i entirely agree that a significant portion of the SGs housing policy looks good but is doomed to failure.
However state funded housing in my view remains the answer.
Given that local authorities if allowed to borrow can do so much more economically than the private sector,and given the very large amounts spent on Housing Benefit , in the long term public housing must surely be a viable solution.
Put it another way: there doesn’t appear to be any other.
Of course short term subsidies will be necessary: increased tax on capital as well as reducing tax exemptions ( such as iSA s )seem perfectly viable and don’t require going anywhere near the more sensitive are of increasing income tax
Yes agreed that local authorities should be able to issue bonds to finance house-building and as I understand it the Scottish Government does have the power to issue bonds under the 2016 framework. But it hasn’t done so. I think probably the shadow of PFI hangs over the bond question - rightly or wrongly. The SNP’s non-profit distribution model turned out to be little better. The bottom line of course is that issuing bonds means local authorities are subject to the demands of the financiers - often pension funds - which will require a return on investment - a profit. I mention this in the column. They aren’t philanthropists. My main point is that in a capitalist economy everyone is ultimately subject to thr disciplines of the market.
"A quarter of a million people are on the social housing waiting list in Scotland and it’s only really available for benefit claimants."
That is absolute nonsense. In my own area new housing has been built by SLC and most of those houses have gone to working families.
"It sometimes looks as if the only building allowed in Scottish cities is for students."
Well, yes, because the main Parties, Labour and Conservative, used further education as a means to cover up the lack of jobs available for young people and, suddenly, everyone wanted into Uni with accompanying Student Loans to fund fees (in rUK) and all the other debts that go with that. And even in Scotland, unis are making plenty out of non-Scottish students in the way of fees. It's big business and a cash cow. (Incidentally, there are many new premises for "students" currently being built in Glasgow, most headed by private (and foreign) companies all looking to make a killing.) Worse, suddenly everyone was "entitled" to go to uni and those bodies responded by messing with entry standards in order to meet that requirement, resulting in people leaving with "degrees" hardly worth the paper they were written on! (My sympathies, incidentally, are with potential employers who see "qualifications" presented by some who can barely write a single sentence.)
"Labour and the SNP blame Margaret Thatcher’s policy of council house sales. But that was 40 years ago and it is time this tired excuse was laid to rest."
That excuse remains valid because the knock on effect is still being felt. ALL receipts for sales of council housing went straight to the UK treasury, not to local councils. Councils, however, were left with the debts associated with those (now sold) properties, including mortgages/remortgages raised on them. Thatcher took the proceeds and left councils with the debts and the inability to build more houses to replace those sold. So, I repeat, Iain, highlighting Thatcher's role in all of this remains a valid point.
"House building has also been blocked by Nimbyism and restrictive planning laws."
Restrictive planning laws like not building on flood plains? The very description of such land makes the risks clear yet Gove is currently considering ripping up those planning laws. It is a disastrous policy. (Perhaps, when they build on land like that they'll throw in a free boat with the house, for a price of course!)
"Long term letting used to be a viable alternative to inflated house prices."
Not for me. Secure tenancies were never guaranteed.
"The result is that many buy to let property owners are voting with their feet and selling up."
The BTL industry was created by successive Tory and Labour governments and they were, and remain, for profit and nothing else. No empathy was involved for any landlord wanting to provide housing. If they are selling up now it's because they made plenty out of it when the going was good and are now squealing as interest rate rises are hitting their pockets, thus, those living in their properties and paying wild rents will be cut loose and turfed out.
"Yet landlords are not all bad and the truth is that Labour Chancellors like Gordon Brown supported the building of a private rented sector 20 years ago."
ALL landlords were in it for profit and little else. Some are just more responsible than others in maintaining their properties. Other than that, it's all about profit. And I know what Blair/Brown did to encourage the BTL industry. They even allowed the banks to introduce special loans for them. Shame on the pair of them because they're as much to blame for the mess we are in now re housing as the Tories.
"when taxes are already at a seventy year high."
This is just nonsense. When I started work in 1975 the basic rate was 35%. It is now 20%. The higher rates ranged from 40% right up to 65%. Capital Gains Tax regulations ensured the treasury took its share from those inheriting properties. Those regs have now been tinkered with in order to reduce the financial "pain" suffered by beneficiaries and make life a lot easier for them, the poor souls.
"Political parties like the SNP, Labour and the Greens...."
Not a mention of all the Tories have done on housing, Iain? No criticism at all? Not a thing? Just a ringing endorsement of "capitalism"?
Hi thanks for the comment. There’s nothing inherently evil about a private rental market - it works well in countries like Germany. Profits apply to every stage of the housing market and social housing is no exception. Construction companies make a profit, so do the financiers, and if they don’t they go bust and houses don’t get built. Same with governments if they borrow without growth. I’m afraid state socialism is not happening here or anywhere else. Regulated capitalism is the only recourse - everything else is fantasy
- I am also getting tired about the carping back to council house sales. Even if I accept your point about knock-on impacts, at a certain point you need to play the ball where it lies. The SNP have now been in power for 16 years - you would have hoped they would have been able to move the dial in that period even if they were in a tricky position.
- "Political parties like the SNP, Labour and the Greens....": This was referring to (I think) the less than devastating critiques of capitalism by these three parties. The Conservatives are exempted as they generally don't do capitalism bashing, although Johnson had his moments during Brexit. There is a decent case here, that the problem is not capitalism.
You have capitalism in one side of the equation (the demand side) - but even that had been artifically inflated by a decade of next to zero interest rates, at least partially to avoid a potential housing crash. Pure capitalism may well have had that price correction. On the supply side you get all sorts of restrictions, not least overly zealous planning rules. So one can criticise capitalism, but the problem here is not capitalism, but the bizarre hybrid mush that we have.
"when taxes are already at a seventy year high." - Iain is right on this one. Tax as a percentage of GDP is as high as it has been since the aftermath of the second World War. This is generally the accepted way to measure tax takes as it: a) offers more meaningful comparisons when comparing over time reflecting changes of general living standards etc. and b) includes all the tax take. To give an example of tax b): yes, you are correct that personal income tax and capital gains are lower now than they were, but what about the indirect taxes? To take the most extreme example, VAT was only introduced in the 1970s, and started at 8%. It is now 20% and raises 160 billion a year (roughly 65% of what is raised in personal income tax). It might not come straight out of people's pay packets, but it all ends up being paid by ordinary taxpayers.
I'm not here to defend the SNP, Neil. I believe that all Parties should be able to reach a fair consensus on housing. It should be a priority for all of them. Sadly it isn't which just makes me even madder that both you and Iain overlook the Tories because, well, they're not going to criticise capitalism or the real problem we face, GREED. What that Party has done to this country is criminal and I can't participate here any more while there's such a reluctance to hold them to account. I am 64 years old. I am a WASPI woman with health conditions that affect my daily life. The lies over that particular policy are legendary. "The longest delay for WASPI women will be 18 months." For me, it will be SIX years at a time when my health was not good. The Ombudsman has already found the DWP guilty of maladministration and yet successive Tory PMs have failed to do anything about that. Starmer isn't keen either. But, hey, let's hear it for capitalism. Let's not criticise capitalism. Let's be ruled by the markets and the wealthy.
I stand by my point re the impact of those council house sales and the major effect they had when Thatcher took the proceeds and left councils with the debts. I honestly don't believe many councils have recovered even now so I'm sorry you consider it "carping" to mention it. I'm not happy to let such a major thing go and pretend it didn't happen. The impact was catastrophic.
We are now dependent on private landlords who are, let's face it, in it for the money. Their purchases were "investments" and nothing else. With interest rates now up to the 14th rise in a row the casualties there will be tenants who will be turfed out if they can't pay more or if the landlord decides to sell the property. (It already happened to friends of mine, a wee family, who had lived in the home and made improvements to it over eleven years. They got months to move out and had to cater to "viewers" by being absent from the property while prospective buyers visited. Fortunately they were able to secure a proper tenancy with SLC and no, they're not "benefit claimants" as Iain suggests. They both work very hard and are dedicated parents.)
As for Germany, I found this yesterday and it's looking like it's not the wonderful place presented in Iain's piece.
Mostly, tho' I'm just sick of people who think through everything in political terms and, in journalism these days, that's the way it is. Sadly, they've become no better, and just as dishonest, as politicians. That makes me sad as I once had great respect for that profession. A quick glance at how far the once respected Herald has fallen makes clear just how awful things have become.
The other thing is, you can take all sorts of figures, mess around with them and make them mean whatever you like. Quite often, however, you don't prove anything at all.
however the capitalist economy shows no capacity to solve the housing crisis here or anywhere else and tinkering around the edges is getting us nowhere
i suspect there will need to be major modifications to the capital markets ( state control of some investment decisions) before the crisis improves. meantime as you set out young middle class families are seriously pissed off
this of course coincides with the development of AI which threatens the careers of the many young middle class people unless there is a very significant change to how economic decisions are taken : net result more pissed off young people
and of course the absence of any serious solution to climate change on the part of captains of industry jepordises everything
my impression is that if all these crises come together thete will be huge political pressure
i entirely agree that a significant portion of the SGs housing policy looks good but is doomed to failure.
However state funded housing in my view remains the answer.
Given that local authorities if allowed to borrow can do so much more economically than the private sector,and given the very large amounts spent on Housing Benefit , in the long term public housing must surely be a viable solution.
Put it another way: there doesn’t appear to be any other.
Of course short term subsidies will be necessary: increased tax on capital as well as reducing tax exemptions ( such as iSA s )seem perfectly viable and don’t require going anywhere near the more sensitive are of increasing income tax
Yes agreed that local authorities should be able to issue bonds to finance house-building and as I understand it the Scottish Government does have the power to issue bonds under the 2016 framework. But it hasn’t done so. I think probably the shadow of PFI hangs over the bond question - rightly or wrongly. The SNP’s non-profit distribution model turned out to be little better. The bottom line of course is that issuing bonds means local authorities are subject to the demands of the financiers - often pension funds - which will require a return on investment - a profit. I mention this in the column. They aren’t philanthropists. My main point is that in a capitalist economy everyone is ultimately subject to thr disciplines of the market.
"A quarter of a million people are on the social housing waiting list in Scotland and it’s only really available for benefit claimants."
That is absolute nonsense. In my own area new housing has been built by SLC and most of those houses have gone to working families.
"It sometimes looks as if the only building allowed in Scottish cities is for students."
Well, yes, because the main Parties, Labour and Conservative, used further education as a means to cover up the lack of jobs available for young people and, suddenly, everyone wanted into Uni with accompanying Student Loans to fund fees (in rUK) and all the other debts that go with that. And even in Scotland, unis are making plenty out of non-Scottish students in the way of fees. It's big business and a cash cow. (Incidentally, there are many new premises for "students" currently being built in Glasgow, most headed by private (and foreign) companies all looking to make a killing.) Worse, suddenly everyone was "entitled" to go to uni and those bodies responded by messing with entry standards in order to meet that requirement, resulting in people leaving with "degrees" hardly worth the paper they were written on! (My sympathies, incidentally, are with potential employers who see "qualifications" presented by some who can barely write a single sentence.)
"Labour and the SNP blame Margaret Thatcher’s policy of council house sales. But that was 40 years ago and it is time this tired excuse was laid to rest."
That excuse remains valid because the knock on effect is still being felt. ALL receipts for sales of council housing went straight to the UK treasury, not to local councils. Councils, however, were left with the debts associated with those (now sold) properties, including mortgages/remortgages raised on them. Thatcher took the proceeds and left councils with the debts and the inability to build more houses to replace those sold. So, I repeat, Iain, highlighting Thatcher's role in all of this remains a valid point.
"House building has also been blocked by Nimbyism and restrictive planning laws."
Restrictive planning laws like not building on flood plains? The very description of such land makes the risks clear yet Gove is currently considering ripping up those planning laws. It is a disastrous policy. (Perhaps, when they build on land like that they'll throw in a free boat with the house, for a price of course!)
"Long term letting used to be a viable alternative to inflated house prices."
Not for me. Secure tenancies were never guaranteed.
"The result is that many buy to let property owners are voting with their feet and selling up."
The BTL industry was created by successive Tory and Labour governments and they were, and remain, for profit and nothing else. No empathy was involved for any landlord wanting to provide housing. If they are selling up now it's because they made plenty out of it when the going was good and are now squealing as interest rate rises are hitting their pockets, thus, those living in their properties and paying wild rents will be cut loose and turfed out.
"Yet landlords are not all bad and the truth is that Labour Chancellors like Gordon Brown supported the building of a private rented sector 20 years ago."
ALL landlords were in it for profit and little else. Some are just more responsible than others in maintaining their properties. Other than that, it's all about profit. And I know what Blair/Brown did to encourage the BTL industry. They even allowed the banks to introduce special loans for them. Shame on the pair of them because they're as much to blame for the mess we are in now re housing as the Tories.
"when taxes are already at a seventy year high."
This is just nonsense. When I started work in 1975 the basic rate was 35%. It is now 20%. The higher rates ranged from 40% right up to 65%. Capital Gains Tax regulations ensured the treasury took its share from those inheriting properties. Those regs have now been tinkered with in order to reduce the financial "pain" suffered by beneficiaries and make life a lot easier for them, the poor souls.
"Political parties like the SNP, Labour and the Greens...."
Not a mention of all the Tories have done on housing, Iain? No criticism at all? Not a thing? Just a ringing endorsement of "capitalism"?
Jesus wept! What is wrong with you?
Hi thanks for the comment. There’s nothing inherently evil about a private rental market - it works well in countries like Germany. Profits apply to every stage of the housing market and social housing is no exception. Construction companies make a profit, so do the financiers, and if they don’t they go bust and houses don’t get built. Same with governments if they borrow without growth. I’m afraid state socialism is not happening here or anywhere else. Regulated capitalism is the only recourse - everything else is fantasy
A couple of points here Jo.
- I am also getting tired about the carping back to council house sales. Even if I accept your point about knock-on impacts, at a certain point you need to play the ball where it lies. The SNP have now been in power for 16 years - you would have hoped they would have been able to move the dial in that period even if they were in a tricky position.
- "Political parties like the SNP, Labour and the Greens....": This was referring to (I think) the less than devastating critiques of capitalism by these three parties. The Conservatives are exempted as they generally don't do capitalism bashing, although Johnson had his moments during Brexit. There is a decent case here, that the problem is not capitalism.
You have capitalism in one side of the equation (the demand side) - but even that had been artifically inflated by a decade of next to zero interest rates, at least partially to avoid a potential housing crash. Pure capitalism may well have had that price correction. On the supply side you get all sorts of restrictions, not least overly zealous planning rules. So one can criticise capitalism, but the problem here is not capitalism, but the bizarre hybrid mush that we have.
"when taxes are already at a seventy year high." - Iain is right on this one. Tax as a percentage of GDP is as high as it has been since the aftermath of the second World War. This is generally the accepted way to measure tax takes as it: a) offers more meaningful comparisons when comparing over time reflecting changes of general living standards etc. and b) includes all the tax take. To give an example of tax b): yes, you are correct that personal income tax and capital gains are lower now than they were, but what about the indirect taxes? To take the most extreme example, VAT was only introduced in the 1970s, and started at 8%. It is now 20% and raises 160 billion a year (roughly 65% of what is raised in personal income tax). It might not come straight out of people's pay packets, but it all ends up being paid by ordinary taxpayers.
I'm not here to defend the SNP, Neil. I believe that all Parties should be able to reach a fair consensus on housing. It should be a priority for all of them. Sadly it isn't which just makes me even madder that both you and Iain overlook the Tories because, well, they're not going to criticise capitalism or the real problem we face, GREED. What that Party has done to this country is criminal and I can't participate here any more while there's such a reluctance to hold them to account. I am 64 years old. I am a WASPI woman with health conditions that affect my daily life. The lies over that particular policy are legendary. "The longest delay for WASPI women will be 18 months." For me, it will be SIX years at a time when my health was not good. The Ombudsman has already found the DWP guilty of maladministration and yet successive Tory PMs have failed to do anything about that. Starmer isn't keen either. But, hey, let's hear it for capitalism. Let's not criticise capitalism. Let's be ruled by the markets and the wealthy.
I stand by my point re the impact of those council house sales and the major effect they had when Thatcher took the proceeds and left councils with the debts. I honestly don't believe many councils have recovered even now so I'm sorry you consider it "carping" to mention it. I'm not happy to let such a major thing go and pretend it didn't happen. The impact was catastrophic.
We are now dependent on private landlords who are, let's face it, in it for the money. Their purchases were "investments" and nothing else. With interest rates now up to the 14th rise in a row the casualties there will be tenants who will be turfed out if they can't pay more or if the landlord decides to sell the property. (It already happened to friends of mine, a wee family, who had lived in the home and made improvements to it over eleven years. They got months to move out and had to cater to "viewers" by being absent from the property while prospective buyers visited. Fortunately they were able to secure a proper tenancy with SLC and no, they're not "benefit claimants" as Iain suggests. They both work very hard and are dedicated parents.)
As for Germany, I found this yesterday and it's looking like it's not the wonderful place presented in Iain's piece.
https://www.dw.com/en/germany-housing-is-almost-unaffordable/a-66432276
Mostly, tho' I'm just sick of people who think through everything in political terms and, in journalism these days, that's the way it is. Sadly, they've become no better, and just as dishonest, as politicians. That makes me sad as I once had great respect for that profession. A quick glance at how far the once respected Herald has fallen makes clear just how awful things have become.
The other thing is, you can take all sorts of figures, mess around with them and make them mean whatever you like. Quite often, however, you don't prove anything at all.
Ah, well. Best wishes to you all anyway.
totally agree
however the capitalist economy shows no capacity to solve the housing crisis here or anywhere else and tinkering around the edges is getting us nowhere
i suspect there will need to be major modifications to the capital markets ( state control of some investment decisions) before the crisis improves. meantime as you set out young middle class families are seriously pissed off
this of course coincides with the development of AI which threatens the careers of the many young middle class people unless there is a very significant change to how economic decisions are taken : net result more pissed off young people
and of course the absence of any serious solution to climate change on the part of captains of industry jepordises everything
my impression is that if all these crises come together thete will be huge political pressure