Is the tide turning at last?

It’s always hard to spot the precise moment a tide peaks and turns. But after a year of severe depression about our housing prospects, to the point recently where I considered stopping writing about it, I have had a minor awakening of optimism.

Mind you, my newly emerging view after the major party conferences is not all that positive: just a feeling that things do not have to get worse inexorably year on year. As far as Labour is concerned, there is the flow of plain speaking backed by rigid determination to turn things around coming out of City Hall since Sadiq Khan was elected mayor with James Murray as his deputy mayor responsible for housing. There is also the final banishment of the hostility to council housing in the Party that undermined policy throughout the life of the Labour Government: it is now commonly accepted by all wings that council building is an essential part of the mix needed to solve the housing crisis.

My remaining concern (apart from the limited chances of actually getting elected to deliver anything) is the reported disagreement as to whether the planned 500,000 new social homes should all be council houses or a mix of council and housing association building. I understand the hostility towards some housing associations, but the sector must be part of the plan if we are to build the necessary homes. From a standing start, councils simply could not start producing 100,000 homes a year: it would take years to obtain the capacity and expertise. They would be set up to fail, and that is the last thing anyone wants. Associations do have capacity and, within a framework of clear Government priorities and adequate grant, they could turn the tap on more quickly.

As for the Conservative Party, there are signs that a new broom is being taken to the old housing policy. At last we have ministers and a growing body of opinion in the country accepting that the Cameron/Osborne ‘one tenure’ policy – the exclusive promotion of home ownership – is miles removed from a ‘one nation’ policy designed to provide homes that are suitable and affordable for all. They have realised that the policy of subsidising demand for home ownership in a desperate attempt to reverse its decline was bound to fail because it would add to upward pressure on prices. To stretch the analogy, Cameron and Osborne were like King Canute, but in their case they were failing to stop the tide of home ownership going out.

It is widely claimed that Labour lost in 2015 because it lacked economic credibility. Yet the Conservatives have ended up following a path on deficit reduction which is pretty close to that set out by Alastair Darling in 2010, but with a lot of additional pain. And they are now adopting the language of Ed Miliband and Ed Balls to distinguish between different types of borrowing: with historically low borrowing costs it makes absolute sense to borrow to invest in homes and infrastructure. It all proves, if proof was needed, that austerity was a political choice and that many of the cuts to public services could have been avoided if different choices had been made around tax cuts.

I am not about to get carried away. The U turn is not yet a sharp 180 degree spin. As Rachel Reeves MP wrote on LabourList, the Chancellor’s speech to the Tory Conference was a “a chaotic cocktail of vague promises and u-turns that work for no one.”  Philip Hammond and Sajid Javid have not suddenly been converted to the cause of Keynsian economics. Nor will they adopt a housing policy which promotes social housing as much as I think is needed – despite the growing evidence that it would be a sound bet for the taxpayer as well as for the people needing homes. Social housing only got an occasional mention at their conference, and the Housing Minister, Gavin Barwell, almost ruined the new mood by making an extraordinary comment that building council housing would deepen and entrench inequality. Thinking that moving from an unaffordable private letting or temporary accommodation or a parent’s home into an affordable council house makes life worse is beyond rational reasoning. But at last they are accepting that rented housing matters and that more ‘affordable’ rented housing is essential. It’s a start – and SHOUT’s man on the spot Martin Wheatley has written a perceptive analysis of what was said at the conference fringe meeting on housing.

The best outcome of the shift in thinking that is taking place would be if some of the new or reallocated money being announced comes out in the form of grant to enable the mayor in London and the HCA in the rest of the country to back new programmes of social housebuilding. Sadiq Khan is in a position to make great use of any funding but he will need to have full flexibility in its use and the Government will need to back him in his determination to get more affordable homes in private development.

The historic evidence is absolutely clear that it was the ending of housebuilding by councils, combined with the failure of the private and housing association sectors to replace their contribution, that was the biggest single factor behind the current desperate shortage. It is great that Labour is firmly behind a large new programme of building and it is encouraging that SHOUT’s proposed programme of social housebuilding at least gets a fair hearing at the Tory conference and garners some support amongst liberal conservative groups like Bright Blue. SHOUT’s plan would set us back on the course that we should have been on for the last 40 years.

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