John Healey is back on the front bench as shadow cabinet minister for housing and has immediately promised to hold the government to account ‘week in, week, out’. Here are some of the arguments that he might deploy.
First, he may well have wrong-footed ministers this week by calling for more action on homeownership, and he was right to judge that this is one of their weak points. It’s also one where he can focus on young people and the barriers to their housing aspirations – the main one being their needing an average deposit equal to 76% of their income (or 126% in London). When John Healey left the housing ministry after the previous election, Britain was still recovering from recession yet 59% of private renters expected to buy a home soon, with 16% having considered applying for a mortgage. With economic recovery supposedly assured, these official figures have got worse not better (56% and 10%). Now half a million fewer households are buying with a mortgage than in 2010. Yet all this is despite the coalition and the new government throwing more than twice as much money at the private market as is being invested in affordable housing.
Second, it’s not as if their investment of over £50 billion in grants, loans and guarantees has boosted housing output. Under the Labour government, housebuilding averaged over 145,000 per year, including the worst years of the recession. The coalition managed an average of 114,000. Labour’s achievement of 170,000 completions in the year before they were hit by the economic crisis now looks like a giddy aspiration under the Conservatives. The coalition plan, Laying the Foundations, was so unsuccessful that one of the new government’s first tasks was Fixing the Foundations. The Tories’ reappointed minister Brandon Lewis wasn’t even responsible for the new policy – it came out of the Treasury. Healey can rightly point to Labour’s much more substantive Lyons Review as a document which sets a target for housebuilding and how to achieve it – rather than simply taking an axe to any regulations that builders find inconvenient, committing irresponsible amounts in financial guarantees, flogging off public sector assets cheaply and hoping that developers will prioritise investment in new housing rather than feeding their ever-growing profits.
Third, Healey will need no urging to bring the focus firmly back onto the costs of renting and the escalating benefits bill. Here he can quote the government’s own social mobility commission as pointing out that housing costs have dragged families with 1.4 million children into poverty over the last five years. In concentrating their action on curbing benefits costs, not only has the government failed on its own terms as costs have continued to rise but the numbers with unaffordable proportions of their income devoted to housing have increased even faster. As with new housebuilding, it’s hardly surprising that private landlords put profits first. Jeremy Corbyn has called not only for limits on rent increases but for rents to be brought down in regions where they are well out of line with incomes. Despite inevitable threats from landlords, this could be an attractive policy package if it can developed in detailed and turned into a robust plan.
Fourth, producing more genuinely affordable rented housing is already one of Healey’s known priorities and he is bound to find Shadow Chancellor McDonnell more flexible in his attitude towards the extra borrowing that will be required. The economic case has been made by Healey himself, strengthened by the recent report for SHOUT. Healey can point to his own track record here – the self-financing settlement that he announced for council housing prior to the May 2010 election, if it had been adopted by his successor, would have provided far higher numbers of new houses than are now being built.
The availability of social rented housing will be a crucial issue in the first major test for the new shadow team – fighting the forthcoming housing bill. John Healey will need a coherent alternative to the Tory package of extending right to buy, selling off high-value council houses, charging better-off tenants higher rents and cutting social landlords’ income. On the last of these, my sense is that he will be on firmer ground if he concedes that social rents have increased too fast, since that would be consistent with his broader argument about why the benefits bill is increasing. But of course the government plans to do nothing to fill the investment gap, even though it is spinning a line that selling off the stock will allow more building.
While the case it made when it published its manifesto in April was extremely weak, civil servants will have had time to strengthen it. Instead of high-value sales funding two lots of replacements, paying off debt and even financing brownfield regeneration sites, we might expect a pared-down scheme, perhaps promising less than one-for-one replacement of the sold-off stock. Healey will need to be ready to expose the injustice of helping fewer than 150,000 tenants become homeowners while closing off the future options for many more who are currently renting privately. Yes, with the help of a hefty government subsidy a bunch of tenants will become owners, but half the properties sold will soon be bought by landlords and they’ll join the landlord bonanza created by selling off vacant council houses. And this from a government which boasts its credibility in managing the public finances and in curbing the cost of welfare.
If Jeremy Corbyn has brought young people back into the Labour fold then John Healey has an excellent chance to put forward policies which reflect their priorities and not those of some older Tory voters. A huge generational gap has opened up in housing. This extends from the half of those approaching their 40th birthday who can’t afford to be homeowners (as the Daily Mail complains), to the one-third of private renters who are now families with children, to the 275,000 households now facing homelessness and the 7,600 already sleeping rough on London streets. For the moment the Tories may be judged by the electorate to be better managers of the economy, but on housing their reputation is in tatters and it’s Labour’s job to make sure the public sees that too.