‘We can create space to build new homes’
‘A major cause of the housing problem is tax-dodging, money-laundering, foreign billionaires buying property and leaving it empty’, says Frank Dobson
22 March, 2018 — By Frank Dobson
Former health secretary Frank Dobson was Labour MP for Holborn & St Pancras from 1979 to 2015
I SET out last week how Camden’s Labour council provided homes for local people in the 1970s, building over 4,500 new council homes, buying up 6,800 from private landlords and refurbishing 2,200 of them.
Yet despite the current desperate housing crisis, the Tory/Lib Dem coalition and the May government have refused to provide today’s Camden Council with even the limited funds and powers we used in the 1970s.
Benefit cuts have forced badly-off families to move out of Camden. Children have to change schools, working parents have to commute into work and elderly dependant relatives are left behind. Nick Clegg, then deputy prime minister, took offence when I described this policy as “social cleansing” but that is what it is.
Young professionals, often burdened with student debt, can’t find decent secure homes. Ministers and developers talk about affordable homes. Now there’s a word – “affordable”.
If you are a Russian oligarch anything is affordable. But not if you are a firefighter, a bus driver, a shop assistant, care worker or an electrician when the government’s definition of “affordable” is 80 per cent of market rents.
The worst betrayal of local people involves the former Royal Mail land at Mount Pleasant. When business minister Vince Cable sold Royal Mail at a knock-down price, that land at Mount Pleasant was one of the most valuable assets for the new owners. Development of the site needed planning permission from Boris Johnson when he was Mayor of London. He duly consented to 640 flats.
None will be within the income bracket of local people. Even a newly-appointed consultant surgeon or physician at nearby Great Ormond Street Hospital will not have the income to buy or rent at Mount Pleasant.
A major cause of the London housing problem is tax-dodging, money-laundering foreign billionaires buying property and leaving it empty. The grotesque prices they pay drag up all property prices and the buildings gobble up useful sites and construction resources. The National Crime Agency says that £90billion a year of criminal money is laundered through the UK, much of it in London property. The government should clamp down on these sleazy trans-actions by Russians and others, as I suggested in the House of Commons four years ago.
Rent controls should be reinstated. Keeping rents down would be good for tenants and save taxpayers billions of pounds by reducing the need for housing benefit which we should remember ends up in the pockets of landlords.
I also advocate additional taxes on some rises in property values and income from rents.
I am in good company. Winston Churchill argued over 100 years ago for a special tax where land values rise as a result of public investment. This should apply to the rise in property values resulting from Crossrail. In The Wealth of Nations, Adam Smith said: “Rents are the species of revenue which can best bear to have a peculiar tax imposed upon them” because “no discouragement will thereby be given to any sort of industry”.
Central government must provide the present Camden Council with the funds, the powers, and the building spaces to directly help local people.
Even though much reduced by the “Right to Buy” sales, Camden’s housing stock is immensely valuable.
So the council should be permitted to borrow using it as security so they would not be required to build flats for sale in order to finance new council homes. In the past surplus public land or buildings were offered to the council to benefit the local community. Thousands of homes were built on surplus railway land and on NHS sites.
This arrangement should be reinstated before any more public property is sold to speculators. Councils should be empowered to requisition flats and houses left empty. But Camden will still be short of the sites to build on. We cannot create more land. But we can create more building space. We can make better use of existing sites and buildings, replacing schoolkeepers’ houses with small blocks of flats, building on top of tube and railway stations and encouraging shopkeepers to let empty upper storeys to the council.
In the 1970s I got the council officers to obtain estimates of the cost of decking over Camden’s deep railway cuttings. It was too expensive. Since then land values have far outstripped building costs.
So we should look again at “decking over”, partly for homes to be built on top and partly to provide open space and play areas for homes built alongside.
Finally that brings me to HS2 and Euston. The decking over the proposed enormous new station and the cutting behind it can’t all be left to the foreign property speculators the government is so keen on.
It must be used to provide homes which local people can afford.