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.