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Labour has a choice - cosy up to the Lib Dems, or attack the coalition

Ed Miliband can't have his yellow cake and eat it.

There are times when even I feel sorry for Ed Miliband. Since his election as Labour leader, he’s followed a clear, if misguided, strategy of love-bombing the Liberal Democrats. He backed them on AV. He’s embraced all sorts of madcap, tree-hugging causes such as the Occupy movement, the St Paul’s protest and 38 Degrees. He’s wooed them with love letters, videos and even started dropping Vince Cable the odd risqué text.

And he’s been widely praised, with many in Labour’s ranks welcoming his new liberalism, and the new members and boost in the polls that have accompanied it. But then Ed made a mistake. A couple of weeks ago, he began floating the prospect of leveraging this strategy into some sort of Lab-Lib coalition.

Suddenly, the new Bobby Kennedy has found himself caricatured as the new Ramsay MacDonald. Or even worse, the new Tony Blair. “I don’t think we should fall into that trap,” Dave Prentis, the general secretary of Unison told the Telegraph. “We will not do what we did in 1997, which is that we were so pleased to get into power we let them [the Labour leadership] do anything.”

“A Lab-Lib coalition is a nonstarter,” intoned the ultraloyalist LabourList website. “A huge proportion of Labour supporters find the notion of going into coalition with the Lib Dems a fairly gruesome thought.”

So what would Labour members prefer? Another five gruesome years of a Tory-Liberal coalition?

Once again, the Labour left is learning the hard way that it can’t have its cake and nationalise it. For the past two years, Miliband has been press-ganging every Lib Dem he can find into the service of the people’s party; he’s been cheered all the way by unions and radical young Labour Turks. Then the moment he talks of taking that operation to its logical confusion, they cry foul.

All of a sudden, Prentis and others have woken up to the prospect of “a kind of right-wing coalition with Labour and the Liberal Democrats, maybe to the exclusion of the unions”. No shit, Sherlock. What did you think was going to happen when Miliband, at your insistence, started ditching policies that could make Labour attractive to Tory voters and began courting disaffected Lib Dems?

We can work it out

Labour has a choice. Either it tries to make inroads into Cameron’s support, which means making some unpalatable choices on law and order, immigration, welfare and the economy (and thereby giving itself the best chance of an overall majority). Or it can come over all lefty and liberal, and try and hoover up Nick Clegg’s refugees while in the process making coalition the most likely of the best-case outcomes. If the latter happens, Dave, right near the top of Vince Cable’s coalition shopping list will be party funding reform.

What does the Labour left really want Miliband to do? Storm No 10 on the back of a new general strike, platitudes about the squeezed middle and a bit of how’s your father? Miliband has been pursuing a Lib Dem first strategy. And, until recently, that was the left’s strategy as well. If they now don’t like it, that’s fine. But they’d better stop moaning and say what they do want him to do. Fast.

This article first appeared in the 17 September 2012 issue of the New Statesman, Who comes next?

Photo: Getty Images
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The Conservatives have failed on home ownership. Here's how Labour can do better

Far from helping first-time buyers, the government is robbing Peter to pay Paul

Making it easier for people to own their own first home is something to be celebrated. Most families would love to have the financial stability and permanency of home ownership. But the plans announced today to build 200,000 ‘starter homes’ are too little, too late.

The dire housing situation of our Greater London constituency of Mitcham & Morden is an indicator of the crisis across the country. In our area, house prices have increased by a staggering 42 per cent over the last three years alone, while the cost of private rent has increased by 22 per cent. Meanwhile, over 8200 residents are on the housing register, families on low incomes bidding for the small number of affordable housing in the area. In sum, these issues are making our area increasingly unaffordable for buyers, private renters and those in need of social and council housing.

But under these new plans, which sweep away planning rules that require property developers to build affordable homes for rent in order to increase the building homes for first-time buyers, a game of political smoke and mirrors is being conducted. Both renters and first-time buyers are desperately in need of government help, and a policy that pits the two against one another is robbing Peter to pay Paul. We need homes both to rent and to buy.

The fact is, removing the compulsion to provide properties for affordable rent will be disastrous for the many who cannot afford to buy. Presently, over half of the UK’s affordable homes are now built as part of private sector housing developments. Now this is going to be rolled back, and local government funds are increasingly being cut while housing associations are losing incentives to build, we have to ask ourselves, who will build the affordable properties we need to rent?

On top of this, these new houses are anything but ‘affordable’. The starter homes would be sold at a discount of 20 per cent, which is not insignificant. However, the policy is a non-starter for families on typical wages across most of the country, not just in London where the situation is even worse. Analysis by Shelter has demonstrated that families working for average local earnings will be priced out of these ‘affordable’ properties in 58 per cent of local authorities by 2020. On top of this, families earning George Osborne’s new ‘National Living Wage’ will still be priced out of 98 per cent of the country.

So who is this scheme for? Clearly not typical earners. A couple in London will need to earn £76,957 in London and £50,266 in the rest of the country to benefit from this new policy, indicating that ‘starter homes’ are for the benefit of wealthy, young professionals only.

Meanwhile, the home-owning prospects of working families on middle and low incomes will be squeezed further as the ‘Starter Homes’ discounts are funded by eliminating the affordable housing obligations of private property developers, who are presently generating homes for social housing tenants and shared ownership. These more affordable rental properties will now be replaced in essence with properties that most people will never be able to afford. It is great to help high earners own their own first homes, but it is not acceptable to do so at the expense of the prospects of middle and low earners.

We desperately want to see more first-time home owners, so that working people can work towards something solid and as financially stable as possible, rather than being at the mercy of private landlords.

But this policy should be a welcome addition to the existing range of affordable housing, rather than seeking to replace them.

As the New Statesman has already noted, the announcement is bad policy, but great politics for the Conservatives. Cameron sounds as if he is radically redressing housing crisis, while actually only really making the crisis better for high earners and large property developers who will ultimately be making a larger profit.

The Conservatives are also redefining what the priorities of “affordable housing” are, for obviously political reasons, as they are convinced that homeowners are more likely to vote for them - and that renters are not. In total, we believe this is indicative of crude political manoeuvring, meaning ordinary, working people lose out, again and again.

Labour needs to be careful in its criticism of the plans. We must absolutely fight the flawed logic of a policy that strengthens the situation of those lucky enough to already have the upper hand, at the literal expense of everyone else. But we need to do so while demonstrating that we understand and intrinsically share the universal aspiration of home security and permanency.

We need to fight for our own alternative that will broaden housing aspirations, rather than limit them, and demonstrate in Labour councils nationwide how we will fight for them. We can do this by fighting for shared ownership, ‘flexi-rent’ products, and rent-to-buy models that will make home ownership a reality for people on average incomes, alongside those earning most.

For instance, Merton council have worked in partnership with the Y:Cube development, which has just completed thirty-six factory-built, pre-fabricated, affordable apartments. The development was relatively low cost, constructed off-site, and the apartments are rented out at 65 per cent of the area’s market rent, while also being compact and energy efficient, with low maintenance costs for the tenant. Excellent developments like this also offer a real social investment for investors, while providing a solid return too: in short, profitability with a strong social conscience, fulfilling the housing needs of young renters.

First-time ownership is rapidly becoming a luxury that fewer and fewer of us will ever afford. But all hard-working people deserve a shot at it, something that the new Conservative government struggle to understand.