Is Labour’s Housing policy shifting leftwards?

Is Labour’s housing policy shifting leftwards? It’s official policy of suspending Right to Buy (RTB) sales was introduced by Teresa Pearce1 when she was temporarily Shadow Housing Minister. This was after John Healey had participated in the coordinated resignations of Shadow Cabinet members aimed at forcing Jeremy Corbyn to resign. Pearce had said that the policy “could only make sense in a time of surplus, in a time of shortage it makes no sense at all”. It didn’t go as far as we would like. We believe RTB should be ended as in Scotland and Wales. However, the new policy did at least mark a step away from New Labour’s craven support for RTB.

When this attempt to force Corbyn out failed and he won the second Leadership contest John Healey, somewhat magnanimously was invited back as Shadow Housing Minister.

In March of last year I wrote to John Healey on behalf of Swindon Tenants Campaign Group when Housing Minister Gavin Barwell made a statement about RTB. He said that the policy was only “politically justifiable” if homes sold are replaced by new homes built. Here was the political equivalent of an open goal but John Healey ignore it. We suggested that Barwell’s statement was an opportunity for him to demand that the Minister suspend RTB given the fact that homes were not being replaced. Alas, we did not get a response to our suggestion from Mr Healey. We did eventually get confirmation from his office that the policy of suspending RTB still remained in place. Yet nothing was done to campaign for it. It remained a policy on paper only. Given John Healey’s well known support for RTB we suspected that he was on strike against implementing the policy. Read on below or download a PDF here healeyland

Labour will suspend the right to buy”

We are pleased to recently read that, for the first time that we aware of, John Healey has publicly said that Labour’s policy is to suspend RTB. He recently told the Daily Mirror that “In the midst of the Housing crisis, the Conservatives’ wasteful Right to Buy is indefensible.”

Since 2010 communities have lost 170,000 council homes while the number of young home owners has fallen by a million. The Conservatives approach to housing is failing on all fronts. Labour will suspend the Right to Buy and start the biggest council housing programme in thirty years.”

This is positive. We welcome this statement. However, as we have pointed out before, Labour’s Manifesto introduced a caveat to this policy. Councils could “resume sales if they can prove they have a plan to replace homes sold like-for-like”. Not all plans come to fruition, of course. Why should councils be allowed to operate RTB on the basis of a promise to replace them? This caveat should be abandoned. Even if one for one replacement was actually applied it would only ensure that council stock numbers did not decline. Yet tackling the housing crisis requires a big increase in council house stock. At the end of the last financial year the number of council homes left in England had fallen to only 1.585 million. If suspension is to be applied it should be applied universally, with no room for manoeuvre given to councils that would want to continue to sell their homes.

How many council homes?

As for “the biggest council house building programme in 30 years”, we have pointed out before that the number of council homes built in England then was only 16,000. This is not much of an ambition. We have attempted to get John Healey to make some commitment to a specific target for new council homes, but none has been forthcoming2. As it stands at the moment, Labour’s policy is limited to social housing grant at around the same level as its National Affordable Homes programme, which, in its best year supported only 3,080 new council homes. Labour’s policy according to John Healey’s office is that councils will have to compete with housing associations for this grant. Moreover, it won’t only be for ‘social housing’ but for shared-ownership homes as well. We have been unable to get any confirmation of in what proportions the grant would go to ‘social rent’ and to homes to buy.

This ambiguity in John Healey’s position is reflected in the fact that even when he talks about suspending RTB he adds:

We will back first time buyers on ordinary incomes by building 100,000 discounted First Buy Homes, targeting help to buy and giving local people ‘first dibs’ on new homes built in their area.”

This outlook was reflected in Labour’s Manifesto policy in which helping first time buyers onto the proverbial housing ladder was announced as Labour’s “first priority”3, rather than a large scale council house building programme.

Compulsory purchase powers to buy land?

Meanwhile there was one other positive development. The Guardian reported that Labour was considering “forcing landowners to give up sites for a fraction of the current price in an effort to slash the cost of council house building”. It reported that the proposal being drawn up by John Healey could use compulsory purchase powers to buy land at “closer to agricultural value rather than paying up to 100 times more”. One of the main reasons for high house prices is the fact that by controlling land developers gain the benefits of the increase in value when planning permission is granted. The Guardian reported that an hectare of land worth £20,000 can sell closer to £2 million if planning permission is granted.

Rather than letting private landowners benefit from this windfall gain – and making everyone else pay for it – enabling public acquisition of land at nearer pre-planning-permission value would mean cheaper land which could help fund cheaper housing,” Healey said.

As it happens this is one of the issues Swindon Tenants Campaign Group raised in our submission to the Labour Party’s Social Housing Review. The post-war Atlee government enabled councils to buy land at use-value rather than market value. This helped facilitate the large scale council building programmes of the post-war years. This policy was ended by the Tories through the 1961 Land Compensation Act. Labour appears to be proposing to amend this Act.

It is welcome that Labour has raised this issue and recognises the injustice of landowners and developers (they are also sometimes landowners) passing on the costs to local authorities and the home buyers who face inflated prices.

There are a number of different ways to deal with this problem, one of which is a land tax. What is certainly necessary is preventing developers gaining the financial uplift in price that the mere passing of planning permission gives. Despite our differences with Mr Healey we welcome this news and look forward to seeing some detail.

The question in the title of this article is as yet to be proven. We hope these statements do mark a shift in Labour’s policy. Yet we need to continue campaigning for a decisive break from New Labour’s housing philosophy. Making Labour’s first priority a large scale council house building programme,4 and abandoning New Labour’s infatuation with home ownership is necessary if such a break is to be made.

Martin Wicks

February 8th 2018

2 Comments

  1. Suspending Right To Buy is an idea which has reached its time, It is now generally accepted by the public as they have figured out that getting one’s foot on the housing ladder is just a cruel joke. nothing is to be lost by the Labour Party by taking a bold stand and decaling that they would abolish Right To Buy, I am convinced this would be attractive to the public at large.

    Like

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