I was born in a house in Swinburne Road, on Whitton council estate, newly built on the northern edges of Ipswich, in 1952. Whitton’s new houses, on roads named after poets and literary figures (Byron, Chaucer, Defoe, Shakespeare, Spenser and so on), were intended for the families of men recently returned from service in the war. My father, Douglas (Doug) Jacobs, had been absent for much of the war in France until the great retreat of Dunkirk, Palestine, and France and Belgium after D-Day. When my eldest brother was born in 1945 Doug was overseas. My sister was born in 1946. Doug was happy to be a council tenant, but his wife, Alice was determined that our family would own its home, and had saved his army pay to accumulate a deposit. She achieved her ambition five years after my birth. My family. Was not well-to-do, but my mother’s careful management of the family’s income kept us well-fed and clothed (Doug was good with numbers but not with money). But if my mother had not been so thrifty my parents could have lived securely in Swinburne Road until their deaths. My first school, a modest walk from the newly-built home in Ely Road that Alice and Doug purchased, was set in another large area of council housing, so many of my schoolfriends lived in council houses. These families, no doubt, were not especially prosperous kike the Jacobs family, but they lived in secure housing at affordable rents.
In 2024 Britain things have changed. The prosperous can still live in decent homes, mostly privately owned, but for the poorer members of our society employment, incomes and housing are precarious, the long-term publicly-provided home is a vanished relic of a very different past. Destitution, child poverty and homelessness are increasingly common and accepted as regrettable facts of economic life. The minister responsible for housing, an unctuous, pervasive character called Michael Gove, has stated that he feels regret when he sees the (steadily increasing) statistics of homeless children, but his only answer is to boast of the number of ‘affordable’ homes for purchase to enable families to ‘get on the housing ladder’. This evades the most pressing housing problem for the homeless and poor: the complete and deliberate lack of publicly-provided homes at rents that people can afford.
Things began to change in 1980 when the government of Margaret Thatcher introduced the “right to buy” policy which has systematically destroyed the provision of rented public housing. Tenants could buy their homes at a discount of 33%-70%. Councils, which were obliged to sell, also provided loans to finance the sale. The council received only half the discounted purchase price, and rather than use the proceeds to build replacement public rented housing, were obliged to use the revenues to reduce debt. Moreover, tenants’ legal right to buy their homes at subsidized prices, was an insuperable disincentive for local governments to build public housing since the Thatcher reforms made this a loss-making investment.
The provision of public rented housing reduced rapidly and many right to buy homes, after a qualifying period, were sold, frequently to private landlords. The minister responsible for this policy, Michael Heseltine, stated that "no single piece of legislation has enabled the transfer of so much capital wealth from the state to the people." The long-term result of the policy has been to create a large (almost 20% of the population) of private landlords, who charge the market rent, not the affordable rent charged by councils. And the quantity of publicly-owned housing has been radically reduced. In effect the transfer of wealth that Mr Heseltine considered to be a roaring success was not to ‘the people’ but to the property-owning class.
The contribution of this policy to the manufacture of poverty can be outlined as follows:
· An increasing proportion of people who cannot afford to buy a home in a society whose economy is founded on an ever-increasing value of housing as a ratio to income.
· Landlords who control the rental market can, and have, driven up the real cost of renting as a proportion of income. Moreover, rentals are extremely short-term and insecure and tenants’ rights effectively minimal because such rights as they have are very difficult to enforce in a market in which the landlords have enormous power.
· The state, which Mr Heseltine rejoiced has transferred capital to “the people” has, in fact transferred it to private investors. Moreover, the state continues to do so because the many people who cannot afford private rents receive (if they are lucky) rental support from the government. In short, the government subsidizes the inflation of rents. As rents inflate, a greater proportion of the population is unable to afford them, so they become insecure tenants, seeking less expensive places to live when the landlord increases the rent. Or landlords evict tenants who cannot pay inflated rents in order to charge more.
· However, the government has not increased the rental subsidy to accord with the levels of rent charged, so rent consumes more and more of the income of even the poorest.
· Those who cannot afford the rents, or who simply cannot find a landlord who will rent to them (for example, because they receive government housing benefit) become homeless. The very councils, which have been obliged to sell and reduce their public housing stock, are then obliged to provide housing for homeless individuals and families. So they pay inflated rents to private landlords or the owners of hotels and bed and breakfasts. This housing is often of poor quality and in many cases simply not decent or safe.
· This emergency rented accommodation is frequently insecure, and may be long distances from family, friends, school and work, sometimes in another city.
Thus, the Conservative Party has engineered the largest transfer of wealth from the state to the people, and then to a class of private landlords, and in the process has systematically immiserated a substantial proportion of the population.
Another of Mrs Thatcher’s contribution to creating poverty was the political and fiscal consequences of the Community Charge, commonly known as the poll tax, implemented in Scotland in 1989 and in England and Wales in 1990. It replaced a tax commonly known as “the rates,” a property tax, which was based on the notional rental value of a property. This tax had become unpopular but nevertheless to some extent was proportionate to the asset value of the property. The new tax was a flat per capita tax to pay for local government: the rich and the poor paid the same tax. The poor were taxed more and the rich less (as a gleeful member of the House of Lords told me at the time). The political opposition to the tax effectively ended Mrs Thatcher’s career in 1990, and the tax was replaced in 1993 by a curiously hybrid tax, the Council Tax. The tax is personal to an extent, since the residents of a home occupied by two or more adults pays the full tax, while a property occupied by one person pays a reduced rate. However, the rate at which the tax is charged is based on the property’s 1991 value classified into bands A-H, H representing a value of £320,000. Since the valuations have not been updated, and since high value homes are now worth vastly more than £320,000, the tax on the wealthy is very low, while residents of low value properties pay much more as a proportion of the value of their home, and generally of their income.
Housing and taxes are not the only tools used by the Conservative Party to manufacture poverty. When the party returned to power in 2010, it adopted rhetoric and policies hostile to recipients of state benefits, in order to label its opponents as supporters of the feckless, lazy poor. The rhetoric was of “skivers” staying in bed while their employed “striver” neighbours went to work. New doctrines of fairness were created. It’s not fair for recipients of benefits to receive child support in proportion to their number of children, so support is provided only for the first two: the result has been increasing child poverty. A tenant who rents public housing may only have the number of rooms dictated by law – it’s not fair for the poor to have ‘too many’ rooms. Thus, a couple whose children have left home, and as a result has one or more bedrooms deemed to be no longer required, must pay extra rent or leave. Moreover, in order to fund tax cuts benefits have not increased at the same rate as inflation because the government’s policy is to force the supposedly workshy into work. Anti-trade union laws, employment laws that hav promoted highly insecure jobs and other government policies have further contributed to increased inequality and poverty.
The result is a society in which the number of people dependent on food banks has steadily increased. Moreover, many families can no longer simply not afford food, they cannot afford the energy required to cook a meal, to buy beds or bedding, new clothes, and other essentials of life. Poor families increasingly live in cold, damp, mouldy, rat and cockroach infested insecure and temporary homes. And, of course, Mr Gove regrets that there are many homeless children. I am sure that many social and economic problems worried the residents of the Whitton Estate in the 1950s, but at least families like mine had access to a decent and secure rented home.
As I was writing this, I received an email from a Latin American listserve that I belong to entitled “Poverty increases in Peru due to corruption and bad governance.” It seems that Peruvian government statistics record that 29% of Peruvians live in poverty (according to the Joseph Rowntree Foundation the figure for the UK is 22%, although I suspect that Peruvian poverty is more severe than that of the UK). The author of the email (Enver Machel Figueroa Bazán, an economist at Syracuse University) writes: “The symbiotic association between the most discredited political groups linked to drug trafficking and illegal mining and the most incompetent and corrupted operators within the public administration has produced some of the wrongest [sic] and most damaging public policies, aimed only to keep big groups of people in a situation of vulnerability, with the intention of capturing their votes for the coming general election of 2026 by giving them direct cash transfers.”
Moe than one million Peruvians (Peru’s population is 34 million) live without access to potable water, sewage, employment, education, health care and banking services. Perhaps the groups that achieved control of the Peruvian Congress in 2021, who Figueroa Bazán blames for increased poverty in Peru learned a few lessons from Mrs Thatcher and her fellow Conservatives.
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