The Conservatives and the Sale of Council Housing in Britain and Sweden

I’ve put up a couple of pieces, one today and one yesterday, which attempt to expand an article Mike put up on his blog, Vox Political, about the housing shortage and the scandalous rise in evictions. These have now doubled. This ultimately comes back to the Tory sale of council houses under Maggie Thatcher in the 1980s. This was deliberately designed to turn Britain into a home-owning democracy. The stock of council housing was deliberately reduced, and over the years former council houses have been bought up by housing associations and private landlords. As a result, rents in some areas have risen to the point where they are unaffordable.

Michael Sullivan in his book, The Development of the British Welfare State, notes that the Tories took their ideas for Housing Association, as a non-state solution to the housing crisis at the beginning of the ’60s, from Sweden and the Scandinavian countries.

In 1961 the Conservative government, struggling with evidence that the crisis was deepening not tapering out re-introduced substantial subsidies for new build, but, under Joseph, the Ministry of Housing was already turning to new ideas about housing for the poor. Officials seeking non-state solutions to the housing problem visited Scandinavia to investigate their not-for-profit housing association. Sir Keith, already an innovator, invested £25 million in a pilot project in 1961. In 1963, the fruit of that investment twelve two-bedroomed flats in Birmingham, took their first housing association tenants. Here, then, though from social democratic Scandinavia, was an idea that was to take root 20 years later in education and health: the publicly funded but independently managed provider of services. In the dog days of the Conservative government, a jubilant Sir Keith announced a £100 million grant to the newly formed Housing Corporation so that the idea of housing associations could spread. (P. 215).

It is therefore ironic that Sweden is also facing a housing crisis of its own, due to the importation of British Conservative housing policies in the 1990s under a Conservative administration. In 2013 riots erupted in an ethnically mixed sink estate, the product of the government’s abandonment of the social housing policies of Social Democratic administrations. This resulted in the creation of nearly all-White, affluent areas from which the poor were excluded through high rents. Owen Hatherley of the Guardian reported:

Under conservative governments in the 1990s and 2000s, housing began to be privatised, with predictable results, especially given the British experience. Flats in the most desirable areas – here, the city centre – rocketed in price. Yet Stockholm has kept building, and British architects and planners have kept visiting. The “success story” is Hammarby Sjöstad, a waterside scheme which shames the likes of Salford Quays. As much as Vällingby, it shows the virtues of long-term planning over speculation.

But although some of Hammarby was built by the municipality, it’s a wealthy and overwhelmingly white area, and rents are high. It offers little to those exiled to the peripheral million programmes. Hammarby implies that in Sweden, social democracy was only abandoned for the poor. Its innovations were retained for a bourgeoisie whose new areas are far more humane than those provided for them by British developers.

In Stockholm, the centre was cleared of the poor – the likely consequences in London of coalition’s housing policies. The stark segregation visible there means that for the first time, it should stand as an example to London’s planners of what not to do.

To read the Guardian’s article, go to: http://www.theguardian.com/commentisfree/2013/jun/16/sweden-housing-programme-privatisation

The newspaper, The Swedish Wire, also carried a piece about the recommendations of the Swedish building workers’ union and its leader, Hans Tilly in 2010. It stated clearly that the Conservative government’s free market policies had failed. More new homes needed to be built, existing homes renovated and improved, especially for the needs of the elderly and handicapped.

Among the unions’ recommendations were the following points:

Do something tangible about the housing situation of young people. Today’s youth is the first generation that is having greater problems finding somewhere to live compared to their parents’ generation. Therefore we should invest in more rental housing….

Pursue a social housing policy. Everyone must have the right to their own home and this right is often a prerequisite when it comes to giving our children a good environment to grow up in.

• Establish a new Ministry for Community Development. For far too long, these issues have been divided between different policy areas. Hence, what is required is a firm grasp of construction, housing and living environment, infrastructure etc.

The present government’s housing policy is frightening. The coalition government is, however, obviously quite satisfied with what it has achieved when it comes to housing policy. Its motto is choice. The housing policy is to a large extent a non-issue for the present government. The government’s Spring Budget for 2010 gives a summary of what the government itself claims to have done as regards housing policy since 2006. 19 lines describe how the government has worked to achieve a better functioning housing market, how those living in the Million Homes Programme areas have been given the opportunity to buy their homes and how the government has introduced a system of owner occupancy in newly built blocks of flats.

See the article at: http://www.swedishwire.com/opinion/4987-swedens-housing-policy-has-failed

Across the world, Conservative housing policies have failed. They are only creating poverty, social exclusion and homelessness. The time is long past that they should be abandoned.

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2 Responses to “The Conservatives and the Sale of Council Housing in Britain and Sweden”

  1. Blissex Says:

    Sure, sure but you somehow omit the biggest effect of the tory housing policy: millions of speculators made a lot of money from rising house prices and rising rents, and these speculators tend to be as your wrote middle aged upper working class people, “aspirational” voters clustered in marginals in the South, who have become thus enthusiastic “Blow you, I am allright Jack” rentiers.

    These millions of rentiers have been overjoyed by tax-free effort-free capital gains of £10,000 a year on properties they bought for £100,000 and a deposit of £10,000 for a yearly return on invested cash of 100%.

    They have been so overjoyed that New Labour had exactly the same policy to deliver massive yearly capital gains when in power.

    The political problem is that the profits of rentier speculation are so huge and have benefited so many people (in the South). Seen from a distance what has happened in 1950 to 2010 is that first trade unions and labour friendly policies have turned poor working class families into lower middle class one, and as soon as they acquired some property and good jobs and wages and pensions they turned tory. Indeed in the 1970s one of the tory think tanks found that *even at the same level of income and class* people who owned property, travelled by car and owned share accounts voted much more to the right than those who rented, used public transport and had work related pensions.

    Some of my usual quotes:

    http://www.conservativehome.com/thetorydiary/2014/03/how-thatcher-sold-council-houses-and-created-a-new-generation-of-propertyowners.html
    «It was indeed at the diffusion of property that inter-war Tories aimed, as the pragmatic answer to the arrival of democracy and the challenge from Labour. There were even prophetic council house sales by local Tories in the drive to create voters with a Conservative political mentality.
    As a Tory councillor in Leeds defiantly told Labour opponents in 1926, ‘it is a good thing for people to buy their own houses. They turn Tory directly. We shall go on making Tories and you will be wiped out.’ There is much of the Party history of the twentieth century in that remark.»

    http://www.opendemocracy.net/ourkingdom/oliver-huitson/thatcher-black-gold-or-red-bricks
    «Under Thatcher, this exploded to over £250bn across her premiership – a staggering 104% of GDP growth. … But Blair did his homework and let loose – as did Thatcher – a wave of cheap credit, financial deregulation, house price inflation and an equity withdrawal-led consumption boom. Withdrawals under Blair’s leadership totalled around £365bn, that’s a full 103% of GDP growth over the same period,»

    http://www.telegraph.co.uk/comment/columnists/rachelsylvester/3556538/Brown-and-the-conservatory-building-classes.html
    «Like Worcester Woman and Mondeo Man, the conservatory-building classes have become an emblem of the upwardly mobile voters Mr Brown must win back if he is to retain power at the next election.
    MPs in marginal seats are worried. Already, the party’s strategists are talking about the south-eastern “killing fields” where Labour will suffer most when it next goes to the polls.»
    «Although Mr Brown talks a lot about aspiration, he means it in the sense that people at the bottom of the pile should be able to get to the middle, rather than that those in the middle should aspire to get a little bit further towards the top.

    http://www.britishpoliticalspeech.org/speech-archive.htm?speech=202
    «I was canvassing in the Midlands on an ordinary suburban estate. I met a man polishing his Ford Sierra, self-employed electrician, Dad always voted Labour. He used to vote Labour, he said, but he bought his own home, he had set up his own business, he was doing quite nicely, so he said I’ve become a Tory. He was not rich but he was doing better than he did, and as far as he was concerned, being better off meant being Tory too.»
    «Post-war Britain has seen two big changes. First, and partly as a result of reforming Labour governments, there are many more healthy, wealthy and well-educated people than before. In addition, employment has switched from traditional manufacturing industries to a more white-collar, service-based economy. The inevitable result has been that class identity has fragmented. Only about a third of the population now regard themselves as ‘working-class’. Of course it is possible still to analyse Britain in terms of a strict Marxist definition of class: but it is not very helpful to our understanding of how the country thinks and votes. In fact, of that third, many are likely not to be ‘working’ at all: these are the unemployed, pensioners, single parents – in other words, the poor. A party that restricts its appeal to the traditional working class will not win an election.»

  2. Blissex Says:

    «Conservative housing policies have failed. They are only creating poverty, social exclusion and homelessness.»

    The point I was trying to make is that they have also created millions of very happy tory voters who have received tax-free effort-free profits of 100% per year on invested cash, and this has created the political problem of mass landlordism, based on massive redistribution from northern and foreign working immigrants to southern mostly retired or divorced rentiers.

    That political problem is essentially insoluble: the working poor and renters tend to vote less than the property rentiers, and are clustered in the North, where they return relatively few members of Parliament, while the property rentiers tend to be the swing voters who decide who wins a lot of seats in the South.

    The result is that almost always in the past 60 years a government that managed to boost southern house prices got re-elected, and incumbent governments lost the elections only when southern house prices fell or did not grow, and then it took 10-15 years for voters to forgive them.

    Mass landlordism will only end as a political force when a huge long lasting collapse of house prices happens, but since politicians are perfectly aware that voters fire governments that let house prices stall or fall, they will do every possible trick to keep them booming.

    To some extent my impression of E Milliband’s and J Corbyn’s strategy is driven by this: house prices fell when Labour was in government, and have been booming under this Tory government. Therefore there is no chance for Labour to be elected, even if they promised bigger faster house price rises, as New Labourites urge. They are simply waiting for the Tories to become unable to push prices up.

    My guess:

    * If prices continue to boom, G Osborne is next prime minister.
    * If prices stall, B Johnson is next prime minister with promise to push them up again.
    * if prices fall, J Corbyn is next prime minister.

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