Labour’s Britain: A public housing boom

Fabian Hamilton MP

Almost every Labour councillor and most Labour MPs, especially those representing inner city communities, will tell you that their largest area of casework involves housing. For many, it’s the lack of any social housing to meet their constituents’ needs, for some it is overcrowding, poor quality homes, the oppressive bedroom tax, inefficient repairs, or damp accommodation. Social housing is reaching a crisis point and trying to rent in the private sector is now too expensive for many with the prospect of purchase – even in poor inner city areas – almost beyond reach of most families, especially when the deposit demanded by lenders is so high.

Labour has pledged to build 200,000 new homes every year for an entire parliament should it win the next general election in May 2015. I know that I’m not alone in suggesting that those homes should be almost exclusively social housing – homes for rent in the public sector.

I know that it’s not fashionable to talk about delivering any large project in the public sector, but I believe that the majority of our large, now mainly Labour-controlled, city councils have the capacity and ability to manage the construction of thousands of much-needed low-cost homes for rent in order to satisfy the massive demand from so many people who are in desperate need throughout the country. So let me offer some possible ways in which this could be achieved.

Many local authorities in Britain have small or even large areas of land which they own and which have not yet been sold off to private sector developers. But at the moment, squeezed councils do not have the finance or the permission to start building homes for rent. I am suggesting that we can change all this by creating two lean new organisations which would facilitate the financing and construction of highly efficient low-carbon houses to rent: I am not proposing a modern version of the vast council estates of the sixties, but well-built homes, carefully designed using the latest materials and which emit very low, or no carbon so that energy bills are also massively reduced.

By creating a National Housing Investment Bank, run by people who understand banking rather than by civil servants, and which can attract private sector investment by offering bonds with a guaranteed rate of return over a lengthy time period, and combined with taxpayers’ money to finance the construction of at least 200,000 homes a year, a Labour government could ensure that the money was there for councils to use the land they own in order to provide the housing that is so badly needed. The bank would be run efficiently along business lines but on a shoestring so that finance costs would be as low as possible. This would not be another Department of State but a delivery vehicle for public housing construction.

It’s well known that construction is one of the best ways to regenerate an economy. It provides the opportunity for many jobs, for necessary skills training, and most construction materials are sourced within the UK, so it doesn’t suck in imports. New homes also create demand within a local economy for soft and hard furnishing, white goods and other services, especially if the construction is done by local building firms using local labour.

My second proposal for ensuring the delivery of these new public sector homes is to create Public Housing Authorities which would be based around the regions of the country, for example the Yorkshire and Humber Public Housing Authority would take in all the local authorities within West, North and South Yorkshire as well as the Humber area and would ensure the bulk buying of materials, the tendering and commissioning of construction contracts and the efficient use of resources like land. The would also be the bodies which negotiate with the Housing Investment Bank for the funding of projects within their regions and they could be accountable through being managed by a mix of local councillors and the representatives of tenants groups.

Obviously these ideas need careful thought and detailed development before they can be implemented by an incoming Labour Government. But just imagine the effect of thousands of new building sites on brownfield land up and down the country constructing environmentally sound well-made but highly affordable homes which are not for profit, but which will satisfy the massive need of our citizens. Combine the regenerative effect on our economy and the new jobs and skills that would be created by this huge programme of house building and it’s hard to understand why we would not back the idea totally.

It solves so many problems and gives hundreds of thousands of citizens the one thing lacking in their lives – a decent, stable and affordable home where they can live in peace and security without worrying how they will be able to pay the ever increasing energy bills. That really would show Labour values in practice.


  1. Paolo Sanviti

    Good housing policy for the continuous improvement of living conditions. Social justice for social development and progress (no empty rhetoric).

  2. Anthony Sperryn

    I sometimes despair about housing in Britain.

    On the one hand, we have masses of charming, but antiquated, houses that are desperately inefficient environmentally, difficult to convert and expensive to manage. On the other hand, we have a construction industry dependent on land speculation and backed up by a finance industry reliant on front-end commissions.

    I like the emphasis on carbon-efficient new homes in this article, but it doesn’t seem to me that the construction industry is geared up to build them.

    As far as finance is concerned, I fear that a National Housing Investment Bank can only be a dream at present. Nowadays, “people who understand banking” are few and far between. The middle layer of managers has gone – computerised. There was once a solid, local housing finance industry based on building societies. They weren’t perfect, or perfectly managed, but they understood risk and only occasionally tripped up.

    Unfortunately, the bigger building societies over-reached, over-rewarded their managers at the time they were de-mutualised and most of them have vanished in a puff of smoke.

    Furthermore, since depositors get virtually nothing for their money at the present time, I can’t see that a ready supply of money is going to be available on the basis set out in the article. I find it difficult to see that many people are going to be available to run a bank “effiiciently along business lines but on a shoestring”.

    In saying the above, I would not disagree with the need for better, more, carbon-efficient homes, but we are up against a serious misallocation of the existing stock, as well as shortages in places of demand and foreign money pushing up prices in London, which has a ripple-out effect throughout the country.

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