A Solution to Thatchers Housing Legacy
Tony Gosling
tony at cultureshop.org.uk
Fri May 10 12:22:04 BST 2013
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>[]
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><http://freecriticalthinking.org/daily-pickings/505-levelling-the-property-market>Levelling
>the property
><http://freecriticalthinking.org/daily-pickings/505-levelling-the-property-market>market
>
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>
>
>Distortions in the US and UK economies have been
>driven largely by property values inflated by
>debt fuelled monetary expansion. People respond
>to incentives and our economic system favours
>landowners at the expense of their (and everyone
>else's) long term interests. In
><http://freecriticalthinking.org/daily-pickings/323-the-traumatised-society>The
>Traumatised Society Fred Harrison explains the
>fundamental problem of land and location value
>accruing to individuals (or companies) instead
>of being shared for the common good.
>
>
>
>Incentives for "buy-to-let" investment dwarfs
>those available to owner occupiers and together
>with other hostile policies have decimated
>public housing provision. Occupier Mike Gold at
>Radical Soapbox explains the effects of housing
>policy since the second world war and proposes a
>measure to restore the balance towards council house provision.
>
>
>
><http://radicalsoapbox.com/a-solution-to-thatchers-housing-legacy/>A
>Solution to Thatchers Housing Legacy
>
> http://radicalsoapbox.com/a-solution-to-thatchers-housing-legacy/
http://www.911forum.org.uk/board/viewtopic.php?p=164607#164607
>By Mike Gold
A Solution to Thatchers Housing Legacy
Posted by Mike Gold on Thursday, May 9, 2013 · Leave a Comment
Mortgages are hard to get, rents keep rising, and
being a landlord is becoming even more attractive
to those with capital. Sixty per cent of Housing
Benefit recipients are in work, as are all
recipients of Tax Credits, and both these schemes
look like a subsidy to employers for paying low
wages. However, most of these subsidies end up in
the pockets of the landlords!!
It is not the first time that wages have been
subsidised and failed to solve the imagined
problem. The Speenham Land System, introduced in
1795, allowed the Speenham Parish in Berkshire to
subsidise the wages of farm workers, and the
system soon spread to large parts of England.
While farmers then just like employers today
took advantage of being able to pay low wages, it
was not these low wages that were the real
problem. It was the price of corn (essential for
bread!) and it was only when the Corn Laws were
repealed in 1846, and cheap corn could be
imported into Britain, that the problem was solved.
Britain, like many countries, found that
migration from the countryside to the towns, as
the agrarian economy changed to an industrial
one, produced a housing problem. The really
sub-standard housing in the towns and cities of
the early industrial revolution would probably
have lasted longer if it hadnt proved dangerous
to health everyones health including the
wealthy. Sanitation and sewers solved that
problem, but overcrowding, sharing toilets and
using council bathhouses was still rife after the 2nd World War.
The 1945 election produced a Labour government
that offered more than the empty rhetoric of
Lloyd Georges post-World War1 slogan of a land
fit for heroes. After launching the NHS, the
government began a most ambitious programme for
getting rid of the slums by massively expanding council housing.
Successive governments, both Labour and
Conservative, had a consensus often called a
mixed economy and that included building
council houses. A roof over your head was seen as
much a right as education, the NHS and full employment.
Thatcher, a populist, ended this consensus,
offering instead greed and selfishness,
epitomised in the 1980 Housing Act that forced
councils to sell off council houses to their
tenants at big discounts. The Act also specified
that councils must pay off all debt before they
could use the proceeds of these sales for
building new council homes. Since most councils
had debt, this was the death knell for council housing.
Today, the cause of the housing crisis can be
traced directly back to Thatcher. The pity is
that Thatcher could not have lived to see this
disaster unfurling. Her economic ideas were based
on the free market and monetarism, and she
equated controlling the money supply with
balancing the weekly household budget! Sir Alan
Walters, her Chief Economic Advisor from
1981-1983, was a monetarist, but monetarism has
long since fallen out of favour, even though its
disastrous effects are still being felt. This
simplistic idea that running a country is the
same as balancing the weekly household budget
still finds favour with Frau Merkel and David Cameron but with very few others.
Since 1980, around two million council homes have
been sold and, as can be seen in Appendix A below
(www.gov.uk ) only 1.2 million built. All the
council houses sold are now lost from the social
housing stock, giving a net loss of 800,000 homes
over the last 30 years. And this over a period
where the population has been rising!!
The figures also show that the mantra of reducing
the public sector, in order to set private
enterprise free, does not apply to house
building, since the number of units built by the
private sector in the boom years 2000-2008
were less than in the 1960s, when council house
building was also at its height.
Any solution based on building more houses
private and/or social housing will take many
years to come to fruition. There are, however,
solutions that do not take years.
Firstly, the vast majority of landlords use
borrowed money to purchase properties, because
this is tax efficient for them! There is tax
relief on interest paid on the loan, which is
really a subsidy http://bit.ly/ZmAFOf, so that
this anachronism should be ended.
Secondly, one of the last acts of butchery that
Thatcher performed on society before the Poll Tax
rebellion toppled her was to abolish rent control
and security-of-tenure for tenants in
privately-rented properties. The reintroduction
of proper rent controls, coupled with security of
tenure, would take the pressure out of the rental
market and see rents being reduced. Less being
spent on housing benefit and tax credit and there
would be time to produce a genuine housing policy
not based on the economics of the madhouse.
Why will the Government and the Opposition not
consider this? Yet again, the political will
isnt there, and as long as governments continue
to ignore the people who have elected them and
get away with it Thatchers legacy will
continue to blight the lives of the less
fortunate in society and, increasingly, young
people looking to make their way in life.
It is time to stand up be counted.
Appendix A
UK House Building 1946-2011Year Private
Enterprise Housing Association Local Council Total
1946
1947
1948
1949 24,460 8,020 168,780 205,260
1950 30,240 7,290 167,900 205,430
1951 25,490 7,350 169,020 201,860
1952 36,670 10,130 201,520 248,320
1953 64,870 16,800 245,160 326,820
1954 92,420 22,120 239,580 354,130
1955 116,090 12,850 195,480 324,420
1956 126,430 9,850 171,390 307,670
1957 128,780 8,520 170,290 307,590
1958 130,220 8,220 140,200 278,630
1959 153,170 6,520 121,880 281,570
1960 171,410 7,240 125,620 304,260
1961 180,730 6,320 116,140 303,190
1962 178,210 6,030 129,410 313,640
1963 177,790 7,550 122,380 307,710
1964 221,260 9,790 152,140 383,190
1965 217,160 12,360 161,710 391,230
1966 208,650 14,890 172,470 396,010
1967 204,210 15,070 196,180 415,460
1968 226,070 15,320 184,450 425,830
1969 185,920 16,660 175,750 378,330
1970 174,340 15,210 172,670 362,230
1971 196,310 16,490 151,670 364,480
1972 200,760 11,220 118,960 330,940
1973 191,080 12,130 101,430 304,640
1974 145,230 13,870 120,540 279,630
1975 154,600 22,050 145,360 322,000
1976 155,300 23,100 146,440 324,840
1977 143,970 30,650 139,540 314,160
1978 152,230 26,,290 110,170 288,690
1979 144,120 21,390 86,320 251,820
1980 131,990 21,480 88,530 242,000
1981 118,590 19,700 68,330 206,630
1982 129,020 13,740 40,090 182,850
1983 153,040 16,820 39,170 209,030
1984 165,560 17,290 37,570 220,410
1985 163,400 13,650 30,420 207,470
1986 178,010 13,160 25,380 216,540
1987 191,250 13,150 21,830 226,230
1988 207,420 13,490 21,450 242,360
1989 187,540 14.600 19,320 221,460
1990 166,860 17,930 17,710 202,500
1991 159,140 20,820 11,060 191,020
1992 146,940 26,500 5,660 179,100
1993 146,380 35,910 3,360 185,650
1994 153,270 36,860 2,880 193,000
1995 156,930 38,760 3,430 199,120
1996 154,340 32,950 1,740 189,030
1997 161.230 28,340 1,540 191,110
1998 155,830 24,100 1,100 181,020
1999 157,930 23,730 330 181,990
2000 154,580 21,990 280 176,850
2001 152,650 21,090 360 174,080
2002 162,770 18,940 250 181,960
2003 172,620 17,260 250 190,490
2004 182,700 20,660 130 203,490
2005 185,850 23,490 230 209,580
2006 186,530 26,000 290 212,820
2007 198,480 27,660 280 226,420
2008 155,430 32,230 630 188,290
2009 122,520 35,050 840 158,410
2010 106,060 29,860 1,360 137,280
2011 106,620 32,200 3,090 141,920
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