Cutting interest rates rapidly towards US levels of around 2% seems at last to be getting through to the MPC (but was it really such a good idea to give them this power in the first place when they invariably display the bankers’ prejudice to countering inflation irrespective of the real economy?). Yet there is still little sign of take-up of the other main weapon to tackle the recession – major public works building programmes, especially housing.
Repossessions are expected by the Council of Mortgage Lenders to reach 45,000 this year and to exceed next year the number reached at the nadir of the 1991 recession. In my constituency alone (Oldham) the number of repossession orders registered in court had already soared to 1340 in 2007, a very worrying 50% increase over the level reached at the pit of the recession in 1991, and must be considerably higher now. The only way to keep people in their own homes and to prevent a veritable national blizzard of repossessions by this time next year is to ensure that any persons threatened with eviction from their home can either convert their repayment mortgage to an interest-only one (saving nearly two-thirds of the cost) until such time as they can switch back to covering the repayment costs, or to allow them to transfer to tenancy status with a local authority or housing association until again they are economically able to resume purchase of their home. The Government has talked about this, but it needs to do it – urgently. I have written to Yvette Cooper, Chief Secretary, and to DCLG to ask for an early statement to be made of their precise plans and the timescale for implementing them.
The other desperate need is a massive crash programme for building social housing. The failure to do this is one of the greatest scandals of the last decade. In Thatcher’s last year 1990-1there were still 13,000 Council homes a year being built in England; by 2004-5 it was just 100 (according to DCLG statistics). The consequences of this New Labour prejudice against building Council houses (because Council tenants were being pressured to become owner-occupiers instead – a home-grown UK sub-prime market in the making) have been dire. In the North-west region housing waiting lists have risen 75% in the last 5 years, and house prices rose no less than 81% over the same short period – far more even than the national average rise of 58%. As a result, homes in the North-west cam to cost over 8.5 times average incomes.
There are now 1.7 million households on Council waiting lists, plus a further 80,000 in temporary accommodation and categorised as homeless. Again, in my constituency alone there are 12,000 households desperate to get a Council flat or house, but none is being built, and even the existing stock continues to be whittled away by the Right to Buy. This year the Government has announced it aims to raise its social house-buildingnationally to 2,500 units. This is certainly better than recent years, but it scarcely scratches the surface of the enormity of unmet need. What is needed is an annual target of at least 50,000 social houses a year, to be reached within 3-4 years. If £100bn can be found by the State to save some of the banks, £10bn can certainly be found by the State to tackle the social evil of homelessness and seriously poor and inadequate housing, especially since its counter-cyclical potential is so powerful. The Government’s fate at the next election may well turn on how forcefully and extensively they deal with this disfigurement of our society.

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