After three decades of neglect and 1,634,000 households stranded on council waiting lists by 2005 (probably nearer 2 million by now), a house-building programme is finally getting under way. But it is nowhere near enough.
Investment in public housing has plummeted from 6.1% of government spending in 1981 to just 1.6% in 2005. What this means is that in current price terms the government is now spending £22bn less a year on public housing than it was spending at the end of the 1970s. Added to that the rent-setting formula for council housing has now been changed from the formula known as “pooled historic cost” to one that is partly related to the value of owner-occupied housing in the area. Rents have climbed steeply as a result. Those in council housing cannot hope to buy their way out in the private sector when the ratio of mortgage loans to income can be as much 8 or even 10:1.
A small increase in housing output will not necessarily stabilise, let alone bring down, house prices when the flow of house purchase lending, now at the staggering level of nearly £1tn a year, is rising so much faster. If extra house-building increases the stock by 1-2% a year, which the housing and regeneration bill – given its second reading yesterday – aims to achieve, while at the same time the credit available to buy it increases by, say, 5% or more a year, house prices won’t fall.
What is really needed is a return nearer to historic levels of housing investment and a construction drive targeted at decent-quality council housing made available at rents related to the cost of construction and completely decoupled from ballooning prices in the private sector.
The government’s aspirations are not ambitious enough. It proposes 200,000 new homes a year to 2016 (last year’s total was 169,000), then 240,000 a year to 2020 – 3 million in all. But new household formation alone is now running at 220,000 a year, and if the accumulated unmet housing need of the half-million or more households living in overcrowded, bad quality or damp housing is to be dealt with within a 10-year programme, then at least an extra 270,000 homes a year is now required.
More pressing still, the government is proposing to build an extra 15,000 social rented homes a year, nearly all through housing associations. Council housing still remains largely taboo, since the Blair government only built an average 300 council houses a year compared with the 14,000 built even at the end of Thatcher’s reign in 1990. But the latest surveys show that at least a further 20,000 social homes for rent are needed each year over and above the extra 15,000 in order to meet what is called “urgent newly arising” need and to halve, as the government intends, the numbers who are homeless or in temporary accommodation (currently 101,000). To achieve this, local authorities should now be allowed to borrow on the open market, as housing associations can, against the security of their existing housing stock. At present local authorities are forbidden to do so.
Less appealing in the new housing bill is the proposal to create an unaccountable regulator which would transfer key responsibilities away from elected ministers. This new quango will have control over such sensitive issues as the criteria for allocating accommodation, the nature of housing demand to be addressed, the extent to which demand is to supplied, the terms of tenancies, the levels of rent, procedures for addressing tenants’ complaints, and even anti-social behaviour. After stock transfer, RSLs, ALMOs and right to buy have shifted half of council housing away from local government, this latest move could now go a long way to removing all the rest out of local democratic control.
Worse, profitmaking companies are to be allowed for the first time to register as social landlords under a lighter burden of regulation. And for the first time means-testing is to be included in the definition of social housing. This abandons one of fundamental founding principles of council housing which was to provide high-quality housing for all sections of society, not housing of last resort for those who can’t afford anything better. Only 30 years ago, according to Professor John Hills, 20% of the richest tenth lived in social housing. Now, if this bill goes through, council estates will further concentrate deprivation and council housing will be further stigmatised when what the government ought to be doing is to promote council housing as a tenure of choice for those who wish it.
Gordon Brown’s renewables conversion on the Damascene road to climate change is extremely welcome, but like all miracles needs to be examined very closely. It is magnificent that the bar for green achievement has now been so dramatically raised, but until plausible mechanisms to get there are set out, the claims ring not a little hollow.
Britain has long been committed to a 60% reduction in carbon emissions by 2050 compared to the baseline 1990, as demanded by the Commission on Environmental Protection in the 1990s. In the base year 1990 Britain’s carbon emissions were about 160 million tonnes CO² (mtC), so by 2050 they have to be down to some 64 mtC, i.e. a reduction of 1.6 mtC every year for 60 years. So in the ten years since 1997 they should have been cut by about 16 mtC. In fact, initially over that period carbon emissions were cut significantly, but then over the latter part of the period they rose substantially, with a net increase over the whole decade of 2%. If then over the last 10 years emissions have gone up by 3 mtC rather than down by 16, what assurances are there that in the next 43 years emissions will be cut by 2 mtC every year from now on to meet the 60% reduction target by 2050?
To Gordon Brown’s credit he is now going further and committing to an 80% cut by 2020, which is indeed what the world’s scientists are now saying is necessary. But that only sharpens the question still further. To meet that tougher target, how exactly are we going to cut by 2.7 mtC every year from now to 2050?
When it comes to Brown’s new targets on renewables, acclamation must give way to incredulity. At present, Britain generates just 4% of its electricity from renewable sources of energy. In most of the EU it’s 10-20%, and in Scandinavia it’s 30-50%. The PM is now committing the UK to meet the EU target of 20% of its energy (not just for electricity generation) from renewables by 2020. Since it is all primary energy that is being referred to (i.e. for space heating and transport), that would mean some 40% of our electricity must come from renewables. To paraphrase, c’est magnifique, mais ce n’est pas l’ecologie. How precisely is a 10-fold increase in renewables to be achieved in the next 13 years?
What makes these objectives less than credible is that it is Gordon Brown himself who has blocked most of the mechanisms that might have delivered these targets. When the Government (I know because I was a Defra Minister at the time) was planning to put into statute a requirement on the top thousand companies in the UK to report annually on their emissions so that the public would know whether each year they were reducing them or not, Gordon Brown unceremoniously ditched the commitment in 2005 because at a CBI dinner just beforehand he wanted to flaunt his de-regulatory credentials. He also dropped in 2000 the fuel duty escalator which increased the price of petrol each year by more than the rate of inflation in order to encourage motorists to use their car less wherever they could because of the environmental damage involved. And it is Gordon Brown who has continued to provide huge subsidies year after year to the fossil fuel industries of oil, gas and coal which are the basic cause of the whole climate change problem.
The other oddity of this sudden spurt of greenery is that it sits uncomfortably alongside a raft of policies pulling in exactly the opposite direction. The Government is still committed to triple airport capacity in the UK by 2030 (and only yesterday announced a third runway at Heathrow) which with the huge number of extra flights entailed would make it virtually impossible to reach these ambitious new climate change targets. Gordon Brown is still committed to a massive nuclear energy revival which, given the enormous costs, would certainly squeeze out any sustained expansion of renewables. And the Government has continued to block measures which would give a major boost to the woefully low standards of energy efficiency in housing and other measures like the Merton Rule to expand the use of renewables in house construction.
So, Gordon, bully for you with your latest aspirations, but how exactly are you going to achieve them?
Extract from my contribution [scroll down to 3.09pm] to the Queen’s Speech debate, 14 November 2007
I believe the Government urgently needs some commanding themes by which its distinctive vision can be clearly understood. I want to propose three.
The first is democratisation which the PM himself adumbrated in his first statement to Parliament. But it has to stretch a great deal further than simply giving Parliament a vote before the country goes to war. Parliament needs real new powers on a much broader front – electing Select Committee members, ratifying (or not) Cabinet nominations made by the PM, approving (or not) the membership and terms of reference of Committees of Inquiry proposed by the PM, and setting up our own Parliamentary Commissions to investigate matters (like extraordinary rendition) when the Government itself refuses to do so.
But it isn’t just in Parliament where there’s a democratic deficit. A far bigger one now exists outside. Power has become so centralised over the last 30 years and the regulatory authorities so enfeebled that so far from regulating corporate power, the biggest businesses have increasingly co-opted the power of the State for themselves for their own commercial ends. The current loosening of controls over major power station, airport and incinerator developments, the failure to regulate unhealthy food advertising because of objections from the food industry despite the epidemic of obesity, the withdrawal of the SFO investigation into corruption allegations against BAE, and the relaxation of the gaming laws to permit a flood of gambling casinos are just a few recent examples.
Accountability today has all but vanished. Perhaps the most telling case is Northern Rock. It is now costing taxpayers £23bn in loans, plus a £2bn interest charge – almost equal to the entire annual defence budget – yet nobody is held responsible. The Bank of England, the Financial Services Authority and the Treasury are all blaming each other. What action is being taken, and by whom, to face up to the fundamental mistakes made that led up to this crisis, including the reckless lending practices of the chief executive of Northern Rock as well as the flawed structure of regulation put in place a decade ago? Why wasn’t Northern Rock temporarily taken into public ownership, as was done in the case of the secondary banking crisis in 1974, in order to avoid a run on the bank and to retain depositors’ confidence without this colossal haemorrhage of public funds? The answer to that of course is that the neo-liberal agenda of privatisation, de-regulation and unfettered markets is still, unaccountably, being imposed above everything else, even at phenomenal cost to the taxpayer so that public ownership, even temporarily, is ruled out.
And what action is the Government going to take over the mania for securitisation, collateralised debt obligations and all the other opaque and dodgy financial derivatives which have so dramatically and comprehensively destabilised the markets? Despite all its de-regulatory instincts, does the Government now acknowledge that stricter regulation of financial markets is now necessary if the frenzy for newfangled financial instruments, which are actually designed to be deceptive over risk and value, is to be curbed?
Equally, at the other end of society, the checks and balances against the arbitrary use of power have all but evaporated. Civil liberties have been drastically eroded, and the introduction of ID cards and 2-months detention without charge, both of which I deplore, are still being mooted. Workers who have been in their jobs less than two years can still be arbitrarily dismissed without any rights, and temporary and agency workers remain an exploited underclass – mainly at the behest of the CBI which this Government should be much stronger in resisting. Accountability, or indeed any redress, against alleged misdemeanours by the police, judges, banks, private utilities or big corporations is almost non-existent. Today powerlessness is widely felt to be endemic throughout society, and it will require an awful lot more than focus groups or citizens’ juries to put it right.
Gordon Brown wants to reassure Bush at the Mansion House tonight that the ‘special relationship’ still lies at the heart of UK foreign policy. After a teeny-weeny bit of independence in beginning to withdraw British troops from Iraq, we have to genuflect again. The real question we should be asking is: are we seeking a closer relationship because we believe that US policies are broadly right or simply because that is where the power is?
There is of course no special relationship, almost by definition, since the essential tenet of the neo-con philosophy is unilateralism, Might is Right, and self-interest overrides everything whatever their ‘friends’ may say. We are no more likely to carry influence if we play the deferential courtier than if we play the critical friend. As we found out painfully throughout the Blair years, playing to the American tune unremittingly on every occasion gained not a singly demonstrable concession.
So are American policies right? Of course there is a considerable US-European consensus across a broad spectrum of policy which nobody seriously doubts. But there are some very important areas of discord where we have a responsibility to make our voice heard.
Iraq is a prime example, though far from the only one. It is becoming clear that the US intend a permanent military presence in Iraq as long as Saudi, Iraqi and Iranian oil lasts, amounting in total to more than half global oil reserves. For this purpose the US is strong-arming an oil law through the Iraqi Government which is virtually expropriating all future Iraqi oil revenues which on some official US estimates could reach the stupendous level of £30 trillions, 12 times the UK GNP! The Americans are now building five colossal military bases across Iraq to enforce their will. We should be telling them this is a recipe for an endless insurgency which is not only flagrantly illegal, but an unwinnable quagmire which can only erode the West’s position to the benefit of Iran, China and Russia.
Second, the US won the Cold War in 1989, but then blew it by passing up a priceless opportunity to win over Russia as a long-term ally. Russia let the Berlin Wall be torn down, pulled the Red Army back inside its border, removed the Communist Party from absolute control, and embraced American-style capitalism. Putin went out of his way to aid American forces after 9/11 and did not use his Security Council veto to block the US invasion of Iraq. What has been his reward? The US, exploiting Russian weakness at every turn, moved NATO into Eastern Europe and then into the former Soviet republics. The US bombed Serbia for 78 days in 1999 despite Russian protests, and is now placing a missile system in Poland and the Czech Republic as well as unilaterally abrogating the ABM Treaty which has produced stability for 30 years. Is it any surprise that Putin is now so suspicious and uncooperative towards the West? This is fundamentally the wrong policy, and we should be saying that loud and clear to the US before we alienate yet further one of the great powers that should be our ally.
Third, instead of continually fudging his options over Iran, Gordon Brown should be making clear that whilst we support economic and diplomatic pressures to deter an Iranian nuclear bomb, we do not and will not support a military attack on Iran. It would have catastrophic consequences – setting the whole Middle East alight, provoking intensified Iranian intervention in Iraq, seriously disrupting the world oil supply a quarter of which passes daily through the straits of Hormuz, unleashing murderous retaliation maybe as far as Western capitals, All without being able ultimately to prevent an Iranian bomb, and indeed generating a national unity behind the mullahs when otherwise an unpopular regime might steadily unravel because of economic failure.
It is our duty to make clear to the Americans now our strong opposition to their perverse and counter-productive military threats towards Iran. Otherwise, the Cold War will be succeeded by another long term geo-political conflict, only conducted at much higher temperature.
Graphic: Project Gutenberg
Some useful proposals – though the devil may lie in the detail, not yet revealed – but disappointing on the vision and no razzmatazz of new ideas for a new leader, largely because Gordon Brown has already been leading on the domestic policy agenda for the past ten years and now has nothing much new to say.
It’s good that after two decades of neglect of social housing amidst the triumphalist ideology of private ownership, the national scandal of housing need is now at least being noticed. Council waiting lists are now above 1 ½ million and there are over 100,000 homeless, yet only 100 Council homes were built last year (down from 13,000 a year at the end of the Thatcher era). The housing stock is only growing by some 185,000 a year at present, yet the number of new households being formed each year is about 220,000. We are still going backwards. Building an extra 40,000 homes a year, as the Government proposes, is clearly nowhere near enough to meet the yawning gap of housing need. And how many of the 40,000 will be social housing anyway? And why are local authorities still not being allowed to build more Council houses themselves if they wish, borrowing against the security of their own existing housing stock?
Changes to the planning system, as is proposed, might seem sensible when some planning decisions have clearly taken far too long. The 8 years spent on the Heathrow Terminal 5 decision is usually quoted here (though much of that was accounted for by the time spent on Ministers’ desks after the planning report was submitted). But today’s proposals are motivated by very different criteria. National Policy Statements will be drawn up which will enable an array of major developments – nuclear power and nuclear waste facilities, coal-fired power stations, airport expansions, major road schemes, and large waste incinerators – to be put through without the public having a say on whether they are needed or safe, or where they are to be located. This rather conflicts with Brown’s stated wish to bring more democracy into public decisions.
A Climate Change Bill is very welcome, but again its contents leave a lot to be desired. It promises a review of progress in cutting carbon emissions every 5 years which is far too lax when the UK is way off track to meet the Government’s objectives. Clearly annual targets, published and enforceable, are urgently needed. Moreover, air travel and shipping emissions are omitted, even though they are the fastest rising sources of emissions. Nor are mere targets sufficient anyway when other Government policies, notably a tripling of airport capacity by 2030, are diametrically opposed.
Democratisation has also been one of Gordon’s ostensible goals, which is also desperately needed. But it has to stretch a great deal further than simply giving Parliament a vote before the country goes to war – a concession which after the Iraq debacle would probably be inevitable anyway. Parliament needs real new power on a much broader front – electing Select Committee members rather than letting the Whips use the patronage to gain a wider acquiescence, ratifying (or not) Cabinet nominations made by the PM, approving (or not) the membership and terms of reference of Committees of Inquiry proposed by the PM, and setting up their own Parliamentary Commissions to investigate controversial issues (e.g. extraordinary rendition) when the Government refuses to do so. Nor can the idea of greater democracy cut much ice when the Government is still intending to pursue the ID cards folly and, even worse, extend the 28-days detention without charge in defiance of the 800 year old habeas corpus.
And what is not in the Queen’s Speech is perhaps even more important than what is. There’s nothing about redressing the centralisation of power which is such an indictment of the current state of Britain. There’s nothing about redressing the grotesque inequality of income and wealth – nor was there is in the Pre-Budget Report a month ago. And there’s nothing about restoring the ethos of public service which has taken such a battering under Blair – indeed it’s taking a further hit currently with the huge cutbacks in BBC funding which threaten public service broadcasting. Et tu, Gordon?