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