HOUSING: A BASIC HUMAN RIGHT?

A roof over one’s head and food to eat is a basic human right

Food and shelter are essential to survival and yet according to the latest Government figures, collected in the autumn of 2019 and published in February 2020, 4,266 people are estimated to be sleeping rough each night in this the 5th largest economy in the world. The Charity Crisis believes it may be nearer to 8,000.

According to the charity Shelter three million new social homes must be built in England over the next 20 years of which 1.2 million homes are needed for younger families who cannot afford to buy and "face a lifetime in expensive and insecure private renting". According to Shelter existing schemes like “Help to Buy” are a less effective use of taxpayers' money. The Government responded that providing fair social housing was a priority and it planned to build 250,000 homes by 2022, including homes for social rent.

Money is made from this basic human need

Housing is big business and it was the collapse of the property marked in America which led to the economic crisis in 2008 which saw the Government bail out the banks and led to ten years of austerity during which the rich, including those responsible for the crisis, got richer and the majority of us got poorer.

The Government gets ￡9.3b per year from Stamp Duty paid on house purchase, and, of course, the value of one’s house is taken into account when assessing long term care charges – with an estimated 30,000 to 40,000 having to sell their houses to pay for their care each year. And despite the introduction of a new allowance that allows couples to pass on a family home worth up to ￡850,000 tax-free, “Inheritance Tax” receipts hit a record high of ￡5.2bn in the last tax year - much of it from houses.

Despite schemes like “Help to Buy” and the abolition of “stamp duty” for first time buyers many new so called “affordable homes” remain empty because there are too few would be first time buyers able to afford them.

Building giants Barratts and Taylor Wimpey made pre-tax profits in 2019 (even after paying their Chief Executives ￡3.6m and ￡1.7m) of ￡909.8m and ￡656.8m respectively. Barratts built 17,856 houses thereby making a pre-tax profit (after all on costs) of ￡50,000 per house. The Nationwide Building Society made a pre-tax profit of ￡833m in 2019 after having paid its Chief Executive ￡2.37m, including bonuses, and this despite profits having fallen from an all-time high of ￡1.2bn in 2016.  

Clearly there is sufficient money in the system to considerably reduce the price of new houses. House prices have to some extent be dictated by supply and demand and to reduce the price of new ones would have a knock on effect on prices generally and leave many home owners in negative equity – ie owing more on their houses than they are worth. Therefore the answer lies, not in reducing prices (although this would clearly be possible) but in increasing the incomes of the lower paid including those in the building industry so that deposits and mortgages are within everyone’s reach.

To quote the Apostle Paul: “money is the root of all evil”

No matter what social problem one considers the cause usually comes down to inequality, social exclusion and poverty and therein must lie the solution.

According to Philip Alston, special rapporteur on extreme poverty to the UN, Government Ministers are in a "state of denial" about poverty. During a twelve day visit to the UK last year he said that despite being in one of the world's richest countries he had encountered "misery". Quoting figures from the Joseph Rowntree Foundation, he said that more than 1.5 million people were destitute at some point in 2017, meaning they lived on less than ￡70 a week or went without essentials such as housing, food, clothing or heating. A fifth of the population, amounting to 14 million people, are living in poverty, Prof Alston said.

In contrast the pay of Chief Executives at businesses on the FTSE 100 index surged 11% on a median basis during 2017 while average earnings failed to keep pace with inflation, rising just 1.7% with inflation at 2.8% which means the majority of people were worse off. There was widespread concern during the banking crisis that whilst the majority suffered austerity those we were led to believe brought about the crisis prospered. For example as a result of the crisis the share value of the banks fell, but after the Government bailed them out share values rose and half the money paid to RBS went straight out in bonuses which were related to share values.

A consequence of this widening inequality is that there are now 3.9 million children living in poverty in the UK. This represents an increase of 200,000 in just one year. The Government has focused on making work pay, but two in three children who are in poverty have a parent who is in work. These parents are powerless to do anything to help their children. Children brought up in poverty are less likely to do well at school, more likely to have health problems, making a demand upon the NHS, and have a shorter life expectancy. This is unacceptable.

At just 29% of national average earnings Britain has one of the lowest state pensions in the developed world, with much of Europe paying in excess of 90% (100.6% in Holland, 94.9% in Portugal, 93.9% in Italy, 91.8% in Austria and 81.8% in Spain). To put this into perspective the living wage is ￡18,000 per year: the basic State Pension is ￡8,767 per year.

There are 1.9m older people living in poverty many of whom were forced into retirement and condemned to spending the rest of their lives in poverty. In that until 2011 it was perfectly legal to deny people work or retire them on grounds of age alone. I have argued previously that the way to deal with the funding crisis in health and social care could well be to increase the state pension, to reduce demand upon health and social care, in that 4/5ths of the expenditure of the NHS goes on older people and there is a correlation between income and demand upon the NHS in all age groups. It is hardly surprising, therefore, that ￡19.6b was spent by the NHS treating malnutrition amongst older people in 2017. 

Addressing Income Inequality

During the banking crisis I promoted a petition on the Number 10 Website calling upon the Government to legislate to restrict the pay of the highest paid Director / Employee of a company (including the banks and utilities and Chief Executives and Chairmen) to an agreed multiple of the lowest paid and that bonuses should be restricted to an agreed percentage of profits (not related to share values or multiples of salaries) and shared pro-rata amongst all who contributed.

Clearly this would not apply to people who get royalties from record or book sales or patents or fill theatres etc but to all those who are appointed to jobs in pre-existing companies, and especially those who circulate around major companies creaming off millions. The salaries of the super rich often run into millions as do their bonuses. For example it is thought that Bob Diamond, a former Chief Executive of Barclays, took ￡125m out of the bank for his own personal use during his five year tenure whilst making 30,000 people redundant before moving on to pastures new leaving counter staff over worked and customers queuing for service.

We can’t meet one basic human need by sacrificing another

Travelling around the UK one gets the impression that there is more house building going on than ever before with new estates springing up on green field sites gobbling up agricultural land. This is at the time that we are leaving the EU, the “single market” and the “common agriculture policy”. About 30% of all our food is currently imported from EU Countries, particularly Spain, and for some products not grown here it is 100%. In 2016 more than ￡30.3bn of Britain’s food imports and ￡12.3bn of its food exports were with the EU, totalling almost ￡1,300 of trade every second and highlighting the scale of economic disruption if the current trade negotiations result in tariffs. With Boris Johnson claiming he will walk away if trade negotiations are not going well by June, World Trade Organisation rules could impose average food import tariffs of 22% and inspections lead to delays shortening the shelf-life of products. Therefore there will be increasing demand for home produced food at a time agricultural land is being swallowed up and the Government’s proposed “points based immigration policy” may deny our farmers the very labour they depend upon.

It could prove very convenient to blame increased prices and food shortages on an outbreak of Coronavirus when, in reality, it is a direct outcome of Government policy.

Since the end of the Second World War there has been a 65% reduction in the number of farms in the UK and a 77% reduction in the number of people employed in agriculture. Remarkably productivity has increased fourfold.

There are currently 23.07million acres of agricultural land in the UK although it has not been possible to calculate how much land has been lost since the end of the Second World War in 1945. What we do know is that the population of the UK was 48.67m in 1945 compared with 66.44m now. During the Second World War, when we could not get food from Europe, people were encouraged to have allotments, which have also declined, to supplement vegetables produced by the then number of farms 

Therefore one must ask how many new homes do we actually need?

Statistics published by the Ministry of Housing, Communities and Local Government (MHCLG) put the number of empty homes in England in October 2018 at 634,453. This represents a 4.7% increase on the previous year's total. In 2019, there were 19.2 million families, an increase of 0.4% on the previous year, with a 6.8% increase over the decade from 2009 to 2019. The number of households grew by 0.9% since the previous year to 27.8 million in 2019, an increase of 6.8% over the last 10 years.

Since 2017, an additional 292,000 people (a statistically significant increase of 3.8%) aged 16 years and over are estimated to live alone bringing the total number of one-person households to just over 8 million (15% of the UK adult population) in 2018.

There are over 2.2 million people aged 75 and over living alone in Great Britain – an increase of almost a quarter over the past 20 years. Older people who live alone are twice as likely to visit or be taken to A & E at hospital.

Many of the 2.2 million older people who are living alone are in two, three and four bedroom houses. Many would wish to stay in the home they know, where their memories are and where their children can visit. Others would down size if suitable housing was available (the Government is intent on building family homes for first time buyers) and if the cost of moving – i.e stamp duty, estate agents fees, removal costs and legal fees etc – were not so great. Therefore the Government might consider some financial relief for older people who wish to move to a home with fewer bedrooms to free up the top of the market and enable people to move up the ladder freeing up homes for first time buyers.

Addressing income inequality is key

From the above it is clear that there is more than enough money in the system to considerably reduce the price of new houses so that they are affordable but this would have a knock on effect and leave many home owners in negative equity and is therefore not the solution. What is required is a redistribution of income so that houses are affordable for all and a rethink as to how need is met from within the existing stock.

With 634,453 empty houses and 8m single person households it should not be beyond the ingenuity of the human race to meet the alleged shortfall of 1.2m homes without swallowing up more agricultural land.

However with so much money to be made out of the current system and house building it is doubtful that the needs of the wider population will be considered.