"Expensive" social housing is unfair for everyone in the system

Sell off the priciest homes, build more with the money, and everybody wins, argues Policy Exchange.

In England we face both a housing crisis and a growth crisis. Despite high house prices and high and rising rents, the number of homes started last year fell 4 per cent to 98,000. The complexity of this topic has floored the Coalition. Policies to kick start house building are failing. Some of the ideas being floated around Whitehall would actually make a bad situation worse by propping up a dysfunctional model of development. Social housing waiting lists have hit an all time high of over 1.8m households. Individuals and families are trapped waiting in often unsuitable accommodation. The Coalition wants to get our economy growing and sees more homes as key to this. They also grasp the housing crisis is focused on the young, disproportionately hit by Coalition policies that are increasing spend in some areas (pensions) but cutting others (tuition fees).

Fortunately, there is a popular policy that could lead to the development of a lot of new homes while making the welfare system a lot fairer. At present, around a fifth of the social housing stock in this country is "expensive" – worth more than the average for that sized property within the same region. Selling off this expensive housing stock when it becomes empty could raise £4.5bn a year. This could be used to build up to 170,000 new social homes a year, 850,000 over five years, the largest social house building programme since the 1970s. Current policy isn’t just unfair to the taxpayer but also the nearly two million families and individuals waiting on the social housing waiting list. One single family will be given a house that most taxpayers could never afford and force others to wait – possibly years.

The more you think about it, the less justified the current system seems. The public agree. 73 per cent agreed social tenants should not be offered new properties worth more than the average in the local authority. 60 per cent agreed social tenants should not be offered new properties in expensive area. The system is so unfair that even social tenants agreed with changing it. Across all regions, classes and tenures, people could see that the idea of expensive social housing for life just doesn’t fit with a fair welfare system.

There are muddled arguments against this on the grounds it would isolate social tenants and cause unemployment. But reform would only affects 20 per cent of the existing social housing stock, sold off slowly as it become vacant. If we mix new homes in the bottom half of the housing stock, and if we maintain 17 per cent of our homes as social housing, the mix would be a 2:1 ratio of private to social housing. On employment, the evidence shows higher employment in more expensive areas. But the link is weak. Even assuming just living in a more expensive area causes this rise in employment, rather than people with jobs living in more expensive areas, the cost per job created through expensive social housing is £2.5m. This eye-watering sum compares to £33,000 per job the Regional Growth Fund creates. Because of commuting, location isn’t that important.

We could create a huge amount of new decent quality council homes. Properties should have an open market value above a set minimum to ensure decent standards. Local people should control design and quality. We need to get a grip on housing policy. This is a quick and popular option that the civil service should have proposed years ago. So what is the Coalition waiting for?

Wrest Park, in Silsoe, England, is not social housing. Photograph: Getty Images

 

Alex Morton is a senior research fellow at Policy Exchange

Photo: Getty Images/AFP
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Is Yvette Cooper surging?

The bookmakers and Westminster are in a flurry. Is Yvette Cooper going to win after all? I'm not convinced. 

Is Yvette Cooper surging? The bookmakers have cut her odds, making her the second favourite after Jeremy Corbyn, and Westminster – and Labour more generally – is abuzz with chatter that it will be her, not Corbyn, who becomes leader on September 12. Are they right? A couple of thoughts:

I wouldn’t trust the bookmakers’ odds as far as I could throw them

When Jeremy Corbyn first entered the race his odds were at 100 to 1. When he secured the endorsement of Unite, Britain’s trade union, his odds were tied with Liz Kendall, who nobody – not even her closest allies – now believes will win the Labour leadership. When I first tipped the Islington North MP for the top job, his odds were still at 3 to 1.

Remember bookmakers aren’t trying to predict the future, they’re trying to turn a profit. (As are experienced betters – when Cooper’s odds were long, it was good sense to chuck some money on there, just to secure a win-win scenario. I wouldn’t be surprised if Burnham’s odds improve a bit as some people hedge for a surprise win for the shadow health secretary, too.)

I still don’t think that there is a plausible path to victory for Yvette Cooper

There is a lively debate playing out – much of it in on The Staggers – about which one of Cooper or Burnham is best-placed to stop Corbyn. Team Cooper say that their data shows that their candidate is the one to stop Corbyn. Team Burnham, unsurprisingly, say the reverse. But Team Kendall, the mayoral campaigns, and the Corbyn team also believe that it is Burnham, not Cooper, who can stop Corbyn.

They think that the shadow health secretary is a “bad bank”: full of second preferences for Corbyn. One senior Blairite, who loathes Burnham with a passion, told me that “only Andy can stop Corbyn, it’s as simple as that”.

I haven’t seen a complete breakdown of every CLP nomination – but I have seen around 40, and they support that argument. Luke Akehurst, a cheerleader for Cooper, published figures that support the “bad bank” theory as well.   Both YouGov polls show a larger pool of Corbyn second preferences among Burnham’s votes than Cooper’s.

But it doesn’t matter, because Andy Burnham can’t make the final round anyway

The “bad bank” row, while souring relations between Burnhamettes and Cooperinos even further, is interesting but academic.  Either Jeremy Corbyn will win outright or he will face Cooper in the final round. If Liz Kendall is eliminated, her second preferences will go to Cooper by an overwhelming margin.

Yes, large numbers of Kendall-supporting MPs are throwing their weight behind Burnham. But Kendall’s supporters are overwhelmingly giving their second preferences to Cooper regardless. My estimate, from both looking at CLP nominations and speaking to party members, is that around 80 to 90 per cent of Kendall’s second preferences will go to Cooper. Burnham’s gaffes – his “when it’s time” remark about Labour having a woman leader, that he appears to have a clapometer instead of a moral compass – have discredited him in him the eyes of many. While Burnham has shrunk, Cooper has grown. And for others, who can’t distinguish between Burnham and Cooper, they’d prefer to have “a crap woman rather than another crap man” in the words of one.

This holds even for Kendall backers who believe that Burnham is a bad bank. A repeated refrain from her supporters is that they simply couldn’t bring themselves to give Burnham their 2nd preference over Cooper. One senior insider, who has been telling his friends that they have to opt for Burnham over Cooper, told me that “faced with my own paper, I can’t vote for that man”.

Interventions from past leaders fall on deaf ears

A lot has happened to change the Labour party in recent years, but one often neglected aspect is this: the Labour right has lost two elections on the bounce. Yes, Ed Miliband may have rejected most of New Labour’s legacy and approach, but he was still a protégé of Gordon Brown and included figures like Rachel Reeves, Ed Balls and Jim Murphy in his shadow cabinet.  Yvette Cooper and Andy Burnham were senior figures during both defeats. And the same MPs who are now warning that Corbyn will doom the Labour Party to defeat were, just months ago, saying that Miliband was destined for Downing Street and only five years ago were saying that Gordon Brown was going to stay there.

Labour members don’t trust the press

A sizeable number of Labour party activists believe that the media is against them and will always have it in for them. They are not listening to articles about Jeremy Corbyn’s past associations or reading analyses of why Labour lost. Those big, gamechanging moments in the last month? Didn’t change anything.

100,000 people didn’t join the Labour party on deadline day to vote against Jeremy Corbyn

On the last day of registration, so many people tried to register to vote in the Labour leadership election that they broke the website. They weren’t doing so on the off-chance that the day after, Yvette Cooper would deliver the speech of her life. Yes, some of those sign-ups were duplicates, and 3,000 of them have been “purged”.  That still leaves an overwhelmingly large number of sign-ups who are going to go for Corbyn.

It doesn’t look as if anyone is turning off Corbyn

Yes, Sky News’ self-selecting poll is not representative of anything other than enthusiasm. But, equally, if Yvette Cooper is really going to beat Jeremy Corbyn, surely, surely, she wouldn’t be in third place behind Liz Kendall according to Sky’s post-debate poll. Surely she wouldn’t have been the winner according to just 6.1 per cent of viewers against Corbyn’s 80.7 per cent. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.