Today’s Policy Exchange report advocating the sale of social housing in valuable areas so that more homes can be built in poorer areas is a boring old retread but of course got lots of coverage.
‘Blindingly obvious’ said Grant Shapps ominously.
The BBC focused on Notting Hill and its wonderfully mixed community – so mixed, open and tolerant they even allow David Cameron to live there. The founders of Notting Hill Housing Trust bought properties in the area in the 1960s to protect poor people from rapacious landlords. As the property grew massively in value the balance sheet of the organisation strengthened and became the foundation for hundreds of millions of pounds of prudential borrowing for more social homes elsewhere. The same applies to all the other social landlords who operate in ‘rich’ areas. It is simply not necessary to sell the homes to use their value to create more homes elsewhere, as they have proved.
All the same promises have been heard before. Thatcher and Heseltine promised lots of new homes from right to buy proceeds, but the sold homes were never replaced and most of the money disappeared into the large pot called Treasury. Now Cameron and Shapps promise ‘one for one’ replacement for homes sold under their new RTB scheme, but the arithmetic makes this highly unlikely – and in any case will not be ‘like for like’ as they will sell off social rented homes and replace them with unaffordable ‘affordable rent’ properties.
And of course it is simply wrong to believe that the only way to fund new social housing is to sell off existing. New investment makes sense in itself. It passes the value test – creating an asset that will make will make a profit in its lifetime, especially as the cost of borrowing to build is currently very cheap. New housebuilding is the best way of encouraging growth – it is economically efficient because it does not suck in imports, exploits unused economic capacity, and, taking account of the multiplier effect, pays for itself in raised taxes and reduced benefits. Selling to pay for new investment is a red herring.
Despite all that is said about their richness, boroughs like Westminster contain areas of huge deprivation. The reality of the social tenant is Church Street not Knightsbridge, Dalgarno not Chelsea. There are reasons why much of central London remains Labour. But it really gets up the noses of Tories to have Labour MPs sitting in north Westminster, Hammersmith, and Islington. That’s when their Shirley Porter instincts kick in and social cleansing for political purposes begins to drive the policy agenda.
Policy Exchange say their policy would apply across the country but it is interesting that their rep on the Radio 4 Today programme this morning talked about Mayfair and areas like that. Mixed communities is a difficult concept to get your head around in central London. It may not be the common perception, but central London is still diverse – working class and middle income communities have survived gentrification, often because of social housing. But their man did not have a clue about towns and cities around the country and the impact their plan would have. In most places their policy would lead directly to ghettoisation and the poorest people living in the poorest places – an outcome we have struggled mightily to avoid over the last 30 years.
Shapps and pals have been cautious about attacking the rights of existing social renters, focusing on the easier task of stripping away rights from new tenants and forcing them to pay higher rents, and ending the concept of building new social rent with Government subsidy. But they are emboldened and creeping closer to an outright attack on the fundamentals of social housing. The bedroom tax was one skirmish. Selling property available to re-let in valuable areas would be another. In Hammersmith and Fulham they have already moved on to selling fully-occupied estates to developers.
Harold Macmillan’s famous criticism of Thatcher for ’selling off the family silver’ is as apt as ever. In November 1985 he told the Tory Reform Group:
The sale of assets is common with individuals and states when they run into financial difficulties. First, all the Georgian silver goes, and then all that nice furniture that used to be in the saloon. Then the Canalettos go.
For Canaletto, read social housing.