Castles in the air: Labour’s social housing policy review

Protesters march against Labour social cleansing

The housing crisis is one of the biggest issues facing the working class in Britain today. Social housing has been decimated over the last 50 years by the policies of Conservative and Labour governments alike. The dearth of affordable and secure housing has driven millions of people into the private rented sector, where one in five homes is unfit for human habitation and soaring rents force those on low incomes into ever-deeper poverty. Private rents average 35% of take-home pay. Evictions and homelessness are on the rise.

Housing for the Many1 is the Labour Party’s Green Paper on social housing – essentially, its wish-list for tackling the crisis.  In the 2017 general election, the most significant element in the swing to Labour came from private renters, by a margin of 20 points compared to 2015.2 These new voters included predominantly younger, better-off workers who have seen their hopes of living in decent, secure housing – let alone ever owning their own home – recede to vanishing point, as well as low-income workers. These votes are crucial to any future Labour victory, and it is to them that this review is addressed.

 ‘We will build for those who need it, including the very poorest and most vulnerable, with a big boost to new social-rented homes. And we will also build Labour’s new affordable homes for those in work on ordinary incomes who are priced out of the housing market and being failed by housing policy. The “just coping” class in Britain today who do the jobs we all rely on – IT workers, HGV drivers, joiners, warehouse managers, lab technicians, nurses, teaching assistants, call centre supervisors, shop staff. They are the backbone of the British economy and heart of our public services.’

Housing for the Many commits Labour to building 100,000 ‘genuinely affordable’ homes a year, predominantly for social rent. These will, it says, be built by councils and housing associations. It rightly rejects the distorted definition of ‘affordable’ promoted by the Conservative government, which can encompass everything from rents set at 80% of market rates to ‘Starter Homes’ priced at £450,000. Instead, it will introduce ‘Living Rent Homes’, with rents set at no more than a third of average local household incomes, ‘aimed at low-to-middle income working families, key workers and younger people who want a better alternative to renting from a private landlord, or who want help saving for a deposit for a home.’ (There is a third option, FirstBuy, a low-cost ownership home that is basically a repackaged version of the Conservative Help to Buy. The Labour Party, like the Tories, considers home ownership the preferred option.) This will be, it says, ‘the largest council house building programme in 30 years’, with a million ‘genuinely affordable’ homes built over a decade. The scheme — estimated to cost at least £4bn a year — would be funded by state borrowing. Shadow Housing Minister John Healey describes the review as ‘Labour’s lodestar’, but all Labour is actually building is castles in the air.

Too little, too late

The headline figure of ‘100,000 council homes a year’ may sound ambitious, given that just 1,840 were built across England, Wales and Scotland in 2016, but is in fact woefully inadequate. There are currently more than a million people on council waiting lists, with around 100,000 in temporary accommodation. This is only going to get worse, with the number of households in England and Wales predicted to increase by 214,000 a year to 2039.3 New research from Heriot-Watt University shows that England alone faces a housing shortfall of four million homes. To meet the backlog and provide for future demand would require building 340,000 homes a year until 2031, with at least 145,000 being ‘affordable’.

But it would not matter what figure Labour conjured up out of the air – there is a far greater illusion being perpetrated here. The reality is that there are only two circumstances, historically, in which the British state has been prepared to fund housing for the mass of the working class.

The first is when atrocious housing conditions have reached such a nadir that they actually affect the usefulness of workers, as units of labour, to the immediate needs of British capitalism. This was true in the aftermath of the First World War. Prime Minister Lloyd George had been shocked by the poor health of working class recruits to the army. This was coupled with fear of the example set by the Bolshevik Revolution of 1917, which enshrined the right to decent housing for workers in the Soviet Union – the second condition is a serious fear of social unrest. These twin concerns fuelled a rise in municipal house building, to high standards, with generous government subsidies. 1,139,000 council homes were built by 1939 (although high rents and tenant vetting meant that they were largely accessible to only the better-off sections of the working class). In period after the Second World War – which Housing for the Many sees as a Golden Age of council house-building – very specific conditions again pertained.

During the Second World War, there was destruction of housing and infrastructure on a mass scale. Under the 1945 Labour government, British capitalism embarked on a period of both physical and economic reconstruction. The first was necessary to achieve the second: working class people who had been through the war were demanding social change. The delivery of decent and affordable housing to a large section of the working class was crucial to preventing social unrest and tying key sections of the working class to state interests. By retaining tight state control over housing and rents, restricting private construction and subsidising local authorities, a housing programme for general needs saw more than a million council homes constructed. As an imperialist power, Britain was able to draw on the super-profits plundered from what remained of its empire to fund this construction. However, this provision continued to benefit predominantly better-off sections of the working class. Even by 1964, the National Survey of Housing found that council tenants ‘tended to be in the middle of the income range’. Slum clearances and the provision of adequate housing for the poorest sections of the working class did not begin in earnest until the 1960s and early 1970s. However, by then, the boom conditions that had allowed a Conservative government to build just under 350,000 council homes in 1954 were faltering. Homes for the poorest were built more cheaply and densely, to reduced space standards. By the end of the 1970s, as the capitalist crisis reasserted itself, even this came to an end.

Where there’s muck there’s brass

The conditions in which public housing was built on a significant scale no longer exist. There is no real movement of the working class in Britain today, and capitalism is in the throes of its worst economic crisis since the 1930s. Crucially, the price of land – which in the post-war period could be bought cheaply by local authorities – has risen exponentially in line with the emerging crisis.4 It has become the repository for profitable investment of super-profits plundered by the City of London, multinational companies, and banks and foreign investors from around the world. In some areas it has proved a better investment than gold. Britain’s biggest housebuilders are currently sitting on at least 600,000 plots of land with planning permission, waiting for their value to rise. Any attempts by Labour to set up a ‘land trust’ to make land available cheaply to councils for public building will be fiercely resisted. Savills – capitalism’s prime estate agent – has already said it would issue a legal challenge on behalf of its corporate clients.

Meanwhile, housebuilders and developers have determined that even the unaffordable ‘affordable’ housing required by current planning legislation is too much of a drain on their profits. Between 2010 and 2017, the number of ‘affordable’ home completions dropped by nearly 50% to just under 28,000. Just 1,102 new homes for council rent were built in England and Wales last year, while ‘affordable’ housing amounted to 23% of homes built by private housebuilders. Meanwhile, between 2012-2015, Britain’s biggest housebuilders tripled their profits.

The elephant in the room

Even cheaper land offers no guarantee that more publicly-funded housing will be built. With every home built for social rent requiring a substantial subsidy – £200,000 in London – private homes for sale and rent remain hugely profitable, and Labour councils, particularly in London, have been in the forefront of cashing in on the bonanza. They have sold off public land – much of it sitting under council estates – to private developers hand over fist, under the discredited guise of ‘regeneration’. In Housing for the Many such ‘regeneration’ merits only a single, meretricious paragraph in which the destructive role of Labour councils is completely glossed over. ‘Done well’, says Labour, ‘regeneration can mean more affordable housing, better neighbourhoods and improved community facilities’. This is a lie. In 195 Labour-run council estates across London, ‘regeneration’ has resulted in the net loss of housing at social rents and the destruction of communities.

The review says it will ‘close the loophole’ whereby developers avoid their Section 106 obligation to build a proportion of ‘affordable housing’, but Labour councils are totally complicit in this process. The Guardian newspaper recently exposed the extent of the corrupt symbiotic relationship between councils and property developers. 43 councillors in London work for agencies that specialise in planning. 48 others either work for or own their own property companies. Four Communications - a planning consultancy set up by former Southwark Labour leader Jeremy Fraser - advises British Land and major housebuilder Berkeley. Former Greenwich Labour leader Chris Roberts helped set up Gatus: its clients include Galliard Homes, Redrow and the housebuilder Barratt. Claire Kober, former Labour leader of Haringey Council and architect of the disastrous HDV deal with Lendlease, has been appointed director of Pinnacle Housing whose ‘regeneration’ mission, it says, ‘requires the social and physical transformation of mono-tenure and hard-to-let communities’. There are many more examples. These people have no interest in the housing needs of the working class, and Jeremy Corbyn has done nothing to rein them in. What would be different under a Labour government?

While the review promises to overturn some of the worst excesses of Conservative housing policy by suspending (although not abolishing) Right to Buy, increasing security of tenure and scrapping the Bedroom Tax, it is seriously timid on other policies which have driven housing poverty. It promises only to ‘review’ Universal Credit and, in an implicitly racist proposal, suggests those with a ‘local’ connection should be prioritised for council housing. It praises the local housing companies set up by Labour councils, although these are committed to providing housing for profit. To tackle the scandal of 600,000 empty homes around Britain it would allow councils to charge a 300% premium on council tax but in many parts of the country, house prices are rising fast enough to offset the cost to the absentee house-owner, and there is certainly no suggestion that Labour would decriminalise squatting. The dominance of private ownership and profit-making will remain safe in Corbyn’s hands.

Labour under Corbyn has to perform a complicated balancing act. On the one hand, any party hoping to govern needs to convince the ruling class that it would protect British capitalism and the profits that flow from land prices and house-building. On the other, it has to persuade its electoral base that it can effect real change. But in the crisis conditions that exist in Britain today it can’t, and it won’t, unless a powerful working class movement is built that gives it no option.

Cat Wiener


[1] Housing for the Many’, All quotes are from this paper, unless otherwise specified


[3] Household projections 2014-2039, Department for Local Government and Communities, June 2016

[4] See our pamphlet Whose land is it anyway? Housing, the capitalist crisis and the working class, Larkin Publications 2018


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