A general view of housing near Herne Hill in London. Photograph: Getty Images.
Show Hide image

Labour will get Britain building to tackle high rents

The lack of supply is the principal cause of unaffordable rents and house prices. 

Today Ed Miliband announced that a Labour government would legislate to make three year long-term tenancies with predictable rents the norm and ban letting fees being charged to tenants, as part of our plan to deal with the cost of living crisis.

Nine million people now rent privately in England. And it’s not just young people: 1.3 million families also live in privately rented housing, and for far too many of them that means a great deal of insecurity. They have to live with the uncertainty that their rents could jump up from one year to the next and that they won't be able to stay in their home. 

Labour will make three year tenancies the norm. If a tenant wants a shorter tenancy, they will of course be able to get one, but the default will be that they can have three years as of right.  As long as they pay their rent, don’t commit anti-social behaviour or crime, or damage the property, they should have the stability to make their flat or house a home in the local community. Of course if a landlord needs to move back in or sell the property, they’ll have the ability to do so. But the default will be clear. This is also good for landlords because what they want are good tenants paying the rent every month of the year, rather than tenants moving in and out which means there are times they are getting no rent at all.

On rents, we’re suggesting that they be set initially, just as happens now, between the landlord and the tenant in line with the market and after negotiation. But once that rent is set, landlords should not be able to put it up unfairly or disproportionately during the term of the three year tenancy. At present, tenants can face unpredictable and costly rent hikes if they want to renew each year. So we will legislate to set a ceiling on any increase; what this ceiling will be will be decided on the basis of consultation with tenants, policy experts and, of course, landlords.

On lettings agents, we will ban charges being levied on tenants, rather like what happens with estate agents, where it is the vendor who pays all the agent’s fees and charges and not the buyer. Some lettings agent charges can be disproportionately high and can involve both the landlord and the tenant being charged for the same thing; for example charging both landlord and tenant £100 just for a credit reference check. We will put an end to this.

But we don’t just want to deal with the private rented sector’s problems to offer more security and stability. We all know that the lack of homes being built is the principal cause of high rents and high house prices. And that’s why Ed Miliband has pledged to get Britain building. We want to be building 200,000 homes a year by the end of the next Parliament. The Tories have presided over the lowest level of housebuilding in peacetime since the 1920s and ours is an ambitious target. So we’ve pledged to work with communities and local authorities to unlock land and consent to build a new generation of homes, including new towns and garden cities.

I believe that in the same way that so many young renters, their parents and families locked out of owning their own home have reacted positively to Ed’s announcement today, communities around the country do see that we need to build more homes. Otherwise we will condemn Generation Rent to insecurity and the possibility of never having a home of their own.

In this way, we can help people who either want to rent, or are having to rent, to enjoy the peace of mind that they can be part of their community, put down roots, send their children to school, keep their local job and not have to pick up their belongings and lives and move. Peace of mind that they can plan their finances and not have to worry that they might be out of their home if the rent suddenly jumps up. And peace of mind that a Labour government will work hard to ensure they get the chance to buy a place of their own.

Hilary Benn is shadow foreign secretary, and Labour MP for Leeds Central.

Getty
Show Hide image

There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.