Tuesday 18 January 2011

A windfall bank tax for social housing

The final session of Saturday's Fabian new year conference was a 'democracy dragons' panel, in which pitchers had 90 seconds to persuade a panel of 'dragons' and the audience with an idea which would be both radical and popular.

In this guest post, Emma Burnell sets out her 90-second pitch for what was the most popular idea with the conference audience: an additional one-off tax on the banks to raise funds which would be ring-fenced for social housing.


In 1997 Labour imposed a windfall tax on energy companies which raised £5bn. I propose that in 2015 we propose a windfall tax on the banks designed to raise £7bn.

This money should be ring fenced, and used to build 100,000 social homes, bringing further investment from social housing providers and kick starting a moribund construction industry which is likely to suffer from the Tory cuts disproportionately as infrastructure investment is slashed.

This could be the start of a rebalancing of the economy from an over reliance on a London based financial services industry to a broad based construction industry bringing much needed jobs and investment as well as desperately needed homes.

This should come on top of increasing a commitment to building more social homes every year, reversing the disgraceful 63% cut to the Governments housing budget brought in by the Tory led coalition.

There are currently 4.5 million people in housing need and we are building fewer homes than at any time since the Second World War.

Housing was barely mentioned during the election campaign, but we know that it is a massive issue for voters. This policy would give us a positive way to counter anti immigration sentiment, which has at least in part been cause by a lack of affordable, decent housing.

This is not just the right thing to do; it will also be electorally popular in areas Labour need to win back. Seats like Harlow, for example, where there were 6,165 people on the housing list in 2009, and the average house costs 9.7 times the average local salary.

It will also be populist, with banks seen as not giving back to the people whose taxes bailed them out. This would be a quick, simple measure to ensure that the banks are putting something back into society and helping those in need.

So popular, affordable and the right thing to do – how can you refuse?

Supporting Facts

Wandsworth Council (which covers constituency of Tooting) has 9,421 people on the housing list. Average houses cost 18.2 times the average salary.

Costs rely on a 60:40 split of housing provider investment to government grant.

Cost of building the homes range from approx £125k in the North East to £225k in London. Average is approx £175K which is what I have used for the costings.

Banking Times estimates the 2010 bonus pot of the banks to be £7bn.

Homelessness figures rose 12% between June and September 2010 – the first rise in 8 Years.


sanbikinoraion said...

So how many 'one off' taxes are we going to levy on the banks, then...?

ironsandlabour said...

Sunder, is there any video coverage of the conference apart from Ed's speech?