If Neil O’Brian wants these latest proposals from the think tank “Policy Exchange” to be taken seriously he should avoid writing odious, deceitful articles like the one below. My comments are in red, the article is taking from the Daily Telegraph of 20th August 2012.
Neil O’Brien is Director of Policy Exchange,
By Neil O’Brien Politics Last updated: August 20th, 2012 (Daily Telegraph, 20th August 2012)
You may have recently read about Nasir Muhsen, an 18-year-old gang member, who was jailed for his part in the riots last year. He was part of a 15-strong gang who, armed with bats and knives, carried out a mass mugging of people in a restaurant. His case made the headlines because he and his family had been given a £6,000-a-month basement flat worth £3 million in a Victorian mansion block in Kensington. Residents described his family as “neighbours from hell”, who reportedly trashed their home and were evicted at Christmas for not paying their subsidised rent. Despite this, his lawyer claimed that he had taken part because he was poor and “the money he took was to buy food.”
His case raises a wider question. Why was he living in Kensington in the first place? Should we really be using taxpayers’ money to house social tenants in some of the most sought-after streets in the UK?
This is a typical tactic used by right wing libertarians – in this case O’Brian has taken one example and used it to smear all occupants of social housing in wealthy districts. It has absolutely nothing whatsoever to do with justifying the proposal described below; it is an utterly dishonest and reprehensible tactic. If Nasir Muhsen and his family were neighbours from hell something should have been done about it – someone or some part of the legal or local housing organisation was at fault – this was not the fault of all the other social housing tenants who also had to put up with this bevaviour. The tone and implication of this paragraph is intended to give the impression that (a) all social housing tenants behave like this and (b) it is OK for neighbours from hell to be moved to a poor area where only social housing occupants will be affected.
In a report published today, my colleagues at Policy Exchange argue that housing one lucky family in a million-pound property while millions of others languish on the housing waiting list is unfair, and a poor use of our resources.
Fortunately, there is a solution. At present, around a fifth of the social housing stock in this country is “expensive” – worth more than the average for that size of property within the same region. We propose selling off this expensive social housing stock when it becomes vacant – when people die or move away – which could raise £4.5 billion a year.
These houses are not luxury houses; they are no more expensive to run. They may be worth a lot but that is because these areas are overwhelmed by wealthy incomers (In the case of Kensington this includes wealthy corrupt Russian Oligarchs and others attracted by lax regulation and zero or low taxation) (In attractive parts of the country village house prices are high because of second, third and fourth home owners who do not care that they are pushing out local inhabitants, whose families have lived in the village for generations.) We are talking about ordinary people who want to live in ordinary houses, it’s not their fault that the excesses of the free market have overvalued the houses on the waiting list they happen to be on. These houses are not expensive to maintain, it is only the paper value that is high but the houses were often bought at a time when they were dirt cheap. They represent an investment not a drain.
That money could pay for us to build up to 170,000 new social homes a year, creating the largest social house building programme since the 1970s. That in turn could create as many as a third of million much-needed jobs.
The current situation is unfair and wasteful in several ways. One single family can be given a house that most taxpayers could never afford. Yes that last point is the problem – ordinary people cannot afford to buy their own house – this proposal will do nothing to solve that – it will just pass owner ship of the houses to the wealthy, including foreign tax exiles, buy to let landlords etc., they will not end up in the hands of normal hardworking people. And that means that others will have to wait – possibly for years in overcrowded conditions. So let’s do something about it – get the wealthy that live in Kensington to pay their taxes and use the money to build genuinely affordably accommodation. If a Russian oligarch wants to live in London he should pay at least the same rate of tax as the hard working taxpayers that neolibertarians pretend to be so concerned about. While we are at it, we could get corporations like Amazon, Vodafone, etc to pay their taxes and recoup the billions of pounds lost to the tax payer each year.
Polls show that 73 per cent of people think that social tenants should not be offered new properties worth more than the average in their local authority. And 60 per cent think that social tenants should not be offered new properties in expensive areas. Even social tenants themselves agree with changing the current system. Yep if you flood the media with the kind of disinformation in this article you will get the answers you want.
Some people on the Left will, nonetheless, say this is unfair, and will lead to “ghettoisation”. I can predict this because when the government recently capped housing benefit payments (at £1,480 a month for a three bed house) Guardian columnist Polly Toynbee accused the Coalition of coming up with a “a final solution for the poor” which would meaning sending them to “distant dumping grounds where there are no jobs.” Again the false impression is given that the occupants of these houses were somehow on to a good deal, whereas the reality is that the money goes to the landlord for what is a quite normal house but the media try to give the impression that the tenants are living in mansions. Once again distorting reality to hide the fact that the problem is a result of a free market in rents and a lack of affordable housing.
To be clear, what I’m proposing wouldn’t mean a single person having to move house. We are only talking about selling off houses that become empty. This is disingenuous – it still represents the selling off of affordable housing in an area where some people may have family roots or may want to live to be near their work – public transport is becoming prohibitively expensive for ordinary people. Nor would it mean that social housing would disappear from expensive cities like London, because the definition of “expensive” I am using is specific to a particular region, not the national average. In other words the policy affects people all over the country, including villages where ordinary hard working people will, over a period of time, be pushed out and available social housing sold to incomers and second and third home owners.
Lots of expensive social housing has come about unintentionally. In the 1970s Britain’s big cities were on their knees. London boroughs in particular took the opportunity to snap up terraces of housing in run-down places like Islington at bargain prices. But Britain’s inner cities – particularly London – have been transformed. What were slums are now eye-wateringly expensive places to live. Two thirds of the heads of households in social housing are not in work, and when you’re living on benefits, it’s not helpful if your nearest shop has been turned into a mini-Waitrose. Again, trying to give the impression that occupants of social housing do not belong in wealthy areas. How many of the private home owners in Kensington are not in work and live off unearned untaxed income and are non UK domiciled- why aren’t we given that information? Libertarians are very good at cherry picking their ‘facts’
Selling off the most expensive council houses in a region might indeed mean that people would be less likely to get given a house in the most expensive parts of expensive cities. But I don’t think anyone has a right to live in Kensington at taxpayers’ expense. Why? What is special about Kensington? If the houses were bought years ago when prices were low what is the problem? The cost of the housing has been paid many times over by the rental occupants. This is not costing the tax payer anything – it is an investment that could be used as collateral for building more homes.
Would it make it harder for the minority of people in social housing who do work to get jobs? Actually there doesn’t seem to be any strong link between local house prices and the employment of people in social housing.
Oh, so that’s OK then the working poor can just push off somewhere else and commute to their jobs on trains that they cannot afford. (Notice again the pejorative use of ‘minority’ – the level of employment in this group is not justification for the policy it is a separate issue that needs to be addressed.)
Of course, this is only a small part of the answer to Britain’s housing crisis. Over the last decade, the cost of housing has growth three times faster than wages. That’s because we make it much harder to get planning permission than in other countries like Germany. This a pathetic attempt to avoid admitting that the problem is due to over inflated house prices in wealthy areas due to a shortage of housing and an excessive gap between rich and poor which means that the rich can price everyone else out of the market. There are currently hundreds of thousands of plots and properties with planning permission – builders are not building them because no one can afford to buy.
Politicians need to do everything it can to make housing affordable. Perhaps we could give local people a right to buy a plot of land on which to get a house built – about half of houses in France and Germany get built in this way. Good idea if the plots are affordable?? Government has been talking about building new “garden cities” to get a lot of housing built with minimal disruption – but it needs to get on with it. Agreed, if the garden cities are appropriately sited.
Reforming social housing in this way is a rare opportunity to do something that boosts jobs and growth, makes people better off, and is overwhelmingly seen as fair. Recycling the value of expensive social housing is an idea whose time has come. How will this make poor people better off? It will help property developers and the wealthy who want to live in exclusive areas and avoid rubbing shoulders with the poor.
It’s a strange coincidence that however neo-libertarians dress up their proposals they always involve consequences that are negative for those on low incomes and positive for those who already have everything.
How about Neil O’Brian writing a new article titled “No one has a right to live in Kensington without paying their Taxes” I won’t hold my breath.
Ordinary hardworking people get a raw deal, encouraging them to blame those who are even worse off will not solve their problems.
Policy Exchange on “expensive social housing” – reasons to be miserable. (Touch Stone)
Article by Steve Hilditch: http://redbrickblog.wordpress.com/2012/08/20/selling-off-the-family-silver-again/