Middle-minded ministers fuelling London’s housing crisis - Ruth Cadbury MP
Aden Simpson
| PoliticsHome
Labour MP Ruth Cadbury tells PoliticsHome that Government ministers are too focussed on their “Middle England” constituencies continue to subsidise the wealthy while making London unliveable for ordinary people.
The Government’s approach to London’s housing crisis is “a mess,” says Labour MP Ruth Cadbury, thanks to its cynical disregard for anyone outside ‘“Middle England.”
The Labour MP for Brentford and Isleworth is leading a Westminster Hall debate today to bring Tory ministers to task for their sustained distortion of the London housing market, as “subsidies for the wealthy” continue to send house prices in the capital spiralling beyond control.
“It’s like a lot of things about the lives of ordinary people, many of them just don’t care,” says Cadbury.
“And sadly too many of them don’t even know the issues. They don’t know people on low incomes, and they don’t have those people coming to their surgeries. These are not the issues of Middle England.”
According to Cadbury the Government’s housing policy comprises a cocktail of fiscal subsidies aimed at homeownership, while ignoring the detriment they cause to ordinary Londoners. Top of her concerns is the ill-conceived starter homes initiative that will see 200,000 first-time buyers receiving a 20% discount funded by the taxpayer.
Whilst there will be people who will benefit, who wouldn’t otherwise be able to buy, she says, “the reality is where you have an overall shortage of housing as in London, all that’s going to do is bump the prices up even more.”
Controversially, these lucky 200,000 will be able to make vast profits by selling their discounted properties at the market rate only five years later, while the remaining two million aspiring homeowners will be stuck in the saturated rental sector.
“And the only thing affordable there is council and housing association-rented housing,” she went on. “Yet the Government has now withdrawn all capital support for new council homes, and instead subsidises the Right-to-Buy for existing tenants.”
This discount, offered to council house tenants able to buy the property they live in, has recently been extended to £100,000 in London, Cadbury explains, increasing the uptake of Right-to-Buy, therefore reducing the number of council houses available.
“And now the Government is imposing the Right-to-Buy discount on housing associations,” she adds, meaning an extra 1.2m housing association tenants will have this same opportunity, but as the Government doesn’t own these homes, it will again have to subsidise the discount.
The Government plans to fund these subsidies, by forcing councils to sell off even more council houses, under the Housing and Planning Act. Once council homes of “higher value” become vacant, councils will be forced to sell them on the open market, and the money will then be divided up and used to compensate housing associations which have been forced to sell theirs.
“They haven’t thought through the logistics,” said Cadbury. “So the situation is a mess.”
With only a chosen few being given a leg onto the housing ladder, and as the social-rented sector contracts, in London the private-rented sector remains thoroughly oversubscribed.
“If you look at rents that are being charged against what salary you’d need to be on to live in London, people are paying 50-60% of their salary on rent,” she said.
“This is not just a social cost it’s getting to be a significant economic cost.”
Aside from the £9.5bn-and-rising housing benefit bill going to private sector landlords - £1bn less than the UK’s net annual contribution to the EU - Cadbury explained that as rents soar, economic growth suffers too.
London is by far the most productive region in the UK - one third of all jobs created since the recession have been in the capital - the rising cost of living is choking the engine.
“Both private and public sector employers tell me about the recruitment crisis,” she said, “Anybody who isn’t a top level manager - senior teachers, specialist nurses, middle managers - who have the skills to work anywhere in the UK, and who have a choice for a better quality of life, they get away from London.”
Those who can’t work elsewhere will choose between a lengthy commute which means “they won’t see their children awake during the week” or be left with no money by the end of the month.
“It’s a choice people make,” she adds, “but it’s also the Government’s choice to continue with policies that effectively subsidise the wealthy and force people to make these choices.”
She added that the gap between London and the rest of the country grows bigger by the day, and the policy responses of the Government “relate to those areas where its’ MPs come from; that’s not London.”
“I’m not an expert on the current leadership of the Conservative Party, but just looking at them across the debating chamber on anything to do with social policy - whether it’s benefits, whether it’s social housing costs, whether it’s childcare costs and so on - they really don’t care.”
