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Time for hard choices as reality catches up with us
• YOUR leader column highlighted the dire state of the housing market and the parlous state of the economy generally (Housing is another reason why roof’s falling in on Brown, July 10).
What a change from the last 15 easy years! Since the 1990s inflation has generally been low, mainly because stable or falling prices for almost all goods have offset increases in the prices of most services. The economy has therefore continued to grow, although more and more lopsidedly.
Financial services have boomed but manufacturing has suffered grievously, especially in our former industrial heartlands.
No wonder our balance of payments is now showing a huge gap. As the oil dries up and services go into a tailspin, we simply do not have enough manufactured goods to sell to the rest of the world to pay our way.
Now that the birds are coming home to roost, the danger is that we talk ourselves into a full-blown recession, led by the financial sector which has let us down so badly over the recent past. Yes, there is a risk of inflation creeping up if the economy is reflated but most of the current price rises – for food, oil and other commodities – are ones which no one in Britain can do much about. Once they drop out of the year-on-year index, the situation will look better. In the meantime the restraint and common sense that most wage earners and trades unions are now displaying in avoiding wages and prices chasing each other is a helpful sign. If only the City had exhibited the same good sense!
The judgment to be made, therefore, is to what extent we risk some more inflation to head off a really serious downturn in the economy. Bankers and financiers always vote for recession but most other people would rather choose not to lose their jobs even if there is a risk prices will then rise a bit faster than they would like. This is why it makes sense to put more money in people’s pockets to keep the economy moving, and not to raise interest rates so the economy stalls.
This should help in the immediate future. In the longer term, we are going to have to have structural changes in the way the economy is run. The only way to pay for all the imports we need is to export more. We will never do this until we get the cost of producing goods down to somewhere near the world average, so we can turn out more of them.
We also need the productivity increases from more manufacturing to underpin our living standards and to provide more good jobs for blue-collar workers. Making the whole economy more competitive won’t happen with high interest rates, an over-valued pound and the country being run in the interests of the City rather than ordinary people.
The problem with the last 15 years is that they have been built on an illusion. It looked as though we did not have to bother with the old problems of living within our means and investing for the future any more. We could live now and always put off the time when we had to pay. Unfortunately, reality has now caught up with us and we now have much harder and more difficult choices to make. This does not mean there are no solutions. It definitely does mean, however, that relying on financial services and the City to pull the economy through is not the way ahead.
JOHN MILLS
NW1
• GOVERNMENT is almost in denial about the scale of the housing crisis but still holds out against investing in first-class public (council) housing.
There’s no way the private sector (either the big-profit-making developers or the so-called registered social landlords) will provide the three million new homes Gordon Brown promised. They are far too preoccupied with holding together business plans based on risky assumptions about property prices, interest rates and inflation that are looking increasingly shaky. That also means they won’t provide the proper jobs and training that could go with a big house-building programme – the jobs that kids growing up in Camden need too.
Ministers might not like the logic but their options are increasingly being squeezed by the scale of the crisis and the pressure from our alliance of tenants, trade unions, councillors and MPs demanding investment in council housing.
The fact that the Local Government Association has come out in support of tenants’ demands and government has set up a review promising “to ensure we have a sustainable, long-term system for financing council housing” is progress. Our job is to add to this pressure – everyone can do their bit!
Instead of selling off homes and proposing to privatise estates, Camden Council should be actively lobbying government. Camden tenants’ reps have called for a joint deputation to meet the new London mayor to demand he honour Ken Livingstone’s commitment to use the London housing pot to fund Decent Homes work in Camden and let Camden bid for a grant to build council housing on sites like the British Library and National Temperance Hospital.
The letter from Camden’s leader to the mayor downgraded this agenda to “affordable housing” and failed to support the call for a joint deputation.
Members of Labour’s National Policy Forum – many of whom live in Camden – can do their bit too.
Later this month they will have the chance to vote on amendments to Labour’s Partnership in Power policy document restating the policy agreed at Labour’s conferences in 2004, 2005 and 2006.
Council tenants, trade unionists and households on the council housing waiting list need to step up our campaign to oppose Camden’s attempts to sell off and privatise our homes and demand a change in government policy.
ALAN WALTER
Chairman, Defend Council Housing
Peckwater Estate, NW5
• I’M pleased the New Journal’s far-sighted radar has picked up the helpful thinking on housing – and the economy – coming from the Lib Dems at national level, in the person of Vince Cable.
Dr Cable has suggested government should allow local authorities to acquire properties to help those on our waiting lists – and to bring unsold and unfinished properties into productive use.
It’s quite absurd to have families spending years in hostels and temporary accommodation while good homes are empty and mothballed because private investor funds have dried up.
If government could use some of the public funding it has already set aside for housing to let us do this, I know we would want to see if we could make it work – on our own, or in partnership with housing associations.
We would want to create more social housing, for those thousands in desperate need of low-cost rental homes. We would also want to build more so-called “intermediate” housing, helping residents who want to own their own homes on a part-buy, part-rent, scheme.
Your editorial ends with the sentence: “Perhaps Camden Council – through private developers – will start building homes again.” My short answer is yes, divert some of those government housing funds to Camden Council and, of course, we will work with developers and housing associations to build more homes.
We have already promised we will replace the homes we have had to sell to fund getting our homes back up to standard.
And we are already on record as saying that – if government lets us – we would think about building without private developers too.
CLLR CHRIS NAYLOR
Executive Member for Homes and Housing Strategy
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