Labour’s recession is far from over

The big story of the past week, along with the preceeding resignations by Blairite ministers trying to topple Brown?

Millions of Labour supporters stayed home; two fascists won seats in the European parliament on a reduced turnout. Yes, their vote fell, but they won seats because of the low turnout.

I won’t give you the obligatory post dedicated to how and why they made a breakthrough. Oxygen of publicity and whatnot.

So, Brown’s clinging on, having ceded more power to Lord Mandelson, who is now virtually deputy Prime Minister – and unelected, like many in the reshuffled Labour cabinet. Having faced down the parliamentary party in a stage-managed meeting, Brown’s hoping that an economic recovery will save his premiership.

Darling, in situ as Chancellor, despite rumours the PM wanted to replace him with Ed Balls, warns against complacency in seeing “green shoots” of recovery. As well he might, he knows how much government spending will have to be directed towards those made unemployed. Oh, and the banks – mostly owned by the public these days – they aren’t lending to our manufacturing base…

Mandelson, negotiating with the new owner of Vauxhall, is unable to guarantee jobs will stay in the UK. So much has been devoted to bailing out the banks, there’s not much room for manuoevre – not unless there’s another radical change in approach.

A senior Tory let slip that they intend to cut spending by 10% on all but health, education, and international aid, if they win the next election. To Labour’s cries of “Tory cuts!” – the nearest they get to a class analysis of Her Majesty’s Opposition – the reply comes, from both the Tories and the corporate press, that Labour is committed to 7% spending cuts across the board.

As Ann Pettifor has pointed out, to cut spending in the next few years will be a disaster for an economic recovery:

As things stand, any fragile signs of economic recovery will quickly be crushed by the failure of government to intervene and spend at an appropriate level. Instead, government cutbacks will impact with considerable force on the fragile economy, and will hurt the middle and working classes. As the year proceeds many will discover the true, and often pitiful value of their pensions, and will be hurt by cuts in services and job losses in the public sector. This will hamper recovery and deepen, if that is possible, the alienation of British voters from the Labour government.

And don’t forget, this is the woman who was writing about the debtonation before it began.

She continues in the same article to outline the blades which may slice through any “green shoots”:

Foreign direct investment could fall globally by 45% this year, according to the same report, and corporate profits will decline by 20-25%. Global trade is down 25%, and the EIU predicts trade will be down by 10-15% by year end – the worst figure since 1945.

In April this year, consumer prices turned negative in the US, the UK, Germany and Japan. This may be good news for consumers, and may help lower food prices for the poor, but it is not good for the economy as a whole. Businesses cannot profit from negative prices, so they are bankrupted and lay off employees. The rocketing numbers of unemployed (whose plight is seldom taken seriously by orthodox economists) will cut back on borrowing and shopping and may even default on loans. This is not good news for the productive sector of the economy, and it’s very bad news for the banking sector. Banks have still not fully de-leveraged the debts on their balance sheets. Now, thanks to rising unemployment, non-performing loans are “set to rise sharply around the world over the next 12-18 months” according to the EIU. This is very scary, if one considers that there are still $600tn of liabilities in the form of derivatives on balance sheets out there – backed up by a mere $38tn of so-called credit default swaps (in reality a form of insurance on derivatives).

More banking trouble, in other words…

Pettifor concludes:

Nothing has been done to restructure the global economy and limit financial imbalances – including Anglo-American deficits and the Chinese surplus. Indeed these matters were not even discussed at the last G20 summit. Big, reckless money continues to be made from currency speculation, just when the global economy requires currency stability.

We – employees, consumers, investors and borrowers – have been misled and fooled by the economics profession and finance sector for years before this crisis. As a result of our gullibility, we lost $60tn of wealth in the past year. We would be wise now to dismiss their vain efforts at confidence-boosting, and instead rest our judgments on the real world economic outlook.

Back to politics, word is that Balls and Darling are split on how to present the supposedly “inevitable” cuts in public spending.

Hardly confidence boosting!

As far as this modest blogger can tell, the debate isn’t on what to cut, but on when to admit the cuts are coming.

In the leadership challenge that never was, the unions didn’t bark – despite the looming cuts and failure to aid the car industry. For sure, a change of leader – even to someone more in touch with the needs of ordinary people – would bring forth a general election at the worst possible time. With MPs expenses hanging in the air, Labour voters are unlikely to show up at polling stations and register support for the party any time soon.

For the Labour grassroots, there’s no difficulty in choosing between Trident, PFIs, the Afghan war, ID cards – or investing in a new generation of social housing, a Green New Deal, and helping workers to stay in their jobs. However, there’s no means by which the party’s grassroots can influence policy; even the parliamentary party has a tough time defeating unpopular measures, like Royal Mail privatisation, which hasn’t yet been ditched.

According to opinion polling, most voters agree Labour has abandoned its traditional supporters and believe that the Tories are most interested in helping out the rich. So what gives with the BNP victories, then? Well, it’s worth remembering that the Green vote was up – they campaigned on job creation through a Green New Deal to invest in energy efficiency and renewable energy industries, all very practical. But if your main themes are not echoed in the media, it’s difficult to get ahead. The upcoming by-election in Norwich could see the Greens win their first MP, should the support be forthcoming.

In the meantime, I’m wondering exactly where this announcement by John McDonnell will lead:

If we go beyond November without real change visibly under way, what hope is left of Labour not only remaining in government but also surviving as an effective political force at all?At that stage the only responsible act in the long-term interests of our movement would be to offer a real change in political direction by mounting a challenge to the political leadership of the party and letting the members of the party decide. Let me give notice now that this is the path I will take. If this route is blocked again by MPs failing to nominate, then the alternative is Labour MPs making it clear at the next election that they stand on a policy platform of real change as “change candidates”.

Of course, they will be standing as Labour candidates but binding together as a slate of candidates committed within Labour to advocating a change programme, setting out the policy programme they will be advocating as a group and supporting in parliament if elected. Only in this way can we demonstrate to the supporters that want to come home to Labour that there is the hope and prospect of change.

I can’t see a policy debate being tolerated, not without the capitalist media emptying another bucket of shit over the heads of New Labour and calling for a Cameron coronation. Hence the talk of the Blairites toppling Brown without recourse to either the PLP, the members, or the unions – with the Cabinet nominating one of its ranks to become party leader and PM.

So, the question is, will McDonnell and co. defect to form a new workers’ party? If not, will parties like the Greens back this new “change candidates”?

Myners strike – words of wisdom from City insider turned govt advisor

Yet another reject from the square mile has made it into government, take note!

Says Paul, who joined Labour because it was more “left wing” than the Liberals:

The capacity for soundly managed banks and markets to support the generation of wealth in the economy could never be matched by the public sector. That is why the government has a policy of supporting a return to an effective commercial banking sector, rather than nationalisation.

Ah, no comrade. The reason is that New Labour is committed to securing the power and wealth of the super-rich, as opposed to using the country’s wealth to re-invest in productive activities…

If Gordon Brown had really wanted to abolish the boom and bust of the capitalist economic cycle, he would have expropriated the banks years ago – not merely part-nationalise them by buying worthless shares.

As it stands, turbo-capitalism of the sort backed by New Labour has destroyed the manufacturing base of this country and damaged the social fabric of the country with mass unemployment. Many were bought off with the promise of a “housing ladder” to climb out of the working class, but now this bubble has burst along with the dream of a “popular capitalism”

The relentless pursuit of profit for the few has brought misery for the many. Now it has brought chaos for those who benefit the most – and they’ve called in the government, which has stepped in with wads of borrowed money which we will have to pay back in years to come (with interest!).

But never fear, we have utopians like Paul Myners in government. Men who can imagine a time when capitalism serves the many not the few. How fortunate he is to have such dreams – the rest of us must bear the reality of the recession: indebtedness, mass unemployment, and a rise in homelessness and crime.

Homelessness increasing as banks theaten repossession – even if you’re paying the mortgage!

The News Line reports that the recession is driving up homelessness:

Crisis, the national charity for single homeless people, yesterday warned of a potential surge in homelessness in 2009 as it opened the doors of Crisis Christmas to hundreds of homeless people.

Following official figures showing record unemployment levels, a YouGov survey on behalf of Crisis has revealed that 41% of adults in Britain know somebody who has lost their job due to the economic downturn.

Unemployment is hitting home with almost one in ten (9%) of people with a mortgage or rent repayment already struggling to pay the rent or mortgage.

In addition, a third of those surveyed (32.4%) believed they would lose their home within three months of losing their main form of income – leading to fears of a surge in homelessness in the New Year.

The survey also reveals that the poorest are the most vulnerable to the impact of the economic downturn, with more than three times as many people with lower incomes struggling to pay the rent and mortgage compared to more affluent groups in Britain.

Poorer people are also more concerned about losing their jobs and homes.

The findings were announced on the day that Crisis is opening nine temporary centres across London to hundreds of people who are already homeless and vulnerably housed.

The centres provide vital companionship, hot meals and shelter as well as services including housing, job advice, health checks, training and further education opportunities.

Leslie Morphy, Chief Executive of Crisis, said: ‘These figures are a stark warning for 2009.

‘Today we open the doors of Crisis Christmas to hundreds of homeless people in London – some of the most vulnerable and deprived people in our society.

‘The economic downturn is hitting the poorest the hardest.

‘Many are struggling to keep their homes.

‘The situation is only made worse by pressure on jobs, with unemployment levels set to reach two million by the end of the year.

‘Our fear is that as the recession bites in the New Year we are going to see more people in the same situation as those relying on our Christmas centres today, whilst those already at the bottom of the pile are going to be further away from the help and support they need to put their lives back together.’

Even if you are in employment and can afford to pay the mortgage, you could still be repossessed, as The Times reports:

Homeowners who have not missed a single mortgage payment could still be threatened with repossession by lenders who use an emergency clause to demand that the entire loan is repaid at short notice.

Peter and Marian Addyman, who live in St Leonards, East Sussex, received a letter this month from NatWest – part of the Royal Bank of Scotland, which is majority-owned by the Government – insisting that they repay a £226,000 mortgage within 30 days or face repossession.

The couple, who have never failed to make a mortgage repayment, bought their new-build five-bedroom property for £250,000 in 2004. When their initial mortgage deal expired at the beginning of the year, they took out an interest-only tracker loan at 0.04 per cent above the Bank of England base rate.

Their local MP, Michael Foster, who has twice written to the bank to request an explanation, said of the mortgage: “The bank are obviously not making any money out of it but they agreed it.”

The Council of Mortgage Lenders said that the clause allowing lenders to demand that a mortgage be repaid at short notice existed in the small print of almost every mortgage in Britain, although it was meant to cover only exceptional circumstances. This month a judge supported the right of lenders to repossess properties at will under a law dating back to 1925.

Since the government owns a majority of RBS, ministers should get involved to ensure this doesn’t set a precedent for the banks. It must be tempting for banks to recapitalise via repossession, thus avoiding total nationalisation and concerted regulation.

Back to the News Line for what to do about the homelessness crisis:

In the next year a million people will lose their jobs, and hundreds of thousands of them will be unable to make their mortgage or rent payments. They will end up on the streets.

What is required is an emergency plan to house the homeless.

Under the Labour government, Labour Councils are actually demolishing council estates and selling the land to developers for speculative building aimed at the very rich.

It has reached the stage where almost the entire housing stock has been sold off, and where council tenants are being threatened with eviction by councils in Camberwell and other places, because they will not leave their council homes.

The sales of council estates, or their demolition by councils must be halted at once.

Likewise, all empty properties must be requisitioned and taken over to house the homeless.

As well there must be a programme of public works to build a million new council homes, both to house the homeless and to provide hundreds of thousands of young workers with jobs and the opportunity to learn trades and master skills at trade union rates of pay.

This is the way forward to begin to solve the housing crisis.

Is progressive taxation is back on the agenda?

The Compass group has welcomed the Pre-Budget Report with as much optimism as the Chancellor’s asessment of the depth of the recession:

Neal Lawson chair of Compass said: “Today’s Pre-Budget Report marks a move away from the Neo-Liberal/free market economic consensus pursued by both Labour and Conservative governments of the past 30 years – but this should not just be a blip before normal service, in the shape of speculative consumer capitalism, is resumed – the government needs to make this a turning point that leads to the moral transformation of our society”.

Jon Cruddas MP said: “This is exactly the kind of measure that we’ve been advocating for a while now and it’s good news for people like my constituents in Dagenham. This should be the first stage in re-balancing the tax system so it’s fairer for middle and low income earners, as well as kick-starting the economy in the short term. When the new US administration takes office then we have the chance to move in to another phase – an international crackdown on corporate tax evasion. Meanwhile, Cameron is now retreating from New Conservatism into orthodox Thatcherite economics and we have to expose that.”

Gavin Hayes General Secretary of Compass said: “A financial crisis that was in part caused by the excesses and risky behaviour of those at the top should not be allowed to unnecessarily hurt the rest of us, so today’s announcement on reducing VAT, whilst at the same time announcing plans to increase the tax burden on the super-rich should both be welcomed, it is absolutely right for government to limit the impact of the recession by using pragmatic and sensible measures such as these.”

As Richard Murphy points out, cutting VAT by such a small amount isn’t likely to impact upon retail prices for consumers:

On an item costing £4.99 the VAT saving will be under 11p. Can you see anyone shifting that price to £4.89?

On £500 (VAT inclusive price) the saving is £10.60. That’s neither here or there: if you are going to spend £500 then £10.60 or so will not change the decision. Other influences are much stronger.

So at low price points this is a boost for the retailer who will take much of the gain. I really do not expect them to pass this on. At high price points I doubt the impact.

Either way the saving goes to marginal jobs in the UK, and Woolworths won’t be saved by this, whilst cheap imports are the only likely sector to see a boost. The business to business sector will see none at all: VAT does not impact them.

But it’s more than that: this might fuel deflation, which we can ill afford. So it’s a mistake.

VAT is regressive, but not as badly as some taxes (e.g. council tax) so the poorest who need help will not benefit most.

John McDonnell MP, chair of the Left Economics Advisory Panel said of the tax changes:

“The introduction of a higher rate of tax for high earners is long overdue but the Government’s proposals are hardly a revolution, and delaying them until after the next election is pointless. The higher rate should be the start of creating a fair tax reform agenda, redistributing wealth from the super rich in order to take the low paid out of taxation altogether.

“The Government should also move immediately to tackle the large scale tax avoidance by the corporate sector, introducing legislation to outlaw tax havens, mirroring the Obama bill in Congress. The public revulsion over City bonuses and bank executive salaries has opened the way for radical tax reform. Government must seize the moment.”

The Public and Commercial Services Union warns of the impact of so-called “efficiency savings” and points out that billions of pounds in taxes go uncollected:

Commenting, Mark Serwotka, PCS general secretary, said: “Further efficiency savings of £5 billion should not be a prelude to yet more job cuts, office closures and privatisation.

“Key public services, such as justice, welfare and tax are already struggling to cope against a backdrop of massive job cuts and office closures.

“Whilst the promise of additional funds for jobcentres is welcome, the government needs to reverse its job cuts programme across civil and public services to safeguard their delivery.

“Whilst the promise of additional funds for jobcentres is welcome, the government needs to reverse its job cuts programme across civil and public services to safeguard their delivery.

“For example the government should be looking at tackling the £21.5 billion worth of uncollected tax and £25 billion lost through tax evasion, by putting more resources into HMRC to claw back the billions in lost revenue, which could be ploughed into public services and stimulate the economy.”

The Morning Star‘s editorial is critical of the direction of travel signalled by the Pre-Budget Report, not so much a return to Real Labour but a continuation of Blue Labour:

Out of his own mouth
(Monday 24 November 2008)

CHANCELLOR Alistair Darling condemned himself out of his own mouth when he said that the central objective of his unambitious pre-budget report was to support firms and businesses going through difficult times.

That is why he opted for a cut of two-and-a-half percentage points on VAT, which will be absorbed into business income rather than find its way into lower prices.

Working people, especially those wondering how long they will be in a job, are unlikely to run out on a spending spree on the basis of a VAT cut.

And, if Mr Darling really wished to spark economic activity, he should have helped those on the lowest incomes whose extra cash would certainly have increased demand.

Those robbed when Gordon Brown abolished the 10 per cent tax rate should be compensated by being lifted out of income tax liability entirely.

State pensioners, whose living standards have been eroded every year since the Tories abolished the link with wages, those working for a totally inadequate minimum wage and others forced to exist on the jobseeker’s allowance pittance should receive a boost in their income.

It is pathetic that the Chancellor should be posing the possibility of no more than a 5 per cent increase to 45 per cent for tax on annual incomes over £150,000 and then only on condition that Labour wins the next general election.

This proposal will not bring any additional income to the Treasury in the life of this government. It’s not even of sufficient scale to encourage the electorate to vote Labour in the hope that it will switch the burden of taxation from working people to the rich.

Government failure to tackle the spiriting away of potential tax revenues of at least £25 billion a year through overseas tax avoidance centres, mainly in British crown territories, emphasises once more its priorities.

The bulk of taxation should fall on the shoulders of those able to pay rather than those too poor to afford avoidance schemes.

And the government should also lift the cap on National Insurance contributions, which is a hidden tax benefit for the better-paid, and introduce a wealth tax.

But the government must not restrict itself simply to measures calculated to increase demand.

It has a responsibility to intervene actively in the economy, especially since the banks have been quick to accept cheaper Bank of England lending and government investment but have not passed benefits on to small businesses seeking to weather the recession.

The government must put substance behind its much-vaunted commitments to environmental issues and to higher employment levels.

Financing at least 100,000 new council homes a year and a nationwide programme of renovating and insulating existing local authority properties could begin to tackle the housing crisis, improve energy efficiency and cut fuel bills.

Similarly, a crash programme of expanding the railways would not only improve the transportation network but increase demand for steel, concrete etc, safeguarding jobs in these industries as well as construction.

Unless the government adopts an economic programme with social justice at its heart, its cosmetic measures will simply prop up big business and ensure that costs of the recession will be paid for by workers.

Not lending? Time to nationalise the banks!

The chair of the Treasury Select Committee has been waving a big stick at the bankers in the form of naming and shaming:

Demand for full-scale nationalisation of more banks could also grow if loans were not made, John McFall said.

The Chair of the Left Economics Advisory Panel, John McDonnell MP says this demand should be heeded:

“Despite all Government attempts to stimulate the economy, all the evidence points to failure. The billions in bailouts have done little to increase lending, and we are witnessing a startling rise in home repossessions.

“The Government now needs to be more forthright and move towards the full nationalisation of the banking sector to be run in the interests of the British people.

“We can’t afford any more dithering by the Bank of England. We need an immediate and substantial cut in interest rates. It is now time for the Government to take back control from the dithering Bank of England.”

On that startling rise in repossessions, housing charity Shelter reports:

New figures released by the Council of Mortgage Lenders (CML) show that repossessions have risen 12% to 11,300 in the third quarter of the year from July to September.

This means that there have already been more repossessions in 2008 than 2007, and CML director Michael Coogan is still predicting 45,000 reposessions by the end of the year as the economic situation worsens.

The figures also show that the number of borrowers in mortgage arrears was up 8% on the previous quarter to 168,000.

Municipal enterprise on the rise?

A great article from Tribune:

Let’s get vocal about local enterprise

Mark Bramah says it’s time to stop the erosion of local government and usher in a new era of municipal innovation

THE late 19th and early 20th centuries saw a golden age of municipal enterprise with major advances in public health and sanitation, slum clearance and the creation of municipal housing. There was also the provision of public education, parks, museums and libraries. The might of civic leaders and the flowering of civic pride in that era are best represented in the gothic town halls that still dominate the centres of many of our major towns and cities.

Localism came in many different forms, from the liberalism of Joseph Chamberlain, Mayor of Birmingham in the 1870s and later a Conservative minister, to the municipal socialism of Herbert Morrison, leader of the London County Council in the 1930s.

However, the role of local government has been eroded in the past 60 years. Responsibility for major national services, such as health, water, housing and education, has been removed from effective local control with the increasing influence of Westminster and the Treasury. Responsibility for delivering services has been transferred to individual schools, housing associations and private contractors. In many cases, councils have become merely the conduit for transferring cash from central government to those who now deliver services.

Fortunately, there are signs of a new wave of municipal renaissance, as local authorities become more enterprising and take responsibility for delivering ambitious visions and solutions for local communities.

Councils are making the most of legislative changes to pull local partners together to give residents what they want. They are taking the lead in tackling climate change and ensuring this country has the skills, services and homes which the private market has failed to deliver.

Legislative changes since 1997 have been designed to develop the community leadership role of local councils. These change include including the duty of best value, the power of well-being, directly-elected mayors and new political structures, and the new place-shaping role envisaged in the 2006 white paper Stronger Prosperous Communities and translated into statute by the Local Government and Involvement in Health Act. However, these have not yet had the desired impact of restoring the former glories of our municipal past.

Nevertheless, local area agreements are enabling councils to bring partners together with pooled budgets to tackle problems that matter to local people. Multi-area agreements apply the principle to a wider area, allowing local authorities – along the Flyde Coast, for example – to work collectively to boost the sub-regional economy, transport system and housing provision.

The municipal place-shaping role enshrined in recent guidance is designed to encourage local authorities to develop specific visions for local communities. The duty to involve local people in decision-making in their area will, it is to be hoped, reinforce the connection between good governance and service delivery.

The nationalisation and privatisation of the local state has created a vacuum that yet to be adequately addressed. But the sense of powerlessness that many people feel in the face of private sector monopolies and quangos which control energy, the environment and transport infrastructure is now being challenged by local councils. They are rediscovering the drive and purpose which were the hallmark of the formative years of local government in this country.

A striking example of this is Essex County Council and the 50 or so other local authorities whose response to the planned closure of thousands of sub-post offices by Royal Mail in the name of efficiency has been to offer to take over the running of local post offices on behalf of their communities.

An example of a council working holistically to address the threat of climate change is Southampton City Council, one of the most eco-friendly authorities in the country. The council’s Energising Southampton strategy means local energy companies provide district heat and power through sustainable sources to various clients including BBC television studios, an ASDA supermarket, a shopping centre and domestic properties. They are also keeping energy costs down in the face of rising prices and dealing with fuel poverty in the process.

Many councils are beginning to redefine their purpose, not just as agents of central government, but also as active champions of their communities. In another example of local initiatives to promote access to higher education and tackle social exclusion, the London Borough of Newham is offering residents entering higher education the opportunity for specialised help and advice with making applications for student finance. For the past four years, the number of Newham residents applying for higher education has increased year on year by an average of 300 applicants – up from 2,234 in 2003 to 3,454 in 2007.

Glasgow City Council is also responding to skills gaps that the construction industry has been unable to fill. Every school leaver in Glasgow who applies for a modern apprenticeship next year will be offered one as part of a £30 million plan to prepare for the city’s 2014 Commonwealth Games. A total of 2,000 construction apprenticeships will be offered, most with construction company City Building, which is owned by Glasgow City Council. Successful applicants will be able to learn electrical, plumbing, roofing, joinery and bricklaying skills. Those requiring assistance in literacy, numeracy and social skills will be offered the help they need to progress.

Broxtowe Borough Council, Darlington, Mid and East Lothian councils and the London Borough of Islington are among the few local authorities which are actually managing to build council houses, despite the lack of national financial backing and the unfavourable political climate in which to meet housing needs.

There can be no future for local government as merely the administrative arm of the central state, enforcing national laws and collecting revenues to part fund government initiatives. While local government in Britain has no separate constitutional identity from the national Parliament at Westminster and is to a very large extent a legislative creature of central government, it is vital to the democratic health of the nation and the creation of active and vibrant local communities.

Although Westminster has been keen to articulate a vision of localism built on city regions, community leadership, place-shaping and neighbourhood governance, this will not come about through top-down imposition. It can only happen through the civic leadership of local authorities responding to the many challenges facing our communities. From improving educational outcomes, developing and improving the skills of the local workforce and building affordable homes, to tackling climate change and the impact of global economic forces on local economies, the challenges and the solutions are all local.

There is increasing evidence that local government is beginning to wake up to its responsibilities in health, housing, energy and the environment. Despite years of denigration and being denuded of any real power, we may be beginning to realise a renaissance in municipal enterprise which, if it is allowed to flourish and is given the support it deserves from national government, might just provide the architecture to support the rhetoric of the new localism.

Mark Bramah is the assistant chief executive of the Association for Public Service Excellence

Housing under threat by New Labour and the High Court

Firstly, Defend Council Housing says:

The Chartered Institute of Housing’s proposals to means test and time limit council ‘secure’ tenancies’ (‘Rethinking Housing’) are shocking but not exactly original.

Alan Walter, tenant chair of Defend Council Housing said today:

“This is yet another attempt to stigmatise council housing as housing of last resort just when we need pressure on Ministers to announce a massive investment programme to build a new generation of first class council housing providing the secure tenancies, low rents and an accountable landlord that the private market has so clearly failed to deliver.”

“With so many people facing insecurity today the last thing we need is the ‘great and the good’ of the housing world proposing to take away ‘secure’ tenancies which council tenants fought for and won after the recession of the late 1970s.”

“The solution to a shortage of defend, affordable, secure and accountable council housing isn’t to means test and time limit it but to build more! That would also have the benefit of opening up council housing allocation policies to the wide range of people who used to live on council estates re-establishing the mixed and sustainable communities the CIH and government say they want.”

The key argument and much of the language has been lifted from the Smith Institute’s ‘Rethinking Social Housing’ paper published in 2006.
This crudely argued that a ‘secure tenancy’ for life encourages ‘dependency’ and should be scrapped. The theme was eagerly taken up by then Secretary of State, Ruth Kelly who asked Professor John Hills to look at the ‘Role of Social Housing’. She and others clearly hoped that Hills would oblige and recommend means testing and time limited tenancies. To his credit he refused. Yvette Cooper when we met her made it clear she didn’t support this agenda but Caroline Flint chose to make her first speech as Housing Minister on ‘commitment contracts’.

The CIH’s latest contribution is clearly an attempt to rehabilitate this agenda despite several Ministers retiring bruised. Timing is deliberate because the ‘great and the good’ want to raise these proposals again in the Housing Reform Green Paper due next month

Their agenda is based on the assumptions that those in council housing have obligations (beyond paying the rent and treating your neighbours with respect) in addition to those in other forms of tenure, and that the job of “housing professionals” is to paternalistically “help” tenants through life (though not by building more council housing because that still isn’t yet “on message”).

Government is robbing council tenants (not subsidising us) to the tune of £1.8 billion a year – as the latest draft subsidy determination confirms – while over the last twenty years billions of pounds of public subsidy has been poured into RSLs and taxation has favoured homeowners and more recently buy to let landlords. The bank bailout is the biggest home ownership subsidy of all time.

Why should employment “help” be tenure specific and why is it appropriate for “housing” rather than health or education professionals to be given new powers to call people into interviews? When millions face insecurity and instability the last thing they need is a threat to their ‘secure’ tenancy.

It’s shocking that in the midst of the biggest economic crisis for a generation, in part triggered by a major failure of housing policy, housing’s professional body decides to address the worry 17 year old tenants who twenty years on become higher rate tax payers.

The principle that needs defending is that council housing should be a mainstream tenure of choice, available to all who want to rent as an alternative to the private market. Council tenants need and have the same right to a ‘home’ as everyone else – not just a temporary place to put their head down until they find something better. It’s ironic that those arguing for means testing and time limits also bang out the rhetoric about building ‘sustainable communities’. Their proposals directly stigmatise council housing as housing of last resort and, if successful, would make our estates ‘transient communities’.

The solution is to start a massive investment programme to improve existing and build a new generation of first class council homes. That would provide the much needed homes the market is incapable of providing and also open up housing allocation policies once again so that our estates return to being the mixed and sustainable communities they were before scarcity distorted them.

There’s clearly a wider neo-liberal agenda at work. Would CIH say people who can ‘afford’ the private market should pay for their health care or kids education? That, of course, would go against the fundamental principles underpinning the post war consensus that millions of people support. Better to start with council tenants who can be more easily stigmatised and some must think more easily bullied.

Many CIH members are unhappy with their professional association “doing a job” for Ministers. They might not all agree with DCH’s response but hopefully they will make sure that council tenants in their area know about the DCH conference on November 25 and receive the same practical and financial help given to empower tenants to attend other events.

And secondly, the Financial Times reports:

A landmark High Court ruling has paved the way for mortgage lenders to sell the homes of borrowers in arrears without seeking a court order, bypassing Gordon Brown’s efforts to make repossession a “last resort”.

The ruling, which the judge described as having “wide-ranging implications”, strongly reaffirms the statutory right of lenders under a 1925 law to sell a property independently after two mortgage payments are missed.

While the power is unlikely to be used by mainstream lenders, who customarily seek repossession orders from judges, lawyers and opposition politicians called on ministers to pass reforms urgently to prevent rogue lenders “threatening families with these powers”.

The judgment dismissed the human rights defence of the homeowners in arrears and backed the right of GMAC-RFC, a specialist subprime and buy-to-let lender that is part-owned by General Motors, to appoint receivers and auction the property.

The former homeowners, who had a buy-to-let mortgage, were then evicted for trespassing by the new owner, Horsham Properties. The sale circumvented the court process through which judges can give struggling borrowers more time to arrange repayments. There are no plans for appeal.

In his ruling, Mr Justice Briggs also suggests the borrowers lost their equity when they fell into arrears, although it is unclear whether they were entitled to the balance of the sale proceeds once the debt was cleared.

GMAC said it “frequently exercised” its power of sale with buy-to-let borrowers who breached contractual terms.

But it said “a receiver would not have been appointed” in the case of a residential home loan, even though the judgment confirmed the power of all mortgage lenders to do so.

Lawyers have responded with ”astonishment” and called for new laws as a “matter of urgency”.

John Gallagher, principal solicitor with Shelter, the housing charity, said the case “gives the green light” for lenders to sidestep courts with legal remedies “rooted in the 19th century and repugnant to most people’s sense of justice”.

“It is quite incredible in the 21st century that the law allows the lender to choose whether or not to take possession proceedings and that the borrower then becomes a trespasser in his or her own home,” he said.

Mr Brown promised repossessions would be a last resort after issuing judicial guidelines to help settle mortgage arrears ahead of court proceedings. But the limited powers of judges to protect borrowers are triggered only when the lender applies for a court order.

Vince Cable, Liberal Democrat Treasury spokesman, said the ruling was “ex-tremely alarming”. “It shows the mounting repossession problems will not be resolved simply by changing court rules since the laws are heavily tilted in favour of mortgage lenders.”

Mr Justice Briggs said the power to circumvent courts was “in the public interest” as it provided the essential security for mortgage lending at affordable rates.

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