A row of houses in the north of England. Photo: Getty Images
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The government's plans are nothing short of an attack on social housing

Social housing used not to be the preserve of the few. That's a ideal worth harking back to, says Tom Copley.

There were some good things in George Osborne's budget. Scrapping non-dom tax status (a Labour manifesto pledge rubbished by the Tories at the time), reducing mortgage interest tax relief for private landlords and increasing tax relief for homeowners who rent out a room. The former two will dampen demand for property and the latter will encourage more efficient use of housing stock.

But let's turn to the bad and the ugly. This budget is the continuation of an all-out assault on social housing by the Conservatives. It began under the Coalition when the affordable housing grant was cut by 60 per cent. Housing Associations were told to introduce the so-called "Affordable Rent" at up to 80 per cent of market rent, and make up the shortfall in funding to build new homes with borrowing.

Then came the last minute Tory election pledge to extend Right to Buy to Housing Association tenants. Even with the £100,000 discount paid for by the government, this will erode Housing Associations' asset bases and thus their ability to borrow the very money they need to make up for the cut in grant from the government. This week's surprise announcement of a government imposed one  per cent annual cut in social rents further erodes their finances and thus their ability to build.

I support cutting rents for social tenants. In fact I, along with nearly every borough in London – red, yellow and blue – vehemently opposed the decision the Chancellor’s previous Government took in 2011 to essentially redefine social housing as anything charging up to 80 per cent of market rent. But the harsh reality is that without any subsequent increase in grant it will mean fewer much needed affordable homes being built - 27,000 fewer according to the National Housing Federation.

George Osborne lamented the 20 per cent rise in social rents since 2010. Yet it was he who agreed a ten year inflation plus one per cent rent increase with Housing Associations in 2013. To renege on that agreement now will plunge the social housing sector into chaos, and may result in a judicial review. Unsurprisingly he had not a word to say about sky high private sector rents.

Turning to councils, they will be forced to sell high value properties to pay for the discounts for Housing Association tenants exercising their new Right to Buy. In practise this means that any new council homes built by inner London boroughs like Islington will have to be immediately sold off as they will all be worth more than the government's regional cap.

Taken in isolation the imposition of one of these policies may be regarded as merely misguided. But taken together is difficult to see this package of measures as anything other than a deliberate attempt to sabotage the delivery of social housing. First they cut government grant and told Housing Associations to make up the difference with more borrowing and higher rents. Now they're undermining the Associations' borrowing ability and forcing them to cut rents.

Meanwhile, all social tenants who earn above £40,000 in London or £30,000 outside will be forced to pay market rent for their homes. This Aspiration Tax will discourage social tenants from earning more for fear of losing their homes. It will encourage others to exercise the Right to Buy, meaning yet more social housing will be lost forever. Work and benefits are not two different lifestyle choices. People move between the two. Social housing is supposed to provide stability for those who can't or don't wish to own a home. Getting a new job or a pay rise shouldn't put the stability of that home at risk.

The Tory justification for charging better-off tenants market rents is to say it's wrong for them to get subsidised rents. This is wilfully misleading. Unlike the Tories' huge Right to Buy discounts, social rent is not subsidised. It covers the maintenance, management and debt repayments of the home. We must be careful not to look at this problem down the wrong end of the telescope. The problem isn't that social rents are too low, but that market rents are too high. The real solution to high market rents is to build more genuinely affordable housing, a goal which this budget makes even harder to achieve.

George Osborne's plan may yet fall apart. The Office for Budgetary Responsibility warned in its budget overview that his meddling with Housing Associations may see the ONS reclassify them from private to public organisations, bringing £60 billion of their debt onto the government's books. But if it goes ahead the legacy will be even fewer new genuinely affordable homes than we're building now.

At the root of this lies a fundamental debate about what social housing is for. The Conservative view is that it is housing for the poor and that anyone with "aspiration" should leave it, whether they wish to or not. Yet before it became so scarce many middle class people lived in social housing. Nye Bevan's dream for council housing was of the "living tapestry of the mixed community." It was a noble dream indeed.

Tom Copley is a Labour member of the London Assembly

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General election 2017: Why don't voters get more angry about public spending cuts?

In 2012, 61 per cent were concerned about the impact of future cuts. By 2017 this was down to 45 per cent. What happened?

The shape of Jeremy Corbyn and Labour’s pitch to the country is clear. The overarching theme is a “rigged” system, a Bernie Sanders style anti-establishment campaign. 

This started with a clear economic focus, but will build out to public services and state support more generally: first, the switch to under-funded schools, and we’ll soon see the NHS emerge as the primary target. As the shadow Health secretary Jon Ashworth said, Labour believes the public has reached a “tipping point” in their concern about waiting lists and accident and emergency services.

And this focus makes perfect sense for Labour. It just won’t work as well as they might hope.

Why does it make sense? Firstly because there is record pessimism about the future of the NHS. Our poll from March showed that 62 per cent of those surveyed expect the NHS to get worse in the next five years, the highest we’ve measured – and by far the most negative outlook for any public service.

It also makes sense because this is one the very few important issues where Labour has a lead over the Conservatives. In our monthly issues index for February, more than half of voters said it was one of the most important issues facing the country, the highest level since 2002. And it’s always in the top three issues that people say determine their vote.

And Labour still have a lead on the NHS: 36 per cent say they have the best policies of all the parties, with the Conservatives on just 23 per cent.

So why will it not work well for Labour? 

First, Labour’s lead on the issue is nothing like it was, even in the relatively recent past. In 2012, 46 per cent thought Labour were the best party for the NHS, and only 16 per cent thought the Conservatives were. In previous decades, Labour was up above 50 per cent at various points. They’ve lost a lot of ground as the originator and defender of the NHS.

Second, while Corbyn is right to claim that issues like public services have more day-to-day impact on people, our relationship with Europe is uniquely dominant right now. Outside a major political upheaval like Brexit or an economic meltdown, there is no doubt that the NHS would have topped concerns over the winter, as we’ve seen it do many times before. We have a special relationship with the NHS, and when we feel it’s under threat it can trump all other concerns - as in the early 2000s, when more than 70 per cent said it was the key national issue. But instead, Brexit tops the list right, with the EU higher in people’s minds than at any point since we started asking the question in 1974.

In any case, it’s not even clear that a real tipping point has been reached in our health care concerns. While our worry for the future is extremely high, current satisfaction and overall ratings are still high, and not declining that much. This is shown across lots of surveys of individual health services: ratings are slipping, but slowly. And this is brought home by international comparisons – we’re the most worried about the future of our health service out of 23 countries, but we’re also among the most satisfied currently. We’re a country-level example of the “worried well”.

And this leads to a fourth point – expectations of public services seem to be shifting. The narrative of the necessity of spending cuts is so firmly embedded now that expectations of the level of service we can afford as a country may have moved for the long-term.

We asked in 2012 what percentage of planned spending cuts people thought had been made. Of course, this is an impossible question to answer definitively, but it is a useful gauge of how long a road people think we have ahead. Back then, people thought 40 per cent of planned cuts had already happened. Now, five years later, we think it’s still just 37 per cent. The idea of semi-permanent austerity has taken hold.

Of course, this could still provide a key leverage point for Labour, if people think there is a way to avoid this future. But the key point is that the cuts are not biting at a personal level for large proportions of the population, rather they are concentrated among quite a small proportion of people. So, back in 2012, 32 per cent said they had been affected by cuts to public services – by 2017 this had actually declined to 26 per cent. No cumulative, growing resentment at the personal impact of cuts - in fact, the opposite. 

And similarly, back in 2012, 61 per cent were concerned about the impact of future cuts on them and their families. But by 2017 this was down to 45 per cent. 

We are constantly scanning for the “tipping point” that the Labour MP Jon Ashworth has identified. It may come suddenly, and if it comes it seems most likely it will be the NHS that shifts the balance. But there’s no sign yet, and that makes Labour’s message that much more difficult to land. 

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