The needs of the many

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

How English housing policy arrived from Vulcan via Wales.

I’ve recently been putting together the 100th issue of Welsh Housing Quarterly. The 25-year history of the magazine is closely bound up with the story of Welsh devolution, a distant prospect when it was first published in 1990 but a developing process that led eventually to the first-ever Welsh Housing Act last year. But there was one period early on that has a very contemporary relevance for England as it prepares for the second reading debate on the Housing Bill on Monday and the spending review later this month.

In May 1993 Wales got a new secretary of state who seemed to come from a distant planet. The Conservative MP John Redwood was an intellectual Thatcherite with an appearance that prompted sketch writer Matthew Parris to come up with a comparison that has stuck ever since: ‘a new creature, half human, half Vulcan, brother of the brilliant, cold-blooded Spock’.

But Redwood was MP for the not very Welsh sounding constituency of Wokingham. A Plaid Cymru MP called his appointment ‘the most bizarre since Caligula made his horse a senator’. And the new secretary of state soon embarrassed himself with a transparent attempt to mime the words of the national anthem at the Welsh Conservative Party conference (one of the best political clips ever – if you haven’t seen it, watch again here).

His two years in Wales were notable for attempts to impose his Thatcherite agenda on a mostly Labour country. Most infamously, he seemed to criticise single mothers in the Cardiff suburb of St Mellons, arguing that they saw pregnancy as the route to a council house and benefits. He denied it and claimed he was a victim of Labour spin but the controversy continues to dog him even years later.

However, his role also gave him the opportunity to experiment with Thatcherite policies in areas such as housing. The Conservatives wanted 80 per cent home ownership in Wales by 2000 and greater diversity and choice in social housing.

He outlined his vision in a House of Commons debate in July 1994 in which he hailed home ownership as the outcome of a British march to freedom that began with Magna Carta. ‘Everyman has gained his rights, his votes, his dignity and his enlightenment,’ he said. ‘Owning a home of your own is an almost universal aspiration and the experience of most.’

And he went on to give what could be the blueprint for what’s happening in England now:

‘The idea that social housing should be housing for rent is one of the oddest in British social policy. Subsidised housing for rent not only reduces the scope for people to move house and to develop their lives as they see fit: low-cost home ownership is better value for the tenant and the taxpayer and it does not have the drawbacks of some rented accommodation.’

He argued that because a home owner pays off their mortgage after 25 years whereas a tenant carries on paying rent for ever ‘the best social housing of all is low-cost home ownership’:

‘The success of our housing policy in the 1980s was to attract many more people into ownership. The biggest advances by far came through rising incomes and more employment opportunities, which enabled many people to buy new homes of their own for the first time in the many attractive estates and villages that grew up around Wales. A very successful council house sales programme converted many tenants into owners. In the 1990s, we need to make sure that housing associations, too, make their contribution.’

The housing policies being pursued in England now are eerily reminiscent of what Redwood was advocating for Wales then. The extension of the right to buy, the displacement of affordable rented homes by starter homes in the planning system, plus compulsory Pay to Stay and fixed-term tenancies all stem from the idea that social housing is part of the ‘dependency culture’. The promised ‘refocusing’ of the housing budget on ownership in the spending review will finally deliver what Redwood said was ‘the best form of social housing’ As Kate Webb sums it up on Shelter’s policy blog, security will only be on offer to those who can afford to own.

Free of their Lib Dem millstone, the Conservatives are finally doing what Redwood was advocating 20 years ago. But back in the 1990s he sounded like a voice in the wilderness. In the wake of the house price crash, a Conservative government invested more in social rented housing than at any time since as part of its housing market rescue package.

Home ownership in Wales (which has always been higher than in England) never did reach 80 per cent and it is now back at around the 70 per cent it was when Redwood was miming the national anthem. Thanks to devolution, Wales remains committed to social rented housing. The right to buy for council tenants is severely restricted and could be abolished completely after next year’s Assembly elections. Even the Welsh Conservatives are opposed to the extension of the right to buy to housing associations.

In England, Messrs Osborne, Clark and Lewis are following Redwood’s agenda in very different circumstances. When Redwood arrived in Wales, the average price of a home for a first-time buyer in the UK was just over twice their earnings and still less than three times even in London. The current figure is more than five times their earnings in the UK and almost ten times in London.

You might think that this shows a desperate need for affordable rented homes. By Vulcan logic though, this huge increase in prices means that social housing is more ‘subsidised’ than ever before. The solution is to sell it off, cannibalise it for ownership schemes, convert social rents to market rents, let the private rented sector deal with housing need and homelessness and then complain that housing benefit is out of control. All this comes at a time when six million workers in the UK are paid less than a Living Wage that is calculated on the assumption that they live in social housing.

The post-Thatcherites in England are set to achieve Redwood’s dream of abolishing social housing for rent just at the point when it is most desperately needed. As Dr McCoy might have put it: are they out of their Vulcan minds?