The housing crisis could be this government’s poll tax, says James Watkins

It was a shocking but everyday story. A young mum forced to sleep on the sofa year in and year out in a cramped council flat while her children were crammed into a single room. Appeals to local government officials and councillors had gone nowhere. So, there was only one thing to do – to tell her story to the prime minister.

On a bright Birmingham day in August, this mother asked the PM what he would do to help her get out of this problem. It said everything any of us would need to know about this government that David Cameron used this agony to declare that council tenants’ security of tenure – being secure in your own home – should end.

This and the 60% cut in social housing combined with construction workers wondering when the next job will come from could become this Tory-Lib Dem government’s poll tax. For if ministers persist in this cruel and economically illiterate policy, the time these cuts will be felt will be in 2014 – the eve of the next general election.

The critique of the government’s housing policy – and the impact on communities and the economy – is clear.

Let’s take security of tenure first. Tenants will lose housing benefit if they start earning a decent living. This could lead to greater ghettoisation – with some housing estates firmly entrenched as “poor” areas and an end to any hope of mixed communities. And it would probably cost the Treasury more money rather than less.

This is because this would become the new disincentive not to get a decent job. Some tenants will argue that they should not go out and find a good job if their reward is to ripped away from their family and friends.

Then we have the chancellor announcing a 60% cut in social housing. Is it really realistic to expect the private sector to pick up the tab instead? The answer is probably no. After all, the subsidy from government is part of the calculation for when a return to a company’s investment will finally come through. So this policy can lead to potential tax revenue being lost from the construction sector.

George Osborne has said rent levels for new tenants in social housing could rise to close to market value and this could fund new social house building. But, as the national housing federation has pointed out, the average social housing rent for a three bedroom home (now £85 per week could rise to £250 per week. Those getting work will then see their housing benefit fall to cover the cost – yet another incentive not to find decent work.

A number of housing bodies has warned that the changes in housing benefit – where ministers set a threshold for housing benefit – could lead to homelessness in areas of our big cities where the market has set rent levels higher than the national average. Not only is it wrong for people to suffer such trauma, but it is economically unsound. For if significant homelessness occurs, the costs associated with the NHS and policing – with illness and the desperation to survive – will hit the treasury again.

The government stated in the spending review document that it “believes social housing is an important element in fostering community cohesion and supporting households in housing need”. Which makes the decisions ministers have made deeply cynical. Their policies totally undermine what they claim are their policy goals.

This is not to say that Labour got everything right on housing when it was in government. The receipts of sold council flats went straight to central government and not to councils to support local affordable housing. And the endless debates about whether or not council house building was a good idea meant that councillors were not able to respond fully to the housing pressures by, at least, considering this option.

But these faults pale into insignificance against the housing errors of the new government. Labour could stand back and let the accumulated housing pressures build up. After all, the impact of the lack of social housing could eventually lead to a negative impact on house prices generally.

But the damage that would be caused to our communities would be so great that a vigorous defence of local people is needed now to get the change in attitude and policy that is sorely needed from the government.

In the 60s, TV viewers saw how poor housing ruins lives in Cathy Come Home. In Birmingham, David Cameron heard a modern tale of a young mum dealing with poor housing. We must strive to ensure that the housing pressures families face now do not become a full blown housing crisis.

James Watkins is a member of the unite national political committee and Labour housing group executive. He writes in a personal capacity.


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One Response to “The housing crisis could be this government’s poll tax, says James Watkins”

  1. All of this rather assumes that the ruling class – Labour and Tory – think that homelessness is a bad thing. What people fail to consider is that our leaders WANT mass homelessness, they WANT poverty. It’s the only way they can build up a sweatshop economy on the ruins of the current credit-driven model.

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