Labour's housing failure

Paul Kershaw

A commitment to build new housing was trumpeted by Miliband at the Labour Party conference. As a document, agreed at Labour's recent National Policy Forum, states: "Britain is in the midst of the biggest housing crisis in a generation".

The enthusiasm unleashed in the recent referendum campaign in Scotland shows what is possible when people begin to believe in an alternative to 'Westminster politics'. A mass party articulating radical policies on housing could generate comparable enthusiasm across the UK. However, the policies set out by Labour can only lead to despair.

Not enough

Labour's target is to build 200,000 homes by year by 2020. But accepted estimates of the rate of household formation suggest that between 200,000 and 250,000 would be needed simply to prevent the crisis becoming more acute. So even if Labour were to achieve the target in its last year, the housing shortage would still be getting worse.

The Lib Dems' Danny Alexander has stated that Britain actually needs 300,000 new homes a year. So Labour's house building targets are lower than the Lib Dems!

Is it realistic to believe that Labour would achieve this inadequate house building target? We are assured that the Lyons Housing Review - set up by Labour - will explain. But leaks already suggest that they are finding that the target does not look realistic because of the commitment to stick to Con-Dem spending plans.

Housing has been hit hardest in local government cuts: a 34% cut between 2010 and 2015. Labour's local government spokesman Hilary Benn has repeatedly stated that there will be no more money for local government from a future Labour government.

There is no mention of restoring social housing grant cuts. Labour councillors had called for further borrowing powers but that has not been accepted. The belief that Labour will 'pull a rabbit out of a hat' and find the necessary money for a serious affordable house building programme is fantasy. Trade union members will question why their leaders voted for this pro-austerity position at the National Policy Forum when union policy opposes cuts.

Miliband promises more first time buyers. While suggesting adjustments, the document reaffirms Labour support for the 'Help to Buy' scheme that supports purchasing homes worth up to £600,000 - the government taking on risk that would otherwise have been the banks' responsibility (welfare for banks!).

When introduced by the Con-Dems, the policy was almost universally condemned by capitalist commentators. Albert Edwards of Société Générale described it as "One of the most stupid economic ideas of the last 30 years," warning that by artificially inflating house prices it would drive young people into "indentured servitude".

Younger house buyers are desperately overstretched; a rise in unemployment or in interest rates would push many over the edge. Yet even in this policy area Labour cannot find the courage to oppose the most discredited of neoliberal policies.

Nightmare

Expanding home ownership through easy money and building council housing with grant funding seemed to offer the prospect of improved conditions in the post-war capitalist boom. In the post-crash world of austerity Labour does not promise grant funding for housing and the dream of home ownership is turning into a nightmare.

In these changed conditions only a radical break from failed capitalist policies can offer a way out. Instead of being run as massively subsidised dysfunctional casinos, the banks must be fully nationalised (already the official policy of unions such as Unite).

Instead of gambling with our money a publicly owned banking system could mobilise finance for a massive programme of house building and refurbishment as part of a democratically determined plan.

Labour has little to crow about over housing. Between 1998 and 2010, when in government, Labour built only 6,330 council homes. Even the Tory Thatcher government managed to build 17,710 council homes in 1990

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