Heart, brain and Clegg

What could housing expect from a government influenced by parties other than the Conservatives and Labour? Part 1: the Lib Dems.

Assuming the polls are right and there will be another hung parliament,  any of the other five parties who took  part in the first TV debate could have an influence. The SNP and Plaid Cymru would seek concessions for Scotland and Wales while demanding less austerity from a Labour government, especially on welfare [though later the SNP reached out to the rest of the UK with a call for 100,000 affordable homes]. However, most housing issues are devolved from Westminster, so I’ll concentrate in this two-part blog on the other three parties. Power may matter a lot more than policies, there are some hints in the Lib Dem, Green and UKIP manifestos of what might offer common ground with one of the bigger parties.

So first, the Lib Dems. Assuming enough of them keep their seats, they could be a coalition partner (or a less formal supporter) for either a Tory or Labour government and they are the only party with a track record in coalition at Westminster.

Last time around their priority in the coalition negotiations was constitutional reform. Within the DWP and DCLG, the Lib Dems had limited influence except on pensions and went along with policies like the bedroom tax until they decided withdrew support in 2014. Aside from tuition fees, the bedroom tax is one of the issues that will cost them most and a u-turn so close the election looked less than convincing. Although the party argues that it was able to block policies such as cutting housing benefit for the under-25s, the parameters for housing and housing benefit were largely set its acceptance of the Conservative deficit reduction plan in 2010.

The bad news in the manifesto launched yesterday is that housing is not one of the key priorities identified at the beginning. The good news is that the Lib Dem deficit reduction plan, pitched midway between Labour and the Tories, allows borrowing for investment provided debt falls as a proportion of national income from 2017/18. Housing gets a specific mention in this context:

‘In our Spending Review we will set out long-term plans for capital expenditure, and ensure that investment in infrastructure, including in housing and energy efficiency, continues to rise both in absolute terms and as a share of the economy.’

As usual, their manifesto offers some good ideas on housing too:

  • A plan on how to achieve their target of 300,000 homes a year published in the first year of the parliament’
  • Ten new garden cities, including five on a ‘Garden Cities Railway’ from Oxford to Cambridge
  • Direct government commissioning of homes for sale and rent to fill the gap where the market fails to deliver
  • Giving local authorities ‘more flexibility to borrow to build affordable housing, including traditional council housing’
  • Devolving full control of the right to buy (this is not spelled out but presumably means giving councils the power to suspend it in their area)
  • A new Intermediate Housing Fund covering affordable rent, shared ownership and the party’s Gentoo-inspired plan for Rent to Own homes.

However, the section on private renting is wishy-washy at best. A Help to Rent scheme offering deposit loans to the under-30s is the big but hardly inspiring new idea. Bad landlords will not be trembling in their boots at the prospect of Lib Dem plans to ‘encourage’ a new multi-year tenancy and establish a ‘voluntary register’ of rented property. And the Lib Dems seem to be prisoners of the coalition’s track record with a ludicrous plan to ban letting agent fees but only if (make that when) current transparency measures fail.

On welfare, the manifesto contains plenty of references to policies that the Lib Dems blocked (benefit cuts for the under-25s) and Tory proposals that they do not support (the party will cap the increase in working age benefits at 1 per cent rather than freeze them).

While most of these ideas seem to have more in common with Labour than the Conservatives, the manifesto also has a long section on planning. Localism was the glue that held the Tories and Lib Dems together on housing last time around and with common ground on issues like self-build it could do so again.

However, there are also references to policies that the party could not block that offer hints about a future arrangement. There’s a welcome emphasis that ‘policies that promote home ownership should be focused on newly built homes to prevent artificial pressure on prices and should not discriminate on the basis of previous housing tenure’. I take these to be references to the extension of right to buy and to Help to Buy mortgage guarantees. That impression is strengthened when it takes credit for Help to Buy Equity loans.

There are also several rationalisations of less successful and more unpopular coalition policies. The Lib Dems will:

‘reform the policy to remove the spare room subsidy. Existing social tenants will not be subject to any housing benefit reduction until they have been offered reasonable alternative accommodation. We will ensure tenants who need an extra bedroom for genuine medical reasons are entitled to one in any assessment of their Housing Benefit needs, and those whose homes are substantially adapted do not have their Housing Benefit reduced.’

These concessions sound reasonable enough but are they workable? And does the insistence on calling it the ‘spare room subsidy’ suggest that the Lib Dems still can’t accept they did anything wrong?

They do accept we’re failing to meet the demand for homes. ‘We have made a start in addressing this. The supply of affordable rented housing has been increasing.’ But that weasel word ‘affordable’ is another rationalisation, an impression confirmed by the dubious claim that the government ‘restored house building from record lows to nearly 150,000 a year’.

And here it is again: ‘We have maintained a substantial programme of affordable house building in the last five years, in part enabled by designing innovative products that can deliver new homes at a lower cost.’

These rationalisations are indications of the compromises the Lib Dems were and are prepared to make in power. Like Labour they’ll keep (but not reduce) the overall benefit cap. This means that the entire political establishment is now committed to a policy that will have severe implications for housing as more and more affordable and social tenancies are affected.

Second time around, the Lib Dems would presumably play a better hand in coalition negotiations and be louder about what they manage to negotiate in Budgets. Would the party demand more on policies like housing and welfare in a new coalition? In the old one, junior minister positions in a Tory-dominated DWP and DCLG offered limited scope and the party may have even fewer MPs this time. Will welfare or housing really be greater priorities for ministerial positions than education and the environment? Probably not. It’s also possible that they may not do a coalition at all, preferring a less formal arrangement to support another party in government.

The other big question is whether the Lib Dem ‘red lines’ in any negotiations would cover housing and welfare issues. They say they’ll give the Tories a heart and Labour a brain. Nick Clegg has said they would not accept Tory plans for £12 billion cuts in welfare (the Lib Dems want £3 billion) but would demand a clearer deadline from Labour about reducing the deficit. Would they block Tory and Labour plans on benefits for the under-21s? Would they insist on more capital investment in housing? Does their criticism of the extension of the right to buy to housing association tenants mean they’d block it? Will Clegg even still be there? We’ll find out – but only after May 7.

Originally posted on Inside Edge 2, my blog for Inside Housing


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