Estimación de la inversión

Although housing subsidies were reintroduced as part of the 1961 Housing Act, the Conservative government made it clear that council dwellings should be targeted at those who could ‘neither afford to buy their own homes nor to pay economic rents’

(MHLG, 1961: 3). General needs provision was seen to be the preserve of private enterprise which would in turn ‘lighten the ever-growing burden of housing subsidies’ (MHLG, 1953: 17). The introduction of ‘realistic’ rents was designed to encourage tenants who were ‘able to make their own arrangements without need of subsidy’ out of their council dwellings, in order to make them ‘available to those who really need them’ (MHLG, 1961: 3). During this period state intervention came to be directed at provision for vulnerable groups including older people, and the

28. The active role the state played in shaping the rise of home ownership is often underplayed. This is partly due to the conceptual wedge drawn between the ‘state’ and the ‘market’ by economists who dismiss the impact of social structure or relations on production, distribution or consumption (Granovetter, 1985: 483). As Murie (1997) argues, it is clear that in housing the ‘market’ is

fundamentally affected by state regulation, and that, as a result, it is misguided to contrast state and market allocative systems (p439).

poorest, overcrowded households through a renewed slum clearance programme.

Local authorities were encouraged to rehouse displaced households by constructing lower quality dwellings using non-traditional construction methods (Merret, 1979).

Cost effective system-building techniques and the modernist design and planning principles developed by Le Corbusier and the Congres International d’Architecture Moderne began to have an influence during this time (Dunleavy, 1981). Over the next two decades the large high-rise estates constructed on the edge of Britain’s cities, became a crucial factor in the declining popularity and appeal of council housing (Ravetz, 2001)²⁹.

The election of the Labour party in 1964 did not mark a significant change in direction. Rather than returning to the immediate post-war response, the party came to accept that a balance of private and public housing was required. Although the government was committed to the construction of 250,000 council dwellings, they were to be directed at the ‘poorest families’ and expenditure was seen as a temporary measure (MHLG, 1965: 7):

‘Once the country has overcome its huge social problem of slumdom and obsolescence, and met the need of the great cities for more houses let at moderate rents, the programme of subsidised council housing should decrease.’

(MHLG, 1965: 8) The government also continued to pressure local authorities into constructing council houses using non-traditional methods, albeit to higher Parker Morris standards (Dunleavy, 1981). In the late 1960s this programme was wound back in the context of the economic crisis of 1967 and the devaluation of the pound (ibid).

An appeal of assistance to the International Monetary Fund led to cuts in public spending which came into effect in 1968 (ibid). These circumstances marked an end to the policy emphasis on meeting quantitative housing targets which had

characterised the debate in the post-war period (Malpass, 2005).

29. The collapse of a large section of Ronan Point due to poor building standards in 1968, a tower block in Newham East London, only two months after its completion came to symbolise the decline of high rise council housing (Hay and Hay, 2012)

Although council housing had grown substantially in the post war period, accounting for just under a third of total housing stock by 1979, over the three decades after the Second World War governments ‘progressively confirmed’ the residual nature of the tenure which was increasingly reserved for ‘those who could not afford to own their own home’ (Glynn, 2009: 25). By the mid 1960s both the Conservative and Labour party came to regard the extension of owner occupation as inevitable, desirable and a ‘symbol of social advance’ (Lowe, 2011: 100). The fiscal advantages of owner occupation were enhanced, and measures were taken to expand demand. As Lowe (2011) argues ‘this series of measures considerably enhanced the position of owner-occupiers, but caused imbalances in housing subsidies, which now favoured home-owners against public tenants and was generally regressive’ (p.101). The cost of mortgage interest tax relief in the UK in 1968-69 was £195 million ‘while the combined cost of Exchequer housing subsidy and rate fund contributions in England was little more than £140 million’ (Malpass 2005: 96). Despite this the tax privileges to owner occupiers were not defined as subsidies, and housing reform came to focus on reducing expenditure in the social rented sector (Merret, 1975). The Housing Finance Act of 1972 hastened the decline of local authority housing, making receipt of rent conditional on a means test, and by encouraging better off households to move into home ownership by subsidising removal and legal costs (ibid). In these ways, as Malpass (2005) argues,

‘[p]olicy was not just supporting the market but was actively shaping it’ by ‘helping to shift demand from renting into owner occupation’ (p100). The result of a steep decline in local authority output and an increase in positive discourses and indirect subsidies to owner occupation meant that by 1970 owner occupation had become a majority tenure, with strong electoral appeal (ibid).

2.5 Neoliberalism’s home front

‘Spreading the ownership of property more widely is central to this Government’s philosophy … A house is most people’s biggest asset. It is a large investment, and it needs protection …. But a house is more than this. It is a symbol of security, and a stake in the future. People who own houses do so not just for themselves, but for their children. They do so as members of a responsible society - proud of the heritage derived from the past, glad to care for it, and eager to give the next generation a bit of capital to give them a start. I believe in home ownership because I believe in individual responsibility, and I believe that by our actions we can shape the future.’

(Thatcher, 1984 cited in Beland 2007: 94).

Whilst significant steps had been taken to dismantle local authority general needs housing in favour of home ownership, the election of the Conservative party under the leadership of Margaret Thatcher in May 1979 accelerated these processes rapidly. Thatcher was influenced by neoliberalism - a political-economic theory advocating that human well-being and freedom can best be advanced by ‘liberating individual entrepreneurial freedoms and skills’ and that the role of the state should be limited to the creation and preservation of ‘an institutional framework

appropriate to such practices’ including defence, military and legal institutions that

‘secure private property rights’ and guarantee the ‘proper functioning of markets’

(Harvey, 2005: 2). Neoliberal economists were strongly influenced by earlier, nineteenth century-theories of neo-classical free-market economics - ideas that had formed the basis of resistance to state intervention in the housing market during the industrial revolution. In Europe and America neoliberalism took on new

prominence in the face of global recession, surging oil prices as a result of the 1973 OPEC oil embargo and rising inflation (ibid). In the UK, fiscal crisis, which had led to another IMF bailout in 1975-6, resulted in declining tax revenues and rising social expenditure (ibid, 12). Globally, the system of ‘embedded liberalism’ that had

‘delivered high rates of growth’ to ‘advanced capitalist countries after 1945’ was ‘no longer working’ (ibid). Some alternative was called for and neoliberal economics, advocated by those concerned with ‘liberating corporate and business power and re-

30. This title is borrowed from Chapter two of Sarah Glynn’s (2009) book Where the other half lives: Low income Housing in a Neoliberal World.

establishing market freedoms,’ (Harvey, 2005: 12-13) ‘filled the breach’ (Peck, 2010:

5)³¹. The emergence of neoliberal thought as the basis for political and economic reform in the West during this time did not mean that the state was withdrawn completely, but rather restructured and redrawn in the interest of shaping a ‘pro-corporate, freer-trading ‘market order’ (Peck, 2010: 9). In the UK the Conservatives pursued a ‘revolution in fiscal and social policies’ based on the breakdown of ‘the institutions … of the social democratic state that had been consolidated in Britain after 1945’ (Harvey, 2005: 22-23). This entailed an attack on trade union power, the creation of a favourable business climate through tax cuts to encourage foreign investment and entrepreneurial initiatives, the rolling back of the welfare state and the privatisation of public services (ibid: 23). In the early years of the Thatcher administration housing was at the forefront of welfare retrenchment and

privatisation and as Malpass (2008) argues, became a model for subsequent welfare changes in other policy areas.