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Nick Howard

Council Rents

(Autumn 1967)

From The Notebook, International Socialism (1st series), No.30, Autumn 1967, pp.5-6.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Nick Howard writes: Part of the general attack on working-class standards, aimed at achieving a higher rate of private investment and a higher rate of profit, takes the form of rent increases in the public housing sector. Labour politicians, raising the banner of ‘More Efficient Capitalism,’ argue that Council and Corporation housing should be financed more by working class tenants and less by government subsidies and less by local rates fund subsidies. Less in subsidies to the public housing service means more in subsidies to private investment. These already run at 45 per cent of the cost of plant or machinery in development areas and are part of a long-term trend in which the tax on net capital formation was reduced from 15 per cent in 1954 to 9 per cent in 1964. In the same period public housing expenditure as a percentage of all public expenditure fell from 9.5 per cent of the total to 7.3 per cent.

The financing of Council-house building not only includes meeting the spiralling costs of privately owned land and paying the profit margins set by the lucrative private house-building companies; it also includes raising loans to meet the cost of the two previous items. The loans system to local government was fixed by a Parliamentary Committee in 1902 and laid down that loans should be over 60 year periods at the current rate of interest. This today trebles the cost of Council house building.

The bulk of such loans come from the private sector and the debt charges levied by finance capitalists swallow up the bulk of the revenue local Councils receive from rents. Their future building programmes require the raising of further loans and the debt burden on the tenants gets heavier and heavier. Quoting an example from Salford, where flats in a fifteen-storey block cost £3,254 to build, but cost £12,062 after loan charges, the present Housing Minister, Greenwood, fulminated against the class responsible (Labour Party Conference, 1962): ‘We are living in an absurd and squalid system of society in which it is possible for some people to hold others up to ransom.’ Greenwood in 1967 has done nothing to identify ‘some people’ nor to curb their financial and political power. Instead, his Government has offered a Land Commission, which, in the words of its estate agent chairman, will operate as a national property-dealing company. So far it has not had any reducing effect on land prices. On interest rates, Greenwood’s administration has concocted a Housing Subsidies Bill; after November 1965 building loan charges are apparently pegged at an effective 4 per cent. In the words of Sheffield’s City Treasurer,

‘... at the time when the proposed subsidies were announced, the effective rate of interest charged in the housing account after deduction of Government grants was 3.83 per cent. In other words the tenant has paid less by way of interest than the legislators think is now reasonable.’

In other words, the working class has been taxed to subsidise some money-lending people, since Government grants are charged to the Exchequer.

The Housing Minister’s latest effort has brought the working class in some cities into the closest confrontation with the financier class since the 1915 Glasgow Rent Strike. Greenwood’s Ministry has issued a circular detailing the policy of rent rebate schemes which they have already successfully urged on some half of all local authorities. Brought in by Labour Councillors to the frenzied applause of the Tories, with heart-rending appeals that we should apply the old Marxist slogan (misquoted and out of context), ‘From each according to his ability; To each according to his means,’ the schemes have had a dramatic effect on working-class political consciousness.

Rent rebate schemes impose drastic rent increases on the majority under cover of regulation-bound promises of lower rents for the poorer paid. At the same time rate fund contributions, which are a local tax on property and private enterprise, are slashed if not completely abolished. Thus a redistribution of income occurs entirely within sections of the working class, with the higher rents charged to piece workers subsidising the slightly lower rents rebated for time workers, or small older families aiding large younger families. The rich, through an unchanged financial system, get richer, and the poor and not so poor, get poorer.

The confrontation between the classes, obscured by demands to vote out the Councillors, or to lobby Parliament, has come with the mobilisation of the tenants into militant Tenants’ Associations. Some 25,000 in the Sheffield area alone are now enrolled. The legalistic and bureaucratic nature of local government housing administration and the undeniable ‘home-centredness’ of many of the tenants make a tenants’ struggle the most obscure, slow and uncertain form of class conflict. Socialists must assist these struggles patiently and unselfishly, to help them become political and to help them avoid the parliamentary formalities of the existing political parties. A rent strike against a rent rebate scheme could mark the biggest post-war shift in working-class consciousness away from the sickness of Labourism. Even a defeated strike would represent a great breakthrough towards the politics of revolutionary, social and Socialist change.

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Last updated: 15 April 2010