposals that were included in the Conservative party manifesto. Due to the introduction of English votes for English laws, for which this bill was the first test case, the government has a majority of more than 50 in the Commons.”

In his article, Bob Kerslake proceeded to explain what concessions had been secured, and to criticise the government for its dangerous and divisive ideology:

Nevertheless some important improvements have been made. Fixed-term council tenancies can now be up to 10 years rather than five, and longer if children are involved. Where higher value council houses are forced to be sold to fund housing association right-to-buy discounts, there will now be a commitment in the bill that these should be replaced one-for-one (and two-for-one in London). The starter homes offer has been modified to make it less of a quick windfall gain for those who are able to take advantage of it. Rent increases for those caught by the pay-to-stay plan – which would see higher earning council tenants charged higher rents – will be less steep.

But the fundamental concerns about the fairness of the bill still remain. One group of people, those with the wherewithal to buy, are being helped at the expense of those on lower incomes who are in greater need. Local authorities will now be required to include 20% of starter homes in all future planning applications, which will largely squeeze affordable rented housing out of planning agreements. The forced sale of higher value council houses, unless they can be replaced like-for-like, will reduce the stock of much needed family housing in areas of greatest demand. The homelessness charity Shelter has calculated that 23,500 local authority homes will need to be sold a year to fund right to buy, a third of all council houses that become vacant. We need to help those who want to buy, but this should not be instead of those whose only real option is social rent.

Perhaps the most worrying part of the bill is what it tells us about the government’s underlying view on the future of social housing. There has been much debate over the years about how social housing has changed from being a general source of housing for ordinary people on lower incomes, to being increasingly available only to those in most desperate need. Providing housing for a third of the population in the 1980s, it now houses less than half of that. With the changes in this bill, the numbers will fall further still and social housing will not just be residual, but temporary and contingent. Social housing tenants who progress in life will be expected to pay more rent and ultimately make way for others in greater need. Social houses will no longer be homes to settle down and plan a future in, but a temporary welfare benefit.

Previous Conservative governments boasted about the number of social rented houses they had built. Many Conservative controlled councils still feel the same way. Over the course of this bill though, I have reluctantly come to the conclusion that for the leading figures in this government, publicly provided, social rented housing is now seen as toxic. This is something that I deeply regret.

In time, I believe the government will come to regret this also. It is simply not possible to deliver the new housing the country needs without building more houses of all types and tenures, including social housing.

I agree wholeheartedly with Bob Kerslake’s analysis, and hope to find ways — as a housing association tenant — to keep fighting for the provision of genuinely affordable social housing for all as one of the hallmarks of a civilised society, and as the only way out of a disgusting and disgraceful housing crisis brought about by years of greed and political short-sightedness. I hope you will join me.

For further information, see the analysis of the final bill by Architects for Social Housing, cross-posted below. A collective of “architects, urban designers, surveyors, engineers, planners, building industry consultants, academics, photographers, web designers, writers, housing campaigners and activists operating with developing ideas under set principles,” their primary conviction is that “infill, build-over and refurbishment are more sustainable solutions to London’s housing needs than the demolition of the city’s council estates, enabling, as it does, the continued existence of the communities they house.”

And Then There Were None

By Architects for Social Housing, May 11, 2016

On Tuesday 3 May, Brandon Lewis, the Minister for Housing and Planning responsible for driving the Government’s Housing and Planning Bill through Parliament, rejected 12 of the 13 amendments proposed by the House of Lords. Financial privilege, a convention that deters peers from voting against the Government’s Budget, was invoked in six of the amendments refused, relating to local authorities retaining a percentage of funds from the enforced sale of high-value council housing rather than it all going to central government, the income threshold at which a household will incur market rents, and the limits to the increase in that rate.

The Minister’s party backed him up, and the following day, Wednesday 4 May, after a warning from the Minister about the Government’s mandate, the House of Lords failed to insist on all but two of their amendments, 108, on carbon compliance for new homes, and 110, on sustainable drainage systems, and proposed five new amendments in lieu: 10B, on the provision of other forms of affordable housing besides Starter Homes; 47B, on local authorities retaining part of the proceeds from the sale of high value council homes to build replacement affordable housing, including, according to amendment 47C, homes for social rent; as well as 97B, on neighbourhood right of appeal against planning permission, and 109B, on affordable housing contributions to small scale developments.

These amendments were sent back to the Commons the following week, and on Monday 9 May they rejected them again, while conceding new amendments to energy performance and drainage. Tuesday they were back with the Lords, who withdrew new amendments 10B on Starter Homes, 97D on neighbourhood planning, 108 on carbon compliance and 110D on sustainable drainage, but narrowly insisted on proposed new amendment 47E on the proceeds of high value council housing. Today the Commons again, and for the last time, rejected amendment 47E, and later this afternoon, after a further warning from the Prime Minister, the Lords finally withdrew the last of their 13 amendments.

This week-long stalemate between the House of Commons and the House of Lords is known in Parliamentary parlance as ‘Ping Pong’; but rearranging deckchairs on the Titanic would be a more accurate description of its bearing on the outcome. If the two Houses had not reached consensus over the final text of the Bill before the State Opening of Parliament on 18 May, the Government could have invoked the Parliament Act and forced the Bill through in its original form, without any of the Lords amendments.

The Minister had hinted at this threat with his repeated reminders to the Lords that the Bill was part of the Government’s election manifesto and therefore has a democratic mandate. So now, after 6 months of debate – first through its two readings in the House of Commons, then a month in the Public Bill Committee, then again in the report to and final reading in the Commons, then for two readings in the House of Lords, a further month in Committee, another report to and final reading in the Lords, back again to the Commons, and then back and forth between Lords and Commons – the Housing and Planning Bill has not changed in any significant way since it was first read in the House of Commons on 13 October, 2015.

Against hopes if not expectations, the Right to Buy will be extended to housing associations, adding to the 40 per cent of council homes lost to Right to Buy that are now being rented out by private landlords. On the pretence of paying for this, local authorities will be forced to sell council homes that become vacant if they are deemed high value according to a threshold that is still to be determined by secondary legislation, but is thought to be around £400,000 for a 2-bedroom home in London, and will apply to nearly 113,000 council homes in England.

A total of 214,000 households earning over £40,000 in Greater London and £31,000 in England, rather than the originally proposed £30,000, will be forced to pay market rates to stay in their council homes, but these thresholds will now be based on the incomes of the main two household earners, not include child or housing benefits, and be raised in line with inflation, with a taper of 15p in every pound over the threshold rather than the proposed 20p.

Secure tenancies will not be passed from parent to child and new council tenancies will be for 2-5 years.

The obligation to build state-subsidised Starter Homes for sale at 80 per cent of market rate on 20 per cent of new housing developments will be an enforceable duty that supersedes any requirement to build affordable housing, including homes for social rent, under Section 106 agreements, but their resale after 5 years at full market price will now be regulated by a taper to be determined, once again, by secondary legislation. And planning permission in principle will be granted to any housing development on sites entered on a statutory register of brownfield land that will include existing local authority housing estates.

All we’re waiting for now is Royal Assent and this legislation is the new law of the land, to be implemented by central and local government, and enforceable by the cops and the courts. So much for Parliamentary democracy.

Note: Also see Defend Social Housing’s briefing from January.

Andy Worthington is a freelance investigative journalist, activist, author, photographer, film-maker and singer-songwriter (the lead singer and main songwriter for the London-based band The Four Fathers, whose debut album, ‘Love and War,’ is available for download or on CD via Bandcamp — also see here). He is the co-founder of the Close Guantánamo campaign (and the Countdown to Close Guantánamo initiative, launched in January 2016), the co-director of We Stand With Shaker, which called for the release from Guantánamo of Shaker Aamer, the last British resident in the prison (finally freed on October 30, 2015), and the author of The Guantánamo Files: The Stories of the 774 Detainees in America’s Illegal Prison (published by Pluto Press, distributed by the University of Chicago Press in the US, and available from Amazon, including a Kindle edition — click on the following for the US and the UK) and of two other books: Stonehenge: Celebration and Subversion and The Battle of the Beanfield. He is also the co-director (with Polly Nash) of the documentary film, “Outside the Law: Stories from Guantánamo” (available on DVD here — or here for the US).