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Prescott's housing plan unsupportable |
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The UK government has hit on a novel idea for affordable housing policy.
It's an effort to reconcile split views at the top of New Labour. But it's just one more novelty that will hardly outlast Christmas, says Peter Gibb.
 Alan Milburn, Labour's election coordinator is reported supporting the ’right to buy' policies for social housing that were championed by Margaret Thatcher in the 1980's. But Deputy Prime Minister John Prescot thinks otherwise. He's declared that "those homes are not for sale". Prescot's idea is that “instead of chasing the market with ever-increasing discounts, why don't we give more tenants an equity share which they can take with them?
The move adds a third blow over and above the standard double whammy which taxpayers - proportionately the least well-off in society - have come to expect.
Blow one: the taxpayer pays for building the social housing. Fine. Blow two: the taxpayer pays for the on-going development of public infrastructure and provision of public services which benefit locations and raise property values. So far so expected.
But now comes blow three - Prescot's new plan. Through an ’equity buy-in' plan, tenants will now be eligible for a lump sum payment, out of public funds, when they move house. Tenants, Prescot proposes, will receive a windfall payment from taxpayers that will reflect the change in value of their home - the very change in value brought about in the first place by the public investment paid for by the taxpayer.
And will there be some provision for a payment into the public coffers in the event of a fall in value? It hasn't been announced. Well it's an election year.
According to the BBC, the plan is that when tenants move a share in the equity of the property would be bought by the housing association, so sharing the profits of any rise in the home's value.
Public provision of affordable housing is one thing. It's a commendable and currently necessary social policy. But public gifts of money to private citizens, from unearned windfalls from rising house prices, is quite another. The policy is unsupportable.
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