Breaching the wall

The government must overcome the divide between the public and
private sector in housing if we are to provide good quality
accommodation for both the low waged and the well off, writes
Conrad Russell.

As a place to be born, there is something to be said for a
manger – provided it isn’t in present-day Bethlehem. Cattle are a
good deal more predictable, and probably gentler, than some of the
more despairing denizens of bed and breakfast accommodation. There
is crawling room in a manger. It does not produce cases like the
one that puzzled doctors recently, when they saw a child of 18
months who could not crawl. They assumed a serious physical
problem, but could not find it. It turned out that there was no
space between the bed and wall in which the child could have
learned to crawl.

Where B&B means what it says, there is usually a problem of
hunger. Income support is not designed to finance eating out for
two meals a day, and 20 people queuing for three gas rings, with
toddlers trying to pull things off stoves, is a prescription for
scalded children and empty stomachs. In 1992, the House of Lords
voted for an extra supplement on income support to allow those in
B&B to eat. Because the suggestion came from the Lords, the
government ignored it. And because many children in B&B do not
have a school place, they do not even receive free school
dinners.

It is, as usual, much easier to identify a problem than it is to
offer a solution. We could put right some of the more obvious
things the Major government did to make the situation worse, though
there is little sign of this happening. We could, for example,
reverse its decision that income support for mortgages is not
available for the first nine months. This change would do much to
reduce homelessness. So would serious help with deposits through
the social fund.

Yet all these are palliatives for a general failure of housing
policy. It is tempting to ascribe the failure of British housing
policy to population density, yet it is not an adequate answer. I
am not aware that Belgium or the Netherlands, which have similar
population densities, have housing problems equivalent to ours. Our
failure is essentially a failure to make a success of the private
rented sector, which has been shrinking in size since 1919, the
extent of which is unparalleled anywhere in Europe. That failure is
peculiarly British, and results, I think, from the distinct
class-based structure of British party politics. That has made the
role of the market in housing provision a battleground in a way
most European countries do not understand, and has meant that every
successive government policy has been dismantled by its successor
before we had a chance to find out whether it would work.

There are features in the subject of housing that point both
ways. If we assume that public and private sectors are good at
different things, housing demands the abilities of both. The
private sector demands, and tends to produce, adaptability,
flexibility, and the crucial commodity of supply. Landlords who do
not make a profit are unlikely to continue to absorb the problems
involved in renting property.

The private sector in London is capable of supplying housing to
a global market. For example, it can provide accommodation to
enable a banker from Osaka to come to London and work.

Yet when we look at need, we see other things that the private
sector is not suited to supplying. We see a need for universality
that the private sector is not equipped to meet. It is the nature
of the private sector to cherry-pick, and it is the Osaka banker,
not the Cockney waiter, who gets the cherries. Asking a market to
supply a universal service is about as appropriate as asking pigs
to have wings. It is not its nature, and if it does, it is no
longer a market.

Equally, it is not the nature of a market to make less money
than it could. If there is a market for high rent luxury
accommodation, it is no use expecting the market to supply cheap
accommodation for people on low wages. Markets are by their nature
undependable; how else could they supply their major virtue of
adaptability?

How do we cope with this mixture of needs? There are two
possible approaches. One is that we could sit down and do some hard
and serious thinking until we come up with a public-private mix
that meets this illogical combination. This may be possible, but it
is extremely difficult. The other, which is more often the
continental way, is simply to forget about the ideology, and let
the system evolve until it comes up with some remotely possible
blend of systems. What is not the solution is to engage in an
ideological struggle for supremacy between the service and the
market visions of housing in which both sides press for a complete
victory, which will always be a pipe dream. That should have been
pulled down with the Berlin Wall.

Conrad Russell is Liberal Democrat social security spokesperson
and professor of British history, King’s College, London.