Towards a popular left wing housing policy

The death of Margret Thatcher reminds us that she was the last Prime Minister to have a popular housing policy.

The famous right to buy policy is still seen by many people as her greatest achievement. I doubt even their biggest supporters would list the housing policies of Major or Blair as among their greatest achievements.

As I argued last week the Labour party has yet to fully detail a decent, popular housing policy. This post will attempt an initial outline of what such a policy might look like.

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Public Opinion

To design a decent, popular housing policy we need to understand the public’s views on housing.

The most obvious thing to say here is that the public, broadly, want to own a home.

64% of people who rent privately want to own a home and 70% of people living with friends or relatives want to own a home. Fully a quarter of people who live in social housing also want to own a home.

Why do the public think it’s hard to buy a home?

As you can see from this chart, many people say that houses are too expensive for them to buy, that it’s hard for them to get a mortgage or that mortgage repayments are too high.

Finally, what do the public think could or should be done to make it easier to buy a home?

Lots of people are hoping for a windfall to help them buy a home. Short of that, or a pay rise, ideas around reducing house prices or making mortgages cheaper or more accessible are clearly popular.

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State of the industry

As well as understanding public opinion, to design a popular housing policy we need to understand the current state of the housing industry.

Since the credit crunch there has been a dramatic reduction in the number of households getting mortgages. This number seems to have stablised but shows no sign of returning to the numbers we say before the recession.

Similarly, the percentage of households that own their home has been steadily declining since before the recession.

So, fewer and fewer people own their home, fewer people are able to get mortgages and yet people would very much like to own their home.

While that is the overall picture, the facts of the matter look very different depending on where you live. The map above shows the ratio between low wages and cheaper homes in different areas of England. You can see that there are many areas (such as the North East) where cheap homes are not expensive when compared to low wages, while there are other areas (obviously West London but also the South coast) where cheap homes are essentially out of the reach of people on low incomes.

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Principles of a popular left wing housing policy

Before we take the plunge and outline some specific ideas for a popular decent housing policy for the Labour party it is worth pausing and asking, what makes up popular decent Labour policies in general?

I would point to three characteristics (there is not much method here other than this excellent blog by Nick Pierce)

1. They build institutions

You only have to think about how much popular the NHS is than tax credits to understand that people can have much stronger positive feelings towards institutions than other types of public policy.

2. They pool or share risk

The NHS, unemployment benefit (actually a Liberal policy, but there you go) or, to a lesser extent, schools and even the BBC, are delivered by at such incredibly low costs because everyone pays in. This means we can all benefit from sharing the risk in a way that schemes that were offered to much fewer people could not provide.

3. They build a better economy

The modernisation of British industry after the Second World War, through nationalisation, or the introduction of the minimum wage, are both examples of popular Labour policies (at the time!) that not only improved the economy in a dry GDP type of sense but also built an economy that people felt more comfortable with

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Towards a popular left wing housing policy

All that is left for us to do then is to mix together what we have learned about public opinion, the state of the housing industry and the characteristics of popular Labour policies and we can come up with some decent popular policies. Easy, right? Perhaps not. 

Here are some initial thoughts though

– The People’s House

Labour could pledge to begin the construction of a selection of basic homes to buy at low cost. This could be done in a number of ways including allowing councils to set up their own house building companies, having a state owned house builder (as they do in, for example Korea) or, more simply, by giving more support to housing associations to develop homes for sale.

– A People’s Mortgage

Similarly, Labour could pledge to introduce a basic, low cost mortgage for people on low or middle incomes seeking to buy their first homes. This could be done in a number of ways including through the Post Office, credit unions or even the state owned banks.

– Local Homes

Labour should seek to ensure that these housing policies are delivered in a way that is sensitive to the specifics of each area. This could mean using processes like participative design where people get a say on what their future home will look like as well as giving a prominent role to local authorities and other agencies that operate closer to the ground.

– Reforming housing benefit

Housing benefit and local housing allowance currently cover renting. There are other types of government support for people having trouble paying their mortgage and other schemes to help people buy a new home (such as shared ownership homes).

An interesting policy area for Labour might be to look at reforming benefits that are currently given to people to help them pay for their rent so that these benefits could actually go towards buying a home. Countries such as South Africa have given people on low incomes one off grants to help them buy homes. At present, with our high house prices, this seems unthinkable, but perhaps could become a possibility if government was building low cost houses.

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These are some initial thoughts. I would be interested in comments on any aspect of this.

For those of who are interested in this kind of thing you might read IPPR’s recent(ish) housing report, the Labour Party’s policy document on renting or the Resolution Foundation’s work on housing

Did Thatcher and Blair trick us into hating ‘scroungers’

It is common these days for people to call for politicians to be brave and to take on and change public opinion. It is equally common for people to bemoan the ways in which politicians have manipulated the public into wrong headed beliefs. These beliefs are two sides of the same coin and stem from the mistaken idea that politicians are able to manipulate public opinion.

In fact, politicians are often completely unable to change public opinion. They are just as likely to put people’s backs up by pressing on a particular issue as they are to persuade people. People hear so little from politicians and are so skeptical of them that they are very unlikely to be hoodwinked by them in this way.

Take two examples of times when politicians have tried and failed to convinced the public on a contentious topic; the war in Iraq and the Thatcher’s attempts to cut taxes and investment in public services. In both cases, despite the best efforts of some of the most successful politicians of the last 30 years, the British public ended up completely unconvinced.

Here is a graph that shows the British public’s opinion on the Iraq war.

You can see that the red line is the percentage of people who oppose the war and the blue line is the percentage of people who support the war.

We can split the chart into 4 sections; the time before the war, the first few months of the war, the next few months of the war, and the rest of the war.

As the war got closer and closer Blair, and the government in general, tried to convince the British public that attacking Iraq was the right things to do. This was the period in which the so-called November and February dossiers were published.

You can see from the chart that this was also the period in which the British public became more not less hostile to the war. The more that Blair tried to convince people that war was the answer the more that the public opposed the war.

Then in March 2003 the war with Iraq commenced (with only 29% supporting the war and 52% opposing it). At this point many people started to support the war. You can see on the chart the way the blue line moves upwards and the red line moves downwards. This is what is sometimes known as ‘supporting our troops.’ Once the war had begun people rallied round and started to support the war. Not because of Blair’s persuasive rhetoric but because there were British citizens fighting in a war.

This period of outright support for the war was relatively short live. You can see that by June 2003 the British public were once again split on whether they supported or opposed the war.

Then, from May 2004 onwards (when it was becoming clear that the war was not going well and would not be over soon) a clear majority of the British public once again opposed the war.

The British government had clearly failed to convince the British public of this course of action, even though the government wanted dearly to convince people that the war was the right way to go.

Take a second example; Thatcher’s support in the 1980s for a policy of cutting taxes, cutting benefits and cutting the amount invested in public services and generally shrinking the state.

Hear is a chart showing the percentage of people who support the idea that the government should cut taxes, cut benefits and cut public services (as opposed to either keeping them the same of increasing both taxes and benefits and funding for public services).

The first thing to notice is the incredibly low level of support for this idea for the last 30 years. At no point in the last 30 years has more than 1 in 10 people thought that government should be cutting taxes, benefits and funding for public services.

The low level of support for this position makes it difficult to say much about changes in support from year to year, since small sampling errors can have a big effect.

However, what we can say for sure is that Thatcher wanted very strongly to increase public support for her policy of cutting benefits, taxes and funding for public services and that she was completely unsuccessful.

In fact, although it might be down to errors in measurement, it would appear that fewer people believed that this was the right thing to do by the end of her time as Prime Minister than at the beginning of her premiership.

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Politicians often want to convince the public on certain topics. However, in the case of the Iraq war and the Thatcherite approach to taxes and public spending, neither Blair nor Thatcher was able to persuade a large number of people to support their preferred policy.

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If they were unable to convince the public on such core topics, why do we believe that they were able to convince the public that people claiming state benefits are ‘scroungers’? What is different about this case versus the two explored here?

There is certainly less support in Britain for the idea of redistribution of income through benefits. Here is a chart showing the percentage of Brits over time that would like to see more money redistributed from higher income households to lower income households.

You can see that however you word the question there has been a dramatic falling off in support for the idea that the state should be tacking money away from richer households and giving it to poorer households.

Contrast that chart with this one showing the percentage of Brits who believe that ordinary working people do not get their fair share of the nation’s wealth.

You can see that although over this period of time fewer and fewer people support the idea of the government redistributing money through taxes and benefits, a large majority continue to believe that ordinary working people do not get their fair share of the nation’s wealth.

This is why Ed Miliband has recently come out in support of the idea of pre-distribution in which wages are more evenly distributed in the first place.

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Many political commentators believe that if only the Labour party would really swing behind the idea of increased redistribution of income through the tax and benefits system then public opinion would come round to this way of thinking.

This is possibly true. However, it is just as possible to imagine a scenario in which the Labour party came out strongly for increased taxes on the wealthy and increased benefits for the poor and this already unpopular position became less popular. Just as Blair failed to persuade people over Iraq and Thatcher failed to persuade people over shrinking the state perhaps Ed Miliband would fail to convince people on redistribution.

There is a deeper point here about equality too. It seems paradoxical to argue on the one hand that you want a more equal society and on the other to achieve this by ceasing power on the basis policies that most people oppose and wielding the power of the state in support of these policies, all in the hope that people will come round to your way of thinking.

The very strength of democracy is that it is a system of government of the people, for the people, by the people, not a system of technocrats or ideologues who decide what is best for the people.

P.S. I am deeply in-debited for this blogpost to this excellent article about the effectiveness (or otherwise) of American Presidents.

P.P.S. You can find all the data I used to make the charts in this post in this spreadsheet or from polling report and the British Social Attitudes Survey