John's Jottings for October 2006

John Ward

Please note: these Jottings are purely personal comment, and do not necessarily or directly represent the policy of either the Conservative Party or the Conservative Group on Medway Council.

Looney Land

Do you, like me, sometimes wonder what planet the so-called Looney Lefties are on? I encounter them all the time, not only on the Council but on various on-line newsgroups and mailing lists. They seem perfectly content that (for example) their favoured people should be offered large multi-thousand-pound sums of money in subsidies, paid for by the rest of us, in order to pursue their purely political ends at everyone else's expense.

Take what is known as affordable housing which is a valid enough concept in the proper context, but in many areas (including Medway) the emphasis is on so-called key workers. Not that these are unworthy of finding and affordable decent housing, of course, but what really is being done about all this as a national policy, and where has it got all of us?

First, whatever it is called, any such scheme means subsidy for those covered by it, so that in turn means that the rest of us are coughing up what are substantial sums of money to pay for these thousands of subsidies, each of which obviously costs taxpayers many thousands of pounds.

Next, why should these so-called key workers be the only people to benefit from such subsidising schemes? Well, a look at the categories in the graph below gives us a clue or two, if we are being alert:

Key Worker Housing chart

Okay, this was prepared two years ago, but the story it told then is the same today: only the precise figures have changed, not the shape of the graph. Let's see what we can learn from this chart, which was presented to members of Medway Council as part of a presentation to Scrutiny in September 2004:

  1. the key workers are all in strongly-Unionised areas of the public sector (Labour territory!)
  2. the house price represented by the red line is a family home: I specifically and carefully checked this when the chart was presented to us
  3. the mortgage availability was based on one income only: I (again, specifically and carefully) checked this as well
Yes, it was effectively rigged to look as though these poor people couldn't afford any decent housing, when in reality they'd be buying smaller properties, or jointly with a second income, and could in most cases comfortably afford to do so without subsidy.

Now, what do you conclude from this? Do you, like me, believe that subsidising the purchase of a family home on a single salary for a select group of people is an acceptable use of vast amounts of public money?

Oh, and what effect has this policy had on housing prices? Obviously, with more money being put into the housing market for purchase, why, they've rocketed up still further! The developers and estate agents must be doing very well indeed out of this, knowing that they can charge ever higher amounts as the difference in thousands of cases will be made up from the public purse. Any first-year economics student would realise that straight away.

This, of course, makes the position even worse of all the other people on genuinely low incomes who are struggling to afford to buy their own homes. They aren't covered by this scheme. Therefore it has made the overall situation in Britain even worse, and that continues to worsen year after year. It is all made worse by John Presott's enforcing high proportions of such affordable housing to be part of all new housing developments of any reasonable (i.e. medium) size upward, meaning that developers already have to put up prices of their regular houses in each development to offset the losses incurred in selling the affordable units at lower cost (which is part of the government deal).

Does it even work? Well, apparently not all that well, even within these obvious limitations. At the last audit in March 2006, a quarter of all homes built in London and the south-east of England under the Key Worker Initiative were lying empty, and it was even worse (at a third empty) in the East of England. They simply have not been either sold or let, and this is official and can be checked in Parliament's Hansard record of 27th March 2006.

A further clue is in the number of first-time buyers. In 1997 (when Labour come to power nationally) there were 503,000 first-time buyers. By 2005 this had dropped by more than a third to just 302,000. Rather tells the real story, doesn't it?

Thus almost everyone loses out, apart from the developers (who make sure they never do anyway!) and the estate agents (ditto) of course. The only other gains are to favoured sectors from the ranks of traditional Labour folk and thus to the Labour Party's chances of being re-elected, and as usual with such schemes (of which we have seen many during the Labour years) we all end up paying ever higher taxes to cover their vast costs.

Hmm. Perhaps, after all, that's not so much looney as shrewd political thinking, at least if one's mind works in that way, which admittedly mine doesn't. If politics in Britain is once again descending into this depth of scurrilous gerrymandering, is it not high time that the Labour era is brought to an end?

Next time: Skating on Thin Ice