Tuesday 19 October 2010

Logic Fail

I'm struggling to identify any sort of "intellectual coherence", "logical consistency" or what we used to call "honesty" in Tory thinking, as evidenced here.

1. One the one hand, they say that 'the better off poor' should be eased out of social housing, basically by charging them higher rents, i.e. that if you are allocated a council house when you are down on your luck, and manage to get back on your feet, you get kicked out again.

2. That view sort-of-has-some-merit, but is only a sticking plaster because there ain't enough social housing. As we know, there ain't enough social housing because:

a) The Tories came up with the wizard wheeze of flogging off the nicer stuff to sitting tenants at half price (a policy which Labour continued with gay abandon).

b) They aren't building enough new stuff - and we note from the linked article that they intend to reduce the amount spent on building new council housing by more than half.

c) As it happens, part of the reason why there isn't enough money left to build more social housing is because they are spending it all on Housing Benefit to subsidise rents in the private sector, a large part of which is ex-council houses which the lucky tenants have since sold for massive profits to BTL landlords. So this was is a shit deal for potential social tenants as well as for the taxpayer; but a splendid deal for land speculators.

3. Returning to the Tories' flagship policy of flogging off the nicer council houses for less than half their value - and recent statements suggest that intend to continue with this - it was of course only the 'better off poor' who could take up this offer, so (even assuming they haven't since sold them to BTL landlords), it is exactly the people who the Tories now say shouldn't have 'a council house for life' who are in 'a council house for life' and who don't even have to pay rent any more, and seeing as council houses were sold off for about £20,000 on average in the 1980s, most of them won't be paying a mortgage any more either.

4. So the question is - do the Tories want to have 'the better off poor' in council housing or not? If 'yes', then their current policy is wrong; and if 'no', then their original policy was wrong. Or probably both are wrong anyway, just for slightly different reasons.

Or have I missed something?

7 comments:

Bayard said...

Some time ago, during the last Tory government, I read an interesting article that pointed out that the Tories used to be the party of the rural landowner but had largely become the party of the urban rentier. If you look at it that way, the Tories' policies make sense - reducing the number of council houses and getting the better off out of council housing and into privately-owned housing cuts down on the state competiton for the rentiers. At the same time the Tories pay their supporters' tenants Housing Benefit which, as we know goes straight into their pockets.

Mark Wadsworth said...

B, fair summary. But that's not how they justified it, is it?

Anonymous said...

Don't think your summary is fair actually.

You claim "a large part of [Housing Benefit is paid on] ex-council houses which the lucky tenants have since sold for massive profits to BTL landlords. So this was is a shit deal for potential social tenants as well as for the taxpayer; but a splendid deal for land speculators"

Your analysis is purely based on the finances and numbers involved. It misses completely the actual aim of the policy.

Most purchasers of ex-council housing are still home owners. They may well have moved on to other owner-occupied housing and sold that original house. The buyer in most cases will be a first time owner-occupier, although sometimes it will be a BTL landlord. Many / most of those BTL landlords will NOT be renting to housing benefit claimants.

Overall, the sale of council housing obviously reduced the amount of housing in the public sector, and increased the amount in the private sector. But it also increased the proportion of owner-occupiers (which was the aim) and broke up the council estate ghettoes that used to blight the country when I was a kid. It helped undermine the country's class system.

Yes, it is/was a flagship policy, since it was probably the most successful of the 1980's Tory policies, which will have lasting positive impacts on the country for decades to come.

Mark Wadsworth said...

AC: "Your analysis is purely based on the finances and numbers involved."

Correct. We work backwards from the result to find out what the aim must have been. Either the aim was the result, or they were lying, or possibly just totally incompetent. Either way, fail, fail, fail.

"Many / most of those BTL landlords will NOT be renting to housing benefit claimants."

Number of private tenant households in the UK = about 2.7 million.

Number of non-social housing tenant households in the UK = about 1.2 million.

Number of council houses sold off since 1980 = 2 million.

So that's nearly half of all 'private tenants' who are on HB. Are these disproportionately likely to be in ex-council houses? Anecdotal evidence says yes, very much so.

And even if not, it is still infinitely cheaper to have people in council houses that to pay HB to private landlords.

As to 'council estate ghettoes blighting the country' or 'undermining the class system', get a grip, man! This is pure propaganda. They sold off the nice bits and thus entrenched poverty even more firmly at the bottom 9as we now observe).

Anonymous said...

Not true, as I can vouch from personal experience, having bought two ex-council houses over the years and lived in them alongside people who remained council tenants.

Without the sell-off, of course, I would have bought houses in private estates instead. The ex-council estates I lived in were perhaps half owner-occupied.

Mark Wadsworth said...

AC, that supports what I say - they sold off the nicer stuff. your anecdotal evidence is worth no more than mine and at least I try and back mine up with real numbers.

Bayard said...

AC,
The aim was not to "break up the council estate ghettos", it was to reduce the amount of social housing, hence the ban on councils using the receipts from council house sales to build more council housing. It was entirely a political move to convert Labour-voting council tenants into Tory-voting owner occupiers. Any beneficial side effects were entirely coincidental. In any case the most ghetto-like of the council estates, the tower blocks and the deck-access flats were the areas with the lowest take-up of the "right to buy". What sort of ex-council housing did you buy, a flat in a tower block or a three bed semi with a garden?

And yes, the sell-off was a success, like all the Tories sales of the family silver, it couldn't fail, seeing as everything was being ditched out at half price.