Iain Dun­can Smith

Calm heads, not po­lit­i­cal point-scor­ing, are what is needed in the de­bate over the fu­ture of so­cial hous­ing

The Sunday Telegraph - - Front page - IAIN DUN­CAN SMITH READ MORE at tele­graph.co.uk/opin­ion

It is almost im­pos­si­ble to com­pre­hend the scale of the Gren­fell Tower block dis­as­ter. as the fi­nal death toll has yet to be cal­cu­lated. My thoughts and prayers go out to them, and my grat­i­tude to those vol­un­teers and neigh­bours who so self­lessly have helped.

The Prime Min­is­ter has said there will be a full public in­quiry which will look into why this tragedy hap­pened and what lessons can be learned from it. That is the right thing to do, but the one thing it will not be able to look at is the way we pro­vide so­cial hous­ing and how that could be im­proved.

Al­ready those on the far Left are press­ing their own view of what the prob­lem is, call­ing in ef­fect for the re-na­tion­al­is­ing of so­cial hous­ing and the end­ing of pri­vate prop­erty rights. This kind of “govern­ment knows best” view may seem al­lur­ing, but those of us who re­mem­ber the sink es­tates, vast rent ar­rears and of­ten sub-stan­dard hous­ing when coun­cils ran so­cial hous­ing know that it is far from a panacea. Oth­ers don’t see it as the Left does. In France, em­ploy­erem­ployee groups pro­vide part of the fund­ing for so­cial hous­ing to sup­port lo­cal employees. In Hol­land, the rent for the cheaper rental homes is kept through non-profit pri­vate hous­ing foun­da­tions or as­so­ci­a­tions.

These fi­nan­cially in­de­pen­dent groups act as so­cial en­trepreneurs, work­ing to pre­vent seg­re­ga­tion. They high­light an im­por­tant prob­lem here. Since the war, we have used the built en­vi­ron­ment to lock in our place in so­ci­ety. A glance at any city will show that chil­dren tend to grow up now in houses near to chil­dren whose fam­ily’s sta­tus is very sim­i­lar.

We have low-in­come es­tates, mid­dle-class es­tates and even some ar­eas where hous­ing is only in­hab­ited by the very wealthy. Now, we need to look at how we can cre­ate more bal­anced com­mu­ni­ties through a mix of tenure, and sen­si­tive al­lo­ca­tion poli­cies whilst pro­tect­ing against the dan­ger of stig­ma­ti­sa­tion.

Hav­ing a home to live in is a vi­tal right for every­one and the huge post-war suc­cess in pro­duc­ing such homes was re­mark­able. How­ever as the world changed, so­cial hous­ing hasn’t kept up. Too of­ten now peo­ple find them­selves in homes which are no longer near to work, trapped in ar­eas riven with high lev­els of crime and drugs. Over two-thirds of so­cial ten­ants have in­comes in the bot­tom 40 per cent. And in some ar­eas now, only five per cent of ten­ants move each year. Almost half of the so­cial hous­ing stock falls in the cat­e­gory of the 20 per cent most de­prived neigh­bour­hoods in the coun­try.

Al­though wel­fare re­forms have meant some two mil­lion more peo­ple are in work, there still re­main large pock­ets of un­em­ploy­ment cen­tred of­ten on the es­tates. Two ar­eas that have acted as a dis­in­cen­tive to work are now be­ing rec­ti­fied. Hous­ing Ben­e­fit is taken away pound for pound as peo­ple earn and Lo­cal Au­thor­i­ties of­ten re­in­state it at the in­cor­rect level when they fall out of work. Univer­sal Credit (UC) ad­dresses both is­sues with a lower level of de­duc­tion and the au­to­matic re-set­ting of the ben­e­fit ac­cord­ing to in­come.

Lo­cal ser­vices failed to be brought to­gether for house­hold­ers, but along­side UC, Univer­sal Ser­vices is set to change that dra­mat­i­cally to the ben­e­fit of res­i­dents. Be­fore the last elec­tion, I ar­gued that we needed to do more to look care­fully at the tenure of so­cial hous­ing with a view to giv­ing ten­ants shared eq­uity.

I wasn’t suc­cess­ful then, but I still be­lieve that it would help ad­dress the is­sue of as­set poverty. At present, 61 per cent of house­holds with­out as­sets are poor and more peo­ple are as­set poor than are in­come poor. As­sets are es­sen­tial for, and a de­ter­mi­nant of, a fam­ily’s long-term eco­nomic growth. This is why we should now look again at how we can give ten­ants an as­set share of the home they live in and the tenure of so­cial hous­ing should be flex­i­ble enough to change as the house­hold’s cir­cum­stances change.

Fi­nally, it is time to look again at the way we treat pri­vate land­lords who buy houses to rent. Ge­orge Os­borne’s de­ci­sions to im­pose a stamp duty levy on the pur­chase of homes to rent, to re­strict mort­gage in­ter­est re­lief to the ba­sic rate of in­come tax and to tax a land­lord’s turnover rather than prof­its have led to land­lords scal­ing back or even leav­ing the sec­tor al­to­gether.

They are a sig­nif­i­cant provider of the ad­di­tional hous­ing we need. We should be en­cour­ag­ing them with de­vices such as VAT re­lief on con­ver­sions or even cap­i­tal al­lowances, not pun­ish­ing them. It’s no won­der buy-to-let pur­chases have fallen dra­mat­i­cally. If the pur­pose was to stop for­eign own­ers buy­ing up prop­erty and leav­ing it empty we would be bet­ter off levy­ing a tax on empty homes. For ex­am­ple, in New York, apart­ments can in­cur a tax of up to $20,000 if they are left empty. We are in dan­ger of throw­ing the baby out with the bath wa­ter.

I be­lieve so­cial hous­ing is the is­sue of our time and that is why I have asked the Cen­tre for So­cial Jus­tice to put to­gether a team of all par­ties to re­view this and rec­om­mend the nec­es­sary changes. The Bri­tish peo­ple need calm heads, not po­lit­i­cal point-scor­ing, as we work to im­prove the lives of those in so­cial hous­ing.

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