Changing the locks

Over the past 30 years, housing policy has shifted from provision by the state to the private sector as successive governments have pursued neo-liberal policies. This has had profound and detrimental effects on housing for working-class and poor communities. PAUL KENNEDY reviews a recent book, edited by Sarah Glynn, which tracks this shift.

Where the Other Half Lives: lower income housing in a neo-liberal world

Edited by Sarah Glynn

Pluto Press, London, 2009, £16-99

THIS COLLECTION OF essays edited by Sarah Glynn is introduced with the observation that, "for millions of households across the world the nature of their home is changing as the political orthodoxy of neo-liberalism puts into effect some of the most financially significant and socially pervasive mechanisms of deregulation and privatisation". This was true when the book was conceived, before the subprime crisis, the credit crunch and subsequent global recession. It is even more so now when pictures have been beamed around the world of devastated but previously comfortable ‘middle-class’ suburbs in the US with rows of foreclosed homes and millions have lost their homes in the leading capitalist country. In Britain, there were 46,000 repossessions last year and 53,000 repossessions are projected this year. Much of the banking sector is now state-owned and it has received enormous bailouts – but stopping repossessions by the banks would transgress New Labour’s market fixated neo-liberal ideology.

William Booth, founder of the Salvation Army, talked of the ‘submerged tenth’ of the population. Glynn says that the focus of the book, those who suffer most from the flip side of neo-liberalism, represent more than Booth’s tenth – if not as much as the ‘other half’ referred to in the title (which comes from a book on housing conditions in New York in the 1890s, called How the Other Half Lives). In the bleak post-crunch landscape, though, more than half will increasingly feel they are on this flip side.

The book attempts to understand housing issues in the context of neo-liberalism. Using international case studies (though concentrating on Britain), the stated aim is to link the experiences of tenants and residents, the changes in housing policy, and the global political and economic forces that drive policy changes. As the editor, Glynn suggests that such an analysis would provide the essential foundation for the fight-back. That starting point lifts this book above other academic and policy-orientated studies.

The book gives many examples of struggle leading to improved housing conditions, as well as examples of the problems of free-market ideology in relation to housing. Internationally, social housing systems have been introduced when the capitalists felt that the future of the profit system was threatened but were undermined as the threat receded. The articles in this collection give much evidence of this. The two big spurts of council house building in Britain after the first and second world wars were driven by this.

Fear of revolution

IN THE 19TH century much progressive housing legislation was driven by health considerations, both the need for a reasonably healthy workforce to exploit, and the fear that disease could spread from the slums to the wealthy areas. But the book shows how fear of disorder and revolution were also factors. The destruction of working-class housing in Paris was seen as contributing to the 1848 revolution and, in the same year, Lord Shaftesbury is quoted as saying, after a meeting of the housing association he co-founded, that "this is the way to stifle Chartism".

Examples are given of the role of 19th century philanthropists and housing associations which tended to blame the poor for their conditions, and to address the problems of the ‘deserving poor’ by making them adhere to draconian rules. Octavia Hill used teams of ladies to enforce what she herself described as a "tremendous despotism". The book draws out parallels between Victorian ideas and aspects of contemporary neo-liberal social policy.

Glynn gives a good summary of the Glasgow rent strikes during the first world war. Along with rent strikes elsewhere in the country, industrial and political struggles and the impact of the Russian revolution, these events led to the establishment of rent controls and, ultimately, the introduction of state-subsidised mass council housing in Britain. As she explains: "The power of tenant protests lay not just in their immediate impact but also in the fact that they were supported by an increasingly powerful labour movement, and it was hoped that by meeting some working-class demands within the existing system, support for a more revolutionary approach would be weakened. Such arguments were hugely strengthened by the Bolshevik revolution in 1917 and by the unrest that followed the war".

She outlines the key role of socialist parties in preparing the ground over years of campaigning, taking up immediate practical housing problems and linking them to the need for wider social change. She brings out the importance of the mass movement involving organised workers and the women’s movement in the tenements. At one stage, tanks were deployed in Glasgow’s George Square and Glynn quotes the prime minister, Lloyd George, asking of the 1919 Housing Act, "Even if it cost a hundred million pounds, what was that compared to the stability of the state?" The parliamentary secretary to the Local Government Board similarly told the House of Commons: "The money we are going to spend on housing is an insurance against Bolshevism and revolution".

The Socialist Party today adopts an approach of fighting for what Leon Trotsky called ‘transitional demands’: building campaigns connecting immediate issues with the need to transform society. It is sometimes suggested that this amounts to campaigning for ‘impossible demands’. But the comments of Lloyd George and co illustrate that, when the capitalists think their system is threatened, they will do anything to save their skins, including implementing policies that go beyond the apparent limits of capitalism.

The 1919 Housing Act introduced state-subsidised working-class housing, and the first Labour government in 1924 instigated a mass programme of council house building. The minister responsible, John Wheatley, had played an active role in the rent strikes. Estates such as the Becontree estate in Barking and Dagenham, where the far-right British National Party has recently made headway, were conceived in this period to provide good-quality housing and public spaces to a mixed community, including line workers at Ford and better-off layers.

Campaigning is political!

IT IS WORTH contrasting this experience of struggle with the approach of the Defend Council Housing (DCH) campaign, whose leadership is under the ideological influence of the Socialist Workers Party. Many local DCH campaigns have done excellent work, and the organisation’s website is a mine of useful information. However, the national leadership has opposed initiatives by local activists to stand council candidates against Labour, arguing that it is important not to alienate Labour supporters, and even Tory and Liberal supporters of council housing.

When the Socialist Party councillors in the south-east London borough of Lewisham, for example, approached the DCH national office for assistance in an anti-transfer campaign support was declined. The DCH officers counter-posed what they termed ‘the need for a campaign likely to win’ the anti-transfer vote, that muted criticisms of the New Labour council, to what they argued was ‘a political campaign’, because it included an explanation and criticism of New Labour’s housing policies and which, DCH therefore argued, would not succeed. In fact, the campaign did succeed without its help. Many tenants who might normally support one of the major parties could see the sense in a socialist case and were not alienated at all. This approach – consistently linking the immediate issues with the need to transform society and to build a political alternative – is the way to prepare the ground for new mass struggles in the years ahead.

The book outlines the role of the Communist Party in housing campaigns in the 1930s around issues such as rent control and investment in municipal housing. In London’s East End such campaigns played an important role in combating the influence of the fascists, bringing workers from different backgrounds together and demonstrating their common class interests. Campaigns extended to homeowners who went on mortgage strike. A Communist Party member, Elsy Borders, played a prominent role taking her building society to court. The homeowners’ issues focussed on the complicity of the building societies in low standards of construction by speculative builders and the campaign was successful in contributing to legislative change.

Glynn notes that a problem of the current period has been that trade union involvement in housing campaigns has been largely passive – donating to DCH for example. Certainly, while a union such as Unison – which actually organises council workers and supports DCH – has played a good role in some local anti-transfer campaigns, the union raises only the most muted criticism of government housing policy at national level, despite the fact that the New Labour government has transferred many more homes out of the local authority sector than the Tories. A fighting campaign at national level opposing New Labour’s housing policy, and linking the lack of house building and the need to stop repossessions to a call for full bank nationalisation and a plan for investment in quality council housing, would appeal to both Unison members and wider sections of society. Of course, Unison’s leadership is as wedded to neo-liberalism as the government.

The book cites the case of Clay Cross council in the 1970s as an example of councillors who were prepared to go beyond the law to hold down rents, playing an important role in a housing struggle. This campaign against the 1972 Tory Housing Finance Act, in which supporters of Militant (forerunner of the Socialist Party) played a prominent part, gives an example of the role that courageous elected representatives linked to the Labour movement can play. However, it is a real omission that no reference is made to the fight of Liverpool city council in the 1980s. The Liverpool Labour councillors mobilised a mass campaign, including trade union support, across a major city using the slogan ‘better to break the law than to break the poor’ and inflicted an important defeat on Margaret Thatcher’s government which had cut £270 million from the city between 1979 and 1983. The legacy of this campaign, in which supporters of Militant played the leading role, included 5,400 new council houses.

Driving out the poor

THE BOOK OUTLINES how neo-liberal ideas of the ‘small state’ and the ‘free market’ went from the political fringe in the post-war period to become the dominant ideas of capitalism with Thatcher and Reagan. It also cites writers who have examined how the role of the capitalist state has changed in practice. Rather than the state shrinking in the neo-liberal period, it has become more nakedly focussed on promoting profit rather than welfare.

For instance, the idea is mentioned of an ‘entrepreneurial state’, where local authorities (for example) play a role of promoting investment (read profit-making) opportunities in an area rather than providing services to meet need. If an area has market potential, the problems of poverty can be ‘solved’ by driving out the poor to achieve a more attractive social balance for capital – the reality behind the rhetoric about sustainable community. Regeneration schemes are based on creating opportunities for developers and delivering a workforce for capital. Graphic illustrations are given. For example, Peter Brooks, New Labour deputy leader of Greenwich council, is quoted from an interview in Roof, the magazine of the housing charity, Shelter: "Kidbrooke could be a key place to live and work in London so I suspect that a different type of person will want to move in. I do understand that communities have been torn apart and I think that’s part of it you regret. But what I am trying to do is form a new community for the people who live in and around Kidbrooke and on an estate that is going nowhere. It is unfortunate that we have had to move people to do this. I suppose I wouldn’t like it if I lived here". (Degeneration Game, Roof magazine, September/October 2008)

Internationally, public services have been moved to non-governmental organisations (NGOs), such as charities and aid agencies: ‘privatisation by NGO’. In Britain, housing associations are well placed to play this role, as Glynn notes. They have huge financial resources and do not have the burden of democratic accountability. Even when they make noises about accountability to the community, business interests are to the fore in their view of ‘community’.

However, the book would have benefited from more analysis of how the state has been refashioned to support profit under neo-liberal capitalism and particularly how the state uses housing policy to provide a compliant workforce for capital. Recent changes in housing benefit, for example, which relate benefit payable to a notional market rent in an area rather than what tenants actually have to pay, is intended to push the poor to make ‘market choices’ to move to smaller accommodation or cheaper areas. Ideas such as removing security of tenure for at least some social housing tenants also remain on the policy agenda. Endless think-tank reports ponder how to use housing policy to increase ‘labour flexibility’.

Laudable demands

THE BOOK CONCLUDES with some demands, arguing that "the proposals outlined here are not simply for better housing. They would also help improve economic stability and would result in a healthier, more equal society, which would feedback into the management and maintenance of homes and neighbourhoods in a virtuous circle". This reads like a case for increased public spending on housing along the lines of the post-second world war economic upswing, but the conditions that made this possible are long gone.

Glynn observes that "it might seem obvious that governments should try and restrain the drive to regard houses primarily as investments and base policy on the need for good homes". But, as she shows, there is not much sign that government ministers see things that way. She raises a series of laudable demands for housing, including restricting high-risk and inflationary mortgage products, cracking down on tax benefits for buy-to-let landlords, extending mortgage-to-rent schemes to stop repossessions, taxing empty and second homes, a land-value tax to stop speculation, and resurrecting a properly-funded state pension scheme which would reduce dependence on housing investment. Along with a programme of investment in public housing, she argues that this would lead to a more stable economic system. It is true that public housing investment can be counter-cyclical within capitalism and some of the other measures proposed could also have stabilising effects. She is also right to argue that the cost of spending on housing would be offset by social benefits. But this does not really get to the essence of the relationship between the nature of capitalism and housing policy.

The book makes many useful points about the rise of neo-liberalism, explaining that it is about redistribution of wealth – to capital! – rather than restoring growth as such. However, from a capitalist point of view, it was not viable to continue with the post-war Keynesian welfare state. In the 1970s Militant warned that, although Labour had been elected in 1974 on a programme promising reforms and a ‘fundamental and irreversible transfer of wealth to working people’, it would end up carrying out counter-reforms unless it broke with capitalism because the post-war upswing had hit the buffers. In fact, the 1974-79 government started the process that Thatcher continued, and it was Anthony Crosland, minister and ideologist of the Labour Party’s rightwing, who declared that ‘the party is over’.

The international articles show the scope of neo-liberalism, and the article on Swedish social housing, for example, is a warning to those on the left who look to a Scandinavian model as any way out. Sarah Glynn shows how ‘financialisation’ in the period leading up to the credit crunch distorted housing policy. In apparently hoping for a revival of left Keynesian policies, however, she fails to square up to the post-credit crunch world – although, to be fair, much of the book was prepared before the crash.

In the pre-credit crunch period demand was depressed as a result of holding down the share of wealth going to the working class and, in the context of reduced profitability of investment in industry, a way out was found through the extension of the finance sector and credit. It was the function of neo-liberal policies to support this shift. But, rather than being a new paradigm for continuous growth, this period laid the basis for the crunch and the subsequent great recession. Internationally, the capitalists have thrown huge resources into trying to avoid a repeat of the 1930s slump, spending around $14 trillion in bailouts to the financial system worldwide plus costly interventions such as quantitative easing, cash for clunkers, and so on.

Capitalist governments internationally now have state budget deficits of around 10%. Greece is not alone in having drastic spending cuts forced on it. The debate in Britain is when to cut rather than whether to cut. Advice to ‘policy makers’ on the benefits of increased state spending is likely to go unheeded in this context and the prospect is, at best, for feeble recovery followed by renewed downturn. The prospects for increased spending on public housing depend on the fight-back from the working class. In preparing for this it is important for socialists not to hide from the depth of the crisis but to put the need for a socialist planned economy on the agenda.