Traditional terraced properties in Greenwich on June 4, 2014. Photograph: Getty Images.
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Labour’s Help to Build scheme will succeed where the coalition has failed

By providing government guarantees to small construction firms we will kickstart housing supply. 

Today on a visit to a small builder in Kent, we outlined Labour’s proposal to boost small house-builders and help the next generation on to the property ladder. Our Help to Build scheme would underwrite bank loans to smaller housebuilders and unlock much-needed finance to get them building.

We’re in the midst of the biggest housing crisis in a generation. Families and young people are struggling to get on the property ladder. More and more people are living in the private rented sector which often doesn’t provide them the stability and peace of mind that they need. And if you’re on the waiting list for social housing then there are another 1.6 million households in the queue with you. The key driver of the crisis is that we’re simply not building enough homes. We're currently building less than half the number of homes we need to keep up with demand.

It’s true these housing pressures didn’t begin under this government - after all no government has built enough homes for 30 years. But things have certainly got much worse on this government’s watch. Under David Cameron, house building has fallen to its lowest levels in peacetime since the 1920s. Only today, we have learned that the government’s flagship housing policy, the New Homes Bonus, is redistributing money from some of the poorest Labour councils to the richest Tory and Lib Dem authorities, and is not delivering the homes communities need.

Labour can do better. We want more people to realise their dream of home ownership. But, unless we build more homes, property prices will rise further out of reach because supply cannot keep pace with demand. So today we are setting out our proposal to tackle the housing shortage by boosting small-builders by improving their access to finance.

Emerging findings from the Lyons Housing Commission, set up by Ed Miliband to deliver a roadmap to getting 200,000 homes a year built by 2020, show there is a need to increase diversity and competitiveness in the housing sector. Figures show that 25 years ago small builders were building two thirds of new homes. Now they're not even building a third of new homes. Over the same period, the number of firms building between one and 100 units has fallen from over 12,000 to fewer than 3,000.

What has caused this decline? The Federation of Master Builders (FMB) surveys of small house building firms have consistently shown that for these firms access to finance and land are the most significant barriers to growing their businesses and increasing the supply of new homes. In the FMB’s 2013 House Builder Survey, 60 per cent of house builder members cited access to finance as a major barrier to their ability to increase their output of new homes, more than any other factor.

That’s why earlier this year, Labour set out plans to increase access to land for SME builders. The next Labour government will require local authorities to include a higher proportion of small sites in their five year land supply. We will give guaranteed access to public land to smaller firms and custom builders. And we will guarantee that a proportion of the homes built in the next generation of new towns and garden cities will be built by smaller firms.

But we must do more. As Ed Balls said earlier this year, we need a Help to Build scheme that tackles the root cause of the credit crisis for SMEs. Our proposals would kickstart the supply of homes by providing government guarantees for bank lending to SME construction firms in a similar way to how the current Help to Buy scheme underwrites mortgages.

The Help to Buy scheme may increase access to mortgages but, when even Mark Carney, the Governor of the Bank of England, has warned about the risks to our economy of a lopsided housing market where housing demand hugely outstrips supply, it is clear the time is now right for a Help to Build scheme, using the strength of government guarantees to help increase the supply of affordable properties.

Labour’s Help to Build scheme will encourage small house-builders to deliver more homes, as well as stimulating the local economy and helping to prevent prices from spiralling ever further out of reach for young homebuyers. And we would lock in a series of stringent safeguards, such as a cap on the value of loans available for each development, to ensure the scheme is focussed on smaller builders, and the normal bank checks on construction firms' ability to repay.

This proposal alone will not solve the housing crisis. There is no one single proposal that can. That’s why our Housing Commission will report later this year, producing a roadmap of how we can reach our ambition of getting 200,000 homes a year built by 2020. But in the meantime, acting on this crucial issue will help get our small builders building again and it will begin to tackle the housing crisis which is leaving so many people without a decent home at a price they can afford.

Chris Leslie is shadow chief secretary to the Treasury; Emma Reynolds is shadow housing minister.

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Erdogan’s purge was too big and too organised to be a mere reaction to the failed coup

There is a specific word for the melancholy of Istanbul. The city is suffering a mighty bout of something like hüzün at the moment. 

Even at the worst of times Istanbul is a beautiful city, and the Bosphorus is a remarkable stretch of sea. Turks get very irritated if you call it a river. They are right. The Bosphorus has a life and energy that a river could never equal. Spend five minutes watching the Bosphorus and you can understand why Orhan Pamuk, Turkey’s Nobel laureate for literature, became fixated by it as he grew up, tracking the movements of the ocean-going vessels, the warships and the freighters as they steamed between Asia and Europe.

I went to an Ottoman palace on the Asian side of the Bosphorus, waiting to interview the former prime minister Ahmet Davu­toglu. He was pushed out of office two months ago by President Recep Tayyip Erdogan when he appeared to be too wedded to the clauses in the Turkish constitution which say that the prime minister is the head of government and the president is a ceremonial head of state. Erdogan was happy with that when he was prime minister. But now he’s president, he wants to change the constitution. If Erdogan can win the vote in parliament he will, in effect, be rubber-stamping the reality he has created since he became president. In the days since the attempted coup, no one has had any doubt about who is the power in the land.

 

City of melancholy

The view from the Ottoman palace was magnificent. Beneath a luscious, pine-shaded garden an oil tanker plied its way towards the Black Sea. Small ferries dodged across the sea lanes. It was not, I hasten to add, Davutoglu’s private residence. It had just been borrowed, for the backdrop. But it reminded a Turkish friend of something she had heard once from the AKP, Erdogan’s ruling party: that they would not rest until they were living in the apartments with balconies and gardens overlooking the Bosphorus that had always been the preserve of the secular elite they wanted to replace.

Pamuk also writes about hüzün, the melancholy that afflicts the citizens of Istanbul. It comes, he says, from the city’s history and its decline, the foghorns on the Bosphorus, from tumbledown walls that have been ruins since the fall of the Byzantine empire, unemployed men in tea houses, covered women waiting for buses that never come, pelting rain and dark evenings: the city’s whole fabric and all the lives within it. “My starting point,” Pamuk wrote, “was the emotion that a child might feel while looking through a steamy window.”

Istanbul is suffering a mighty bout of something like hüzün at the moment. In Pamuk’s work the citizens of Istanbul take a perverse pride in hüzün. No one in Istanbul, or elsewhere in Turkey, can draw comfort from what is happening now. Erdogan’s opponents wonder what kind of future they can have in his Turkey. I think I sensed it, too, in the triumphalist crowds of Erdogan supporters that have been gathering day after day since the coup was defeated.

 

Down with the generals

Erdogan’s opponents are not downcast because the coup failed; a big reason why it did was that it had no public support. Turks know way too much about the authoritarian ways of military rule to want it back. The melancholy is because Erdogan is using the coup to entrench himself even more deeply in power. The purge looks too far-reaching, too organised and too big to have been a quick reaction to the attempt on his power. Instead it seems to be a plan that was waiting to be used.

Turkey is a deeply unhappy country. It is hard to imagine now, but when the Arab uprisings happened in 2011 it seemed to be a model for the Middle East. It had elections and an economy that worked and grew. When I asked Davutoglu around that time whether there would be a new Ottoman sphere of influence for the 21st century, he smiled modestly, denied any such ambition and went on to explain that the 2011 uprisings were the true succession to the Ottoman empire. A century of European, and then American, domination was ending. It had been a false start in Middle Eastern history. Now it was back on track. The people of the region were deciding their futures, and perhaps Turkey would have a role, almost like a big brother.

Turkey’s position – straddling east and west, facing Europe and Asia – is the key to its history and its future. It could be, should be, a rock of stability in a desperately un­stable part of the world. But it isn’t, and that is a problem for all of us.

 

Contagion of war

The coup did not come out of a clear sky. Turkey was in deep crisis before the attempt was made. Part of the problem has come from Erdogan’s divisive policies. He has led the AKP to successive election victories since it first won in 2002. But the policies of his governments have not been inclusive. As long as his supporters are happy, the president seems unconcerned about the resentment and opposition he is generating on the other side of politics.

Perhaps that was inevitable. His mission, as a political Islamist, was to change the country, to end the power of secular elites, including the army, which had been dominant since Mustafa Kemal Atatürk created modern Turkey after the collapse of the Ottoman empire. And there is also the influence of chaos and war in the Middle East. Turkey has borders with Iraq and Syria, and is deeply involved in their wars. The borders do not stop the contagion of violence. Hundreds of people have died in the past year in bomb attacks in Turkish cities, some carried out by the jihadists of so-called Islamic State, and some sent by Kurdish separatists working under the PKK.

It is a horrible mix. Erdogan might be able to deal with it better if he had used the attempted coup to try to unite Turkey. All the parliamentary parties condemned it. But instead, he has turned the power of the state against his opponents. More rough times lie ahead.

Jeremy Bowen is the BBC’s Middle East editor. He tweets @bowenbbc

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue