Housing is a welfare issue. The cost of housing affects everybody and it affects the poor most seriously. The cost of housing in Britain is much higher than in some other countries, partly because of the difficulty of getting planning permission (please use the search facility to find the posting mentioning Redrow for more on this).
The new government seems to have recognised this through the measure below. It should probably be getting more attention than it has so far.
The government has created a £1bn funding pool to reward local authorities for pushing ahead with new housing developments, in a move that brings much needed clarity to the housebuilding industry.
Under the New Homes Bonus incentive scheme, announced by Grant Shapps, housing minister, on Friday, the government will match the council tax that local authorities generate from new homes for the first six years.
“For too long communities have fought against development because they can’t see how it does anything to improve their lives. Centrally imposed targets created a bitter legacy of animosity between developers and local communities, who fought pitched battles through the planning system, with councils permanently caught in the crossfire. I’m determined to change this,” said Mr Shapps.
The full story in the Financial Times is here.
I wonder if this is an example of a think tank really changing policy. Four years ago, a think tank compared planning laws in Britain with those in Germany and Switzerland. There was a series of three publication. The Policy Exchange booklet I still have was called Better Homes, Greener Cities and was written by Alan W Evans and Oliver Hartwich. It was excellent research which pointed out that in Switzerland, I think, local authorities gain financially when they allow development. So the local authorities and their tax and council taxpayers benefit financially. This creates an incentive to allow development to counter the obvious reluctance people have to allow development in their backyard.
The Coalition government seems to be introducing something along these lines. How much difference it will make I do not know.
A TV programme is coming up on Thursday evening in which I expect I will appear. It is a 90 minute film by Martin Durkin about the huge national debt that has piled up and his solution. He will be arguing against Big Government and he interviewed me about the NHS and about welfare and social housing. Apparently the film also includes interviews with four former Chancellors. I believe he also filmed in Hong Kong.
I wonder if Channel 4 knew what they were in for when they commissioned this film since these kind of arguments - presented at length - are not usually seen on British TV. If the channel knew what it was doing, then all credit to it. Maybe something really is changing in Britain. There was a time when most of the media elite would not contemplate giving airtime to such ideas.
Here is a link to the programme details.
Yesterday The Times had a useful commentary on problems that could be created by housing benefit. Unfortunately there is a charging barrier at Timesonline. But here are a few excerpts:
"...the Government’s proposals seem extraordinarily simplistic and hasty. From next April, there will be a national cap on housing benefit. Anyone living in a property that costs more than the upper limit (£250 for a one-bedroom flat rising to £400 a week for a four-bedroom home) will either have to pay the difference or move out. From next October, the rate at which housing benefit is set will be lowered so that it is based on the cheapest third of properties in an area rather than the average rent. Farther down the track, the coalition is also planning to cut 10 per cent from the housing benefit of anyone who has been unemployed for more than a year.
In London, where rents are higher than most other parts of the country, the changes will be devastating for many people. Last week, a group of councils warned that 82,000 families could be forced to move out of the city centre as a result of the reforms. They have already taken block bookings at bed and breakfasts in towns within striking distance of the capital. Like Paris, London could soon become a wealthy enclave, surrounded by impoverished banlieues."
"...The National Housing Federation, which represents housing associations, estimates that 1.3 million households will be affected across the country and that many of these families will be at risk of losing their homes. Paul Rees, the assistant director, says: “We fear an explosion of homelessness with more people sleeping on the streets than at any time in the past 30 years.”
"Boris Johnson has condemned the “draconian” housing benefit reforms. In evidence submitted to a committee of MPs, the Citizens Advice Bureau says it is “highly regrettable that the housing implications of these cuts do not appear to have been given any consideration in advance of decisions being made”.
"...The Government accuses critics of the policy of “scare-mongering”. It puts the figure for the number of families who will be affected by the changes closer to 17,000. But officials admit that there is no accurate figure. Nobody knows whether landlords will lower their rents to keep the reliable housing-benefit tenants or keep rents the same and fill their properties with young professionals who cannot afford to buy a home.
There are other unanswered questions. If a family cannot pay the difference between the housing benefit cap and their rent, and get thrown out by their landlord, what happens? Does the local authority have a duty to rehouse them in the area? Or, having defaulted on their rent, will they be seen as responsible for their own homelessness and so beyond the protection of the State?"
The full article for those willing/able to pay the charge is at: http://www.thetimes.co.uk/tto/opinion/columnists/rachelsylvester/article2781534.ece
1.67 The Government believes social housing is an important element in fostering community cohesion and supporting households in housing need. The number of social rented properties fell between 1997 and 2009. The result has been rising housing waiting lists combined with growing numbers of workless households trapped in dependency on subsidised housing. In the 1970s, 11 per cent of households in social housing had no earner, by 2003-04, this had risen to 69 per cent.
1.68 The Government wants to make social housing more responsive, flexible and fair so that more people can access social housing in ways that better reflect their needs. In future, social housing will more effectively reflect individual needs and changing circumstances. Social landlords will be able to offer a growing proportion of new social tenants new intermediate rental contracts that are more flexible, at rent levels between current market and social rents.
The terms of existing social tenancies and their rent levels remain unchanged. This is fair to households and reduces costs for taxpayers.
1.69 Taken together with continuing, but more modest, capital investment in social housing, this will allow the Government to deliver up to 150,000 new affordable homes over the Spending Review period.
From the Comprehensive Spending Review, page 29.
I can announce that grant funding for social care will be increased by an additional £1 billion by the fourth year of the Spending Review.
And a further £1 billion for social care will be provided through the NHS to support joint working with councils – so that elderly people do not continue to fall through the crack between two systems.
That’s a total of £2 billion additional funding for social care to protect the most vulnerable.
Mr Speaker, we will also reform our social housing system.
For it is currently failing to address the needs of the country.
Over ten years, more than half a million social rented properties were lost.
Waiting lists have shot up.
Families have been unable to move.
And while a generation ago only one in ten families in social housing had no-one working, this had risen to one in three by 2008-09.
We will ensure that, in future, social housing is more flexible.
The terms for existing social tenants and their rent levels will remain unchanged, new tenants will be offered intermediate rents at around 80% of the market rent.
Alongside £4.4 billion of capital resources, this will enable us to build up to 150,000 new affordable homes over the next four years.
We will continue to improve the existing housing stock through the Decent Homes programme.
And we will reform the planning system so we put local people in charge, reduce burdens on builders and encourage more homes to be built, with a New Homes Bonus scheme.
Within an overall resource budget for the Department for Communities and Local Government that is being reduced to £1.1 billion over the period, priority will be given to protecting the Disabled Facilities Grants.
This will go alongside a £6 billion commitment over four years to the Supporting People programme, which provides help with housing costs for thousands of the most vulnerable people in our communities.
The full speech is here.
From an article in the Guardian:
Almost 300,000 people are at risk of being squeezed out of their properties in London because of the government's plan to reduce housing benefits paid to some of the most vulnerable people in the country, campaigners warn today.
The exodus, says the National Housing Federation, the main voice for the country's housing associations, would follow George Osborne's plan to peg housing allowances next year to the bottom third of private sector rents. At present claimants get allowances calculated on the bottom half of private rents.
The federation calculates that, if enacted, the changes would see the rent charged on 114,000 homes occupied by benefit claimants in London become unaffordable – leaving more than 250,000 people "at risk of losing their residences". Osborne's move would not just affect wealthy areas such as Westminster but also poorer parts of the capital such as Lambeth and Southwark.
The research, which is based on official government figures, backs the claim that poor and vulnerable people will no longer be able to live in the capital – forced instead to go to London's fringes or pushed into "overcrowded conditions".
The Federation suggests more than 250,000 would be 'at risk'. So by implication, fewer which actually change their housing arrangements.
But even if far fewer moved out of London or lived in more crowded conditions, it could be a pretty traumatic time in the lives of many people. I wonder exactly how this will be enacted and how people and rent levels will respond? I would be interested to hear of any individual cases - good and bad.
From article in Telegraph:
In what is being described as the biggest shake-up in housing policy since the Second World War, a host of other policies designed to ensure more people receive housing on the basis of need will be unveiled.
But the most controversial is the plan to end the current situation that means tenants effectively have a “council house for life” if they reach the top of the waiting list, even if their personal situation changes and they can afford to buy privately.
In an attempt to end the era of heavily subsidised rents, the Coalition’s new system will lead to tenants paying as much as 80 or 90 per cent of the market rate.
“This is still about there being affordable rent, but it needs to be more realistic. At the moment, if you get a council house you are really winning the jackpot,” said a source.
“In terms of the rent you pay it is very, very heavily subsidised. You may pay only a third or a half of the market rate.”
Lower down the article it is indicated that some of this will apply only to new council tenants. It would indeed be a massive upheaval - a political dynamite - to raised rents at all existing properties to a market rent and, at the same time, to limit housing benefit to £500 a week. That would mean evicting thousands of tenants who could not pay. So I assume it will all be for new tenants. The detail on this will be very important.
The pace and breadth of welfare reforms that Iain Duncan Smith is attempting have not been seen in a couple of generations. This is the first time that I know of that a new Secretary of State in this field is one who already knows the subject in depth. He has hit the ground running which means the chances of getting things done are much greater than before. Also the Prime Minister, in appointing him, must have known what he was doing. So Duncan Smith is less likely to be undermined than previous ministers such as John Hutton whose ambitions were limited by Gordon Brown - a man who never understood welfare and what can go wrong.
Someone at the conference yesterday remarked that there had been nine different Secretaries of State for Work and Pensions during the Labour administration (which lasted about 13 years). No wonder progress was halting and uncertain.
But now must be an exciting time at the Department. These are likely to be the biggest reforms since the Attlee government. I have to admit a touch of jealousy about the opportunity they have to improve the operation of the welfare state in fundamental ways.
In an impressive speech yesterday, Duncan Smith went beyond the printed text several times. Among other things, he remarked that, in private, members of all parties acknowledged that reform was overdue. He is finally taking this one on.
The prime reason we need reform is that the benefit is so valuable to certain people that it is almost impossible for them to be able to find work which would pay well enough to pay their rent. So they are obliged to stay unemployed and stay on benefit.
Duncan Smith said that 75,000 people get more than £10,000 a year in housing benefit, presumably in addition to other benefits. It is impossible that they would be better off taking a low-paid job. So they are inevitably going to remain jobless, living off the taxes paid by others.
But Duncan Smith gave another reason why reform is desperately needed. The cost, he said, has risen by £5bn in five years and is projected to amount to £21billion in 2014/15. It is a staggering sum.
He said the task ahead of him was 'frightening' and that, once in government, he realised it was like trying to turn a super-tanker round. He said he was sometimes asked why he was moving so fast. He said he was 'in a hurry not to be late'.
With so much going on, it is sometimes hard to pick up on what is not being reformed. But one thing seems to be the Pension Credit. Steve Webb, the pensions minister, also spoke at the conference. I asked what he thought of Pension Credit and whether he intended to reform it. This is a credit which many poor elderly people do not collect simply because they are elderly and do not manage the paperwork. This is a kind of obscenity if ever there was one. Meanwhile the benefit also has been a substantial discouragement to saving for those who are less well off. This needs reform urgently but Mr Webb seemed quite content for it to stay.
The text of Duncan Smith's speech is here and also follows here....
Department for Work and Pensions
30 June 2010
The Rt Hon Iain Duncan Smith
Secretary of State for Work and Pensions
Wednesday 30 June 2010
[Check against delivery]
Good morning, and thank you to Andrew and the team for organising this morning’s event.
The Emergency Budget gave credibility back to the British economy:
* driving down our record deficit
* cutting the second highest level of debt in Europe – projected to be £149 billion this year – over the course of this Parliament with a clear, 5-year plan
* securing a forecast for steadily falling unemployment
* and producing a plan for sustainable, economic growth.
But the Budget was not just about being financially responsible or top-slicing.
It also laid the groundwork for radical reform.
Phase One of our agenda for change sits across two critical areas:
* Housing Benefit reform
* and the new Work Programme, which includes our plan to get the people who can work off long-term incapacity benefits.
The cost of Housing Benefit and Incapacity Benefit has spiralled out of control in recent years and put a great burden on the taxpayer.
But the true cost has been paid by some of the poorest receiving these benefits as they have become trapped in dependency.
Taking Housing Benefit first, no-one can really doubt these reforms are long overdue.
In real terms, the cost of working age HB has jumped by £5 billion in 5 years and is projected to reach £21 billion in 2014/15.
This is clearly unsustainable.
But cost is not the only problem.
The scale of these payments has meant that Housing Benefit has become a disincentive to move into work for those receiving it.
In fact, politicians of all parties have recognised the need for major reform. Yet for too long, nothing has been done.
75,000 people get more than £10,000 a year in HB and some get over £100,000 a year – payments that no-one on a low income could ever afford and it has distorted the social rented sector. So:
* we have capped Local Housing Allowance levels to the rate for four-bedroom properties
* we have introduced size restrictions to the social rented sector to make better use of existing housing stock
* and we have changed the percentile of market rents for Local Housing Allowance rates to 30% to help keep rising rents under control.
The reset the balance of incentives to move into work, these changes are vital.
The other key element in Phase One is the Work Programme and the transition to get people off Incapacity Benefit.
The Work Programme was launched yesterday when Chris Grayling opened the competition for the new commercial framework.
For the first time, the Programme offers providers real freedom to truly tailor support for Jobseekers.
No more centralised, one-size-fits-all schemes, but real support to help people back on the path to sustainable work.
To ensure that we are being fair to the taxpayer, the Work Programme will be run on a payment-by-results basis when it rolls out in the first half of next year.
We have to make sure people stay in work over the long term and make sure they get into the work habit.
We will also demand that Jobseekers take personal responsibility for accepting work when it is there, so there is conditionality and sanctions on the benefits side as well.
This is a complete reappraisal of how we help people back into work and involves a major change in the way providers deliver support.
And I want to see the voluntary sector and other groups get involved too.
Incapacity Benefit / Employment and Support Allowance Migration
We are also committed to tackling the huge numbers of people languishing on Incapacity Benefits.
We currently have some two and a half million people claiming inactive benefits – a figure which has remained stubbornly high, costing the taxpayer £7.2 billion.
Despite many of these people wanting to work, people can spend years on Incapacity Benefit without ever being required to have an assessment.
In fact, 30% of those on the old style benefit never had a medical assessment.
Our society should be capable of tailoring support to get people into work.
When John Hutton was Secretary of State for Work and Pensions, he pointed out that if you have been on Incapacity Benefit for more than 2 years, you are more likely to retire or die on it than ever move back into work.
This is why we are starting the process of migrating 1.5 million of those on Incapacity Benefit on to Employment Support Allowance and simultaneously providing intensive, personalised support to help them make that transition back into work.
In next phase of reform will take this forward:
* reforming the benefit system to make work pay
* simplifying the system to make it more efficient and understandable
* enhancing mobility
* and reforming pensions.
Make Work Pay
Benefit reform will play a major part here.
I have been working with David Freud and experts and officials across Government to look at how we can deliver a benefits model that ensures it pays consistently to take work.
In that context, we have asked Frank Field to look at the issue of poverty, beyond the narrow definitions, for example asset poverty.
At present, the poorest in our society see little reason to take the risk of finding a job and losing their benefits.
Seen in the light of the calculation made on the basis of risk and reward, the decision looks rational.
All the figures show that work provides the most sustainable route out of poverty.
However, the complexity and perverse nature of the system have acted as disincentives.
Multiple withdrawal rates have resulted in a regressive tax and benefit system for the poorest.
For someone to seek work for the first time in an area of high economic dependency, there is a cultural issue to overcome, as well as a financial issue.
We are asking them to make a positive decision about their life, but that is more difficult if they have no examples of people in work around them.
It can be a big decision and we have to make sure the risk outweighs the reward.
For as they see it, if they take a few hours work, for every £10 they earn they might lose £7, £8 or even £9 of their benefits.
Moreover, the complexity of the system means too often they have no idea how much they will lose or when it might be clawed back.
The benefit system has to be far simpler and establish a very clear link between work and reward.
A simpler system will also help to reduce administration costs, as well as reducing the opportunities for fraud and error, which today cost the taxpayer billions every year.
This process of reform to enhance the dynamic benefit of making work pay and simplifying the system is at the heart of our reform agenda.
I hope to bring forward more detail on this soon.
Beyond this, even as we make work pay and simplify the system, we face another problem.
Britain has one of the highest rates of workless households in Europe.
Worse, we have the highest number of children living in workless households in Europe.
But this is not about a North/South divide.
In my view, that is lazy rhetoric. The problem is more complex.
You can find workless blackspots across the country.
In fact, the gap between wealth and worklessness doesn’t have to be far at all.
For example, jobs growth and employment recovery in cities such as Manchester and Leeds has not benefited the deprived communities within them.
This is in part because the system works against labour market flexibility.
Not just transport costs, but because anyone in council housing who wants to move into an area with work runs the risk of losing their right to accommodation.
Again, it is that balance between risk and reward where we seem to penalise the poorest, yet expect them to take some of the greatest life-changing decisions.
So we will be exploring how we can take the risk out of mobility across wider areas with the Department for Transport and Communities and Local Government.
For too long, we have ignored the plight of those trapped in areas where inter-generational unemployment has become the norm.
Without the capacity to seek work, aspiration and hope become the preserve of the middle classes.
We are applying the same principled approach to pensions too.
Steve Webb will be talking more about this later this morning, but the main point to note here is that we are taking responsibility for facing up to the long-term challenges posed by the fact that we are living longer as a society.
That is why, for example, we have already made a start by announcing the end of the Default Retirement Age.
No longer should we have employees who wish to delay their retirement forced out by this sort of mechanism.
However, long-term reform involves providing a solid Basic State Pension that people can start to build on, while creating the right conditions to reinvigorate private savings.
We have made a good start by restoring the earnings link with the triple guarantee for the Basic State Pension.
But we have further to go, which is why we are taking forward the review on auto-enrolment.
I want to reverse the decline in saving levels and ask people to think carefully about how much they will need to fund the type of retirement they want.
We have already said we are committed to raising the state pension age to 66.
At the same time, we have to help people understand why this is the case and the benefits of to them of working longer.
Our figures show that working a single year beyond the current State Pension age and deferring your pension can increase retirement salary by up to 10%.
Just as importantly, working longer is also good for the economy.
If we can extend the effective working life of the country by just one year, it is forecast to increase GDP by 1% – that is around £13 billion.
66 is the starting point for this debate.
At present, there are plans in place to raise the State Pension age to 68 by 2046.
But if we want to be fair to next generation of taxpayers – and be realistic about increasing longevity – then we also need a serious debate about how far and how fast we move forward.
This agenda is, I believe, a bold agenda. But we have no choice.
With the welfare budget ballooning over the last few years, we need to shift the culture which underpins demand.
There is nothing good about a society that accepts people growing up without work, aspiration or hope.
The prize is a society more in balance where work is well distributed and where children grow up seeing work as a normal activity and responsibility is ingrained in them.
A society where people save for their retirement and where we can afford a more secure future for pensions.
My agenda is to make that happen.
This morning I appeared on Broadcasting House, a BBC Radio 4 programme. I was discussing what had happened to state welfare since William Beveridge's famous report. A Labour MP, Kate Green, was there taking a more favourable view of how things have developed than I do. It was a good, civilised, if brief, discussion.
I was honoured when Kate told me after the programme that she had read The Welfare State We're In. Sometimes people ask me what influence the book has had and I am never sure. I know that a signicant number of Conservative MPs and ministers have looked at it. But this is the first time a Labour MP has told me that she has read it. I am delighted by this since influence lasts better if it reaches both sides of the political divide. Not, of course, that Kate Green is likely to have agreed with it all by any means.
Among other things, I said that if Beveridge brought forward his plan today he would be regarded as a right-wing fanatic. The modern welfare state is a travesty of what he proposed. If his system had been put in place and persisted, much of the damage done by the welfare state would not have taken place.
He wanted a system of flat rate contributions for flat rate benefits. Means-tested benefits were designed be a tiny part of the system. In fact the very opposite has developed. Means-tested benefits are vastly more significant than unemployment benefit.
He did not specify any particular favours for lone parents. He was, provisionally, against special payments for housing benefit. He never even dreamed of those who became too ill to work being given more money or different conditions from those who are unemployed. The modern welfare state has very little to do with Beveridge. It is a corruption brought about by vote-seeking politicians - notably during the governments of Macmillan, Wilson and Heath - who knew and cared little about what could go wrong in welfare.
Beveridge proposed that the insurance flat rate payments should be at 'subsistence' level and that the non-insurance, means-tested assistance should be "something less desirable than insurance benefits; otherwise the insured persons get nothing for their contributions" (section 369). So the insured benefits would be 'subsistence' and the means tested benefits would be significantly less than that.
More on this, of course, is in The Welfare State We're In (chapter 2).
But here is a quotation on pensions and retirement that is not quoted in the book:
"...the conditions governing pension should be such as to encourage every person who can go on working after reaching pensionable age, to go on working and to postpone retirement and the claiming of pension." (Section 245)
Here is powerful evidence that the planning system is driving up the cost of housing.
It is part of the system, now, that developers are obliged to create 'affordable housing' in expensive areas. This is gesture towards the idea of making housing more affordable for those who are less well off. But it is one of those gestures that costs the pretend benefactor - the council - nothing but costs the developer and those who buy the accomodation which is not 'affordable' plenty. It is a hidden tax.
While local and perhaps national governments feel they are being terribly philanthropic about this (with other people's money - the modern way) they are themselve guilty of making housing more expensive for the less well off. How? Through the planning system.
It has now reached the stage where one of Britain's major building companies says it has to spend more on getting planning permissions than on buying bricks.
Here is what the chairman said:
The only negative point is that the roll out is being constrained by the time taken by local authorities to give planning permission on both existing and new developments.
Indeed, on the subject of planning, since my return to Redrow some 11 months ago, I have been dismayed by the sheer levels of bureaucracy and red tape that have crept into the planning system. The list of documents required to accompany planning applications verges on the comical. Even the simplest of planning applications frequently takes many months to secure approval and indeed there are many examples where the months turn into years. It is reflective of the system that Redrow, as one of the UK's largest home builders, now spends more money on planning and planning related fees than it does on bricks.
The Planning Green Paper produced by the Conservative Party this week proposes a complete revolution for the planning system. It does however raise a whole different set of concerns for the industry and in particular its proposal for third party appeals is likely to result in an even more bureaucratic system.
There is no doubt that the current planning system needs substantially streamlining and speeding up. The result would be an increased supply of new housing, significantly more employment and a major stimulus to the UK economy.
This is from pages 6-7 of the Redrow interim report published in February, I think.
Kevin McCloud's experience of staying with a family in an Indian slum made fascinating television when I caught up with it last Saturday night. One of the most interesting aspects of it was that it challenged whether 'slum clearance' and new public housing leads to improvements in the lives of those concerned.
He found much to be appalled by in the slums but also much to admire and even envy.
Plague, cholera and TB abound, but its citizens are among the happiest and most beautiful I’ve seen.
This entirely echoes the discoveries of researchers in Britain when they got close to the removal of so-called slums here and their replacement by planned, architect-designed council housing. Michael Young, who had written the 1945 Labour Party election manifesto, joined by Peter Wilmott studied a slum in great detail and then also a council estate. They found that contact with extended families fell by as much as 75 per cent after the move to the estate.
George Orwell, another Left-winger, when he lived among the poor also found that much was lost when people moved to council estates. What are the most important things? I suspect that two are among them: a strong sense of community and family and a sense of being responsible for one's own actions. The idea of community and the benefit it gives is well known. What is less commented on is the impact of independent action. I struggle even to find a language to write about it.
It is illustrated at its best by the daughter of the family in the overcrowded, rat-infested slum building where McCloud stayed. She emerged looking immaculate each morning in her school uniform. She was evidently bright and one believed she would succeed when she said she aimed to be a lawyer. How did she come to be ambitious and work hard? Because she knew very clearly that if she did not work, she would never emerge from the slum and grim. long hours of manual labour. Compare her with the offspring of a household in Britain where no adult works but the flat or house is paid for by the state and they get income support. The children learn that you can get a tolerable life style without really bothering and if anything is wrong, in the house or the education or healthcare they get, it is all down to someone else. Life it not what they make it. It is what the state makes it. That takes away from them a self-respect and a sense of being able to make a difference to their own lives.
"Slumdog Millionaire" was a superbly made film and one can understand the power of the story of the TV quiz changing everything in the hero's life. But the more important story is of the thousands of girls like the one in Kevin McCloud's film who was going to change her life through a decision in her own mind to work. The state changes the condition of people's minds. That is the way it tends to do the greatest damage.
ps The name that was not mentioned, as far as I know, in the programme was Hernando de Soto who is a leader in this field and who has argued that the key thing for economic growth is to give property rights to slum dwellers.
pps Much more about the damaging effects of council housing - and their possible causes - is in the housing chapter in The Welfare State We're In.
There have been 20 occasions since 2004 on which gang members have fired guns in the Croxteth and Norris Green areas where Rhys Jones was killed. The gang members start as early as 12. They come from broken, workless homes and start out as couriers or look-outs for the older members. Then they progress up the pecking order, their rising status measured by the viciousness of the crimes they have committed.
Sean Mercer, the youth who killed Rhys Jones, has been stopped by police on an astonishing 80 occasions by the police. He scorned them and their lack of ability to arrest him and other gang members.
It is surely impossible to deny the association between the social breakdown – the unmarried parenting and the worklessness in Norris Green and Croxteth – and the development of these gangs.
In Norris Green, more than half the people are in social housing and the workless rate is 35 per cent – far above the national average. A worrying number of council house and housing association estates have turned into ghettoes of hopelessness, vandalism, crime and fear. A poll by YouGov on behalf of the Centre for Social Justice found that a third of social tenants nationwide feel that where they live is not ‘reasonably safe’. Nearly half won’t say that they trust their neighbours and 40 per cent don’t believe that the local schools provide a good education.
The underclass has grown and become concentrated in many council estates. What are we going to do about it?
Yes, of course we can start by tightening up the weaknesses in the policing, prosecuting and sentencing. These communities have a crisis on their hands and it is offensive that police time is taken up with so much paperwork. It is absurd that the police should have had such knowledge or the wrongdoings of Sean Mercer yet been somehow unable to send him to a corrective institution. The weakness of our justice system – and those who made it so weak – bears a responsibility for the death of Rhys Jones.
So, yes, it would help if Labour finally fulfilled its long-ago promise to be ‘tough on crime’. But we need to go much deeper. One of the major causes of crime is the way many estates have become centres of unemployment and unmarried parenting. There is plenty of evidence that unmarried parenting leads to a greater likelihood of children becoming delinquents. Add that to a concentration of unemployment on a council estate and the result can be extremely toxic.
Council housing has been around for well over a century. Originally it was allocated to the respectable and even prosperous working class. It was a reward and a privilege for people considered worthy of it. It was also for those who had been compulsorily or otherwise moved out of housing areas designated as slums.
But then in 1949, the allocation of council housing began to change. It began to be granted to people on the basis of need rather than worth. In 1977, this way of doing things became compulsory. And so began the downward spiral of Britain’s council estates. Sir Robin Wales, the Mayor of Newham described it like this last year: “If you walk in and say ‘I’m homeless’ you get a greater priority than if you walk in and say ‘I’ve managed to do something for myself but I’m still looking for a council property’”. I could add that if you walk in and say, “I’m homeless and I’ve got a baby” then you jump ahead as if you were playing snakes and ladders.
So the system now makes the life-choice of being unmarried and workless easier to fall into. Not actually attractive, but less obviously awful. Worse still, it makes it almost impossible to get out the trap. Once you have council or social housing and are in receipt of housing benefit and council tax benefit you will find it difficult to discover a job which would bring in much more money after you are obliged to give up these benefits.
Housing benefit is the dark secret of the whole benefits system. People often say the Jobseekers’ Allowance and Income Support are tiny. They say no one would be discouraged from working because they get one of these benefits. Perhaps. But once you add on housing benefit and council tax relief and other so-called ‘passport’ benefits, the maths change substantially. The council estates have become quagmires from which few escape. Would you like to guess how many people move out of council estates each year? It is mere four per cent. Once you are in, it is practically for life. A large minority of people are living in these estates, subsidized by everyone else and living low-quality lives.
Reform is desperately needed. But even after 11 years in power, Labour is still in the position where it is only promising a green paper next year. In other words, it has not thought the unthinkable. It has buried its head in the sand.
What should be done? First, one must surely allow those of retirement age to live out their lives in peace in the council homes they have known for years. But after that, we should no longer be content to let this disastrous social experiment continue as it is. Those of working age should be required to seek work if they get subsidised rents or housing benefit. The tenancies should not be for life but for limited periods – an idea that is being taken on in the Netherlands. Tenants should be given every encouragement to become the owners or partial owners of their properties. Unmarried parents should no longer jump up the housing lists compared to those who have worked and planned for their futures.
Such a programme – allied with a more purposeful justice system - could make a dramatic difference. Some may say the government would need a lot of political courage to do such things. But many of us – especially those in council estates – will need a lot of courage to face the future of increased unemployment, crime and fear that will result if we do nothing.
The above is the original draft of an article which appears in today's Daily Express.
Thwe full report on housing by the Centre for Social Justice is here.
A Daily Telegraph leader on Saturday puts the case for tough welfare reform. Of course it is a case with which I agree and it is satisfying, well over 15 years since I conceived the idea of writing The Welfare State We're In to see one of the main contentions of the book supported in a major national newspaper. But, as I have said before, our best chance of a major advance will be when the Guardian and even presenters of the Today progamme or Newsnight take the same view.
The conclusion of the Telegraph leader:
Ten years ago, Labour identified a moral case for welfare reform, but, like so much with this Government, it was mere rhetoric.
Another attempt is to be made in the current parliament, but it offers no greater prospect of success than the last.
Unless a far tougher approach is adopted, another generation of children will be born into this cycle of state-sponsored hopelessness.
Sadly, Polly Toynbee in the Guardian appears unwilling to accept that things are getting worse or that welfare and housing benefits are the root cause. She wrote on Saturday:
But this is not a story of broken Britain going to hell in a hand cart; it is a picture of small but deep and persistent dysfunction passed from generation to generation. Social historians looking at Charles Booth's maps of poverty in Victorian Britain find the same areas still in deep poverty, often the descendants of those he studied. The seven Matthews children or Baby P's siblings have a slender chance of growing up to be good parents, as abuse, neglect and lack of love are passed on indelibly.
I would urge her to read the Duncan Smith article below which offers at least some evidence that this constant level of people in great difficulties that she suggests does not actually exist. The levels of dependency, worklessness and crime have all risen dramatically. Moreover the evidence from Charles Booth is not all as most people suppose as this earlier post reveals.
If you read little else on this website, I hope you will at least read this extract from an article by Iain Duncan Smith in the Saturday Daily Telegraph. It describes the problem well and with some data which I had not seen before.
Britain is witnessing a growth in an underclass whose lifestyles affect everyone. Perhaps the reason why most people haven't been aware of the extent of this is because housing policy has, over 20 to 30 years, ghettoised many of these dysfunctional families.
In the Seventies, only 11 per cent of households on the estates weren't working; today barely a third of working-age tenants have full-time work. Less than 15 per cent are headed by a couple with children. Two-thirds are occupied by lone parents, lone men or lone women.
On such estates, few children see a positive father figure, with young men having children by different mothers, with the state covering the cost.
Small wonder that alcoholism rates are high and drug dealers ply their trade in full view of young families. This social breakdown leads far too many young boys into street gangs.
Although gangs are criminal and bound together by harsh discipline, the leader acts as an authority figure and the gang's strong ties and loyalties perversely replicate the family they never had. As gangs clash, residents suffer from the violence and high levels of crime.
These young boys are on their way to a life of crime. You don't have to take my word for it - look at the background of those who as young offenders end up in custody.
Over three-quarters of them are from broken homes, just under half of them experienced violence in the home and half of them have educational levels below an 11-year-old.
Girls suffer too. Many have grown up in dysfunctional families where their mothers had children as teenagers and they have shared the house with a string of "guesting fathers". Too many will repeat the lives of their mothers.
Families like this are much more at risk of abuse than any other. Recent NSPCC research has shown that a child growing in such a family structure is up to six times more likely to suffer abuse, which is why the social services are under growing pressure.
The cases of Baby P and Shannon Matthews have led to demands that more children be taken into care, yet in the past ten years 20 per cent more children have been taken into care. Furthermore, the outcomes for those youngsters are appalling.
Nearly half of all the under-21s in the criminal justice system have been in care, only 12 per cent gain five A-C GCSEs and a third of all homeless people have been in care.
When social services do take the child, too often the young mother goes off and has another child, which will more than likely end up in care as well.
The full article is here.
Here is a link to the Centre for Social Justice report on "housing poverty".
On Newsnight last night, I was in a discussion that included the minister, Yvette Cooper (the only one who got TV make-up), Professor John Hills (who wrote yesterday's report on council housing), Lynsey Hanley (author)and Shaun Bailey (excuse me if I have mispelled his surname).
There was a moment to relish when Yvette Cooper was talking earnestly about the importance of mixing up the rich and poor. It all sounded very admirable and important. The interviewer, Emily, was taking it in very seriously and not challenging her in the least. Then Shaun Bailey, who lives on an estate, said it would make no difference. You could put the rich and the poor next to each other but they would still be living "in different worlds".
It is probably true that concentrating those with major problems in one housing estate does tend to compound these problems. But it is also true, as Mr Bailey said, that you can have rich and poor very close together without talking to each other for decades. I live in a street with a council estate. I know of no interaction between the rich and the poor on this street over many years. The only exception is via the porter of a luxury block of flats who speaks easily to everyone and - in his amiable way - ticks off council children if they deal in drugs in the estate garden or otherwise misbehave.
For today, at least, and perhaps for the next week, it is possible to listen to the debate I took part on the Today programme. Here is a link. The discussion was a 7.55am on Tuesday 20th February.
The Today programme interview went off tolerably. In preparing for it I came across the remarkable fact that even Will Hutton, the left-wing writer for the Guardian, has decided that council housing has been a disaster. His article is here.
He mentions a book called Estates, Britain's own special ghettos by Lynsey Hanley, who has written for The Observer. He says her book is "passionate and engaging" and it certainly sounds worth having.
On re-reading the chapter on council housing in my own book, I was particularly struck by the fact that in the sixty years up to 1911, 21 million more people came to live in cities in Britain. Without any planning or state housing of substantial size, this massive increase in the city population - a tripling - was successfully catered for.
There were no massive building projects, just thousands of builders building houses and flats to meet demand. Planning and building controls were, of course, much less of an obstacle and added expense than now. What is most impressive of all is that the density of housing - the number of people per dwelling - actually improved during this time. It fell from 5.46 to 5.05. (This from A Social History of Housing by John Burnett).
Another fact worth remembering is that after the second world war, the Attlee government was desperately keen to get new housing built. Council housing was thought to be the answer. Some four out of five buildings were built by councils. Private sector building was restricted to allow all the effort to go into council house building. And the result? Fewer houses were built than in the years after the first world war.
During the debate on the Today programme today, Alan Walter, for the lobby group Defend Council Housing, argued that huge amounts of money are being taken out of council housing. Rents and sales, he suggested, were bringing in much more money than the costs of maintaining existing council housing and new building.
I don't have figures available on this but I am deeply sceptical. The pace of selling council housing has slowed. The costs of renewing council estates that have gone wrong remain enormous. One of the cuttings I cam across stated that Birmingham has faced a bill of £1billion to renovate its council housing. In 2000, it said it intended to destroy 300 tower blocks. The North Peckham Estate - where Damilola Taylor was killed - has been renovated at vast expense. The rents in council accomodation tend to be well below market prices.
There are many ways of counting the numbers on such things. I very much doubt that, properly looked at, council housing has been anything but a financial as well as a social disaster.
"Our UNISON branch wish to fight. A lot of our members not only work in housing but we also live in council houses, so we're in double jeopardy."
It is signed, "Jane Moore, Cardiff UNISON".
This is an open, unabashed admission that part of the reason she wants council housing to continue is that she works in the business of council housing. One can't help admiring the honesty, but she is admitting that the 'great fight', in her case, is partly based on her own self-interest. Sight of this made me wonder where the funding for Defend Council Housing comes from. Is any of it from unions whose members work in council housing?
Correction: On buying the book by Lynsey Hanley, I find that the subtitle is "An intimate history" rather than "Britain's own special ghettos".
My appearance on the Today programme (see previous entry) has been brought forward to between 7.50am today and 8.00 am.
I have been invited to appear on the Today programme on BBC Radio 4 tomorrow, sometime between 8.30am and 9.00 am, to talk about whether council housing has a future. Preparing for this, I have come across the remarkable information that, at its peak, social housing accounted for half of all households in Scotland. That proportion has now slumped to a quarter. And the Chartered Institute of Housing in Scotland has predicted that this will fall to only eight per cent in 14 years.
This is a measure of just how enormous was the faith once shown in the welfare state: to provide housing for half the population in Scotland, at least. And now that faith has enormously diminished. When was the last time you heard anyone suggest that the state should provide half our housing?
Housing is a part of the welfare state that is quietly being dumped. No government spokesman has ever stated this as policy. Quite the contrary. But this is what has been happening over a long period. (See the chapter on housing in The Welfare State We're In for details.)
Many thanks to Phil Taylor for directing me to this article in the Sunday Times eight days ago.
Here is an extract:
The analysis of figures in 14 European countries found that Britain has by far the highest proportion of single mothers in the European Union.
The report says that in 2001, more than 8% of British households were headed by a single mother aged 18-35, while the UK also has one of the highest rates of benefits for single mothers.
In 1994 a single mother with two children who worked for about 18 hours a week could expect more than £2,000 a year in benefits. By 2001 the figure had increased to more than £3,500.
The researchers do not say outright that high benefits accelerate family break-up. Others, however, believe the study shows that generous benefits for single motherhood provide an incentive for women to have children alone.
the former Labour minister for social security, said: “I’ve always believed in a causal link between benefits and the number of single mothers.
“We’ve got to change so that people don’t become single mothers. For some, they become single mothers by accident, while for others it’s a deliberate choice.”
The study contrasts the situation in Britain and elsewhere in northern Europe with Mediterranean countries such as Spain, where single-mother families constitute less than 1% of the total. Spanish single mothers received £137 in special benefits a year in 1994, which by 2001 had declined to £38.
Spain, along with Greece, Portugal and Italy, have the lowest numbers of single-mother families in Europe.
Latest figures from the Office for National Statistics show single-mother families in Britain have steadily risen from 1% of all households with children in 1971 to 11% in 2004.
Libertad Gonzalez, a Barcelona academic who compiled the research, studied a sample of 6,580 single mothers from the European Community Household Panel. She estimates that for every £675 a state offers in benefits to lone parents, the incidence of single mothers goes up in that country by 2%.
After Britain, Ireland — despite its Catholic heritage — has the highest proportion of single mothers in the EU. In 2001 more than 4% of households were headed by single mothers. Irish lone mothers receive as much in benefits as their British counterparts.
Gonzalez said single mothers received more benefits in Britain and Ireland because they had “liberal” social policies where welfare payments were means-tested, which gave greater assistance to the greatest in need.
By contrast the southern European countries had benefits systems where there was an implicit understanding that family networks should provide assistance.
“The correlation across countries is quite striking,” said Gonzalez. “The countries with the highest incidence of single mothers are also the countries with more generous benefit, and vice versa . . . Spain, Greece and Portugal with small numbers of single mothers also have lower benefit levels. The UK and Ireland are both generous with benefits and have a higher incidence of these families.
See also this previous entry citing Libertad Gonzalez.
David Blunkett wrote in the Sun last week (august 30,
All too often girls come to my constituency surgery demanding a house for themselves and their baby.
This just isn't on. If the family - and often their mothers are single parents too - can't or won't look after the offspring then we will simply have to go back to the idea of hostel accomodation.
The "give us a house" mentality has to become a thing of the past and be replaced by "give us respect".
It may sound harsh, but blaming the changes in society won't wash.
So there is a former senior minister calling for hostels for unmarried mothers instead of council flats. It is a sign of the changing times. I remember once suggesting to a Daily Telegraph features editor that offering free flats to unmarried mothers had substantially increased the numbers of children born out of wedlock. Out of concern for children, we should cease to do it. Possibly we should offer hostels instead but it was essential that single parenting was an unattractive route for a girl to take (as it naturally would be if the government did not get involved). Only that way would we reduce the number of children brought up in a way that makes them more likely to be unhappy, more likely to be abused, more likely to under-achieve academically and - indeed - more likely to go wrong and suffer in every possible way.
The features editor of that Conservative Party supporting newspaper was shocked. Now a senior Labour Party figure suggests it. It is progress of a sort - but it is painfully slow.
Further on, David Blunkett refers to a survey of 13 European Union countries "this week" which "tried to link the increase in lone parents with the rise in their benefits." He adds "it is true that lone mothers here are given more financial help than all but one of the other countries surveyed".
It is no surprise if the survey suggests a link between subsidies for lone parenting and increases in the incidence of it. But it would be interesting if it was actually commissioned by the European Union. And, in any case, I would be glad if anyone knows of this survey and could direct me to it.
The government has a target to build more homes on 'brownfield' sites. This conjures up the idea that instead of beautiful countryside being invaded to create new homes, redundant industrial wasteland is being converted into new, attractive, residential areas.
In fact, as new figures have revealed, a significant proportion of new housing is being on town and city gardens. Our urban environments are having their greenery removed and replaced by blocks of flats. 15 per cent of new dwellings are being built on residential plots, including gardens.
Nobody wants to live without greenery around. But that is precisely the kind of environment towards which current government policy is taking us.
The figure is from today's Daily Mail (page 2) which cites Tory MP Greg Clark as the person who has found it out - presumably from the government. For good research and analysis on the subject, see Better Homes, Greener Cities published by Policy Exchange.
The relevance of house prices to the welfare state might seem pretty weak. In fact, there is more of a connection than one might think. Centralised state planning of permissions for development was started, as I understand it, by the same post-war Attlee administration that was responsible for various other aspects of the welfare state. The restrictive planning was intended, like much else, for the benefit of the people. But it has resulted in property in Britain being phenomenally expensive. This is to the disadvantage, above all, of the poor. This fact may be only tangential to the article on trends in property prices below which I wrote and which appeared in the Daily Express today. But I am posting it anyway. I expect to write more on British housing policy later.
House prices are on the way up again. Hometrack says that they rose 0.6 per cent in April, the biggest increase in a single month since 2004. Across the country, the proportion of estate agents reporting lower prices has fallen from half, last Autumn, to less than five per cent now.
It is true that the Nationwide reported only a nominal rise in April. But its price increase for March was a big one. The exact timing does not matter. Overall, virtually all price reports now tell us that the property market is on the move this spring. Those of us thinking of buying should probably get a move on. Those thinking of selling can probably relax a little. The buyers are on their way.
How far can this new upturn go? Are the boom conditions of the past back or will it fizzle out? We need a bit of history to put it in context:
In 1995, only eleven years ago, the average price of a home in Britain was £51,000. The average price is now over £160,000. There has been a massive increase. In the second half of last year, the remarkable boom finally slowed down and then stopped. Property prices actually fell. In some areas, including London, prices fell quite noticeably.
What caused the astonishing boom in British property prices which started well before 1995? There are many factors but one of the most crucial was surely the major reduction in interest rates. In the 1980s, mortgage rates were often well over ten per cent. It cost a great deal to borrow. Lower interest rates brought the cost right down, increasing the fire-power of competing buyers. A second factor has been the much great competition among lenders. One used to have to get into a mortgage queue in order to borrow. Borrowers were supplicants hoping to get a favourable hearing. Now the queue is among lenders - to hand over their money. The cost and availability of mortgages have both improved dramatically.
Price rises came to a grinding halt last year largely because interest rates were on the rise again. This increased the cost of borrowing and pushed up unemployment, too, another dampener.
But now, most people believe that interest rates are near their peak. Borrowers are no longer in such fear that interest rates might continue upwards to a level that they cannot manage.
So how far can the current rise go? It will not be a boom as extraordinary as the one we had over the past two decades. The one-off radical drop in interest rates cannot be repeated. But prices are likely to continue rising in a way that will substantially affect the wealth of all who own property.
In the short term, the latest upward trend was only established in October and there would need to be a compelling reason for it to run out of steam in only half a year. Secondly the stockmarket has been rising for three years now. The bull market in shares augurs well for houses because the stockmarket tends to be ahead of the game. One direct effect is that those working in the City are getting big bonuses again.
Over the past few years, London prices have not risen as fast as those in the rest of the country. But aided by these City bonuses, London is now pushing ahead at the fastest clip. The good news for the rest of the country is that rises in London prices tend to spread out over the following years.
Not everything is positive. Council tax has become a bigger burden because Gordon Brown has found it to be a good way of hiding the overall increase in his taxation. Council tax is primarily levied on housing, not people. So it has become a kind of tax on home ownership. Mr Brown has also hit housing through increased stamp duty which, since the rate of duty increases with prices, is now hitting more and more people harder and harder. The same applies to inheritance tax. People do not want to die leaving their children an asset which will, in part, be taxed at 40 per cent. So the elderly will increasingly be more inclined to sell, or trade down.
More immediately, our electricity and gas bills have gone up and will probably be bumped up again. That reduces the cash left for servicing mortgages.
But the positives are currently outweighing these negatives and there seems no reason to think this will change soon. So prices will probably continue to rise this year and, in the long term, prices will be virtually forced to rise. The logic seems inescapable: demand for housing in Britain keeps on rising but the supply is hardly budging at all. It is a pressure cooker.
Growing demand comes from the way we increasingly live in small households because more of us are elderly or divorced. It comes from growing incomes, inflation and immigration, too. In response, new housing amounts to a mere one per cent of the existing stock. Planning law in Britain is highly restrictive. So the increase in demand cannot be met by an equivalent increase in supply. Prices have to rise. In the coming years it won't be at the 17 per cent a year rate which it was for the recent two decades. But, by combining inflation with the growth in incomes and then adding in something for the 'pressure cooker effect', it is easy to come up with a long term average of at least six per cent a year and quite possibly seven or eight per cent.
What happens if property prices rise at an average of seven per cent a year? Prices nearly double in ten years. Housing remains a good investment.
There's a real culture of dependency on these estates. One reason is because people expect to be housed and never to be kicked out....
Imagine you are a nine-year old boy living here. You see these groups of older boys. They seem to be tough. They seem to be having a good time. Nobody interferes with them. You want to be a man and these appear to be men to you.
These are quotes from a new pamphlet.There is a shortage of descriptions of the dynamics of life for those who become alienated and turn to crime and other forms of destructive behaviour. So the publication of No Man's Land: How Britain's Inner City Youth Are Being Failed by the Centre of Policy Studies is welcome.It is written by Shaun Bailey, a man whose mother tried to get him away from the council estate culture in which she lived. She succeeded but he has returned to try to help on an estate. He describes the culture there.
The first chapter is on the CPS website here. The full pamphlet can be bought via that website. There is a serialisation in the Daily Mail today.
How many people, even in the Labour Party, have noticed the dog that didn't bark? On what has been one of the major parts of the party's social policy for decades, the government has gone very quiet.
The hush that has fallen is shown by two statistics: in 1953, local councils built nearly a quarter of a million council homes. Last year, they built a mere 250. The building of council homes has gone from being a major part of British life and politics, the stuff of headlines and passionate national debates, to a virtual irrelevance - a trifling thousandth of what it once was.
This is the beginning of an article I have written for The First Post. The full article can be found here.
When the riots in Paris are reported, the most commonly mentioned factor is race. The implication is that this is a cause of the violence. No doubt racial conflict adds to the problem. There is also mention of people being poor.
But I suspect something different lies behind it all. The report in the Telegraph on Thursday by Henry Samuel referred several times to the places in which the riots took place:
The riots first broke out on the Chêne-Pointu council estate. Last Thursday, two adolescents from the estate died when they scaled the 8ft wall of an electricity substation to dodge police and were electrocuted.
....Chêne-Pointu typifies the problems of many of the urban ghettoes that surround Paris and other large French cities: a high immigrant population, soaring unemployment and drug dealing.
...."We're not dumb. Sarkozy has declared war on suburban youth," said Karim, 23. "Unless he apologises for the way he has treated us, then he can expect 40 nights of violence," he said.
But others around the estate back Mr Sarkozy. "What he says may be crude, but he's right. Drug runners and petty criminals have had it good too long around here.
....In the neighbouring Bosquet estate, Traore Gounedi, a 27-year-old worker in a local social centre, is incensed. "Ten years ago, Clichy was a real no-go area. But in recent years we had built up sports clubs and other associations and it had become calm...."
As night fell at Chêne-Pointu, sirens heralded the approach of two fire engines that positioned themselves in front of the estate awaiting the flames.
Notice the appearances of the word
'estate' in these excerpts. To what extent could the violence be due to alienation and criminalisation in council estates with high proportions of unemployed and never-married lone parents? In other words, not really race or being poor.
It is impossible to be precise, of course. But it is interesting to note the way council estates seem to be the hubs of the riots. Of course, many will take the word 'estate' to be merely an indication of 'social deprivation' and conclude that the people in these estates need to be given more. But there are poor people all over the world, yet the riots are taking place in a rich country where people are living on state-provided property and many are living on state-provided hand-outs.
Meanwhile we also know, as background, that many council estates have become crime-ridden in both France and Britain. We also know that the unemployed and children of unmarried mothers are more likely to turn to crime. There is also plenty of evidence that unemployment and unmarried, lone parenting is encouraged by welfare benefits (see The Welfare State We're In. The unemployed and the never married tend to be concentrated in council estates which, in their turn and of themselves, appear to have an alienating effect on those who live in them.
From this it does seem possible, to put it modestly, that the root cause of the violence in these Paris council estates, lies in welfare benefits and state-provided housing in damaging combination. In short, the cause of the riots could be the French welfare state.
Another measure of how brutish Britain is becoming: DHL will no longer deliver to some areas because of the danger to drivers. Imagine what those areas must be like for the residents.
DHL has put parts of London, Glasgow, Manchester and Birmingham off limits because of complaints from its drivers.
Recently blacklisted areas include London's Canning Town and Custom House.
The firm, which will not give exact details of other trouble-spots, is asking people to collect their packages from its local depots.
The BBC online version of the story is here.
Former Welfare Minister Frank Field is pushing for tough action to throw unruly tenants - responsible for social ills including noise, assaults and vandalism - off estates.
And he believes ministers should copy a scheme in Kamper, eastern Holland, where neighbours from hell have been moved into vandal-proof accommodation in steel containers.
Each home has three basic bedrooms, a kitchen and a bathroom and is supplied with heating, gas, electricity and hot water.
The Dutch scheme was hailed a success and is to be extended nationwide. Mr Field said he would volunteer his constituency of Birkenhead, Merseyside, if ministers wanted to run a pilot scheme here.
And he went on: "They can put them up underneath the motorway flyover. The Labour Party in Holland has stopped messing about on this issue and has got serious.
"We need to be doubly serious about this issue because we are further down the road to anarchy."
The story comes from the Mirror today.
I have been asked to appear on Radio 5 Live between 10.00pm and 10.30pm tonight to discuss Field's idea.
Thersites listened to the Radio 5 Live discussion and makes some remarks on it here.
I was not surprised to be surrounded by people with a Left-wing mind set. But I was mildly encouraged by the way the managing editor of the Observer implicitly acknowledged that this was a serious problem and not just a matter of a few people playing loud music now and again. On the other hand, the 'criminologist' was, indeed, extraordinary. We were all asked by the presenter, Anita Anand, what we would suggest should be done with nightmare neighbours if all else had failed and we did not want Frank Field's steel houses. His answer? We should 'have a debate'.
If you own property, the government is on your tail. The idea of increasing taxes on property has been building up for several years. Now the election is out of the way - and there is a big government budget deficit to fix - it won't be long now.
Ministers are bursting with ideas and are asking others to come up with more. A government policy document proposes that council tax in Northern Ireland should be based on home values. The idea could be tried out there and then applied nationwide.
If ministers don't go for that one, they will get suggestions from a review of council tax by Sir Michael Lyons later this year. He is likely to recommend changes to council tax which will result in many people paying more.
Don't let us forget second homes. Next month a 'rural housing commission' will start looking for ways in which to hurt those with a place in town and a hideaway in the country. This could be done through planning restrictions or by raising council tax for second home owners. Yvette Cooper, a minister in John Prescott's department, has said it might be a good idea to tax second home owners because this could make more homes affordable for local people. As ever, the government is keen to blame problems on other people. The real reason property is expensive is that we have a rising population (partly through immigration), more people living alone because of family breakdown and very restrictive planning laws. The result is inevitable and not the fault of second home owners.
Gordon Brown has already got 'form' on taxing property. He has increased the rate of stamp duty several times since he became chancellor and he has kept the increases in stamp duty thresholds - the point at which the higher rates apply - far below the increases in house prices. The top rate of stamp duty is now four per cent and many people who once thought the higher rates would never affect them are finding they are getting close to them.
Mr Brown also increasingly taxes property when people die. As with stamp duty, he has raised the inheritance tax threshold as slowly as possible. As property prices have risen, there are millions of people alive today who will not be able to leave their homes to their children, free and clear. They will be forced to leave up to forty per cent of the value to Gordon Brown.
Why does Labour government have it in for property?
One reason is grubbily political. Property taxes genrally raise money without hitting Labour's supporters in areas where property prices are relatively low. In Scotland and the North of England, some 60 per cent of property purchases do not attract stamp duty at all. That compares with only 13 per cent in the South East and less than five per cent in London. Similarly less than 10 per cent of purchases in Scotland, the North, the North-West, Yorkshire and Humberside and Wales attract the the three per cent or four per cent bands of stamp duty. In contrast, the higher rates are paid in close to 40 per cent of purchases in London. Stamp duty is a tax on the south and on Conservative Party supporters.
Gordon Brown has also got Left-wing theorists egging him on towards higher property taxation too. The Institute for Public Policy Research has called on the government to “reduce the under-taxation of home ownership” arguing that more tax would reduce the gap between the homes lived in by the rich and those of the poor. Another argument in favour of hitting home owners is the suggestion that, Britain has "too much owner" occupation and is "out of line" with the lower levels on the Continent.
Is it right that our property should be taxed more? Is it a 'good thing' we would be selfish to oppose?
Actually a high rate of home ownership is a positive thing. People look after their own homes better than, say, homes belonging to a council. The total destruction of many council estates over the years - both in Britain and abroad - is testament to this fact. The reason home ownership is less widespread in many Continental countries is probably because they have taxed it so heavily. Some Continental countries have made it disastrously expensive to buy and sell houses. The rules are far from simple but in France, for example, stamp duty is between 10 and 12 per cent for properties older than five years. In Italy the rate is 11 per cent. So what happens? People don't buy and sell. They rent, not through choice but because the government pushes them that way. These countries have made a mistake. They should change, not us.
Labour is missing the most profound point about property. A house or flat may seem to be just a piece of land with some bricks - a good target for taxation. But to each of us as individuals, an owned home is profoundly important. It is somewhere we can go to whenever we want and for as long as we want. It is financial security. Even if we lose our jobs or our shares go down, we feel that we will still own something if we own our home. And it will very probably keep, or increase, its value.
A house or flat is a way in which we try to improve our circumstances. We typically start off in a small place. But we hope to save, get promotion or an inheritance and then move on to something better. The desire to take ourselves and our families to better things is a natural part of human behaviour. It benefits ourselves, our families and the national economy.
These are things Tony Blair appeared to understand before he became prime minister. When out canvassing for votes, he met 'Sierra Man' polishing his car - the sort of person who had done well out of Lady Thatcher's years. Sierra Man had bought his council house and had been able to get his car because of lower taxes. 'Sierra Man' had 'got on' with the aid of property ownership and low taxes. It was because Mr Blair saw the importance of this that he got his landslide.
Unfortunately Tony Blair has not been in charge of the taxing and spending of this government. Gordon Brown has. What is more, he is likely to get the top job in the next few years. He subscribes to the idea that taxing property is good. So look out, home owners, you are first in line for the coming rise in taxes.
(This is an unedited version of an article that appeared in the Daily Express today.)
I went to an event at the Institute of Economic Affairs last night at which several of the authors of a new book, Margaret Thatcher's Revolution, including Norman Tebbitt, spoke. Here are some of their remarks:
Dennis O'Keeffe: "much 'special needs' is about children who have not been taught to read".
David Marsland: Privatising the supply of healthcare (ie hospitals and doctors) is relatively easy. Privatising demand is more difficult. But a start could be made by using tax rebates to enable people to opt out of state-financed care.
James Stanfield: He went to a comprehensive school. He did GCSE in English Literature and did not do any Shakespeare at all. The year after he left, the headmaster was punched by a pupil as order faded. He reckons he got out 'just in time'. He wanted governments, if they are subsidising education, to subsidise the consumer, not the producer. He said he had been to Kenya and was appalled that the British government was exporting the failed British model of 'free and compulsory' education. He said, "British money is destroying education in Africa."
Norman Tebbitt talked of the huge transfer of assets that took place under Thatcher from the public sector to the private sector. He reeled off a list of companies privatised that was far longer than most of us can easily remember. On top of that was the sale of council homes. He said these things combined to make a big difference in social attitudes.
He admitted some failures.
He said, "we failed in the non-economic aspects of policy" and "I bitterly regret that we weren't bolder in our programme in 1987 - particularly in health reform and education reform".
On Europe, he suggested the policy now should be to describe a European Union of a kind that we would like and, if we cannot get it (or, presumably, something close, that we should leave the EU. He said that Thatcher tried to make the European Union into more of the kind of place she wanted with the Single Market. But this had not worked: "Have we got a single market? Have we hell!"
He was asked what was the biggest mistake of the Thatcher years. He had no doubt that it was joining the Exchange Rate Mechanism. Up until the ERM fiasco, the Conservatives were ahead in virtually every opinion poll on the question of which party would be better at running the economy. Ever since the ERM, the Conservatives have been behind on the same question.
In describing Margaret Thatcher's view of things, he said, "she believed fundamentally that people behave logically". He said approvingly that she was "predictable". You know what she would think on any issue. You did not have to ring up Number Ten and ask. When she and he were both making speeches on the same night, they did not need to exchange speeches to ensure they would not contradict each other. The line was clear and predictable. He pitied those who worked for Blair who would have no such certainty. [For example, does he believe in the state running things or private companies? One minute Railtrack is nationalised, the next he is contracting out hospital operations to private companies.]
The evening brought home how many radical things she did - things that are easily forgotten like removing exchange controls, pay limits and dividend controls. Tebbitt remarked, "we were thinking so many unthinkable thoughts we almost frightened ourselves".
Dennis O'Keeffe said that under the Thatcher administration he came to be proud of Britain. In looking to a future leader of the Tory party, he thought we would need one who could make us proud again.