Housing in Crisis : A Clear Failure of Free Market Policy


Housing in Crisis:

By Henry Stewart : @happyhenry

If councils had continued to build homes at the rate they did from 1974 to 1979, we would by 2014 have had 4.1 million extra dwellings.

That fact perhaps on its own explains the current housing crisis. Now it might not have been possible to build that many homes. Perhaps, due to available land, they would only have built half that, or a quarter of that, number. But even just a quarter would have meant we would not have the same level of housing shortage or, probably, prices as unaffordable as we face today.

The decision to stop local authorities building houses was a political one, taken by the government of Margaret Thatcher. It was based on a belief in the market. Surely, the argument went, if the housing market was not “crowded out” by public construction then the free market would respond and provide the homes that were needed.

Restrictions on council house building were not only continued by her successors, but further tightened. The average 32,000 council houses built each year from 1979 to 1990 was well down on Labour’s 152,000 from 1974-79. However under John Major it fell to an average 3,500 from 1990 to 1997. Under Tony Blair, from 1997 to 2007, just 357 council homes were built each year on average.



Local authority Housing Association Private Total
Labour, 1974-79 151,678 21,978 144,240 295,920
Thatcher, 1980-90 31,905 14,684 166,417 211,147
Major, 1990-97 3,584 33,052 147,114 183,323
Blair, 1997-07 357 23,712 180,657 202,738
Brown, 2007-10 680 29,847 123,437 153,963
Cameron, 2010-14 2,830 27,158 106,345 140,335

Source: Table 208 House building: permanent dwellings started, by tenure¹ and country2



The number of dwellings built by housing associations during Blair’s years in office also fell, to 10,000 less per year than under Major. We know from Nick Clegg’s memoirs that, for Cameron and Osborne, there were clear political reasons not to increase social housing. He remembers one of them saying “I don’t understand why you keep going on about the need for more social housing – it just creates Labour voters”


Why Labour did remove the ban on councils building more homes is more of a mystery. Owen Jones has said that he once asked Hazel Blears, who had been Secretary of State for Local Government, why Labour did not ensure more public housing was built. The reply: “None of us knew anybody in social housing so we weren’t aware of the scale of the problem.”

Private sector house building did rise. But the 22,000 extra houses built each year from 1979 to 1990 did not come near to making up for the 120,000 annual shortfall in council houses. Neither was a shift made to housing associations, which built an average 7,000 homes a year less during the Thatcher years than under the previous Labour government.

Free market advocates would probably claim that the failure of the private sector to bridge the gap was down to market flaws, such as a shortage of land and planning restrictions. However a successful free market creates a balance of supply and demand, but there is no reason to suggest it will meet a public need for affordable housing.

Faced with a choice between using a piece of land for a £20 million mansion or 90 affordable homes at £200,000 each, it is always going to be the mansion that is more profitable. That is an extreme example. But the choice between 45 expensive home or 90 affordable ones is probably more common. It is clear that, without planning intervention, private developers will tend to build for the more affluent part of the market.

“Subsidised” housing? Or efficient housing?

David Cameron liked to describe social housing as “subsidised”, suggesting that the lower prices faced by council or housing association tenants was due to public subsidy. However social housing in the UK receives no such subsidy.

Cameron’s description was a recognition that social housing provides more affordable homes. It is also a recognition that the public sector can provide homes, without subsidy, at a better price (and often better quality) than the private sector. It is simply more efficiently provided housing.

The housing sector is a clear example that the free market cannot provide the solutions to all our public needs and indeed that it is often the public sector that can do so more efficiently and at lower cost.

Jeremy Corbyn has pledged to build 100,000 council house a year if elected. It does seem to be a policy that makes simple sense. It does not even need an increase in central government expenditure or in taxation, but only a removal of the restrictions on local authorities securing loans to build homes.

During the 2015 election the Green Party leader had difficulty explaining where the money would come from for public house building. Evan Davis on Newsnight explained it very simply: all that is needed is for councils to borrow the money on the public bond markets, and then to to use the resulting rent to pay both the loans and the interest. No extra public expenditure is required.

The housing crisis is a problem created by political ideology being put ahead of what was society needs. But it is also a problem that can start to be solved very easily by a return to public housing.




The War Game #NotoTrident


In 1965, this film was produced, suggesting what we might experience if there was a nuclear war. Initially it was banned but I watched it in school in 1970.  I was so shaken, and have been opposed to nuclear war, and nuclear energy ever since. There is no sense whatsoever of having nuclear weapons which are horrific, pointless and extraordinarily expensive.  We have had seventy years of senselessness, and it will end when people are made aware of the horrors of these weapons of mass destruction, and that is by real education. There can be no more important issue which we should be educating future generations about.

The war game can be seen on this link 

It is the US debut of the film showing. I could not find a full Youtube link, though there are clips.

war game

A review is seen here on Film Four http://www.film4.com/reviews/1966/the-war-game

An extract of the review is reproduced below,

The BBC and Harold Wilson’s government thought that The War Game was so powerful that it would have a profoundly negative effect on British morale, and conspired to keep it from the small screen – even when it won an Oscar after a triumphant run on the festival circuit. Their perturbation – if not their reaction – quickly makes sense as this chilling 47 minute film plays out. The War Game still ranks as one of the most powerful examples of the docu-drama form (which Watkins had practically invented with his earlier success at the BBC,’Culloden’). He expertly blends statistics, government information, and the graphics and tropes of contemporary BBC news reports with the fictional enactment of the aftermath of a nuclear strike on Kent. The effect of Michael Aspel’s authoritative tones declaring “this could be the way the last two minutes of peace look” over realistic footage of miserable chaos can easily be imagined, especially since the scenario under the Cold War seemed all too likely.


Think Left: Seventy Years of Senselessness, Nuclear Weapons are pointless, horrific, and extraordinarily Expensive


The War Game: A Review from Film Four

Corbyn’s excellent unreported Speech


Yet again, there has been an almost total lack of reporting on Jeremy Corbyn’s response to this most slippery of rightwing governments.   Yet again, only the Morning Star has fulfilled the role of the media.  Yet again, for the rest (and don’t mention Labour List!) the only aspects of interest were:

Jeremy Corbyn refusing to chat to Cameron en route to the House of Lords (they said how silly and rude – what?)

Jeremy Corbyn refusing to take interventions in his ’41 minute speech’ (actually 29 minutes and another Cameron ‘mispeak’)

Jeremy Corbyn being drowned out by non-stop Tory yelling (they said JC should have allowed interventions – why?)

This is not journalism.  It is trivialisation of the highest order given the seriousness of this government’s policies and intents.  Democracy requires accountability.  We get none from this Conservative Government and our mainstream media colludes in ignoring its own responsibility to report the words and policies of Jeremy Corbyn’s opposition LP.


Fortunately, RT has filled a gap by allowing us to hear Corbyn’s speech in its entirety (and to feel the disgust at the behaviour of the Tory MPs – how would anyone know that its the speaker’s role intervene).

The Morning Star’s report can be read here:

‘… Mr Corbyn said the government’s vague promises will do nothing to “create a more equal society, an economy that works for everyone and a society in which there is opportunity for all.

“Still this government does not seem to understand that cuts have their consequences,” he blasted.

“This austerity is a political choice, not an economic necessity, and it’s a wrong choice for our country made by a government with the wrong priorities — and it’s women that have been hit hardest by these cuts.”


Len McCluskey: Labour Right must stop scheming and start fighting the Tories


Len’s speech lasts 25 minutes then a Q&A

Len McCluskey | Jeremy Corbyn: Blast From The Past Or Leader Of Tomorrow? | Oxford Union

Published on Feb 25, 2016

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In his address to the Oxford Union tonight (20:00 hours, Tuesday 9 February), McCluskey will say that last summer’s Labour leadership election saw an exhausted New Labour collide with rising public discontent about the inability of business-as-usual politics to tackle growing inequality.  Against this backdrop, an electrifying campaign based on the promise of real political change propelled Jeremy Corbyn to Labour leader.

McCluskey, the first modern day trade union leader to address the Oxford Union, speaking on the subject Jeremy Corbyn: Blast from the past or leader of tomorrow? will say:

“Some have sought to excuse their disloyalty to Corbyn by pointing to his own rebellious past on the backbenches. But who can seriously argue that his votes in parliament against the Iraq war, identity cards or university tuition fees now diminish his ability to lead the Labour party today? On all these issues he was not only right, I believe, he was giving voice to the views of most Labour supporters.

“I’m not saying that any Labour MP should have to abandon his or her own views, or cease to articulate them within the party’s democratic structures. But I am saying that this continual war of attrition is achieving nothing beyond taking the pressure off the government.

“So my clear message to the plotters is – stop the sniping, stop the scheming, get behind Jeremy Corbyn and start taking the fight to the Tories.”

The leader of the 1.4 million-strong union will remind those undermining Jeremy Corbyn that they have failed to grasp why their brand of politics was roundly rejected by the Labour electorate – and dismiss the term ‘moderate’ as  wholly inappropriate for MPs advancing further foreign wars or versions of austerity:

“These MPs, who refuse to accept the overwhelming mandate Jeremy Corbyn got from Labour’s membership, are generously described as the “moderates” in the party.  It’s an abuse of language – there is nothing “moderate” about voting to bomb Syria or agreeing more public spending cuts, anything more than it’s “extreme” to vote for peace or for an end to eye-watering austerity.

“Such labelling simply obstructs the debate we need to have which is what went wrong with New Labour, what lessons can we learn, and how can we craft an appealing electoral pitch for the reality of 2020, not 1997?

“Their analysis of Labour’s defeat in 2015 was unconvincing, their proposals stale, minimalist and uninspiring – and for the most part they have still not shaped up after Corbyn’s victory. Until they can do that, they are a plot without a programme; a cabal without a critique.

“Labour cannot simply go back to where  it left off in 1997, 2007 or 2010.  Jeremy Corbyn’s message, his authenticity, his radical challenge to the status quo is part of an international movement against business-as-usual politics.”

McCluskey will further say that that the efforts of some in the parliamentary Labour party (PLP) to present the May elections as a referendum on the leader should be thoroughly dismissed:

“This is a sensitive issue and I am not a supporter of going  back to mandatory re-selection or other changes designed to intimidate or undermine Labour MPs. But I also believe that we need to issue a clear warning to those who are advocating the PLP being used as a lever to force Jeremy Corbyn out.

“The bizarre plans outlined by Joe Haines and pollster Peter Kellner, the call to arms by Damian McBride in his Times article and the ludicrous 99 days’ notice given by Michael Dugher to the arch-Tory Mail on Sunday – all have to be dismissed with distain by any real Labour supporter.

“If the Labour MPs want something constructive to do, then start working out policies and ideas that might help attract voters back to Labour. The leadership election revealed just how much the New Labour faction had run out of political impetus.  They offered no answers to the big questions of inequality, economic management, and 21st century social justice. There were certainly no big ideas from what were dubbed the “mainstream candidates” during the last leadership election.”

Turning to the need for an alternative to austerity, McCluskey will advance that Corbyn represents the best chance the UK has to reverse Conservative policies that have rendered this the most unequal of the major western nations:

“The global political and economic problems are so stark that they can no longer be ignored. Politicians who are willing to talk frankly about them will be listened to.  Under Jeremy now, we have a clear message: one that rejects austerity economics and promises investment and growth instead.

“Fairness, tackling corporate greed, tax avoidance and tax evasion, and holding power and wealth to account – all popular proposals which are resonating on both sides of the Atlantic.

“What Jeremy Corbyn offers – like Bernie Sanders in the US – is a calling out of corporate corruption, a rejection of the austerity that has made the UK the most unequal economy in the G8 and the promise that politics and politicians can and will put things right for ordinary working people.”

– See more at: http://www.unitetheunion.org/news/len-mccluskey-to-labour-plotters-stop-the-scheming-back-corbyn-and-take-the-fight-to-the-tories/#sthash.xTOVqWw1.dpuf