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Why Owen Jones is wrong on housing

1 July 2014

Columnists like the Guardian’s Owen Jones have perpetuated a myth that harms rather than eases access to truly affordable homes for the impoverished on whose behalf they campaign.

Taken in by the rhetoric of special interest groups, they recycle claims that house building is stymied by Treasury restrictions on council borrowing.

Abolishing this ‘cap’ would help town halls to ‘resolve the housing crisis’ by constructing ‘hundreds of thousands of homes’. So says Jones in his personal manifesto: ‘Agenda for Hope’.

But Jones and others who adhere to such views are not only misguided. They are diverting attention from the real and practical problems that need to be urgently fixed: that many authorities lack the ambition, skills or confidence to play their part in easing the housing crisis.

That few if any councils are held back by the cap is an inconvenient truth the housing and local government lobby has kept under wraps for some time. This has not stopped these investment-hungry groups from recruiting uncritical cheerleaders to their cause, however.

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This myth has now been exposed by my analysis of council landlords’ financials for the magazine Inside Housing. As of February this year, the lion’s share of this borrowing power – a cool £1.4bn – has been untouched, this indicates. Four out of ten authorities had no plans to put a single penny to good use. And as the graph below shows, the overwhelming majority – nigh on nine out of 10 – possess sufficient loan power to get some development going.

The research also uncovered far more pressing reasons for councils’ failure to get of the house building blocks. Paralysed by fear of rising arrears, many are unwilling to invest until the impact of welfare reforms becomes clear. Others are yet to regain the house building mojo that saw them commission hundreds of thousands of homes a year through the fifties and sixties. New investment is not a priority for authorities primarily focused on cuts.

These pointers make the Treasury review of council housing the most important work on affordable homes for a decade. Led by housing finance lawyer Natalie Elphicke, it aims to discover how councils fit into the increasingly complex jigsaw that is the house building industry.

Unlike those parroting the wish lists of special interest and industry groups, the reviewers will be focused on the practicalities. Such as how councils could help those struggling to find affordable homes in the failing fringes of the market that private industry shuns. Good examples of these interventions already exist in places like Thurrock and Wakefield, where the authorities bankroll building in rundown neighbourhoods until they return to profitability.

The review will ensure such well-targeted tactics become more widely deployed. It is also expected to suggest ways of ‘buddying up’ unskilled authorities with seasoned developers like housing associations or private firms. These seem sensible means of unleashing councils’ largely dormant borrowing potential.

Whatever the review’s recommendations, it will be of interest to people of all political persuasions. The most workable solutions to the current housing crisis will trip not from the pen of Owen Jones and the like, however attractive their ideas seem on the surface. Nor from the self-interested lobbyists.

The answers will come after a prolonged and impartial analysis of some dry, dusty facts on the ground. They won’t make for pithy and punchy manifestos; but they might just help the impoverished.

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Show comments
  • Alistair Mcintosh

    Owen Jones has aged in that photo – though he retains the familiar haircut

  • andagain

    The Conservatives have had four years to demonstrate their improved approach to getting houses built, and there is not much to show for it.

    Instead we have one of lowest housebuilding rates in europe. What do you expect, trust?

  • HJ777

    If The spectator is going to write a blog entry every time Owen Jones gets something wrong, this blog is going to become awfully boring.

  • El_Sid

    Abolishing this ‘cap’ would help town halls to ‘resolve the housing crisis’ by constructing ‘hundreds of thousands of homes’.

    Something that’s a problem round here is people sitting on land that has been given planning permission – encouragement to use it or lose it would be helpful. Perhaps the best way would also help council finances – start charging Council Tax as soon as planning permission is given, or some kind of monthly Section 106 charge.

  • global city

    Mass building of social housing will only lead to more ghettos and crap houses.

    Remember the last major period where governments competed with each other to build more and more houses?

    • you_kid

      Q: If a home takes 50k to build but is worth 250k on paper upon completion, then why oh why aren’t councils building like there was no tomorrow?

      A: Because we cannot have hundreds of thousands of new cheap homes – it’s most people’s ONLY pension (!) The prices must rise.

  • Seldom Seen

    Anyone who’s ever seen a picture of Owen Jones on his Guardian photo by-line will know he’s about six years old and writes as a six year old might: without the benefit of knowledge or life experience. All he knows, he read in books. He’s never been past Islington in his life.

    • Andy

      Are you sure he can read ?????

  • IanH

    Can we stop this lie that councils are primarily focused on austerity and hence unwilling to invest. Councils have only one concern, and it’s not investment or services, it is the funding black hole in their pension scheme. Their aim is to hoard money wherever possible hoping that at some point the Treasury will allow them to transfer it into their pension scheme. They should encourage Right to Buy, as that housing stock is locked up and seldom returns to the pool instead being held by people who could afford to purchase privately, illegally rented out, or handed onto dependents. They would be better off selling it at a paper loss and building new, something our friends north of the border have singularly failed to grasp.

    • HookesLaw

      I am not sure a difference between LA total assets and LA total liabilties is particularly meaningful.
      The govt is changing local govt pensions onto career average not final salary, retirement ages are rising. Employees of course pay in as well as the employer.
      The numbers in local govt are falling – this of course means there are fewer people paying in to match those recdeiving payoiuts, but ultimately the numbers receiving payouts will fall.
      Hutton suggested the LA pension funds shared admin costs to be more eficient and investment priorities should change.

  • TrulyDisqusted

    When social housing was first introduced in Britain, there were very strict rules about who was eligible. Away from pensioners and the disabled, applicants from the able bodied working age groups were required to be in work, be good upstanding citizens and most crucially, be able to pay their rent.

    This worked very well. The public finally had homes with running hot water and inside toilets and council estate living was better than the private sector could offer at that price point. Council estates were something many in the private sector aspired to, so worked to meet the conditions to be eligible.

    What happened? Labour and the do gooders decided that public homes reserved only for working, upstanding citizens was discriminatory and let the riff raff in. Estates went down the toilet and rent revenue nose dived.

    All helped by the Unions and their decimation of UK industry through their demands for unearned wages and pensions.

    Anyone who listens to Owen Jones and his half stories deserve to lose everything. Some sections of society never learn from past mistakes.

    • Kaine

      The people in work bought their council homes, at a spectacular discount, and moved out of the sector. The people left were those who could not. Further, the lack of housing meant that what was retained was used for the hardest cases, because it’s cheaper than putting people in private rented accommodation.

      And this repeated nonsense about trade unions, as if Germany and Scandinavia didn’t exist. As if the switch to a service sector economy targeting inflation, regarding unemployment as “a price worth paying”, wasn’t Conservative economic policy. As if tens of thousands of working people were not encouraged onto the sickness rolls to keep them off the unemployment figures, and because it was cheaper than re-training them.

      Indeed, some people never learn from past mistakes.

      • TrulyDisqusted

        Gosh, where to start…

        The people in work bought their council homes at a discount that was calculated on how many years they’d occupied and paid full rent on them. Unlike some, they’d already paid tens of thousands of pounds in rent on the properties they now, thanks to Margaret Thatcher, were given their first real chance to own.

        They qualified for mortgages because their financial history deemed them a good credit risk.

        Trade Unions in Germany and Scandinavia work closely with industry. Unlike Britain’s Class Warriors, the European union’s recognised that only by working to produce great products, by eliminating waste and poor working practices would their industries, their jobs and their futures be secure in a global economy.

        Whilst they were submitting ideas to improve efficiency and reduce costs via modernisation, the British Trade Unions were demanding higher pay and pensions that hadn’t been earned or sustainable and spent more time wrecking production lines, going slow or sleeping throughout their entire night shifts or walking out on strike at great cost to their employers, the economy and ultimately themselves.

        Perhaps if the British Trade Union’s had copied their German and Scandinavian counterparts, there would still be millions of jobs in engineering and industry and no need for anyone to hide the unemployed on sickness benefit?

        It’s always someone else’s fault with you lot isn’t it because the centuries old factory owners really did profit from losing everything their ancestors ever built and fought for.

        If running profitable and sustainable business is so easy, why don’t the British Trade Unions open factories of their own and you can all buy nice houses with your millionaire wages?


        • Inverted Meniscus

          Sorry, I’ve tried but I simply cannot find anything to add to that perfect riposte. Sadly, it will fall on deaf socialist nutter ears but thanks for providing such a lucid and realistic response to his nonsense and saving me the trouble.

          • Andy

            Local Councils should not be building houses. That should be for private developers. And nor should they be in the property business. That should be for private landlords.

            • Inverted Meniscus

              Hi Andy, I suspect you were trying to respond to that socialist nutter because I agree with what you are saying.

        • saffrin

          Thatcher’s policy of selling off council houses had nothing to do with turning the UK into a property owning democracy.
          Thatcher sold off the council housing stock for prices tenants couldn’t refuse for on reason and one reason only.
          To break the trade union movement.

          • TrulyDisqusted

            Yawn… because working-class people owning their own homes is Theft?

            So much better to be under the Jack boot of the evil capitalist landlord?

            You seem a little confused there matey… but thanks for stopping by.

            All comments are welcome. Enjoy your night!

            • saffrin

              If you think paying 25yrs interest isn’t being under the boot of the evil capitalist it is you that is confused.
              Your comment reminds me of an idiot manager I once spoke to.
              That fool didn’t consider himself in debt, regardless of the fact he had a £300,000 mortgage.
              In his tiny little head, he seemed to think as long as he paid the mortgage payments on time he wasn’t in debt.
              He didn’t seem to understand the very reason he was paying mortgage repayments was because he was £300,000 in debt.

              • Inverted Meniscus

                You have taken a very long time to say absolutely nothing. Well done you.

          • Andy

            Anything which breaks the Trade Union Movement, dominated by some real Fascist scum, is to be welcomed.

            • saffrin

              You must be young enough not to know WTF you are
              talking about.
              Working conditions have plummeted “for everybody”
              since the demise of the trade union movement.

              • Andy

                Unfortunately I am old enough to have had to negotiate with some of those scum. They didn’t give a flying f*ck for their members jobs: it was all about class war and the Socialist revolution. I hated them all then, and I hate them now. Anything which destroys these Fascist thugs is to be welcomed.

              • Inverted Meniscus

                Not me old boy. So that renders your ridiculous comment redundant.

          • Inverted Meniscus

            Well done Maggie then.

      • Hexhamgeezer

        Shouldn’t you be out with your mates now that the exams are finished?

  • JoeDM

    Immigration is the source of the problem. Deal with that and you will dieal with most of the housing problem.

    • HookesLaw

      There are 700,000 empty houses in the UK. There is no problem. You spin a dreary cracked anti immigrant record.

  • fathomwest

    Owen Jones is an opinionated boy, he is entitled to have them and express them. The fact remains he is an aggressive, nasty boy of a kind of socialism of the Len McCluskey School of How Not to influence people. I am always reminded of the phrase. “Empty Barrels”. Whenever I hear his voice. I turn the sound off.

    • Inverted Meniscus

      Me too. I find it works very well with Ed Balls too. Muting that amoral imbecile always keeps me in an even temper.

  • you_kid

    Who is Owen Jones?
    What does he know about housing that we do not?

  • Martin Adamson

    It’s utterly futile discussion housing without discussion mass immigration. If our population is annually rising by large, unpredictable, uncontrollable numbers, we will never be able to build enough houses to cope.

    • sarahsmith232

      The Metro sheep set have seen to it that we’re expected to understand that your point of view is evidence of your rejection of decency, a statement only uttered by the barbarian.
      How did we ever become this as a society? Personally, i’d say you only need to check the standard form sheep contributors employed by this publication for some indication. I don’t get on with right-wingers, always been around the Lefties, so I know what making the most mildest of statements like ‘I think immigration needs to be reduced’ will result in with that lot. (stating ‘i’m sexually attracted to children’ would press less of their pre-programmed, set to recognise BBC explained, social reject barbarity response). Most people will cave, most will weakly follow on behind and parrot the majority Metro sheep statements.
      Problem now is the London dwelling right-wing politicians and journalists have weakly and lamely caved too. Cameron can’t think for himself, he’s too weak, he’s too unconnected to the majority, combination of the two means he’s a pathetically led Metro stereotype. Weakly courting the good favours of his fellow ignorant, insular, little London, old world class snobs. There’s no alternative associations out there for them. ‘I believe immigration should be reduced’ sets off BBC generated associations for them, they hear social stereotypes, none of them are real but they’re too weak, ignorant and arrogant to be aware of this.
      So there’s no way out, we’re done for. I just want to leave the country and pretend it isn’t happening.

      • goatmince

        S**t hit the fan when most builders and all those who then own the buildings are now foreigners too … another Shard for Londinium anyone, or a Malaysian sea of rather battered looking investor flats?
        London = Sardinia of Northern Europe, broke and sold for cheap.

    • Blindsideflanker

      But the question you will never hear our mainstream media ask a Minister is……’Minister if you are so worried about our housing shortage how come you continue to have a mass immigration driven population growth policy? ‘

      There are subjects the British media have tacitly agreed to never ask or embarrass a politician about. They pretend to be investigative blood hounds, chasing down all avenues of accountability , but there are policies where they are in group think agreement with the political class, so never challenge them. The malign effects of mass immigration is one, another is English devolution.

    • goatmince

      it would be futile to listen to IDIOTS who have no idea what they are talking about.

  • Hexhamgeezer

    This headline is ideal for recycling purposes.

    Why Owen Jones is wrong on………….

    • Inverted Meniscus

      Everything. Sorry, couldn’t resist it.

    • John Dalton

      This ranty little boy is just like the other juveniles of his ilk so fawned over by the BBC – Laurie Penny and Jack Monroe being prime examples.

      They take the easy side of every argument – i.e. the one rubber stamped by the right-on metro lefties who give them the platforms to spew their woolly-headed grievance-fuelled nonsense.

      Then, like sixth formers, they stamp their feet and stick two fingers up at the straw men they have created to symbolise nasty, old-fashioned, bigoted conservatism – all the while playing to the gallery of other braying, bullying know-nothing lefties.

      They are idiot kids. Those worth listening to are the ones who take the right side of the argument, however unpopular, and fight for it despite the abuse and bullying and we all know who they are.

      • global city

        all the while crafting nice, comfortable and utterly bourgeois lives for themselves. They will all be married, employ an accountant, live in a white area, build investments and a pension and buy property.

        If they also trumpet all things ‘global warming’ they will also own a nice big car and take plenty of exotic holidays.

      • channel.fog

        ‘They take the easy side of every argument…’ Surely the ‘easy side of every argument’ is spouting the usual free-market-we-deserve-to-be-rich-because-we’re-wonderful bullshit.

        • Hexhamgeezer

          ‘ the usual free-market-we-deserve-to-be-rich-because-we’re-wonderful bullshit.’ ? Not sure I’ve ever seen that formulation. ‘Usual’? I Think the fog is in your head as well as the channel.

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