Thursday, 16 April 2015

Have the Tories have abandoned the middle classes?

I wrote earlier this week about selling social housing to tenants, and the circumstances where it could be a radical idea again, as perhaps it was in 1980 - backed at the time, rather bravely, by the Liberal Party's housing spokesman, David Alton.

Of course, what we didn't know then was that local authorities would be forced to hold onto the money they made from the sales, rather than investing them in new stock.  That small mistake made an excitingly radical idea into the foundation of our current housing shortage.

What I wrote seems to have been read more widely than my posts usually are, and especially for some reason in the USA - it was copied in Florida (thank you, Maria!) and I've found myself on the receiving end of fascinating responses from there.

I've also had a number of online conversations with people who don't agree with me that the independence of owning a home is in any way superior, or that it should be extended to the poor as well as the rich.

I realise it is politically correct to say that renting is morally preferable, but that seems to me to deny the obvious - that wealthier people have a privileged independence not open to renters.

The idea that has really caught the imagination of radicals in Florida is the TINY home, a self-built home built to the size of an average car parking space (89 square feet).  There is rather a good film about it - but since I know that, in London, young people will soon be forced to live in tiny temporary cabins, I don't feel quite the same excitement about it as they do over there.

What they do have in the USA which we can learn from is the Habitat programme of community-led self-building, though it does have a track record in the UK (and something related is in the Lib Dem manifesto).  Self-build social housing was pioneered in Lewisham in the late 1970s over here - in the teeth of opposition from the local Labour Party.

Because it seems to me that, traditionally, both Labour and Conservative have their heads in the sand over housing.  We are clearly expected to look back fondly on the council house sales policy of 1980, but then most of those outside Westminster are aware of how much the world has changed since then.

We were already talking about house prices in those days, in training for a thousand dinner parties to come, but actually – compared with what came later – the average price of a home in the UK was very low: £18,000 (now worth about £74,500 at today’s values).

This was not quite the 1930s, the heyday of house buying, when a new semi-detached cost just over £500, available with a down payment of £50, and when mortgages cost about 10 per cent of a middle-class income and were paid off within sixteen years. But looking back, 1980 was actually the beginning of the extraordinary process which – over the next three decades – has goaded the rise in prices so brutally that it has ended the house-owning dream for many people, and which now, more than anything else, threatens the very existence of the middle classes.

See more about this in my book Broke.

This was the peculiar thing about Cameron's presentation on Tuesday about 'working people'.  As if somehow working people were the only people in difficulties, when - if you are not on the housing ladder already - working class, middle class, every class are in precisely the same sinking boat.

The Conservatives have failed to grasp that the vast majority of people in the UK, especially those under 40, are now priced out of civilised life.  They have failed to grasp that the so-called 'affordable' housing still requires combined salaries of £100,000 or more.  They have failed to understand that, far from spreading home ownership in the UK, we are increasingly dependent on Big Landlord plc.

It is, in short, a huge lie.

In those circumstances, letting 27,000 tenants a year buy their social housing at a discount is really neither here nor there.  It is a symbolic policy, of course, but there is nothing behind the symbol.  Meanwhile, the young middle classes wither on the vine.

Can we imagine a policy that might have some chance of tackling the problem, both helping 'working' families and keeping the middle classes alive?  Here is mine:

1.  Build new homes to give away to tenants, along the lines of the Lib Dems rent-to-own scheme but on a much bigger scale - on condition that, if they are given a discount, then the home must stay at that discounted price for 30 years.

2.  Clamp down on banker's bonuses and foreign investors which are currently pushing up prices so disastrously (we might be able to build enough to satisfy our own demand, but not Singapore's as well).

3.  Give all tenants, public and  private, the right to buy their homes.

Will it be enough?  No, but it would shift the power.  And let's be clear about it: there was no recognition in David Cameron's statement of quite how tyrannical the situation has become - for everybody.

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Wednesday, 15 April 2015

Does anyone hear 1940s political language any more?

I have been reading the Lib Dem manifesto.  Well, I had a couple of days to spare.  And it is an impressive document.  No political party can ever have written quite such a detailed manifesto before.  I've been wondering why.

In fact, the manifesto reveals what the Liberal Democrats have become after five years in coalition.  Detail orientated.  Deeply pragmatic.  Determined to deal with the world as it is, not as it might be.  It's great advantages are that some of the commitments are vital and bold - the commitment to zero-carbon Britain by 2050, for example.  But there are disadvantages too.

It reveals itself as a document written in Whitehall.  Its small commitments are spelled out in painful detail.  Its big ones remain vague.  It has figures running through the thing like a piece of Blackpool rock.  And the language is old-fashioned: does anyone hear commitments in 1940s language - 'healthcare for all', 'prosperity for all' - any more?

Of course, this is not a document written for the public.  It is a document written to be used in coalition negotiations, and as such it works very well.  But it is so hard-headed a document that people may not feel like spending too long in the company of the party which drafted it, for fear that they will start spouting statistics at them.

Like other documents written in Whitehall, the authors forget how little people hear figures - especially when they involve amounts.  Most people, in my experience, don't hear a difference between million and billion unless they are very familiar with the debate already.

I have to declare an interest - the two major proposals I have been working on for the past two years are both missing.  This is very disappointing, but this isn't the moment to spell them out, and they are at least hinted at.

Perhaps the real problem is that it bears the scars from Whitehall battling over five bloody years.  It assumes the existing arrangements, uses the word 'continue' rather too much, thinks ahead too little and does not even attempt to inspire.  Its cover emphasises the failure to join up ideas.

Perhaps that is the right strategy this time.  I don't know.  But for all these reservations, it is a real achievement too.  It is an extraordinarily comprehensive compendium of how we would bend the system, without too many running battles in the corridors of power.  It leaves no doubt - and I realise this was the intention - that everything there is eminently achievable.

It is a hymn of praise to a highly complex system of government, and a commitment to change it a bit.  Yet don't be under any illusion - if we have a zero-carbon Britain by 2050, and free school meals, and a new Freedom Act, and a network of community level banks, and many other things that are all in there somewhere, the nation will look very different.

I just hope people read it, but wonder...

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Tuesday, 14 April 2015

Build more homes and then give them away

The Conservatives have announced an extension of the right to buy.  It is an important, populist idea, but it carries within it a serious flaw.  Enacted in the right way, it could be liberating.  Imagine the shift in power if this was applied to private tenants too.  Enacted in the wrong way, it will be inflationary, tyrannical and destructive.  

So, instead of dismissing the idea out of hand, let's think about how something along these lines might be achieved, as it should be.  Because the record of politicians over the past generation has left us a housing legacy so toxic (see Mark Jordan's television programme last night) that something demands to be done about it.

The Lib Dems alone have come out with at least three major policy announcements to help with the housing crisis, so the electorate might be forgiven for not remembering any of them.  Which is a pity because, so far, the commentators have missed what is an important and  innovative idea - and, for me, by far the most important proposal of the election so far.  The proposal for rent-to-own social housing.

I can't think of any area of public policy where we needed something generous and imaginative which cuts through the usual tired old stuff more than we do in housing.

Here is the division, and you have to put it in stark terms - because both big parties of government (I'm referring, perhaps for the last time, to Labour and Conservative) support both these untenable positions.

Position 1.  We need to extend home ownership.  We do, of course, but the political rhetoric ignores the fact that it is plummeting like a stone because successive generations of politicians have done nothing about rising house prices - or the too plentiful finance pouring into the property market and pushing up prices to ruinous levels.

As I explained in my book Broke: How to Survive the Middle Class Crisis, home ownership - even in London - is now below Romania or Bulgaria.  We are becoming dependent supplicants to the new landlord class, the rentiers which Keynes once told us deserved 'euthanasia'.

Position 2.  We need more social housing.  Again, we do.  But again, this is all political rhetoric and battling by number, aware that - in the past (for example under Harold Macmillan) - high target numbers meant low quality housing which would become slums themselves a decade or so later.

Worse, the political rhetoric stops there, so that social housing becomes an end in itself.  We trap poor people in ghettos, and leave them there, preventing their escape.  And we congratulate ourselves, as a society, because we are providing social housing for rent.  The quality of that housing for rent has been, certainly in my lifetime, deeply dehumanising high density places, where people are given little or no control over their environment.

That is the besetting sin of Labour housing policy.  In fact, the appalling housing Labour built in Scotland over two generations explains a great deal about their difficulties as a party north of the border. See Labour's hutches for the dependent poor pictured above.

I've come to believe, as a modern Distributist, that the way forward has to be building new homes and then giving them away - on three important conditions:
  • They do not go back onto the open market and fuel house price inflation (ownership need not imply the right to sell).
  • They stay at the same nominal price they were originally sold for, ratcheting down the rest of the market, perhaps for a generation or so.
  • They are built in sufficient numbers to satisfy demand.
Simply giving away social housing also works, but not if it fuels inflation and isn't replaced.  But if the social housing is replaced, giving it away seems to me a more Liberal solution, given that it  provides people with genuine independence.  I've got no time for the idea that, because people are poor, they must be forced to pay rent.

Which leaves us with the issue of how it can be affordable.  The Lib Dem solution suggests a model - rent-to-own, giving people progressive ownership rights thanks to the rent they pay.  I'm only sorry they are only promising a pathfinding 30,000.

I'm also sorry that the proposal appears, so far at least, to have got lost in the crossfire.  It is a policy of huge significance and it deserves to be heard.

Because unlike today's Conservative proposal, which involves the destruction of voluntary sector housing, it has some chance of happening.

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Monday, 13 April 2015

The antidote to nationalism: Liberalism

It is now four days since an incredibly bored Daily Telegraph correspondent on the Lib Dem battlebus tweeted in desperation that the bus had just run over a pigeon.

It was a dull day on the election front - it usually is (did you understand a word of Ed Balls' interview on the Today programme this morning?) - and the political media fell about laughing, presumably because they believe the Lib Dems are doomed and that this was some kind of omen.  I was even commissioned to write about it for the Guardian.  You can see what I came up with here.

But the exercise made some things come home to me powerfully.  One was what makes this election different from others: this will be remembered as the nationalist general election.  It is the election where the real issues have become confused because it isn't clear where the heart of the debate lies.

The truth is, it isn't really about spending commitments or otherwise - which most of the electorate take with a pinch of salt.  The central debate is about nationalism, English and Scottish.

This is the case most obviously in Scotland, of course.  One of the peculiarities of UK politics is that Liberalism and celtic nationalism often look a bit like each other.  They both seem to back local self-determination.  I remember my great-aunt (a liberal and a Liberal) saying that the only nationalism that English Liberals have a soft spot for is Irish nationalism.

In fact, the contrast could not be greater.  Liberalism is about self-determination at every level, local, regional and personal.  For nationalists, it is the nation and only the nation that counts - and that overrides local interests just as it over-rides personal ones.  That is why nationalism ends up sooner or later in intolerance.

That is all the more important in England where the intolerance is clearer and where, I have come to believe, that there is some kind of reverse relationship between Lib Dem and Ukip support. It seems clear to me that the Ukip vote is now falling and the Lib Dem vote rising, but so little that this isn't obvious yet.  Even so, I predict that Ukip will end up behind in the national vote share as well as seats.

That would then be for me the main message of the campaign, if it was to come about: tolerance and genuine self-determination faces down nationalism.  And in Scotland, I have a feeling that only a Lib Dem vote will achieve it.

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Thursday, 9 April 2015

Iceland, the Greens and the money revolution

The Green Party is a bit of a conundrum.  Go to their events and you find a strange division between the articulate, highly effective handful of activists who make things happen and the rest - who tend to be mildly misanthropic, angry types.  Perhaps a bit like me.

I have no difficulties at all with their basic premise.  It is the overlay of mushy do-gooding kind of unthinking positioning on the left that I find infuriating.  It shows little or no thought about the real changes that a greener society would require, especially a society no longer in thrall to economic growth.

They are against student loans, and heavens they may be right - but it isn't a principled stand.  It is a thoughtless one.  Especially as, behind this unco-ordinated positioning, there seems to be a great deal of equally uncritical rage.

I understand this positioning is designed to attract disaffected Labour and Lib Dem supporters, who would - I would have thought - come to them in even greater numbers if they had genuinely thought through the kind of policies we need.  But nobody has.

Consequently, they are blocking progress towards the big shift we need - which will have to attract the conservative right as well as the conservative left if it has any chance of shifting the political world on its axis.

But then, the Greens have at least had the guts to propose a bold Liberal solution: a citizen's basic income of £72 per person, as of right.

This is a traditional Liberal policy, proposed originally by Conservatives working with Beveridge, who saw it as an antidote to the huge bureaucracy of welfare state means-testing.  It would set people free from poverty in a dramatic and effective way, and it would slash the corrosive bureaucracy of welfare.

The trouble is that the Greens have not costed it.  Nor is it possible to cost.  As far as I know, nobody has found a way that such a policy could be even marginally affordable under the current design of money.

When the Social Credit Party of Alberta took control in 1943, their similar basic income proposals were ruled illegal by the Canadian supreme court, since when nobody has even tried.  But changes are happening elsewhere which might make this idea more practical.

The Prime Minister of Iceland, Sigmundur David Gunnlaugsson, has commissioned a report proposing a change in the way money is created.  At the moment it is created by banks in the form of loans, and inflation is controlled by altering the central bank interest rates.  The proposal is that this should change: money would be created interest-free by the central bank instead and issued into circulation - well, that isn't clear, but potentially as a citizens' income.

This is an outline of a far more stable economic system.  Its other implications are not clear either, except that it would change domestic banks from money-creators into money-warehousers.  It is the proposal put forward in the 1930s by the Chicago School economists, and never enacted.

If Iceland goes ahead - and they might - this could herald one of the big shifts in economics everywhere.  If it fails, of course, it will be forgotten.  But if it succeeds in creating a more stable economic system that spreads prosperity, other countries will follow suit.

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Wednesday, 8 April 2015

The historic destiny of the Lib Dems. There is one.

One of the highlights of the Guardian's election coverage over the weekend was the group of 'blind dates' between opposing politicians they set up - Caroline Lucas with Vince Cable, Danny Alexander with Stella Creasey and so on.

One of these was an unlikely pairing between Natalie Bennett and the ultra-Tory Jacob Rees-Mogg, and it was here that he was quoted as explaining the basic two categories of Liberal Democrats:

"The Lib Dems have two strains: the classic liberal strain, which is essentially Peelite and quite conservative, and the Social Democrat strain, which is closer to Labour; so they could emphasise one bit of their personality to do a deal with either side..."

I was unnerved by this, not because I'm unaware that people think this, but because - for one awful moment - I thought to myself: maybe he's right.

I recovered my sense of myself, and my sense of the party I belong to, shortly afterwards.  But just imagine, if Rees-Mogg was correct.

It would mean that there would be no place for me in the standard bearer for Liberal parties everywhere.  I am not a Peelite Conservative and am, in no sense, a social democrat.  It would mean there was no place for Liberals either, as I understand them - and other people who recognise that same Liberalism in a straight line from Cobbett, Russell, Gladstone, Lloyd George, Grimond and so on.

It would mean that the ideology that shapes what I believe is no more than an awkward compromise between conservatism and social democracy, both backward-looking creeds, when I see myself as something quite different.  Liberalism, it seems to me, is an essentially forward-looking creed.

Nor can we really blame Jacob Rees-Mogg for misunderstanding.  If the party has failed to explain where they stand, what their ambitions are beyond coalition, then really it is their own fault.  I was on the party's federal policy committee for 12 years - it must be my fault too.

Yet, even in government, it seems to me, the party edged towards a Liberal view of the world whenever they could - apprenticeships, mutualism, green energy investment, local government involvement in health.  Perhaps the mistake was in failing to explain how these little shifts fitted into a Liberal approach that went beyond the sum of its parts.

This isn't the right moment to pick over the remains of the coalition years - they may not have finished, after all.

Nor is it really the right time for me to have another go at a future articulation of Liberal economic policy.

But I do think this.  Every 40 years, with some accuracy, there is a major shift in economic thinking in practice in the UK.  The next one is due in 2020 or thereabouts.  The outlines are already clear: it will sweep away the brittle, basically destructive power of finance.  It will reshape the economic landscape so that ordinary life can be affordable again, and can stay so.  It will end the growing chasm between the tiny elite and everyone else.

The big question is how.  It won't happen until all sides agree broadly about how it can be achieved, and I have some ideas myself, and then - when the crisis hits - the political parties are able to shift relatively seamlessly to the new dispensation.  History suggests these shifts happen, in the end, quite fast (1979/80, 1940, 1908/09, 1868, 1831 and so on, and so on).

One political party needs to hammer out the basic outlines of the post-Thatcher/Reagan economics in practice.  It is the historic destiny of the Lib Dems, it seems to me, that they should play this role.  Inside or outside government, that is their task in the next parliament.

Why them?  Because deep in the Liberal soul, it seems to me, is an understanding of how economies might work quite differently, and based on an idea that flies in the face of everything we are now taught: that small plus small plus small plus small equals big.

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Friday, 3 April 2015

I was wrong three times over about the leaders' debate

Well, I was wrong.  I was wrong on many counts. 

First, I thought last night’s debate with the seven leaders would be boring but found it was able to cover some issues which would never have been otherwise covered at all – though climate change only got a nod, even from Natalie Bennett.  I don’t agree with my friend Nick Tyrone that it was dull – not in comparison with the boring snoring (as they say) prime ministerial grilling by Paxman it wasn’t.

Second, I was wrong that Miliband was recovering his style.  I realise this isn’t the way the polls saw it, but I thought he came across as rather creepy, with long lists of policies that seemed incoherent.  I thought he got a drubbing on the NHS, and his hand signals seemed embarrassingly masturbatory.

Third, and I’m happy to say this, I was afraid that Clegg’s simplistic positioning as neither one thing nor the other would miss the point – that it would be too anodyne to catch attention.  In fact, it suited the occasion very well.

It was delivered with passion and personality.  I am, of course, biased, but I thought Clegg managed a kind of effortless dominance over the debate, where Cameron was too tired, Farage was too unpleasant and Miliband was too peculiar.

What  I hadn’t realised was that four of the leaders (Miliband, Sturgeon, Wood and Bennett) would simply outline a sort of vague lefty conservatism, a rather woolly condemnation of bad things and demand for good things, and that would make the Clegg formula stand out.

I’ve read the polls.  I know this isn’t the popular view, and I have tried to see the events of last night through the eyes of someone who was less committed.  I have obviously failed.

But I have a feeling that Nick Clegg managed to build the foundations of a fight back last night that will resonate with people over the coming weeks.  That isn’t clear yet.  Nor is the sheer creepiness of the leader of the opposition.  But my guess is that it will be.  We will see.

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