Yesterday, in a speech delivered in the Hertfordshire town of Stevenage, Labour leader, Ed Miliband, reiterated his pledge that the next Labour government would solve the acute crisis in housing by building 200,000 homes a year in England by 2020.
This pledge, which Miliband obviously believes is a vote winner, even if carried out would come nowhere near solving the issue of housing.
In London alone, a survey of all the local authorities has estimated that to clear the backlog of people without homes and to meet the demands of a growing population would require the building of more than 100,000 new homes a year from now until 2021.
That represents building an extra 809,000 homes in the capital alone and Miliband is trumpeting 200,000 nationally as a solution.
Leaving aside the ridiculous inadequacy of Labour’s proposal, how exactly are these new homes to be built?
According to Miliband, the profits of the country’s four biggest housing developers – Barratt, Berkeley, Persimmon and Taylor Wimpey – are ‘going through the roof, increasing by 557% since this government took office while homes have been built at their slowest rate for almost a century.’
Miliband pledged: ‘The next Labour government will give councils powers to charge fees or, if necessary, purchase such land, so that developers have an incentive to do what they went into business to do.’
Stirring stuff, but one million new homes would barely cover the requirement of London let alone the rest of England and, anyway, all he is pledging is 200,000 new homes under any future Labour government.
The more one looks at Miliband’s pledges, the more they dissolve into populist nonsense.
Given the fact that Labour are in full agreement with the Tory-led coalition that the huge national deficit must be cut through slashing public expenditure to the bone, is he seriously expecting anyone to believe that they would spend billions buying up land being ‘hoarded’ by developers.
As for his threat to effectively fine building developers for not building, this can be taken with a large pinch of salt, these firms will only build homes when they can make a profit out of the subsequent sale.
They hoard in the expectation of house prices once again going through the roof and indeed this is exactly what is happening.
According to the Nationwide building society, prices for flats and houses have gone up this month at a rate of 6.5% a year.
The average price of a house or flat is now £174,566, the highest since April 2008.
The main factor in this house price ‘boom’ is the government Help to Buy scheme which gives financial aid to buyers of new build homes and allows them to buy with as little as a 5% deposit.
Even the Bank of England is running scared of the consequences of this encouragement of workers and sections of the middle class to take on 95% mortgages that, should the interest rates increase these mortgages will become un-repayable, millions of families will be thrown into default and face eviction – exactly the same result that occurred in the US sub-prime mortgage scandal that precipitated the banking collapse in 2008.
With houses and flats priced out of the reach of the majority of workers, and private rents also going through the roof, coupled with the effects of the government’s cuts in housing benefits and the bedroom tax, homelessness and overcrowding has reached epidemic proportions and can only get much worse.
The only solution to this crisis is to deal with the system that has spawned it – capitalism.
Only through bringing down this government and going forward to a workers government that will carry out socialist policies of nationalising the banks, building developers and land and embarking on a massive programme of public, social housing, can a decent affordable home be provided for every worker and young person.