An end to landlordism

Last Friday, August 21st, Claim the Future, the new project launched by John McDonnell MP, hosted an online meeting entitled An End to Landlordism. Labour Hub publishes three of the keynote speeches, from John McDonnell MP, Andrew Fisher and Liz Davies

 “The eviction ban needs extending not just for a few weeks but as long as the Covid crisis has an impact”

 By John McDonnell MP, former Shadow Chancellor

Introduction to the Claim the Future Initiative

Thanks to all of you joining us tonight in this discussion. Some of you will have attended the launch of Claim the Future a couple of weeks ago. The velocity of political developments is such at the moment that the launch seems ages ago. So let me remind people who were at the launch and for those that weren’t let me explain briefly what Claim the Future is all about.

Three points:

First, the loss of the election in December was extremely tough for so many people who had placed their hopes in securing a socialist transformative government. So there was a need to discuss and determine where progressives go next.

Second, in the meantime, the Covid pandemic hit us and has created not just a tragic loss of life and human suffering but it has also brought about an accompanying emerging social and economic crisis.

Our underfunded public services are under immense stress, the economy is going into recession and people losing are their jobs and incomes.  The result is an inevitable questioning of the way our society operates, how it is organised and how it is governed.

Third, indeed, the crisis has prompted a more fundamental consideration of what we value and what sort of society we want to live in. There has been some recognition that this could be a paradigm-shifting moment, when our whole view of the world and the world we want to live in could be transformed.

Lessons from the Last Crisis

Many, many commentators have looked back at the last major crisis, the banking/financial crisis of 2008, and argued that by failing to seize the moment, progressives allowed the right to hegemomise the whole narrative of that crisis to their advantage.

The result was a decade of austerity imposed upon us and vast wealth and power concentrated even further in the hands of the rich and corporations.

Claim the Future

So how do we avoid this happening this time?

One advantage that we have this time round is that the resources on the Left are so much greater. We have a new and extremely competent, creative and professional architecture of think tanks and policy experts and researchers.

We also have a mass membership in the Labour Party, a range of active social movements, Momentum, the World Transformed and a flowering of mutual aid groups and a renewed, extended range of engagement by trade unions in active campaigning and industrial action.

What became a key question for some of us was how can we facilitate the connection of the analysis, the ideas, the policy options for transformative change with the campaigns on the ground and how if necessary can we create new campaigns around some of these new ideas.

Praxis – connecting theory and practice

If we can do that, we can mobilise so much more effectively to achieve change. We could potentially achieve a shared understanding of the political, economic and societal change that is necessary.

Tonight’s Discussion

Tonight’s discussion on housing is an ideal example of the interventions that are needed if progressives are to seize the moment, force immediate change and create the agenda for the future. Housing is such a fundamental need that it has to be a central issue to be addressed if we are to construct a new society based upon people’s real needs.

So we brought together a whole range of housing policy experts, tenants’ representatives and campaigners to talk together about the housing issues we face and the solutions needed.

Andrew Fisher has drafted a paper, which we have published on our Claim the Future website, which sets out many of the issues raised and the policy options that people and groups have proposed.

What are we saying?

What are we saying as a result of these discussions? First, we know that housing was in crisis before the pandemic hit.

The facts are pretty stark. 700 of our fellow citizens died homeless on our streets in the last year. 125,000 children are being brought up in temporary accommodation. Families were discovered to being housed in metal shipping containers. Others were forced to live in squalid, often unsafe accommodation.

The benefit cap, cuts in housing benefit and the bedroom tax were forcing poorer families out of whole districts of our cities. The legal process of Section 21 no fault evictions undermined the security of tenants, producing, for some, levels of stress leading to mental health problems.

Second, the impact of the Covid 19 pandemic has exacerbated the risks to renters and the threat to their homes as wages have been cut, jobs lost and high rent levels continued. Pressure for a basic level of protection from eviction during the Covid crisis resulted in the court ban on possession orders in March. The extension in June was also secured in recognition that the impact of the pandemic had not disappeared.

Until this afternoon we were faced with the ban being lifted and, according to Shelter, nearly a quarter of a million renters being at risk of eviction.

At the same time local councils have exposed that given the scale of their financial crisis, they are already unable to cope with the homelessness and demand for housing they face in their communities. The Institute for Fiscal Studies confirmed that councils are looking at a possible £3.5 billion financial shortfall this year alone as a result of the Covid impact.

Yesterday, the BMA and the health Royal colleges warned the government that the failure to prevent evictions and homelessness “could significantly contribute to an increase of Covid 19 infections.”

The campaigning by renters’ groups and their supporters has forced another government u turn with an extension of the ban until 20th September. I pay tribute to the campaigners.

Third, even with the ban on evictions extended, renters whose incomes have been affected by the pandemic are at risk of carrying high levels of unmanageable debt. Unless support is provided the result is simply eviction postponed.

Fourth, as it has in many other policy areas, the Covid pandemic has exposed the fundamental failure of the operation of our housing system.

Immediate Solutions

So let’s talk tonight about solutions. Immediate solutions.

First of course, the eviction ban needs extending not just for a few weeks but as long as the Covid crisis has an impact.  That looks like at least another year.

Second, Johnson promised to reform the Section 21 no fault eviction procedure. We demand he fulfils that promise and scraps it once and for all.

Third, financial support has been given in direct cash grants to businesses to help them survive and get through the pandemic. Let’s provide that direct financial support to renters to ensure that they are not burdened by debt.

Fourth, most businesses, the self-employed and workers have all taken a hit as a result of the pandemic. There is no reason that landlords should be exempted.

So let’s use this moment to introduce fair rents, a system of rent controls that ensures that housing is no longer used for profiteering.

Finally in the immediate term, it should go without saying that the bedroom tax and the benefit cap must be scrapped and housing allowance linked once gain to the local 50th decile.

Long Term Fundamental Change

These are all immediate measures that could readily be introduced in the short term to respond to the pandemic pressures, but we need to seize this opportunity to lay the foundations of a housing strategy that provides everyone with a decent roof over their heads. To achieve that we need a fundamental challenge to the existing system. To challenge the notion of housing as a source of profit rather than a response to need.

In recent decades the role of housing as a profit-making asset rather than response to need has dominated. At the heart of this profit-making is, on the one hand, housebuilders managing the housing market and land ownership and supply to maximise profit and, on the other hand, the revived growth of large scale landlordism with landlords buying up properties, forcing up house prices, and controlling rents.

Unless we can address the power balance within the existing housing market, whether someone is decently housed will always be at the whim and under the control of the corporate housebuilders and landlords.

The basic foundations of a housing strategy based on need not profit are:

  • A public housing programme that builds the council homes we need for rent at rents that people can genuinely afford, breaking the dominance of the corporate housebuilders over housing supply.
  • Land ownership reform that takes into community ownership the land that needs to be freed to house our people.
  • Ending landlordism by limiting the number of properties that any individual can own and introducing rent controls.

“Tax landlords more harshly, control rents, regulate private sector homes and build council housing”

 By Andrew Fisher, former senior policy advisor to Jeremy Corbyn

The Government’s eleventh hour U-turn on evictions was welcome, but it only kicks the can down the road. The fundamental problem is landlordism.

Let’s start with something too often absent from political discourse in the UK: principles. Political principles.

For socialists, it’s only appropriate to begin a discussion of our socialist principles by quoting Keir: “Socialism proposes to abolish capitalism and landlordism.”

Keir Hardie wrote that in 1907, and was first elected in on a ten-pledge mandate that included “no landlordism” and “fair rents”.

For Hardie, “socialism makes war on a system, not upon a class”. And it is the system we want to dismantle – the system that means some people can accumulate more wealth than they need, buy more houses than they need, and use that wealth to exploit those without a home of their own.

Liberals used to believe that was wrong too – for typically technocratic reasons. John Maynard Keynes, the great liberal economist, wrote in favour of “the euthanasia of the rentier” in the economy. By which he meant those who live by receiving income from their wealth rather than from work – and he singled out landlords and money-lenders in the concluding chapter of his seminal General Theory of Employment, Interest and Money.

Indeed at the Liberal Democrat conference, they still sing the Georgist song ‘The Land’, which says

“Why should we beg work and let the landlords take the best?  Make them pay their taxes for the land, we’ll risk the rest! “The land was meant for the people.”

So ending landlordism was once a mainstream feature of socialism and liberalism. Yet today, many people who claim to be socialists are cautious about this, and you’d be hard-pressed to find a liberal committed to ending landlordism.

The Conservatives may seem unlikely recruits for a campaign against landlordism – over a quarter of Tory MPs are themselves landlords – but in late March the Conservative MP Alexander Stafford asked the Prime Minister at PMQs: “Will he join me in calling on people to only take what they need, not to stockpile, and to stamp out the disgusting scourge of black market profiteering?”

The Prime Minister replied: “That is something that we should be looking at from a legislative point of view in this house as has happened before in this country.”

The PM’s spokesperson later added: “The prime minister is clear that we don’t want to see profiteering of any kind.”

So if stockpiling essential goods like food and toilet paper is morally wrong, how can it be OK to stockpile and profiteer from the essential good of housing?

Ending landlordism does not require either the confiscation of people’s properties or compulsory purchase. We just need to reverse the tax advantages that successive governments have given to those with wealth over decades.

And this is urgent. Research by Leeds Building Society published in mid-August found that “between March and mid-July the volume of buy-to-let mortgage applications held up better than residential”

So more housing being bought by buy-to-let landlords. Incidentally, 40% of council homes sold off under Right-to-buy in the 1980s are now owned by private landlords.

So how could we stop this?

We could increase capital gains tax for second and subsequent homes in line with income tax bands – 20%, 40% and 45% (removing the advantage for unearned income over earned income).

We could tax buy-to-let mortgages – with a levied surcharge, or with ongoing higher interest rate charged by Government on buy-to-let mortgage debt.

We could regulate too – legislating so that only individuals can own residential accommodation; not offshore trusts, not private companies.

We could go further and limit the number of homes an individual can own.

We should regulate rents too – to cap the profits of landlords. This would save both tenants and the taxpayer in general – since over £23 billion a year is paid in housing benefit.

So tax landlords more harshly, control rents, regulate private sector homes through licensing and enforcing standards, and build council housing.

In that way you euthanase the rentier, you clamp down on excess profiteering, and you end landlordism.

By doing so you’ve brought together a coalition – theoretically at least – of John Maynard Keynes, Boris Johnson, and Keir Hardie.

Socialists should campaign for this long-term policy goal, but in the here and now, it’s urgent to support the amazing campaigners like London Renters Union, Acorn and Living Rent in Scotland.

They are doing the hard work of organising, trying to collectivise tenants and resist rent hikes and evictions. We organise to defend work, we must organise to defend homes too.

“Housing should be a human right for all”

 By Liz Davies, housing rights barrister

We are meeting on the day when the government has announced a further extension to the moratorium on Courts hearing possession claims. So I’m going to go through what we were expecting next week, when the moratorium was due to end and Courts were due to resume hearing possession claims, and what is likely to happen now to private renters. And then deal with what we should be pushing for to protect private renters. As well as thoughts on “ending landlordism”.

What were we expecting? The end of the moratorium on Monday 24th August would have meant that Courts could hear possession claims, and that bailiffs could resume evictions. There wouldn’t have been huge numbers of people suddenly evicted, because the Courts were organising their lists with some care.

But we know that many private renters are struggling to pay rent – Shelter estimated in June that 227,000 private renters were in arrears – and that landlords can rely on the s.21 no fault eviction and/or the Ground 8 mandatory ground for possession where the tenant has eight weeks arrears. Provided that the landlord had served the right notice, the Court has no choice in those circumstances but to make a possession order. There would initially be a trickle of those cases, but it would build up to many people evicted over the forthcoming weeks or months.

The government announced today that the moratorium is now to be extended to 20th September 2020, so Courts can resume hearing possession claims from 21st September 2020. That is certain, because we’ve seen a judicial announcement confirming it. That gives tenants a further four weeks’ breathing space.

The government has also said that it intends to extend the notice period that landlords have to give, before bringing possession claims, to six months rather than three months. We don’t know the detail of that. It may be that tenants cannot be subject to possession claims until March next year, at the earliest. We don’t know if, for example, a three month notice was served in April, whether the landlord will now have to give a new six month notice or simply another three months. We need to see published proposals.

This extension is due to the howl of protest at the prospect of evictions from a very broad coalition: Acorn, London Renters Union, Generation Rent, the more established housing campaigns such as Shelter, Chartered Institute for Housing and Crisis, and Labour politicians including John McDonnell writing in the Mirror on 17th August, and Thangam Debonnaire. Keir Starmer acknowledged the government’s announcement today as necessary but not sufficient. This shows that private renters are a real electoral force and the government feels that it has to respond to them.

Is this extension enough? It provides a breathing space in which government should legislate to protect renters. There is absolutely no reason why the government should not implement its existing plans – announced in the Queen’s Speech in December 2019 – to abolish s.21 no fault evictions. It is a relatively simple piece of legislation and would have cross-party support.

We should also be calling for the government to abolish Ground 8 mandatory ground for possession where the tenant is in eight weeks’ arrears. Abolition of Ground 8 would not prevent a landlord seeking possession on the grounds of rent arrears, once the Courts resume and subject to compliance with the notice period. There are discretionary grounds for possession on the basis of rent arrears available, which means that the Court should look at the landlord’s reasons for wanting possession, and the tenant’s circumstances and decide what is just. If the tenant can pay his or her rent, and can start to repay arrears, the Court can keep the tenant in his or her home subject to a repayment schedule and everyone wins. The landlord recovers arrears, the tenant retains his or her home and does not become homeless. Discretionary grounds for possession give the Courts the option to strike the right balance.

The homelessness campaign Crisis have proposed emergency legislation requiring councils to accommodate anyone sleeping rough, or at risk of sleeping rough, or homelessness. The duty would last up to a year and is based on the public health risks of homelessness. It would apply regardless of whether that person had a priority need (the normal test for homelessness assistance), regardless of immigration status and regardless of whether there was a local connection. This proposal builds on what many of us in the homelessness world welcomed in March 2020, when the government instructed local authorities to provide emergency accommodation for all those sleeping rough, or at risk of sleeping rough.

It was quite unprecedented, over 15,000 people were accommodated and it showed that with political will, we can accommodate. Since then, there has been a new wave of rough sleepers, often those who had insecure jobs and insecure accommodation which they lose when they lose their jobs. This duty, which includes the lifting of No Recourse to Public Funds conditions so that those accommodated can claim benefit and their housing costs will be paid, would mean that we prove that ending rough sleeping can be done.

We should also argue for the suspension of the benefit cap, both to help people find affordable accommodation, and to keep those who were not subject to the benefit cap because they were working, but then lose their jobs, in their homes, with their rent being fully paid, rather than becoming homeless. And housing benefit should be restored to the 50th percentile, along with abolishing the five week waiting period for universal credit.

This webinar is called “Ending Landlordism” and all I can do is agree with John, Andrew and others that ending landlordism requires a vast programme of council housing building, along with encouragement of other forms of housing such as housing co-operatives. If that happened, the private rented sector would no longer be the only housing option available for tenants, and private landlords would have to compete with the affordability, security and decent standards contained in council housing.

We need to introduce security of tenure into the private rented market. Abolishing s.21 achieves that partially through the backdoor, in that landlords will have to give a reason for possession. But it’s not workable in practise unless rents are also controlled, or rent increases are controlled, because otherwise a landlord wishing to evict a tenant could simply raise the rent to an unaffordable level.

Finally, we need as a society to move away from seeing bricks and mortar – housing – as wealth creators and a form of investment. That requires a fundamental change to our economic system, but it would be the right thing to do. Housing should be a human right for all.