Labour shoud kill off Right to Buy, not breathe new life into it

This article was written before the Labour conference in response to a Financial Times article which reported that Labour was thinking of introducing Right to Buy into the private rented sector. It was published in Labour Briefing.

According to the Financial Times Labour is considering introducing Right to Buy into the private rented sector. “The idea of a private right-to-buy was mooted by Jeremy Corbyn, Labour leader, during his leadership bid in 2015 but it never became party policy. Reviving the idea as “great” and “radical”, Mr McDonnell said it could help reverse the problems caused by Thatcher’s policy.”

To hear John McDonnell saying this, especially since he has expressed the view that RTB should be abandoned for council housing, is a cause of great concern not to mention consternation. It would be a crass policy which would make a nonsense of the Party’s move away from RTB for council housing.

The way to “reverse the problems caused by Thatcher’s policy” is to end RTB and build sufficient council housing to stop the growth of the private sector. It is the shortage of council housing which has facilitated the growth of the PRS in combination with the gulf between earnings and house prices for those who want to buy.

Last year’s Labour conference voted to end RTB as opposed to suspending it. John Healey, a long time supporter of RTB, has refused to implement the change in policy. The idea of introducing it to the PRS will only give sustenance to Healey’s resistance to banning RTB.

RTB in the PRS, if it was adopted as Party policy, would give Labour’s opponents a gift with which to beat the Party. They will say, how can they propose to suspend RTB for councils and at the same time introduce it in the PRS? It will be denounced as contradictory not to mention hypocritical.

Shadow Secretary of State for Housing, John Healey, has been resisting attempts to make a complete break with New Labour’s housing philosophy and its worship of home ownership. A proposal to extend RTB to the PRS could be used by him and his supporters to breathe life into RTB for councils. After all if it is only suspended rather than outlawed it could be reintroduced. The formal position of the Party is that if councils show that they will replace homes sold on a ‘like for like’ basis then they could win back the right to sell their homes again.

Aside from more stringent regulation and policing of the PRS the best way to tackle the worst PRS landlords is to significantly increase the council housing stock so that less and less people are forced to live in the PRS.

Herein lays the weakness of Labour’s housing policy because it has no commitment to a specific target for new council homes. There is no grant dedicated to council housing. The only commitment is for £4 billion a year grant for council, housing association homes and “affordable home ownership”. Councils would have to compete with housing associations for grant. Instead of imposing a duty on councils to build council homes Healey’s policy is a duty to promote “affordable housing”. This means that councils could fulfil this duty without building a single council home. They could simply apply for grant to build “affordable ownership” homes.

What we want from John McDonnell, who has spoken about his “battle with Healey” over Labour’s housing policy, is a commitment that Labour’s first housing priority is a large scale council house building programme. Fortunately there are moves afoot to commit the Party to to such a programme. The newly formed Labour Campaign for Council Housing has succeeded in getting 12 CLPs to forward its motion on council housing. It calls for Labour to commit to

  • 100,000 council homes a year, funded by £100,000 per property, that is £10 billion grant a year, and
  • ending Right to Buy rather than suspending it.

The resolution is due to be discussed at other CLPs which are meeting before the resolution deadline of September 12th.

The idea of extending RTB to the private sector should be unceremoniously buried and councils banned from selling off their homes. What we want from John McDonnell as potential Chancellor is support for the proposals of the Labour Campaign for Council Housing. He cannot win a “battle” against John Healey by giving credence to RTB. It makes it more difficult for us to win the case for ending it.

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