Wednesday, February 21, 2007

Living in the Ghetto?

I did not realise it but I live in a ghetto. Will Hutton, that doyen of the English middle class ‘progressive’ liberals says so. It must be true. Even worse I inhabit a ‘living tomb’.

“The truth is that council housing is a living tomb. You dare not give up the house because you might never get another, but staying is to be trapped in a ghetto of both place and mind.”

The context of these wild assertions of Hutton is the debate sparked by the spate of teenage murders in South London and the UNICEF report which put Britain at the bottom of the ‘league’ for children’s well-being. Step forward Hutton for the prosecution. The cause of these social problems is, according to him, the Council housing estate.

Curiously Hutton fails to even broach the question of why Council estates have ended up the way they have today, in contrast to what they were before Thatcher’s assault on them. If you visited a Council estate up to the 1970s you would have met a cross-section of working class life, from the engineering worker to the shop or office worker. Unemployment was very unusual then amongst tenants. This was a world in which people generally treated each other with respect. The degeneration of many estates dates from the time that Thatcher sought to launch her social engineering project. She wanted to undermine the electoral base of support for Labour which most council estates were. She introduced ‘the right to buy’, combined with an end to the building of new council houses.The result was that the better-off Council tenants bought their houses at give away prices. Councils were left with the worst stock. The only people who did not buy were those who were too poor to afford even the low prices offered and the small minority of people who refused on principle to buy their house because they considered it collective, socially owned property.In the absence of new housing being built, over time only the poorest people were left in Council housing, many with social problems.

Hence something like 75% of tenants are eligible for benefit of one sort or another. To accumulate the points necessary to qualify for the decreasing number of units, applicants have to have large families, serious health problems, and/or serious levels of social deprivation. That is why there are 1.5 million people on Council housing waiting lists.

Despite this, Hutton’s generalisation that Council estates are ghettos is too sweeping. The area I live in has its problems but I do not feel like a prisoner and I do not want to be ‘freed’. It is a quiet area. It is certainly no Peckham. On the only occasion when somebody tried to rob our house in the past 23 years, they escaped only with a pair of gloves, evidently disgusted that they did not find a TV or a coin metre for gas or electric. The rumour that they left a £10 note because they felt sorry for us is apocryphal.

Hutton bemoans the fact that the “aspirations and expectations of the rest of society are not for you” if you live in a Council estate. On the contrary it is the “aspirations” which Thatcher encouraged and Blair views through the same prism as the “Iron Lady” in which resides the problem. Council housing was a collective solution to a social problem – poor and overcrowded private accommodation for those who could not afford to buy a house. Some of the post second world war council housing was neither well built nor well-planned. But for many of the generation of people who grew up before the Second World War, Council housing was a liberation. It provided them with cheap and decent accommodation in place of the poor and often unhealthy conditions that many working class people had to suffer. It did not have double-glazing or central heating but not much British housing did then.

Hutton wants me and other tenants to be freed from a ‘living tomb’. For what; the privilege of having a mortgage that I cannot afford in order to fulfil the ‘aspiration’ of being a home owner? There is nothing natural in the desire to own a home, as many other European countries show. They do not share the seeming British infatuation with home ownership. Contrary to myth, such an aspiration is a social phenomenon which has been engineered.

The Blair government’s contempt for Council housing and Council tenants is part and parcel of their abandonment of the collectivist outlook of the labour movement. It rests on the same prejudices as those of Thatcher who famously said there was no thing as society. The ‘aspirations’ which the Blairites worship are those of the self-interested individual who wants to ‘get on’ and is disinterested in the collective interests of working people. That is why for them any conception of a working class movement is completely alien.

For the middle and upper classes housing became very much an ‘investment’ rather than a place to live. From the 1980’s the rocketing prices meant that small and large fortunes were made as people moved from house to house, to take advantage of the inflated values. But current unprecedented levels of debt are the inevitable product of these inflated values. Millions of people struggle month to month to earn enough money to pay mortgages which they cannot realistically afford, at least without working themselves into the ground. The banks used to lend individuals around two and a half times their wages for a mortgage. Today they lend five times or more. This is unsustainable. It causes stress and illness amongst wide swathes of the population.Many people who would previously have put their name on a Council house waiting list are today forced to take out a mortgage because they have no chance of getting council accommodation. In pre-Thatcher times there was no social stigma to living in a Council house. Today you are seen as a ‘failure’ if you live in Council accommodation. That is partly because the absence of new building means that less people live in them. For many people their view of Council estates is produced by what they read in the newspapers or see on the TV. If Hutton wants to visit this one he might recognise that his vision of a ‘tomb’ is preposterous.

He might also consider this question. Why if life is so uniformly appalling on Council estates have we seen the repeated experience of Council tenants voting against having their housings sold off, rejecting the propaganda of the government that breaking the link with a Council landlord will remarkably transform their lives? It is not because they love their Council. They often have problems with bureaucratic structures. It is because they fear private landlords or ‘not for profit’ Housing Associations, because of historical and more recent experience.

Hutton offers one ‘controversial option’, repeating the idea which Ruth Kelly has floated, allowing tenants to own ‘a fraction of the value of their home’. Ten per cent was the figure that Kelly suggested. This is presented as ‘the first step on the housing ladder’. Currently you can ‘buy’ as little as 25% of your home.If up to 75% of tenants are on benefit how are they going to afford to pay a part-mortgage, on top of their rent. What would the motivation be?

How could it be a first step when the chances are that even if the individuals concerned are working, often in part-time work, they are going to be earning low wages. As one mortgage broker quoted in the Observer says:

“You have to ask whether someone who can only afford a 10% stake should be getting on the property ladder in the first place. The whole point is that you increase your stake over time, with the aim that you eventually own the property outright. That is a struggle if you initially buy a 25% stake; it is near impossible with a 10% stake.”

The housing crisis in Britain results from the lack of what is called ‘affordable housing’. The ‘market’ so beloved of Blair will not deliver housing which low income families can afford to buy. For Kelly to propose a 10% stake in Council housing is remarkably stupid. Moreover, if you live in a ‘ghetto’ why would you buy 10% of your house? The government has failed to address the lack of ‘affordable housing’ because of its ideological prejudice against Council housing. Why does a government for whom ‘choice’ is a mantra deny Councils the right to invest directly in Council housing even when tenants have rejected government policy and voted to stay with their Council landlord? I suspect that to a large extent this is because if there was a major Council house building programme embarked upon this would tend to drag the price of private houses down because there would be less pressure on people to take out a mortgage.

Thanks Will and Ruth, but I don’t want to own 10% of my Council house; nor 100% for that matter. When I shuttle off this mortal coil I know that somebody who needs it (that’s different to demand in the market – human needs as opposed to the ability to pay) will become the new tenant. Indeed I have a friend who could afford to buy a house and decided to buy one because he and his partner thought they earned too much to justify living in a Council flat. So instead of earning a fast buck by buying it from the Council at a give-away price, they did the right thing and gave it back to the Council to put in a new tenant who needed it. They put this principle above their personal interests, a sentiment which is unimaginable for Blairites.

Like my friend I consider this house as social property which was not built to enrich individuals but as public provision in response to social need. That’s why I would not buy one on principle even though it might be in my interest to do so, if I was solely self-interested. Ironically, if Will were to wander around our estate, he would see that quite a few of the worst houses were one’s bought under ‘the right to buy’. It was too good an offer for some to refuse. It was cheaper to buy than to pay the rent. Yet many tenants did not think it through. They did not think about the cost of the upkeep of their house, of the cost of repairs, never mind the cost of modernisation.That was what Thatcher wanted – tenants to see them selves as individuals with no other consideration than their personal interests. One of the founding tenets of Blairism was that the Labour Party had been wrong to oppose ‘the right to buy’. Blair consciously transformed Labour into the Party of the aspiring individual.

Hutton finishes his piece by saying that it is not ‘British civilisation that ails’. It is British Council estates. “We made them. Now we need to unmake them.” This is a staggering summation, for Hutton appears to have forgotten even some of the things which he himself has written. Council housing was not responsible for mass unemployment. It was not responsible for the worship of success, of the encouragement of naked self-interest. It was not responsible for the Blair government copying their beloved American economic and social template.

What is needed is not the destruction of Council housing but investment in it; investment in social facilities. The partial atomisation of the working class, which was conscious policy on the part of Thatcher, produced social conditions whereby sections of the poorest within society war against each other rather than seeing that their collective interests require building a labour movement which defends those interests. Individuals can ‘get on’; some can escape from their ‘ghetto’. Yet as America has shown, the free market solutions which are worshipped at the shrine of Blair (and Brown) allow individual success but cannot disguise the reality that in a competition of each against all, for each successful individual there any many more who are thrown into an impoverished existence, both materially and culturally. That is what the labour movement was formed to address.

Addressing the social problems which Hutton refers to requires collective solutions, of which Council housing is one. We can discuss its weaknesses on the basis of experience, the need for greater tenant involvement and so on, but Hutton’s ‘solution’ is nothing more than a variant on the Thatcher/Blair outlook. It is out of the camp of rampant individualism, where everybody survives by their individual initiative, often at the expense of others.


Louisefeminista said...

I was utterly appalled by Hutton's article but I also think New Labout might be gearing up for an attack on council housing tenants and council housing overall. The whole situation regarding social housing is a nightmare. What I would also say is the other schemes like "shared ownership" is a joke as well as the sums don't add up! I know people who work in the public sector who have gone for shared ownership as a way of getting somewhere permanent to live as they are sick of rented accomodation as it is so precarious..... and it becomes such a minefield and even they say the sums don't add up but people are desperate to live somewhere where they are not exploited and not beholden to someone who can up your rent and your tenancy not being secure either.
And there are thousands of empty houses going begging which is obscene and the government are reneging on their policy on social housing as they are only building a fraction of what they "promised". Demand for housing is increasing and therefore that demand is being exploited and desperate people are being screwed......

Tawfiq Chahboune said...

I don’t expect anything more from Will Hutton. For example, see my “Triumph of the Will (Hutton)”, published here at the SUN and UKWatch ( What else would we expect from Hutton? If there’s a victim, he’ll line them up in the crosshairs.

The thing about the kind of nice housing Hutton believes is civilised and all the rest of it is out of most people’s reach – presumably why he likes it so much. What interests me is the following. No more than approximately 8% of people earn more than £30,000 a year, I believe (I was told this by a group of financial people, proudly boasting their bonuses). However, the average house price has broken through £200,000, and in London it went past a cool quarter of a million a few years ago.

Now, given that banks are not allowed to lend more than 3, 4 or at best 5 times more than the borrower’s annual income (unless you’re the passionate Tony Blair) there seems to be some very fishy arithmetic going on. The banks aren’t stupid: they know jolly well they’re lending to people who aren’t making the kind of money that what would entitle them to these mortgages. The borrowers know they’re making mendacious claims as to what they earn. Presumably, none of these people who seem to be doing a Peter Mandelson need to prove how much they’re actually making? The government knows what’s going on but does nothing about it. All this grossly inflates the house price boom. In years to come when the bubble bursts the devastation will be complete.

One of the major brakes on all this is council housing. But the first thing Tony “The Passion” Blair did was to cut the brakes. Yes, Thatcher started the war, but Labour really put the boot in. If Labour had wanted it could have built hundreds of thousands of council houses in the past ten years and brought house prices down greatly and saved the country from certain economic disaster when the housing bubble bursts. But no. To round things off, the unions bankrolled this complete lunacy. Champagne all round.

AN said...

There is an interstng article in Scottish Left Review on the impact of high house prices on the overall economy:

"One of the disturbing recent trends, particularly in England’s economy over the last decade, has been the huge increase in consumer indebtedness. When New Labour came to power in 1997, the UK mortgage debt to GDP ratio was just under 50 per cent. By 2004, it had increased to 79 per cent (the EU average in 2004 was 45 per cent). Further, since 1997 the UK level of personal consumer indebtedness (credit card debt, personal bank loans etc) has increased 300 per cent. Today, one third of the entire EU’s unsecured consumer debt is held in the UK, most of it in England.

The engine of growth here has been house price inflation. Since 1997 the UK, or rather the south-east of England, has had the highest house price inflation in the EU. According to the Executive, throughout the period 1997 to 2004 property prices in London were two and a half times greater than in Scotland. House price inflation has produced the recent phenomenon in England of large-scale ‘equity withdrawal.’ As a consequence of so-called ‘wealth effects’ owner occupiers, in anticipation of rising house prices, have been withdrawing ‘equity’ i.e. borrowing money on the rising value of their property. Inevitably this house price bubble will burst in England. And as we saw in the late 1980’s, when levels of indebtedness were considerably lower and less extensive than today, when this happens the consequences for the Scottish economy, which depends on England for 63 per cent of its exports, will be potentially devastating. The other problem with debt-laden consumption led growth is that consumption spending becomes highly sensitive to interest rate increases. "

AN said...

As I understand it, In addition to the right to buy legislation, there was also a conscious policy introduced by Thatch of what they called "residualisation" whereby councils would only be responsible for housing the socially marginal.

This if course over time has shifted the character of council estates, which up until the end of the 1970s were often socially indistinguishable from private estates, to the situation where "problem famnilies" are concentrated on council estates.