11.45am update: Aware that only selected quotes from his interview had been released, I asked Iain Duncan Smith if he could add some context to his remarks. He has now got back to me and says:
"What the full interview should show is that I pointed out I am a supporter of the sale of council houses but that when the allocation of council houses to replace those who moved out was restricted to a ‘needs’ based criteria the estates suffered. Only the neediest, ie: broken dysfunctional families, came on to the estates and this has ghettoised such families as the good working families left.
"The sale of council housing was never enough on its own - that is why we need to complete the social reform agenda so that we can change all this. Our housing paper points out that future sales should be set in such a context of breaking down these monolithic estates and using social housing as a support to lift people out of dependency and into work."
The CSJ's full report on Housing Poverty can be downloaded here.
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The sale of council houses during the 1980s has generally been hailed as a flagship policy of the Thatcher Government which sought to help create a property-owning democracy.
Yet the consequences of that policy appear to be being questioned by Iain Duncan Smith.
In a yet-to-be-published interview with the Left-wing Fabian Review, the former Conservative leader and founder of the Centre for Social Justice seems to suggest that as a stand-alone policy, the sale of council houses meant that many of the country's most vulnerable families got "left behind", since further social reforms were not forthcoming.
He is quoted as saying:
“While I’m not going to point the finger and say the changes made in the Eighties were wrong, we didn’t have any real sense of where this might go and what needed to happen. Big social reforms should have taken place then, and they never did.”
He is also quoted as suggesting that the Thatcherite reforms of the 1980s created greater social injustice:
The edition of the magazine including the interview with Mr Duncan Smith won't be published until later in the month; so I must add the health warning that for now all I have seen are excerpts released in advance by the publisher, the (Labour-supporting) Fabian Society.
Jonathan Isaby
He's wrong.
People were not 'left behind' by anybody. People who bought their council homes, mainly stayed in them and those which were sold on were then inhabited by others who were equally upwardly mobile. It sounds like he thinks an 'empty space was created' when someone bought a council house, but this could not be further from the actual truth. Millions of people began to improve their homes and to renew the estates, lifting many areas upward, not creating "ghetto's".
Unfortunately there are always 'some' which do not fit the generality but that doesn't make the RTB policy 'wrong'.
But he's right about the lack of further reforms, one of which was the failure to BAR the use of ex-social housing by private landlords, whilst seeking to fill their pockets, were not bothered who they put in, and obviously given a choice in the matter, any ordinary person would choose private housing rather than social housing when 'renting'.....Hence, ex-council homes became increasingly known for 'drug pushers', benefit claimers, unemployed and dysfunctional families with social problems, to which the knock on effect has in some parts of the country created impoverished ghetto type places which are 'broken'.
There should be a BAN on the sale of social housing for investment purposes for this reason but that is not the only reason, there are many more including that they create less available housing and a greater demand which leads to a higher price for families.
When the penny drops that houses are made for families to live in, then Ian Duncan Smith will be on the right track, but unless someone does something to intervene, by amongst other things 'splitting' commercial and domestic lending and removing stamp duty for domestic purchases, and banning the use of social housing as a means to create bad housing because someone wants a fast buck, then the problem will not go away and it will continue to grow. So too our economic problems and so too the queue for housing and first time buyers, and so too the ability of people who built their homes and invested in their homes, to enjoy either a peaceful life or the rewards of their personal investment in their own homes.
Posted by: rugfish | March 21, 2009 at 09:15
It is clear that the housing professionals in the RSLs and Councils know the current system of bricks and mortar subsidies is broken and that there needs to be a radical change.
Stephen Greenhalgh and I have written a pamphlet on this for Localis which we previewed here a few weeks ago here:
http://conservativehome.blogs.com/platform/stephen_greenhalgh_and_john_moss/
What is absolutely clear is that the "machines for living" we built for people in the 50s and 60s were one of the reasons for social breakdown. Extended families were atomised and scattered and I have no doubt this contributed greatly to family breakdown and the establishment of a culture of entitlement thorugh the generations.
That 50% of 4m social homes are now in the bottom fifth of deprived areas is because of this and building more social homes in those areas will make this worse not better.
What is key to improving those broken neighbourhoods is giving residents a real stake in the place where they live and ownership, or the prospect of ownership, is the best way to do this. Earned equity shares with rent reductions and the ability buy further slices of equity at generous discounts is imperative if residents' attitudes to taking work and building something for their families is ever going to change.
RtB failed on inner city estates and many of them need to be rebuilt anyway. Decent Homes has largely been an exercise in polishing shite and we will be knocking these homes down in ten years time. When we do we need to replace them with proper family homes, not micro-flats and high rise blocks. A community is its people and there has to be a mix of incomes, homes and tenures to make a neighbourhood work.
David Cowans of Places for People, probably the most innovative thinker in the RSL movement described an existing estate in Hammersmith as a "barrack for the poor". Extending and entrenching social renting just extends those barracks to more and more people.
Look to Holland where deregulation in the 1990s has been a great success. "social" homes exist cheek by jowl with market homes, their "social" sector is bigger now as a consequence and the stigma has gone. RSLs help people with training and into work and they don't see selling a home to somebody as a "loss" of social housing, they see it as a success, using the cash to build another home.
Politicians are way behind the professionals but we have to be bold if we want to fix what is one of the biggest drivers of social breakdown and high welfare spending in the country.
We won't fix "broken Britain" unless we fix broken Britain's broken neighbourhoods.
Posted by: John Moss | March 21, 2009 at 09:28
This is unbelievable nonsense. Properties were improved and estates made better by council house sales. Giving people a stake in there neighbourhood improved some estates beyond recognition. Council house sales actually stopped ghettos being created not created them.
Also isn`t it better to have a mixed estate where council and private owners exsist side by side than have giant estates of council housing. This is what creates ghettos. Mr Duncan Smith clearly doesn`t know what he is talking about.
Posted by: Jack Stone | March 21, 2009 at 09:33
Also, in addition to the above. The 3 year period for clawback of discount was utter madness. ALL discount should have been repayable throughout the life of each occupancy and that would have prevented many people cashing in. Secondly, the values were too low and didn't reflect true market values. This was particularly lopsided if you happened to be renting a 4 bedroom council house in London and were able to pick a house up for what amounted to buttons. To that extent, it was unfair. The taxpayer didn't get a good return, and the equitable gains were simply used to massage the economy and thus inflate house prices.
Take 20 years of this madness which has been brought to a sudden halt, and you'll begin to see why the economy is now falling back to very dangerous levels and why jobs are being lost and why incomes and pensions are now too high in proportion with what the 'real economy' should be if not for the wash of money from house price inflation which has fed it.
This is why Labour went on a spending spree, knocking down schools and hospitals and drawing up lists and lists of where they could spend all the extra cash they could raise from continuing the cycle of a false economy, and the only way it could ever hope to meet the bills, is if house prices remained stable yet they've done nothing to help stabilise it.
Posted by: rugfish | March 21, 2009 at 09:44
God, I hate Fabians. Describing them as "Labour supporting" is understatement of the century.
Nice bold bit of pwning by IDS there though...
It's certainly made me think about it.
I am beginning to think that Jack Stone is several different people posting under the same name.
Just look how easy it is.
Posted by: Jack Stone | March 21, 2009 at 10:02
IDS is right in that certain socioeconomic groups have been left behind. However the determining factor in this is the question of employment and the dog-eat-dog culture of poverty that comes with unemployment.
If we really want to improve the lives of people then we have to have an economy that employs most of its people and doesnt have close on six million struggling on benefits. This means moving the economy away from services and towards productive sectors that employ large numbers like manufacturing.
We have to be watchful that the poverty and social breakdown on certain run down social housing estates doesn't become seen as examples of life on all council estates. The findings of IDS and others could easily create a stereotype.
As I stated earlier, employment is the solution to such poverty. For this reason 12 month fully waged public works programmes should be built into the benefits system for the long term unemployed. These such be mandatory. For those who want to work they would be a godsend, for those who by resignation have developed the habit of not looking for work, such programmes would be like a trawler-net, pulling people in and making sure that no-one is ever allowed to become long term unemployed.
It is no coincidence that social breakdown is related to unemployment. The nexus of cause and effect has to be understood. Get people back into waged work and the nature of problem estates will change.
Posted by: Tony Makara | March 21, 2009 at 10:08
The sell off was wrong in principle, as money has had to be ploughed into 'social housing' to make up for it - with a major shortage of such housing still.
If such estates have 'improved' it is probably just due to time.
Apart from that the level of discount given was potty.
Posted by: Peter | March 21, 2009 at 10:42
The second posting is not the real me but never mind it shows good taste anyway. I will agree with ideas and policies if I agree with them and disagree when I do I don`t care where they come from or who says them. Council house sales were the best idea of the Thatcher years because they were the greatest redistribution of wealth this country as ever seen. I cannot understand conservatives sometimes. They have a good idea then rather than build on that and expand it they go and thrash it when its seen to be successful. Strange to say the least.
Posted by: Jack Stone | March 21, 2009 at 10:42
IDS is such a lamebrain. No wonder he was a complete failure as party leader.
I don't think I'd ever been so embarassed as when that last report of his came out about the shocking state of council estates around Glasgow, when he said something like 'A lot of us never understood it was this bad'.
With that phrase he suggested, falsely, that 18 years of Tory government had been ignorant of the true state of affairs at the bottom end of the socio-economic scale. He undermined decades of effeort by Tories in those areas. He damned us all as the caricatures leftists want us to be. Teresa May's 'nasty party' had nothing on this because she was arguing it was only a preception.
And back to council house sales creating ghettos.
What exactly does IDS think council estates were before?
I guess he just didn't know.
Posted by: Inspector Morgan | March 21, 2009 at 10:51
Jonathan
On the substantive point, I would be surprised if you could find a housing policy expert (Tory or otherwise) who does not accept the evidence-based point that IDS makes here.
I understand why you make a cautionary health warning. But I think we have shown we are fair and professional when we interview politicians, whether Labour or from other parties (as with Vince Cable at Christmas or IDS this time. Just as I am sure Conservatives can be, as with Iain Dale or The Spectator interviewing left voices. The interview was conducted by Mary Riddell and your former colleagues at the Tel have seen the full thing (and had intended to run a longer extract).
IDS has made the point before, including when we held joint Centre for Social Justice/Fabian and End Child Poverty fringe events at both the Tory and Labour conferences to seriously examine the cross-party policy agendas and political debates.
This was my report of his pitch to the Labour fringe
http://www.nextleft.org/2008/09/ids-finds-common-ground-with-labour.html
And this was the Birmingham fringe, where IDS stressed he would make similar arguments to two different party audiences.
http://www.nextleft.org/2008/09/two-strands-of-tory-thinking.html
Of course, there should and must be political disagreements about all of these issues. I don't agree with the IDS/CSJ analysis in some significant respects, and that is a political and polic debate. But I think ourselves, Centre for Social Justice and the charities and campaigning groups involved were all serious about that being based on substantive scrutiny and debate, not punch and judy party knockabout, and I hope that comes across from our reporting of what was said, which goes alongside our own analysis and advocacy on the issue.
Posted by: Sunder Katwala | March 21, 2009 at 11:25
I do not understand Iain's arguments.
When a council house is sold it is then in the private sector.If that tenant moves on the house remains in the private sector.
If a council tenant buys a flat in block of flats le is the leaseholder and if he moves on the flat is sold to another private tenant.
I once lived in a high rise council block of flats which had originally been built for the private sector and was built to a high specification.In 1967 all was well and ordered ,and a mainly British ,plus a small West Indian community, lived
in clean peaceful harmony.As more and more immigrants arrived this changed.The council seemed to take pleasure in locating problem families in the block and it rapidly became a noisy filthy slum.NOBODY BUT NOBODY even considered purchasing their flat.Ultimately the flats were demolished on the pretext of having asbestos in them .There were always problems on estates but these have increased because of immigration by itself and it's effect on the white working underclass.Anybody who han an ounce of nous moved out
Posted by: Waltham Forest exile | March 21, 2009 at 12:30
Sorry, but I just don't understand the point IDS is making....why would the sale of council houses create ghettos? The houses sold didn't suddenly teleport out of the area once bought...or is he saying that because it effectively gave people a rung on the housing ladder those would could afford to buy then traded upwards later, and dysfunctional families moved in? How exactly did that happen once those houses were privately owned? Was it because they were rented out cheaply as another poster here has suggested?
All policies - good and bad - create new problems of some kind or other. Its mature and honest to recognise that, but we must be very careful here not to let this look like a complete mea culpa that one of our flagship successes of the 1980s.
Posted by: Andrew Cadman | March 21, 2009 at 14:07
The point I think IDS is making is that the level of RtB purchases in some areas was so low that it didn't create the "critical mass" necessary to allow the benefits of having a mixed community to work.
I agree with Jack Stone - wow - RtB was a huge transfer of wealth from rich to poor. I started my professional career in the Yorkshire coalfields where the NCB did the same with thier rented estates and when about 35% were owned privately, the whole estate improved. Peer pressure or positive role model, whatever, it happenned.
That largely didn't happen in the big inner city, flatted developments and in many cases the private buyers moved out and let to Housing Benefit claimants or even back to Councils and RSLs. Couple that with the allocation policies driven by the concept of "priority need" and you have seen a "residualisation" of the remainng estates.
The Smith Institute wrote a great paper, [http://www.smith-institute.org.uk/publications/visions_for_social_housing_international-perspectives.htm]
(bloody hell, I agree with Jack Stone and cite the Sith in one post!), comparing the approach in other countries. Most had stuck with bricks and mortar subsidies, most had rationed by "need" and most were a mess. Only the Dutch made a substantial change, deregulating the social housing sector and paying income benefits to households rather than capital grants to builders. It worked and led to breaking up of "estates", the worst ten percent of stock was rebuilt over ten years and the cost to the taxpayer came down.
Posted by: John Moss | March 21, 2009 at 14:53
Andrew, I think the point IDS is making is that estates develop two very different cultures and the fact that those who own homes and are in work make a stark contrast with those who are trapped on benefits. The only way to improve living standards and to get men of their 20s and 30s into a structured lifestyle is through waged work.
On the question of council house sales, this should have been followed up by building more social housing with, as Rufish suggests earlier, payments sensibly structured a purchase clause stating that the home cannot be resold. This would encourage the development of a home-for-life culture and help create stable communities.
Conservative strategists have a difficult task. How to deal with social breakdown without staying into the dangerous territory of social engineering? Its a difficult balancing act, and in my opinion is as much an economic issue as a social one. Put people back to work and poverty can be arrested.
Posted by: Tony Makara | March 21, 2009 at 14:56
"I agree with Jack Stone"
But WHICH "Jack Stone", John?
Personally I wish all the "Jack Stone"'s would just Troll Off (and take their even more boring friend "Joshuawahwah" with them)!
Posted by: Sally Roberts | March 21, 2009 at 15:06
The problem would have been much smaller and easier to sort were it not for mass unlimited immigration which Labour promoted whilst the Tories looked away.
Posted by: michael mcgough | March 21, 2009 at 15:23
Rugfish, one intersting feature of the proposals Stephen Greenhalgh and I have put forward is the Right to Buy part of your home.
Basically, you can buy out about 30% of equity and cease to pay rent at all - you do take full responsibility for repairs charges though. You would then be restricted from sub-letting, unless you bought out the full equity.
If you wanted to move, you could sell your part share in the market, or you could sell it back to your landlord. It doesn't prevent people who buy all the equity from subletting, but it provides a real halfway house between renting and full ownership, with protection for the taxpayer as well. (If you buy 25% then sub-let at full market value, you are defrauding the taxpayer).
Posted by: John Moss | March 21, 2009 at 15:35
Sally,
I am also confused now. More than one person has posted under that name - it is now conclusively proven - and at least one can spell and make sense,
Stephen.
Posted by: Super Blue | March 21, 2009 at 15:42
Sally. Glad you agree with the real me. Iain Duncan Smith talks a lot of sense usually but I am afraid on this subject he is wrong.The right to buy should not be stopped it should be extended. Personally I would even go as far to say that you could actually just transfer ownership of the remaining social housing to its tenants. That would be the biggest redistribution of wealth ever and having lots of new owners who would want to mnove and better themselves would actually start the houising market moving again. This was something the late and great George Gale advocated years ago when Margaret Thatcher was still in power but sadly was never acted upon
Posted by: Jack Stone | March 21, 2009 at 16:34
They started off in far to many cases as ghettos for London's poor and so even private ownership cannot completely change that. A pig is always a pig, such badly built estates are the fault of 60's social engineering. Of course they can be much improved as is starting to happen in Swindon.
Park south once held real black spots. Cavendish square was a nightmare ugly and full of dangers, with social neglect writ all over it. This was one of those place where staircases were strewn with syringes
and failed people lived on endless poverty benefits. Its not like that now. Conservative Swindon is doing rather better than that. The sad part is that without the bulldozer Park South will always be at a disadvantage. Even so it boasts a state of the Art New College and endless students of Advancing education. Swindon is riding the recession for now and the mood here is still rather upbeat. Swindon is placed to provide real annswers and correct solution to the problems that England has brought upon the world. If Swindon can do it, others can.
We have to thank in some small part the Conservative party at Swindon. Governance is only part of the solution people have to be well motivated and adjusted. A well motivated Swindon will produce.
Posted by: Bishop Swine | March 21, 2009 at 17:00
I think my days here are numbered. It just seems that the conservative party is not run by conservatives.
In this blog Jack Stone seems more of a tory than IDS.
And it was only the other day that Dianne Abbot said that bad banks should be allowed to fail, and regulation should concentrate on insulating the public from those failures - precisely what I have said/thought all along, and to my mind the only 'correct' conservative view.
If these people (clearly not tories) are out torying the tory party then I need to be looking elsewhere for the real tories...
Brown has to go -- but not just because he implemented his plans badly but because he was implementing the wrong plans.
The conservatives seem determined to stick with nulabours plans, but to try to implement them better...
The conservative candidate is the best man to be my next MP and, I am happy to support him in that - but the party itself seem hopelessly confused.
Posted by: pp | March 21, 2009 at 17:12
pp. We should judge issues on merits not on political ideology. I believe in home ownership. It gives people a stake in there future and in there neighbourhoods. I want to see home ownership extended. If that means me sounding like a Tory then so be it. I am just saying what I believe.
Perhaps if party`s were not so dogmatic and judged issues and policies on there merits we would not only have a better run country but people would be more interested in politics as they would start to see that politics is about finding solutions to issues its not about party loyalty or self serving power its about making life better for people.
Posted by: Jack Stone | March 21, 2009 at 19:14
So, Maggie and the CONservative party were wrong.
Apologise now.
Posted by: Patrick Harris | March 21, 2009 at 20:59
Jack
Apart from marxists, I don't think any one would say they blindly follow an ideology.
My point here is that the current tory leadership seem to be adopting a number of NuLabour policies - policies that even NuLabour supporters reject as too socialist.
How can they get it so wrong?
I rejoined the party, and have given them the benefit of the doubt, but the number of bizzare policy decisions they have made leaves me at a loss.
If they spent two seconds thinking things through and taking soundings they would not make these massive errors -- maybe ill thought out announcements made on the hoof are another Brown trait that has infected them.
Brown has to go he is destroying the UK for us and our children - but the tory replacement gives the impression that they the best we can expect is a slow down or lull in the destruction - we will have to wait longer for someone who can actually start the repairs - and there is no sign of who that might be, or where they might come from.
Posted by: pp | March 22, 2009 at 11:44