The Politics of Policy
The Politics of Policy
Post war Europe developed a diverse base of low cost rented housing; We chose to use the instruments of local government.
Uniquely to the UK, this allowed Mr Heath to abolish low cost rented housing at the stroke of a pen, when he announced the doubling of council rents in 1971.
The politics of housing has become more blurred. Labour has placed some limits on the ‘right to buy’ for housing associations who provide ‘social housing’; but they still fear the electoral consequences of Mrs Thatcher boast that:
“the Right-to-Buy policy alone is sufficient to persuade thousands of people to vote Conservative for the first time”
Yet Conservative voters now commonly express the feeling that the ‘right to buy’ was a mistake. It was always market nonsense to sell off that great resource at 30% of its real value. The sales have sealed the total loss of a low cost rented alternative to house purchase in the UK. But change began when legislation to abolish cost-balanced rents was announced in 1971.
Post war Europe developed a diverse base of low cost rented housing, through a variety of agencies. In response to large scale war damage, schemes were started by Trade Unions, Churches and a variety of charitable agencies as well, as by government. In the UK, a more centralised approach to providing ‘Homes for Heroes’ was begun by Aneurin Bevan and to give his programme the control he needed, he chose to use the instruments of local government. In those days, the majority of working families lived in rented accommodation and much of it was in slum conditions.
Council housing transformed the quality of life for the majority of working families. It set standards, which influenced the building of private homes and it raised the aspirations of the next generation for the independence of home ownership.
While Labour and Conservative governments competed in house building for the early years (Macmillan a Conservative Prime Minister still holds the record), two huge disadvantages of the choice to employ local government as the instrument for low lost rented housing emerged.
- Politics is at the roots of local government and building programmes became restricted by political expediency rather than responding to housing need. Just as homeowners experience, costs in the early years of any borrowing programme are high. The need to include a subsidy from the local rates was a political issue and access to council housing became increasingly restricted. While the need for rates subsidy declined and eventually vanished as the stocks matured, this restricted access became ingrained in the institution of council housing. It began to evolve from general provision to a limited form of welfare housing.
- The second disadvantage of using the instrument of local authorities is that they can be controlled by central government. It was this uniquely British phenomenon that allowed Mr Heath to abolish our low cost rented system at the stroke of a pen, when he announced the doubling of council rents in 1971.
By the 1960s council housing was, by far, the dominant provider of rented accommodation. Average subsidies fell below the mortgage subsidies for house purchase (1968 subsidies: £157 million on 5.5 million council houses and £300 million on 9 million private houses). Investment had resulted in a rented system capable of sustaining new building programmes on cost balanced rents, well within the affordability of people on average incomes.
But without reform, access was restricted to the ‘deserving poor’ and building programmes were reduced to cater for this narrow view, thus making them less able to serve the critical needs of the homeless. Housing was a political battleground. Just getting onto the ‘council waiting list’ became an issue and administrators, flattered with the power to provide a ‘local’ service, considered long waiting periods acceptable. Council estates became Labour strongholds, making them less likely to be favoured by councils with Conservative control. Sustaining the myth of council subsidies was also a part of the political agenda.
Nye Bevin, the post war minister responsible for the development of both housing and the Health Service had warned against the danger “segregation of different income groups is a wholly evil thing from a civilised point of view”. But residualisation grew in the 1960s and the Wilson government failed to recognise an even greater danger that lurked within the political agenda of the Conservative party. Residualisation and politicisation made the achievements of investment in housing vulnerable.
Unlike the Health service, which genuinely catered for the vast majority of the electorate, the average tenant was poor. A wider housing need existed, young couples saving to buy and a generally wealthier more mobile population were not served by a rented system with restricted access and long waiting periods. Unlike the Health Service, the investment in housing was not protected by the public, when Mr Heath disconnected rents from cost-balanced budgeting in order to encourage the private rented sector, nor when Mrs Thatcher sold council stock at a third of the market price “to persuade thousands of people to vote Conservative for the first time”.
By 1969 in Great Britain, total stock exceeded the number of households for the first time with 50% owner occupied and 30% council housing in spite of the restricted access. Most Local Authorities outside of cites were fully capable of maintaining low cost balanced rents while supporting moderate new building programmes.
The lesson of history is not that council housing failed, but that its success was made vulnerable by the failure to adapt it to the changing need of the population as a whole. The loss of the low-cost rented sector marked a watershed change in the stability of the UK housing market. A low cost rented alternative is not only a widespread general need, it is essential to control the level and stability of house prices. An open access, investment based affordable rented sector is the key to solving our current housing problems.
