Housing in Crisis : A Clear Failure of Free Market Policy

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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.

house-chart

 

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

https://www.gov.uk/government/statistical-data-sets/live-tables-on-house-building

 

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.

priced-out-graph

http://www.pricedout.org.uk/why

 

Corbyn’s excellent unreported Speech

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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.”

 

The Tories would rather you didn’t vote because…

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Screen Shot 2015-11-09 at 23.36.23

 

Last date to register online is Monday 16th November 2015

On 19 November 2015, local authorities will close their electoral registers so 16 November 2015 is the last day to register online.  It is easy to register to vote.  It takes less than 5 minutes but you’ll need your national insurance number. You can find out more and register by visiting www.gov.uk/register-to-vote

Why is it important?

The Conservative government is in a rush to change the constituency boundaries. It wants to ensure that the 2020 general election is fought over 600 seats, fifty fewer than the present allocation.

To achieve this, the government plans to use the electoral roll as it stands on 1 December 2015. The numbers on the roll will determine the size and shape of voters’ constituencies.

But millions of people are not on the electoral roll. This means that we are in danger of an electoral map of the UK that does not represent the people who live here.

We need to stop this. The best way to do so is to register to vote.

Why are millions missing?

Last year, the UK moved from the old household survey method of electoral registration to a new method of individual registration.

More time is needed to make Individual Electoral Registration (IER) work because millions of people are dropping off the electoral register.

Some 10 million citizens may not be counted when the government redraws constituency boundaries from April 2016.

Efforts to continue to find the missing millions were meant to carry on until 2016. However, on 16 July 16 2015, just before summer recess, the government moved the date forward to 1 December 2015. 

Stop the rush, democracy is at risk

Because of the hurried changes and because millions could lose their vote, the government has been advised to slow down and get this right.

The Electoral Commission said than an additional year was needed to allow the new system of IER to function.

The government rejected this advice and is pressing on with its plans to close the voter roll in December 2015, one year earlier than originally planned, and move to redraw the boundaries on that basis.

From December 2015, those people that local authorities have not been able to match with tax or benefit records and who have not re-registered and provided a National Insurance number will be taken off the electoral register. 

The missing millions matter

The new register will form the basis of the parliamentary constituency boundary review that the Conservative government wants in place before the 2020 election. Reducing the number of seats and redrawing the boundaries both favour the Conservatives.

The registers with the largest predicted drop off tend to be in large urban areas with a high incidence of multiple occupancy housing, regular home movers and large numbers of historically low propensity registering voters.

The 2016 boundary review will mean:

  • 31 constituencies could go in England
  • 7 in Scotland
  • 10 in Wales; and
  • 2 in Northern Ireland

The danger is that the UK will end up with a distorted electoral map in which urban areas and low propensity voters are under-represented.

According to IPSOS Mori, if the proposed boundary changes go ahead, Labour will need to ensure it has at least a 13 per cent lead over the Conservatives to stand any chance of winning the election (October 2015). 

Make sure you don’t lose out 

It is estimated that there are around 10 million eligible voters not on the electoral register. 

Dismantling constituencies on the basis of a voter roll that is not reflective of the real constituency population is a danger to democracy.

  • 23% of Hackney voters could drop off the electoral register in December
  • Birmingham could lose 7.7% of its electorate
  • Glasgow loses 67,225 voters, Birmingham loses 56,645
  • Cambridge loses 17% of its electors and that’s before an expected heavy drop off of students in the new college year
  • Six of the eight biggest drop-offs are in London, which overall loses as many as 415,013
  • London loses up to 6.9% of its voters while the South West only loses 2.8%, East of England 2.9% and the South East 3.5%.
  • Scotland is the next worst affected region, losing 5.5% of its voters.

The Boundary Commission is scheduled to start work on redrawing the constituency map of the UK, down from 650 to 600 seats, in April 2016. Under their rules, seats will be reallocated away from areas with high numbers of unverified voters who are typically young people, renters, certain ethnic minorities and students.

The situation is particularly bleak for young voters. Students now have to register individually. Electoral Commission data shows that the number of voters aged 17 dropped significantly with the introduction of IER in 2014. 

And the missing voters are not evenly distributed across the country – there are in the region of 120 local authorities that will see a fall in the number of registered voters in excess of the average of 4%.

www.unitetheunion.org/campaigning/no-vote-no-voice-campaign/#sthash.xt7kqqQD.eTClASyw.dpuf

Why is it important?

It’s not – if you are part of this Conservative government because it makes it harder for Labour to win in 2020.  If the Boundary Review goes ahead as planned, the House of Commons will have fewer MPs than at any point since 1800.  It is estimated that of the 50 cancelled constituencies, more than 30 are Labour held and of the remaining 600 seats, many will become much harder for Labour to win.  In the US, this is known as gerrymandering.  It doesn’t matter whether you think that you’re already registered – make sure by doing it again online before Monday!  And make sure that your friends, family and 16/17y olds register as well.

The very design of neoliberal principles is a direct attack on democracy and worker’s rights.

 

The Battle to save the NHS

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The crisis in the NHS grinds on inexorably.  In just the last day, former LD health minister, Norman Lamb warns that the healthcare system will crash in two years and says Tories are being dishonest over crisis.   Furthermore, NHS junior doctors have condemned a new contract imposed on them, fearing that it will cut their pay by up to 40%, force them to work more antisocial shifts and put some off becoming GPs or A&E medics.

They have pledged to resist the move by ministers, which they say is “bad for patients, bad for junior doctors and bad for the NHS”. The joint leader of the 53,000 junior doctors in England affected has indicated that they may even go on strike in protest.

Tony O’Sulivan sets out the current position in the piece below, re-posted from openDemocracy

The NHS stays centre stage as the political ground shakes

By Tony O’Sullivan – Consultant Paediatrician and member of Keep Our NHS Public and the Save Lewisham Hospital campaign.  First posted 14.09.15 openDemocracy

The English NHS is likely to stay centre stage in political fights.  New Labour leader Jeremy Corbyn’s first official visit as Labour Party leader was to Camden & Islington NHS Mental Health Trust yesterday.  His new shadow chancellor, John McDonnell, last night highlighted his opposition to the EU/US TTIP trade deal which many see as a huge threat to the NHS.  And – uniquely amongst leadership contenders,  Corbyn is a signatory to the NHS Bill 2015 – which aims to reinstate the NHS and was re-tabled in Parliament by Caroline Lucas, Green MP with cross-party support on July 1st.

Yesterday, Corbyn wrote

“We as a labour movement have to be strong enough to stand up and ensure that we have a system that prevents anyone falling into destitution, supports those going through mental health crises and ends the internal market and privatisation of our health service.”

 

Later today, parliament will debate a vote of no confidence in health secretary Jeremy Hunt, Health Secretary, after two petitions calling for such a debate attracted over 300,000 signatures – though the Government has relegated it down from the main chamber of the House of Commons, to the significantly more low-key Westminster Hall venue.  Doctors have been asked to ensure their MP attends this debate and to ensure the focus is on Hunt and his record.

NHS campaigners will be out in force to show the Government the depth of feeling for the NHS and against Conservative ideological direction at the Tory Party conference in Manchester on 3-7 October.

The greater openness of political debate, first in the Scottish independence referendum and now in the Labour Party leadership election, means that many more will be ready to get involved.  And we must be ready to respond to every anti-NHS argument.

The ideological untruths and practical assaults on the NHS and public sector that we saw under the coalition government are being ramped up under the new Tory government.

If a public service is starved of essential finance for long enough it will start to fail – and the NHS is no exception.  Just earlier this month, GPs in Worcestershire were told not to refer patients to local NHS hospitals for three months so that they could clear a backlog – and encouraged to pay private hospitals to take patients in the meantime.

The NHS is ‘broken’, wrote James Bartholomew in the Telegraph electing to place the NHS bottom of the pile of European health systems.  He concludes that the ‘failed’ NHS must be replaced by a compulsory insurance system, such as that of Switzerland.

In the UK of course, there is a compulsory contribution to the NHS from public taxation made in the UK.  The great difference is that the UK system is not run for profit and is free at the point of need.

This principle makes the NHS far more cost effective – out-performingSwitzerland in effectiveness and value for money according to a 2015 Commonwealth Fund report.

No doubt other systems have lessons that we can learn from.

But Bartholomew’s argument is a purely ideological one. Like the Government, he wants us to equate publicly funded health systems with failure.

His 2004 book The Welfare State We’re In was praised by Thatcher’s guru, Milton Friedman, as “a devastating critique of the welfare state”.  During the 2010 pre-election period, Bartholomew advocated the abolition of the NHS on Radio 4.

Our NHS has been amazingly effective despite ongoing underfunding compared to other advanced national health systems.  Just why is it that the NHS has lower number of doctors and acute hospital beds per 1000 population and second lowest number of MRI scanners per million compared to other advanced European health systems?  It is a failure of funding rather than a failure of the NHS.  It receives less funding than the OECD average and less than the European comparators.

Nonetheless, the Commonwealth Fund’s comparative analysis of 11 advanced national health services, using data and surveys from 2010-13, placed the USA bottom and the NHS top.  The NHS was best in 8 out of 11 criteria and was the most cost-effective national health system.

In fact, despite significant underfunding, the NHS has punched above its weight for three generations.

It is now under threat from cleverly disguised ideology, worsening cuts, PFI payments and privatisation, not from its ‘failure’.  The failure to adequately fund front-line NHS services over the last five years has increased waiting lists.  We need more GPs, hospital doctors, more nurses and therapists and better equipment.  Not an insurance based system such as the USA or Switzerland.  The USA spends double the UK on health but over 30% of that funding is wasted on private insurance administration and profit margins.  In insurance-based health systems, the incentive of profit regarding who gets investigations, procedures and treatments, can be a more powerful motive than what is bestfor the patient.

Efforts to privatise whole swathes of health services have failed to deliver more effective care and are proving more costly.  We now face a national health service increasingly without national coordination of standards, with shrinking resources and accelerating fragmentation.  This will devastate patient care pathways which rely on many services cooperating together (including social care).

We must get back the NHS.  In the example of New Zealand we can see the immediate benefits if we succeed.  New Zealand privatised their health service in 1993.  Perverse incentives dominated and costs escalated.  The new 1999 government looked this failure in the eye.  They made a political decision to act on the evidence and renationalised their health service in 2000 with clear benefits.  Following the calamitous Christchurch earthquake of 2010, public conclusions were that the privatised and fragmented health service would not have been able to respond to such magnificent effect as New Zealand’s reinstated NHS.

There is one category where the UK comes out close to bottom in international comparisons like the Commonwealth Fund (though still above the USA).

It’s ‘healthy lives’, a category which reflects more specifically health inequality: the effects of poverty, education and societal attitudes to promoting early child development (see the Marmot Review).

The greatest single determinant of health outcomes is of course poverty. The impoverishment of the British people through austerity, unemployment, low wages and zero hour contracts, the mental and physical stress that places on us, coupled with the assault on the funding of the NHS and escalating privatisation, means that the battle to save our NHS is more important than ever.

With additional reporting by Caroline Molloy.

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