The £79bn Housing Subsidy Rip-Off Must End

The biggest item of note in Andy Burnham’s recent devolution speech was his commitment to ‘the biggest council house building programme since the post-war period’. It is estimated such construction will cost the taxpayer up to £13bn a year. This is merely the tip of the iceberg, however. Research released by the Centre for Policy Studies shows the state is already implicitly subsidising social housing rent to the tune of £43bn every year and paying out £36bn in housing benefits, taking the total housing subsidy to a staggering £79bn. 

The average council house tenant is receiving over £1m of subsidy over their lifetime. Whilst there might exist an argument for providing council housing to the truly destitute, the vast majority of social tenants are not in this state. The redistribution built into both existing council housing, and Burnham’s proposal for more, simply amounts to stripping the productive class of yet more of what they create. No. More council housing must be opposed.

In Britain today approximately 17% of households live in social housing, made up of 1.6m households in council housing and 2.5m in housing associations. Unfortunately, for the taxpayer, the average rent for a social home fails to cover the repairs and maintenance by £53 every year and doesn’t even dent paying the original outlay for the home itself. 

But the main implicit subsidy is in the average social rent being just £6,227 compared to the much higher average private rent being £16,500. In London the disparity is even larger with average private rent being £26,748 and social rent being £7,744. It shouldn’t be thought that the lower rent reflects worse housing either. 85% of social homes were built after 1945, while this is true for only 53% of homes in the privately rented sector, and, the space in each home is broadly the same too.

As we must all concede, it would be wrong for a Newcastle shop assistant to hack into a lawyers bank account and steal £17,436 so she could rent a London home and be a shop assistant there, so, analogously, it is wrong for the state to tax lawyers the sum of £17,436, i.e., the difference between London rent and north east rent, to provide a shop assistant with London accommodation. Leftists will immediately dispute this analogy because they’ll contend ‘need’ caves in the London lawyer’s property right in their income, meaning, it’s silly to suggest taxation here is morally equivalent to stealing. 

For a start almost half of social tenants are able bodied. After mobility, the top two causes of disability are stamina and mental health, both easy to fake. Indeed, some people might fairly call a lack of stamina persistent laziness. Certainly, there is no reason why able bodied people can’t pay their own way, and even mental disability is often not a bar to manual work. While true need may require social housing in limited instances, e.g., for those in wheelchairs with severe learning disabilities, 17% of households are not in true need of it. 

However, even accepting 17% of households truly need social housing, why does any of it need to be in expensive areas such as London and the south east? If I was in severe need in Newcastle and was offered a council house there, I couldn’t rightly demand I have one in London at the cost of £17,436 instead, simply because I preferred London. The fact many people in council housing today already live in London is irrelevant; neither should they get the massive implicit subsidy. If council housing must exist at all it should be almost entirely in the cheap north east. 

Two points will be made against this. First, it is no good going to Newcastle as there are no jobs there, and, second, people live in communities which they have a right to remain in. Unemployment, however, is actually lower in the north east than in London at 5.6% compared to 6.8%. The idea there is a right to remain in a community is questionable too. No one would accept private actors stealing thousands from others so they could pay rent where they were born, so, why should the state be treated any different? 

Andy Burnham’s plan for a massive expansion in council housing will only further the injustice of the state forcefully taking off the productive class who work hard, often commute and save for their own homes; all to subsidise Labour voters in the fiscal drain class who live in salubrious parts of London which many young professionals could only dream off. The rip off of council housing for those who don’t truly need it must end; or, at least, Burnham must not be allowed to make it worse.

Image: Flickr/Nico Hogg

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