I always thought that Mrs Thatcher was a crude Marxist. She
had a base and superstructure view of society the idea that the economic base determines
the social, cultural and ultimately political shape of a society. Her simply view was if you turned people into
individual house owners they would become Tories.
The privatisation of publicly owned homes, the largest
privatisation of all, had in some cases that desired effect. It didn’t with my
parents they bought their council house, a brand new house when they moved into
it for about a third of its value, but they never stopped voting Labour.
When you are on a modest income, however principled you are,
it is hard to turndown a large gift of tens of thousands of pounds. Of course the Tories never really wanted us
to own our homes. If the Miners back in 84 had “owned their own homes” they
would still be on strike now.
No they wanted us in hock to banks and building societies.
Large debts make it more difficult for workers to take industrial action. Psychologically
however it would be wrong to say this was not a vote winner for the Tories.
The long term effect has been a tragedy. Effectively they
replaced a reasonably well regulated public social housing sector with an
unregulated private rented sector causing a huge increase in rents and in the subsidy
for private landlords in the form of housing benefit.
The data is interesting the peak for social renting was 1981
with 31.7% of households and about 11% private rented. However by 2013 social
renting was down to 17% and private renting had overtaken it at 18%.
Interestingly there was as a result of the Tory policy an
increase in home ownership from 57% in 1981 up to a peak of 71% in 2003. The
decade since has seen the first generation of privatised council houses coming
back into the market many have been snapped up by buy to let landlords and the ownership
numbers shrunk back to 65% by 2013 and the falling trend seems set to continue
despite government programs promoting home ownership.
Now we have the farce. Today the largest social rented
sector is Housing Associations partly driven by organic growth and partly by
large scale council house stock transfers.
Now the Tories want to destroy this sector too. It is worth noting
that around 800,000 housing association tenants already have “the right to
acquire” but at considerably lower subsidies than for Council tenants. The long term implications of Associations
being forced to sell property at a loss would be devastating.
The Tories seem to have forgotten that these are private
organisations and secondly who is going to lend them money to develop new
property if they have to sell it before recovering the cost?
As for accelerating the sale of Council homes, the trouble
with privatisation is you cannot sell things twice.
Don’t think that because this policy, in terms of improving Britain’s
chronic housing situation, is bonkers means that it does not make sense.
This policy is part of a wider pattern of unlocking assets
that are held collectively. That is what George Osborne’s pension reforms are
about, that is really what the original Council house privatisation was about; when
you know that this is what is going on the pattern is clear.
With low economic growth capital needs to open up new assets
that are owned collectively and bring them onto the market. This process began
with an attack on state owned assets then it moved onto other collectively
owned assets like the Building Societies and now Housing Associations.
This is ultimately about the transfer of assets from the
poor to the rich. Ultra low interest
rates mean that investors are looking for more diversified returns. Look at the
way they have moved into the private rented sector in London. Those same low interest rates mean however
that the rich can borrow to buy assets cheaply whereas someone on a zero hour
contract cannot even afford to save let alone get a mortgage.
Then they service the debt by kindly allowing us to rent the
things we once owned back from them. Railways, energy, water, our homes, post
and telecoms, higher education, next they will come for healthcare and
schools.
James Meek’s detailed account of the disaster that is
privatisation, Private Island, (Why
Britain Now Belongs to Someone Else, Verso, 2014) is a well written book by
someone previously known for fiction has now been shortlisted for the Orwell
prize.
Some of the things he
uncovers sound like fiction like the fact that when Enron collapsed it owned Wessex water!
His key point however is one we should all remember in this
coming election that tax can be kept low because as our national assets are
sold, these private businesses become effectively tax gatherers. As we the ordinary
citizens are handed over to these private tax-gatherers, the greatest burden of
taxes shifts onto the poorest.
As
Meek points out, “The essential public good that Margaret Thatcher, Tony
Blair and now Cameron sell is not power stations, or trains, or hospitals. It’s
the public itself. it’s us.” No
wonder we see income inequality reverting to the pattern before the First World
War as the pattern of ownership in the economy heads that way too.
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