Britain needs more council houses
It has caused not just a divide between rich and poor but an intergenerational one, with all kinds of deleterious effects: reduced labour mobility, delays starting families, social exclusion. A chronic shortage of houses has left property increasingly unaffordable. As the think tank points out: 'In 1970, the average house in London was four times higher than the average salary.' Today, with prices averaging £510,000, it's 14 times. On top, it's not merely a question of getting on the ladder; rents too have rocketed.
Of course, building more houses would help. Yet since Tony Blair brought in the much-repeated 300,000-a-year target in 2004, guess how many times it's been hit? Answer: precisely none, not by Labour or the Tories. This government is proving no exception.
And even then, what about the mix? A chunk of new housing is meant to be 'affordable', but we're not building enough of that stuff either; it's hardly a priority for private developers. And, as the think tank puts it, the definition — 'no more than 80 per cent of market rates' — is for many 'spurious' too. They can't afford that either.
Hence, its big idea: Building Beautiful Council Houses, the title of a new Policy Exchange report by Ike Ijeh. It advocates 100,000 a year. And yes, 'beautiful' does sound a bit Trumpian, even if the sentiment is valid; new council homes need to be 'high quality' and integrated into local communities, not the sort of thing that creates grim ghettos. Still, isn't there a case for reversing the damage from Margaret Thatcher's 'Right to Buy' — the programme that sold off Britain's council housing stock, which successive governments have failed to replace?
Go back to 1969 and council houses were 28 per cent of the total, a figure down to 6 per cent by 2023. It's a decline that has been accompanied, too, by the hollowing out of local authorities' ability to build new homes: just 2 per cent of the total in 2022, versus nearly 70 per cent in 1954. No one's suggesting going back to that, or 1979's level of council homes: 5.1 million versus 1.5 million today. But building more could boost the whole market.
First, it would stop new homes being the preserve of the big private housebuilders — a crew focused on making a profit out of balancing supply and demand, not hitting government targets for new homes. Second, it could revitalise smaller, local builders, working in partnership with councils. Third, it could push down rents, also giving tenants more scope to save up for a deposit to buy their own home.
Yet how do you pay for it? Well, one result of our dysfunctional market is that Britain now spends £25 billion a year on housing benefit, paid to private landlords — a figure that the think tank reckons will 'balloon' to £70 billion-plus by 2050. Instead of subsidising them, money could be better spent on 'a new generation of council properties', with an obligation to replace each one sold via Right to Buy. On top, a levy on all new infrastructure developments could help finance new council houses.
Sure, there are obstacles to all this. Local authorities don't yet have the funds or skills to build 100,000 new council homes a year — and the big developers will focus on more profitable stuff. People will also argue that if immigration was under control, Britain wouldn't need so many new homes anyway. Still, when it comes to fixing the UK's housing crisis, more council houses should be part of the foundations.
Pit a rottweiler against a chihuahua in a fight and there's typically only one winner. So the big puzzler is how the $130 billion KKR (and its chums from infrastructure firm Stonepeak) managed to get thumped by the £1.25 billion Primary Health Properties in the set-to for Assura.
As Shore Capital analyst Andrew Saunders put it, 'there are not many examples in M&A history where the underdog has come out on top', suggesting it was proof of the old adage that it's more about 'the size of fight in the dog than size of dog in the fight'. He's right, too, to 'congratulate' PHP chairman Harry Hyman and chief executive Mark Davies on their victorious scrap: 63 per cent acceptances for their £1.7 billion cash and shares bid.
They saw KKR was trying to buy rival healthcare property group Assura on the cheap, a bottom-of-the-cycle cash bid at no premium to net asset value. And that investors didn't want out of a sector enjoying political oomph: £29 billion a year extra for the NHS, with a shift to more primary care boosting the value of buildings housing GP surgeries. PHP just needed to give them a convincing reason to stay in.
Yet KKR and its adviser Jefferies also made a huge tactical blunder. They made their bid 'best and final' too early, leaving them zero room for manoeuvre once PHP raised its offer. One result? Friday's desperate attempt to trash it, which required three corrections from the Takeover Panel. It was a sign even they knew their bid was going to the dogs.
A tenfold share price rise since January 2023 would be enough for most chief executives. Not Rolls-Royce's Tufan Erginbilgic. He told the BBC that the company has the 'potential' to be UK No 1, implying a doubling of its £92 billion market cap to AstraZeneca's £177 billion. How come? Rolls's as-yet unproven mini-nukes. Yeah, the market didn't fall for it either. Rolls shares fell by almost 1 per cent.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
43 minutes ago
- The Independent
Jenrick calls for removal of judges who ‘bring personal politics' into job
Shadow justice secretary Robert Jenrick has said judges who 'bring their own personal politics' to the job need to be removed. Mr Jenrick said tighter checks are needed before judges are appointed to see if they have partisan views, as well as a system which would allow for them to be removed from their position if political meddling is confirmed. He told The Daily Telegraph: 'If judges want to enter the political sphere themselves, then they should stop being judges and go into politics. 'We have to have a situation where judges who act politically and bring their own personal politics into their job as a judge are held to account and frankly, can be removed.' Mr Jenrick said he has exposed judges who have tweeted 'highly political, partisan messages' while others have acted as trustees of charities which he described as 'highly partisan'. 'I think that is bringing the historic independence of our judiciary into serious disrepute, and we've got to change that,' he said. Among suggestions from a review is removing the appointment of judges from an independent body – introduced in 2005 under then prime minister Tony Blair – and returning them to the Lord Chancellor. Removing senior judges requires a vote in both the Commons and the Lords, while an investigation ending in a recommendation of removal is needed in lower courts. Mr Jenrick said that while UK judges in some areas remain 'among the most respected in the world', he said the independence of the judiciary has been 'brought into disrepute' in some areas, including immigration tribunals. 'There's no point extricating ourselves from activist judges in Strasbourg only to be beholden to activist judges here,' he said. The former immigration minister also told the Telegraph he wanted 'every single illegal migrant in this country' to be deported. He said that included not only those arriving on small boats, but also those who have arrived in lorries or claimed asylum after landing at airports. Earlier this week, the BBC apologised to Mr Jenrick after a refugee charity boss suggested the shadow justice secretary is xenophobic. Mr Jenrick accused the broadcaster of smearing 'millions of worried citizens as 'xenophobic' for their completely understandable fears'. While appearing on Radio 4's Today programme on Wednesday, Krish Kandiah, a director of Sanctuary Foundation, claimed Mr Jenrick had increased 'fear of the stranger' among people.
Telegraph
43 minutes ago
- Telegraph
How Rachel Reeves created a generation of accidental pension millionaires
Are you planning to contribute sums to your children or grandchildren's pensions? Get in touch at: money@ Young people are poised to inherit a colossal windfall from their parents and grandparents. Baby boomers – born between 1946 and 1964 – are expected to pass at least £5.5tn of wealth to younger generations by 2047, more than double Britain's GDP. This 'great wealth transfer' is already well under way. The inheritances of Generation Z and millennials – born between 1980 and 2009 – have almost doubled in value every 20 years since 1979, according to a report by think tank Demos. But now an inheritance tax squeeze is prompting many of the boomer generation to employ new strategies to help their descendants. Paying money directly into their retirement pots is one way to beat the taxman – and could create a lucky generation of pension millionaires. 'Significant windfall' In her Budget last year, Rachel Reeves announced that unspent private pensions will be liable for inheritance tax from April 2027. The move has prompted many boomers to raid their pension pots and give away their wealth in order to avoid a potential 40pc tax hit for their family. Inheritance tax rules mean unlimited amounts of money and assets can be gifted to friends and relatives without them paying any eventual inheritance tax, as long as the transfer happens at least seven years before the person giving the gift dies. A so-called taper tax rate of between 8pc and 32pc is applied to gifts given between seven and three years before death, once the total value of gifts made in the seven years before a person dies exceeds the £325,000 tax-free threshold. Money given less than three years before is taxed at the full inheritance tax rate of 40pc. Giving away cash to help children and grandchildren get on to the housing ladder is becoming increasingly popular. Over half (52pc) of first-time buyers received financial help from family members last year, with an average sum of £55,572, according to estate agents Savills. The total value of Bank of Mum and Dad assistance has reached £38.5bn since 2021, 71pc more than in the previous four years. However, one overlooked option is for 'surplus income' to be paid into a young family member's pension. Under current rules, a parent or grandparent can contribute up to £2,880 a year into a child's pension. A pension contribution at this level is topped up by HM Revenue & Customs (HMRC) to £3,600, as basic rate income tax is claimed back on the payment, with any gains shielded from tax. If these gifts are made regularly – and do not affect the giver's standard of living – then the money is automatically exempt from inheritance tax, and the seven-year rule does not apply. Paying into adult children's pensions is also possible, although they would not benefit from tax relief. Transferring even relatively modest amounts in this way could turn younger generations into future millionaires, according to accountancy firm RSM. The firm calculates that contributing the £2,880 maximum each year would give a grandchild a pension pot of £105,000 by the time they turn 23, assuming 4pc annual growth. Even if they don't save another penny, the pot would likely be worth over £607,000 by age 67. Annual returns of 5pc would boost this to over £1m. Chris Etherington, of RSM, says: 'There will usually be an upfront income tax cost to consider for anyone withdrawing sums from their pension. That should also be taken into account when determining the best course of action and the overall potential benefits. 'However, many may consider it makes sense to incur an upfront income tax liability so they can make gifts earlier and in turn, secure the financial future of generations to come while also reducing their inheritance tax exposure.' Ian Cook, of wealth management firm Quilter Cheviot, says decades of investment growth mean beneficiaries could net a 'substantial sum' by the time they come to retire. He added: 'Contributing to a child or grandchild's pension can be a smart way to pass on wealth without triggering an immediate inheritance tax bill. 'For some families, pensions are also appealing because the funds are locked away until at least the normal minimum pension age, currently 55, but rising to 57 in 2028. 'This avoids the concern that can come with gifting large sums into a junior Isa, where the recipient gains full control at 18, an age at which not everyone is ready to handle a significant windfall.' Growing wealth divide This strategy could prove to be a lifeline for the young people fortunate enough to inherit wealth. Experts have warned that Britain faces a 'pension savings crisis', as the current 8pc minimum contribution level is not enough to fund adequate retirements. Under auto-enrolment rules, employees put at least 5pc of their salaries into a pension, in addition to a minimum 3pc employer contribution and government tax relief. Labour has committed to not changing these rates during this Parliament. On current contribution rates, an average earner on a £35,000 salary risks falling £700,000 short of a 'comfortable' living standard in retirement, according to the Pensions and Lifetime Savings Association, a trade body. Boomers – on average – have it better. Some are lucky enough to enjoy lucrative 'defined benefit' pensions which guarantee an inflation-linked income in retirement, based on final or average salary. These schemes are close to extinction in the private sector, as they have become too expensive for employers to maintain. They have been replaced by much less generous 'defined contribution' schemes, where the final value depends on how well investments perform. It's easy to see why many younger people see owning a nice house or having a good pension as impossible – unless they inherit it. Differences in pension wealth and the swelling value of homes have widened the generational wealth gap over the last 20 years. A study by the Resolution Foundation think tank found that between 2006-08 and 2018-20, median wealth among Britons in their 60s rose by 55pc in real terms, but for those in their 30s, it fell by 34pc. At the same time, the share of Britain's wealth held by the under-40s has fallen from 7.5pc in 2010 to 4pc today. Molly Bloome, of the Resolution Foundation, warns that younger generations are becoming more reliant on financial gifts, and that this form of trickle-down economics will only widen the generational wealth gap. 'There's a big element of luck at play – you can't choose who your parents are, and having wealthier parents obviously puts you in a much better position, especially if they own their own home.' But there is an implicit obligation attached to these transfers, she adds. 'It's a case of, 'Help me on to the housing ladder, then I'll help you pay for care in old age'. It's not just a one-way street.'
The Guardian
43 minutes ago
- The Guardian
Like Jeremy Corbyn and Sophie Ellis-Bextor, I grew up in Woodcraft Folk. Here's how it changes children's lives
At the age of six I made the most important decision of my life: I joined Woodcraft Folk. It's impossible to overstate the impact that growing up in the UK's oldest co-educational youth movement made on me. My values, my skills, the deep friendships that have lasted into adulthood, the very fact that I am writing these words in this paper, every vote I have ever cast – all can be traced back to my time in Woodcraft Folk. The largest leftwing force in British youth work, the charity turns 100 this year. It has produced some striking alumni including former Labour party leader Jeremy Corbyn, pop star Sophie Ellis-Bextor, poet Michael Rosen, and political editor Robert Peston. With the government announcing new funding to boost youth services outside schools, Woodcraft Folk's centenary is the perfect moment to learn from its remarkable story and unique approach to youth empowerment. The challenges young people face in contemporary Britain take many forms. They are denied the ability to play outside as their grandparents did, or to take healthy risks. They are subject to suspicion from authority and derision in the media. They are fed the full addictive force of under-regulated new technologies almost from birth, then chastised for using them. There are no simple answers to these compounding challenges, but the mix of inclusive community, political education, fun outdoor activities and meaningful support that Woodcraft Folk offers young people could, perhaps, offer a blueprint. Founded in the aftermath of the first world war in south London by working-class young adults who wanted a more democratic and less militaristic alternative to Scouts and Guides, Woodcraft Folk grew quickly. Supported by co-operatives and trade unions, groups germinated across the country, combining after-school activities with large summer camps run on socialist principles. The hope was to model a more egalitarian society, giving young people the skills and knowledge to become active citizens. By the late 30s, Woodcraft Folk was a serious force. The Labour party had recognised it as 'the appropriate organisation for the children of its members' and a mass display of the charity's camping techniques took place in Wembley stadium. Oswald Mosley, founder of the British Union of Fascists, was intimidated by its rise. According to former MP for Brighton Kemptown Lloyd Russell-Moyle, who also grew up in the organisation and is now its chief executive, Mosley's Blackshirts marched to the gates of a 1938 Woodcraft Folk children's camp in a show of intimidation. Fascist Mosley was right to see Woodcraft Folk as an adversary. A year later, it became the largest secular organisation to support the Kindertransport, helping Jewish children escape from Nazi-occupied Czechoslovakia. Woodcraft Folk leader Henry Fair, christened 'the second Schindler' by the press, was put on the Gestapo death list for his role in the evacuations. Over the decades the charity has remained at the forefront of ethical youth work. It has consistently campaigned against apartheid, austerity and war. It stood up for the rights of queer youth workers despite funders withdrawing grants, marched against the invasion of Iraq and has boycotted Israeli products since 2010 in protest at the blockade of Gaza. For me, Woodcraft Folk was not just a political education, but a rich mix of hiking, making and adventures too. It's where I first learned to light a fire in the rain, use a compass to navigate fog, to juggle and to edit film. The first time I boarded a plane was with Woodcraft Folk to be part of an international camp in Austria, pitching tents alongside children from all over the world. It was with Woodcraft Folk that I marched through London in my first big anti-war protest and, of course, had my first kiss. Many adults balk at the prospect of tackling sensitive subjects like war, sex and politics with children, but finding creative ways to navigate difficult issues is why the charity remains so important and relevant. In the internet era there is no healthy way to shield young people from complex topics, but neither should there be. Ignorance is a shoddy substitute for a culture of safe and open discursive learning, and children are far more capable of grappling with heavy truths than many adults give them credit for. Raised alongside difficult topics, the children of the charity aren't just better prepared for the world, but more able to support and educate each other. For example, when as a kid I tried regurgitating a racist joke I'd heard at a school, it was my Woodcraft Folk peers, rather than adults, who immediately explained why the 'joke' was stupid and offensive and made sure I never repeated my shameful mistake. At a Woodcraft Folk camp marking their centenary, volunteers put the charity's theory of mixing politics with fun activities into practice. Night-time orienteering and ceilidhs ran alongside eviction resistance workshops and discussions around prison abolition. While the Scouts sing campfire songs like Coca-Cola Came to Town and Ging Gang Gooly, the Woodcraft Folk songbook includes civil rights anthems about Rosa Parks and Hiroshima. But if Woodcraft Folk has a clear vision of how society should empower the young, the current government has produced only topsy-turvy contradictory policies and proclamations. Last week the prime minister declared kids these days are 'detached from the real world' and pledged £88m to liberate young people 'stuck behind a screen'. But, at the same time Keir Starmer's government is pumping more than twice as much money into bringing more 'AI learning into classrooms'. Sixteen year olds are finally to get the vote (a right Woodcraft Folk has long campaigned for), yet simultaneously the censorious Online Safety Act has imposed sweeping restrictions on those same young people's access to certain information, including political posts. A closer look at the newly announced youth funding reveals much of it is, in fact, earmarked for calcified initiatives like gym equipment and more police cadets that will fail to holistically broaden horizons. I was a shy and nerdy child, often bullied by local schoolchildren. There's a parallel universe in which, retreating from my tormentors, I too could have become detached from the real world, the reclusive screen addict that Starmer fears. But Woodcraft Folk gave me space to flourish in my own way, supported by caring adults. I built profound friendships with peers, learned about big ideas and took on big challenges. My life and career have been immensely richer thanks to those experiences, as have the lives of thousands of others. If the government is serious about empowering young people, they should start by listening to and learning from the movement that's already been doing it brilliantly for a century. Phineas Harper is a writer and curator
