A Solution to Thatcher’s Housing Legacy

Tony Gosling tony at cultureshop.org.uk
Fri May 10 12:22:04 BST 2013


>
>[]
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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
>
>
>
>
>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 Thatcher’s 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 Thatcher’s 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 hadn’t proved dangerous 
to health – everyone’s 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 George’s 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 
isn’t there, and as long as governments continue 
to ignore the people who have elected them – and 
get away with it – Thatcher’s 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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