Wednesday 24 December 2008

No time for 'fairy gold'

Having just escaped from the furore of Oxford Street this afternoon, I thought of the Archbishop of Canterbury Rowan William’s criticisms of the government’s response to the economic crisis. Williams, in an interview for Radio 4 last Thursday, suggested the government’s attempts to boost spending in a downturn to be like "the addict returning to the drug". He argued not only that lessons can be learnt to help us get through current difficulties, but that the credit crunch could act as a ‘reality check’ that could be used to initiate a fundamental re-think of our approach to wealth and consumption. A society based on unsustainable greed and financial “fairy gold” is simply not a good idea, and the fact that the economic arguments behind it are shaky offers an opportunity to move on from this.

The issue of housing seems to be another area where we are failing to learn from the economic crisis. Housing is ostensibly the area where the troubles began, with banks lending money to those ‘sub-prime’ borrowers who stood little chance of keeping up with their repayments.

One very obvious lesson here, then, is that some people cannot afford to take out enormous mortgages. Owning a house is thus not a good option for them. In fact, it perhaps also suggests more widely that the idea that people should generally aspire to home ownership is itself misplaced.

And yet, Boris Johnson in his recent housing strategy speaks of the extension of property ownership to as many Londoners as possible, and indeed ‘raising aspiration’ to ownership. Even where he speaks of social housing, it is with the proviso that this be a means towards the more important aim of people eventually acquiring a property themselves. Boris thus seems to miss the very obvious danger of people who cannot afford to get a large mortgage doing so. He also neglects to note the idea that many people could be well accommodated in good quality social housing, and that this need not represent any lack of aspiration, or lack of fulfilment. And the government is no better, focusing on the expressed wishes of most people to own their own home.

This is poor politics. Taking people’s views as fixed rather than engaging people in dialogue misses much of what it should be to be a politician (Boris failed in this regard in a similarly spectacular fashion when he asked residents and business in the western extension of the congestion charge whether they want to pay to drive there, and, in receiving a negative response, took this to be a sufficient ‘dialogue’ to propose scraping the zone). Of course people are likely to say at first that they want to own their own home (or that they do not want to pay to drive where they used to be able to do so for free). People like the security that property ownership suggests, the idea that you become safer and less vulnerable to the whims of a landlord. People also like the idea that you then have something to leave your children.

The lesson from the economic crisis seems to be that, while you are safer if you are lucky enough to own your home outright, ‘owning’ a home with a large mortgage- as is invariably the case- in fact offers very little security. The whims of the market now seem far more dangerous than those of any landlord.

The emotive arguments surrounding ownership, and the idea that one is then able to leave something for your children, are then arguments which progressive politicians must tackle. And, as with Rowan William’s comments on consumption, the present economic crisis offers a good context within which these arguments can be made. The idea that owning property is important to one’s self-respect, and so on, can be challenged- what is important is the knowledge that you are secure in your home, not that you literally own it. And this can be provided with good quality social housing.

Similarly, the idea about inheritance must be challenged, as a brave Labour government would have done last year when the Tories proposed raising the threshold for inheritance tax (see the Fabian pamphlet, ‘How to Defend Inheritance Tax’). The aspiration that you leave a house for your children- aside from being a reality for only certain privileged sectors of the population- can also be seen as less ‘essential’ if we are to move away from a situation of astronomical house prices which even most well off young professionals cannot afford, and towards a more realistic housing market, in which safe, secure, good quality social housing played a key role. Building new social housing will not be enough, though, if we do not also think about reassessing the presumption in government policy that home ownership is an eventual end-goal we should be aiming for.

'Crisis' and other homelessness charities have already warned that the recession will see a rise in the number of homeless in Britain. It is high time we heed the lessons of our economic errors. Failure to do so will not only increase the likelihood of similar problems repeating themselves; it will present a lost opportunity to reassess what our goals should be, both as individuals and as a society. In the case of housing, is it then the symbolic but largely meaningless notions of ‘ownership’ which is key, or the more simple yet far more substantial knowledge that you are safe and secure in your home, whether or not you own it?

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