Wake Up to the Injustice of Britain’s Housing Crisis

17.12.12

Modern Britain is gripped by a cold-heartedness created by a sense of entitlement — not the entitlement to meagre benefits that is so shamefully touted by the Tory leaders of the coalition government as an excuse for hateful attacks on the welfare state, but the entitlement of those like David Cameron and George Osborne and those they represent, those who feel entitled to use clever accountants to avoid paying tax, both individually and in relation to the companies and corporations they support, and those who believe that it is acceptable to exploit others to live in the manner to which they believe they are entitled — which many people do through property.

These people, through their invented sense of entitlement, are presiding over the creation of the most hideously unequal society since before the time of the great Victorian reformers, who, in contrast, were inspired by a desire to help the poor rather than punish them, and were often inspired by the words and deeds of Jesus Christ. As a response to unfettered exploitation and hideous inequality, these reformers laid the foundations for the welfare state in the second half of the 19th century, foundations that were only fully realised through the establishment of the modern welfare state (including the creation of the NHS) by a Labour government after the Second World War.

However, in modern Britain, the notion of Christian charity is severely endangered by naked profiteers and those who, less obviously but no less damagingly, exploit those who cannot afford to buy their own homes to charge hideously expensive rents in a rental market that is unregulated by government, and is, moreover, one in which rampant greed has become commonplace.

Last week, one of the results of this collective greed was aired by the BBC in a Panorama special entitled, “Britain’s Hidden Housing Crisis,” which followed four groups of people over five months, as unexpected troubles derailed their lives, and they lost their homes and ended up homeless, joining the thousands of other people living on the streets, or, more typically, the millions living precariously in rented accommodation, where there are few obstacles preventing landlords from charging whatever they want, and, if they can get away with it, making those people live in squalor.

The BBC described the programme as follows:

Britain is in the grip of a housing crisis of a sort not seen before — where even the most unexpected people are finding themselves homeless. Every two and a half minutes someone in Britain is threatened with losing their home. This Panorama Special follows four stories over five months and reveals the devastating impact of being evicted from your own home and losing everything — from an investment banker now sleeping rough in a park in Croydon; to a businessman who lost his company in the recession; and a grandmother who gets cancer, has to stop working and then has her house repossessed.

So how did this happen, and what can be done about it? First of all, more people need to become aware of how desperate the housing situation is in the UK, and, if they are comfortable themselves, to imagine how horrendous it is to not have a roof over your head, or to live in overcrowded and/or unsanitary conditions. Secondly, people need to accept that London and the south east are gripped by a damaging form of greed that is causing widespread misery and suffering for the benefit of the banks, housing developers and individuals and companies exploiting others for unacceptable profits.

Slow signs that people are waking up to the scale of the crisis can be gleaned from the response to the Panorama programme, and by the fact that it is beginning to filter through to the right-wing media. Mary Riddell, a former Guardian columnist who now writes for the Daily Telegraph, last week wrote a column, “Britain’s monumental housing crisis is the scandal of our age,” in which she did a good job of providing an introduction to the crisis for the Telegraph‘s readers.

As she explained, “Homelessness has risen by more than a quarter in three years, with the number of families forced to live in B&Bs, often in conditions reminiscent of the Dickensian workhouse, up by 57 per cent in the past 12 months.” That latter statistic is particularly grim. She also pointed out that, according to Shelter, an estimated 75,000 children “will wake up on Christmas Day without a home.”

She also pointed out that, even beyond the sharpest end of the housing crisis — those who are homeless, or in unsuitable rented property — “[m]illions of young people are now realising that their hopes of buying their own homes will be unfulfilled, perhaps for ever.” The reasons are clearly delineated — stagnant wages, rocketing property costs and a mortgage moratorium,” which mean that “the average first-time buyer in London is now 37.” Riddell also explained that newly published census figures revealed that “house-building fell by four per cent between 2001 and 2011, while the numbers renting from private landlords rose from nine to 15 per cent.”

The central problem, as she proceeded to explain, is that there has not been enough building — for decades. In a new report, the Institute for Public Policy Research has noted that, under current projections, “demand for housing will outstrip supply by 750,000 homes by 2025. As Riddell notes, “Of the 88 per cent of 18- to 30-year-olds who told the institute that they hoped to own their own home within 10 years, the majority will see their hopes thwarted.”

Instead of addressing these issues, the government is only making matters worse. Ministers are both hiding the crisis and adding to it through cynical attacks on the unemployed, persuading my fellow citizens that the unemployed — and the disabled — are actually workshy scroungers, who should not be entitled to benefits, and are, in some unexplained alchemical way, responsible for the financial problems that have followed the global economic crash of 2008, which, of course, was actually caused by bankers and politicians. The fact that there are five times more unemployed people than there are jobs appears not to trouble either ministers, or my fellow citizens, who have taken readily to scapegoating the poor in a manner that would have been deeply satisfying to the Nazis.

Last week’s announcement by George Osborne — that he intends to limit an increase in benefits to just 1 percent a year for the next three years — adds to the problems shovelled on the poor in the last two and half years. In April, the cap on benefits, at £500 a week in total, will be introduced, and will cause huge damage, as numerous newly homeless families, unable to afford their rent, will be moved to ghettos where the rents will be cheaper, in large part because there is no work. Ignored in all of this, as ministers and my fellow citizens continue to rail against the spongers, is the fact that the housing benefit that makes up the majority of people’s benefits is not something that is pocketed by those in receipt of benefits, but is paid to the landlords who are not obliged to charge anything less than whatever the market will bear.

Noting this, Mary Riddell pointed out how the Labour MP Karen Buck has explained that “recent government forecasts predicted that £35 billion would be spent subsidising private rents between 2011 and 2015, meaning the taxpayer will pay £12 billion more on supporting low-income households renting in the private sector than in the preceding four-year period.” She added, “Whatever small savings come from welfare crackdowns, the only winners will be the private landlords now demanding extortionate rents from benefit claimants and from young people forced to shelve any idea of buying their own homes.”

Riddell also notes that the Labour Party has “promised, as part of its policy review, to consult on forcing landlords to give longer tenancies and ‘predictable’ rents,” although it remains to be seen if Labour will in fact tackle a crisis that is partly of their own making, and which involves the great profiteering scam that almost all of the wealthier members of society — including MPs — are tied into; namely, the huge profits to be made in Britain’s monstrously overpriced property market.

Rent caps — an obvious solution to the activities of the rental market’s unprincipled predators — would undermine the bubble that is feeding so many people who believe they are entitled to profit from property in a completely unregulated manner, although another problem, which Riddell notes, is “the dearth of affordable social housing,” which “Labour should have done far more to rectify when it was in office.”

There is indeed a huge and long-standing shortage of social housing, although the Tories are not actually interested, having made it clear that they despise anyone who isn’t a mortgage holder, and, as a result, having introduced a pernicious new rental regime for social housing in which children are not allowed to take over homes from their parents, and new social tenants are obliged to pay 80 percent of market rents. This is an absurd situation, in London and the south east in particular, as market rents are extortionate, and unaffordable for many workers, and 80 percent of those rents is also an unaffordable amount for low-paid workers — or even those on the median income, which, in the UK, is around £14,000 a year (the median being the half-way point in the incomes of all workers, rather then the average income, which is skewed by the incomes of the rich).

While politicians fail to seriously address the housing crisis, Mary Riddell notes that many of those forced into exorbitant rental situations, and unable to afford to buy a home, are not so indifferent. Some of the young people who spoke to the Institute for Public Policy Research, for example, spoke of “how they were deferring getting married or having children,” while others said they “had no sense of belonging or commitment to the area in which they lived.” She added, crucially, “These are not the vagrants of tomorrow but the bank managers, the teachers and the potential backbone of the communities that bind Britain together.”

She also noted, “Like the houses and flats that Generation Rent cannot and may never afford, that sense of belonging is beyond price. If it is to be restored, then rents must be brought down and investment shifted from welfare (and the pockets of unscrupulous landlords) into building the homes that Britain needs so desperately.”

Mary Riddell touched on some of the key themes of the housing crisis in an important — i.e. Tory — medium, although she failed to note that another pernicious Tory lie concerns those in receipt of benefits, who, in contrast to the government’s unsubstantiated claims, are not. for the most part, unemployed. As the New Statesman explained back in June, after David Cameron had floated a vile idea to cut housing benefit from the under-25s, in his speech he “perpetuated the biggest myth about housing benefit: that it is a benefit for the unemployed.”

The New Statesman added:

The truth is that just one in eight claimants is out of work (not a statistic that you’ll find reported in most papers). The majority of those who claim housing benefit, including the under-25s, do so to compensate for substandard wages and extortionate rents. A recent study by The Building and Social Housing Foundation showed that 93 per cent of new housing benefit claims made between 2010 and 2011 were made by households containing at least one employed adult.

Reiterating the crucial point that a bloated housing benefit bill is just a giant scam to transfer billions in taxpayers’ money to private landlords, the New Statesman also explained:

It is meaningless of Cameron to claim that the housing benefit budget is “too large” without considering why. The inflated budget, which will reach £23.2bn this year, is the result of a conscious choice by successive governments to subsidise private landlords rather than invest in affordable social housing. Yet rather than addressing the problem of stagnant wages and excessive rents, Cameron, in a bid to appease his querulous party, has chosen to squeeze the already squeezed.

For a final thought, for now, on the need for a massive new programme of social housing, John Perry, who was the director of policy at the Chartered Institute of Housing (CIH) for 12 years until 2003, recently wrote an article for the Public Finance blog, in which he noted, “The construction of more council houses could help provide homes to rent while boosting job creation and the wider economy. George Osborne should lift the borrowing caps on local authorities to make this happen.” Refuting, crucially, David Cameron’s claim that “you can’t borrow your way out of a debt crisis,” Perry wrote that “borrowing to build houses makes perfect economic sense,” because austerity is not working. As he put it, “if interlinked economies like those of the EU all cut at once, the austerity is self-defeating and debt overhang gets worse, not better,” as “the National Institute for Economic and Social Research has pointed out.”

Pointing out that George Osborne needs to invest in housing, Perry noted that, although £10bn is in the pipeline as guarantees for housing associations, it is not known “how the guarantees will operate, and stimulating the building of houses for sale will only work if buyers can get mortgages,” and, in fact, what is needed is “direct investment in building new homes for rent.” As he proceeded to explain, “it so happens that local authorities have the capacity both to borrow and to build,” and “building council houses provides an almost perfect combination of economic benefits that could easily outweigh the costs,” because “it would use spare capacity in the construction industry and create jobs at a time when many point out that it is the decline in construction that is dragging down the economy,” and also because, “Many councils would link building contracts to training and apprenticeships, not only taking people off the dole but equipping them for future work. Gloucester City Homes calculates that apprenticeships are almost cost-neutral given the benefit savings if the apprentice was previously unemployed.”

Perry also noted that “every pound spent becomes £2.84 in the wider economy,” which is “just the sort of high-leverage impact required,” because “when spending money on building houses 92p of every pound stays in the UK.” He also pointed out that “houses when built and let generate rents and save benefit expenditure, because half of new social lettings go to people who were paying expensive private rents. If some of the remaining lettings rehouse people from costly temporary accommodation, there are further savings.”

He also noted that, “since they started building again two years ago, councils have shown they can do so at lower costs,” and that they also charge lower rents. In conclusion, he asked if anyone can “think of a good argument against doing it?” which is surely a very valid question. I have no doubt that George Osborne will do nothing substantial, and I also fear that the Labour Party will also not be interested, so perhaps the first appeal needs to be to those profiting from property, who need to ask themselves why their narrow self-interest should be unregulated, and why, in any case, they should think it appropriate to profit from their exploitation of the housing needs of others.

Note: For more discussions of the housing crisis, see the series of articles, under the heading, “The Politics of Housing,” on the website of the New Left Project.

Andy Worthington is the author of The Guantánamo Files: The Stories of the 774 Detainees in America’s Illegal Prison (published by Pluto Press, distributed by Macmillan in the US, and available from Amazon — click on the following for the US and the UK) and of two other books: Stonehenge: Celebration and Subversion and The Battle of the Beanfield. To receive new articles in your inbox, please subscribe to my RSS feed — and I can also be found on Facebook, Twitter, Digg, Flickr (my photos) and YouTube. Also see my definitive Guantánamo prisoner list, updated in April 2012, “The Complete Guantánamo Files,” a 70-part, million-word series drawing on files released by WikiLeaks in April 2011, and details about the documentary film, “Outside the Law: Stories from Guantánamo” (co-directed by Polly Nash and Andy Worthington, and available on DVD here — or here for the US). Also see my definitive Guantánamo habeas list and the chronological list of all my articles, and please also consider joining the new “Close Guantánamo campaign,” and, if you appreciate my work, feel free to make a donation.

15 Responses

  1. Tom says...

    This brings to mind Cory Booker, a NJ politician who’s thinking of running against Hillary in 2016. Why would either one run? Who knows.

    Having said that, Booker recently made headlines by saying he’d live on food stamps for one week “to get some insight into how people are struggling”. First off, just saying that’s insulting on a human decency level. Next, the potential benefit amount is tied to the case specifics. There is no national system for many types of benefits. Re: food stamps, the federal govt. has outsourced overseeing this program to JP Morgan Chase. This means that their CEO Jaime Diamond has a vested financial interest in keeping as many people as possible on this program.

    How much of UK benefits are being outsourced to companies? Here, for many programs you’re connected to a intl. call center literally anywhere from New Delhi to Manila.

  2. Andy Worthington says...

    From what I understand, Tom, the benefits system is still in-house, although I’d be surprised if the call centres relating to benefits are located here in the UK. I do know that, where there is outsourcing, it comes through workfare, which the government imported from the US. I wrote an article about it here: http://www.andyworthington.co.uk/2012/05/14/the-tories-vile-workfare-project-and-how-it-has-now-infiltrated-the-nhs/
    And there’s a good website here: http://www.boycottworkfare.org/

  3. Andy Worthington says...

    On Facebook, I wrote:

    Thank you, my friends, for liking and sharing. The future of housing is a matter of great concern to me – the insane house prices and unaffordable rents in London and the south east, and this wretched government’s unprincipled assault on those in social housing, who are not regarded as sufficiently human to be allowed to regard their homes as homes, and, according to the Tories, should be abused with huge rent increases, insecurity of tenure, the the right to be down-sized, or made to pay more, if a child grows up and leaves home, and they dare to have a spare room.
    God forbid that social tenants should dare to regard where they have lived and brought up their children as a home when they don’t “own” it, and especially with the Tories in their mansions doing such a great job of providing accommodation for those in need, stuffing every spare room with the poor and the homeless and the vulnerable. They are stinking hypocrites and bigots, and my disgust at their inhumanity and disdain for all but the rich knows no bounds.

  4. Thomas says...

    Cameron wants to turn things back to the past which (with the exception of Youtube which really was a lot better in the past) is a very bad thing. It would serve him right if he got visited by three ghosts this Christmas Eve. That might change his ways.

  5. Andy Worthington says...

    Thanks, Thomas. Yes, Cameron, Osborne (who really is Scrooge reborn), that idiot Iain Duncan Smith, Chris Grayling, Andrew Lansley, Jeremy Hunt, Michael Gove – they all need visits from Dickens’s ghosts.

  6. Andy Worthington says...

    On Facebook, Patricia Sheerin-Richman wrote, in response to 3, above:

    But then Cameron and Osborne’s friends can’t make lots of money from real estate.

  7. Andy Worthington says...

    Yes, and obviously the Tories are not interested in changing that, Patricia. But neither, it seems to me, are politicians of any other parties, or any of the other people, from all walks of life, who are prepared to exploit others through charging them far too much for housing, for example, in order to feather their own nests. We need a change of mentality, or we’re doomed to a bitterly divided world of the too comfortable and the ripped-off (those being ripped off by those who are too comfortable).
    The problem, as I see it, is that people in general have lost their belief in society (as Thatcher intended, and Blair continued to promote) and their belief in the future. It has become a dog-eat-dog world, when, between the end of WWII and Thatcher, it looked like something else – often misguided, but with the gap between rich and poor at its lowest, and various beliefs in society expressed by all the major parties.
    Now all those paid well above the average (which is £27K, so let’s say everyone on £40K and over) are removed from the travails of those on less than the average, and far too many of them are now leeching off those less fortunate than themselves – through property primarily, but also through their investments – to pay themselves handsomely throughout their long retirements.
    The big question for me is how to persuade these people that their sense of entitlement is built on exploitation, when everyone has been encouraged to believe that they are more important than everyone else and that therefore all their aspirations are acceptable. I think we need a political party led – led! – by those who can talk for the people because they are of the people – for example, those on incomes between the median and the average – i.e between £14,000 and £27,000 a year.

  8. damo says...

    hi andy my rent is £999.80P per mounth for a studio flat in shepards bush the shit bag end not god forbid the gentrified end the place stinks one wall is now becomeing covered by mould and the place stinks of blocked drains..this is modern england the england of the 21st century ..there are no jobs out there esp of someone my age this country is over..OVER…its a society and a place just not worth liveing in anymore it only benefits the rich,greedy,and ruthless and sod every other poor bastard..people realy dont care we have created a sick society were money is the bottom line now..money and wealth are the new gods a corrupt moraless sick society i have german friends who live in berlin there saying to me come over here ,get out of that hopeless place ill be takeing them up on there offer in may i just cant see a future for myself here ..and the sad thing is andy i,m not alone in my thinking that way

  9. Andy Worthington says...

    Hi Damo,
    I’m at a loss to express how disgusted I am that this kind of robbery and disdain for others has become routine in modern Britain, and that most people seem not to care. You saw in my article that I’m fed up pussyfooting around and not pointing the blame where it needs to be pointed – at everyone who exploits others through housing.
    If you go to Berlin, I really wouldn’t blame you.

  10. damo says...

    lol the funny thing is andy how these vile torie scum drones on about owning your own home how they thing anyone without a mortgage is some kind of subhuman ,lol,lol the thing is without nepatisum and there inherited wealth …none of them would get a mortgage ,lol ,lol there to stupid as ive said before there not capable of holding down any form of employment,lol yes expencively privately educated ..but as thick as pig shit with no common cense ,lol,most of them are not capable of wipeing there own areses,lol

  11. Andy Worthington says...

    Yes, Damo, between those funnelled into the deregulated City to make a killing, and those like our supposed leaders who went into politics at university and have never actually worked for a living, it doesn’t seem that places like Eton are very good at producing useful, hard-working people.
    Seriously, politicians should be prohibited from running for high office when they don’t have any experience.

  12. Damo says...

    Lol Andy the time for pussy footing around has come to an end,this is all starting to spiral out of control as it seems capitalism is eating itself people seem frenzied …gimme ,gimme gimme,more,more ,more its never enough ,people are gorgeing themselves from the profits from the misery from others suffering ..as that wise old red Indian said once the last fish has been caught you cannot eat money well in this case iPhones,lol,lol

  13. Andy Worthington says...

    Thanks agin, Damo. Yes, if only the uber-greedy capitalists would really, literally eat themselves!

  14. Tom says...

    A break from all the doom and gloom. A early Happy Xmas :)!

  15. Andy Worthington says...

    Thanks, Tom. And an early happy Christmas to you too!

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