The answer is public

tim — Sun, 31 Aug 2008 16:27:04 +0000

Even the dogs in the street now know that something has to be done about the housing crisis, but the government is confused over what aspect of the crisis to concentrate on.

Its pronouncements have tended to prioritise the “need” to restore confidence in the housing market, which means stabilising the finances of lenders with cheap state loans.

This will do little to increase the number of mortgages being offered to first-time buyers or to assist overstretched homeowners hit hard by the rising cost of borrowing.

Banks and other financial institutions will use these cheap funds to ensure that directors and shareholders do not bear the brunt of the financial crisis.

The relevance of this approach to Britain’s real housing crisis oscillates between negligible and nil.

There are huge numbers of people who need decent accommodation but who are in a position neither to buy nor to rent privately.

The government has to draw a distinction between the financial crisis in the housing market, which was caused by the banks’ greed and reckless speculation, and the real housing crisis, which expresses itself in growing numbers of families and individuals being denied the right to a decent home.

New Labour ministers are too ready to accept the neoliberal argument that government should not involve itself in housing provision.

On the contrary, the housing crisis is so serious that it requires a response almost as determined as that needed after the second world war to overcome shortages and drive up housing standards.

The government-led, non-mandated retreat from public provision, ownership and management of housing has been a disaster.

Reliance on market forces in a situation of ever-growing demand has driven up house prices astronomically, reserved most local authority housing stock for those on benefits and driven low-paid and even average-income workers into the grasping arms of the private rented sector.

Government funding of new council homes, with a return to restriction of the right to buy, could make a real dent in homelessness and help to hold down runaway inflation in the housing market after the current slump.

It could also be used to enforce advanced environmental features to reduce pressure on energy and water resources. If the government restricts itself to bailing out the banks, it will fully deserve the contempt that it brings on itself.

Council | ukwatch.net

The answer is public