Lime Legal

Buy freedom!

Published 01 September 2023

In the past it was those with the money and the land who dictated political reality in the UK, says Kevin Cahill. But what happens now the masses have a stake in the country’s most valuable asset?

About four generations ago, in 1872, a second Domesday book of the United Kingdom showed that 95.1 per cent of the British population of around 28 million owned nothing at all – not a blade of grass. The population was mired in rent-based landlordism and extraordinary insecure and inadequate wage slavery. In the four generations since, about 70 per cent of the population of the United Kingdom has obtained a stake in land by way of a home. The majority of the population has a capital asset in a capitalist economy. Absolute dependence on wages has been almost abolished and a new vista has opened. And because we live in the midst of it, we often miss its meaning, which is this.

The UK land mass, most of it rural agricultural, is worth a mere £250 billion, compared to the pirvate housing stock, which is worth about £4 trillion

We are not a wage bound system any longer. Our well-being is not merely a factor of steady employment, although tightly bound to it. Our well-being, and it is far more fundamental than mere economics since it affects the roof over our heads, is inextricably bound up with our capacity to obtain, own and keep a home. Not having a home does not simply mean being the victim of the insecurity of private or public landlordism. It means being excluded from the economic mainstream of society. But by listening to politicians – Tory, Labour and Lib-Dem alike – you would never guess this. Housing is seen as a vague kind of public good, good for the generality and good for the young. The why is not gone into too closely, because it implicates all recent governments in a virtual crime against this advancing tide of prosperity. And it means that politicians have to face a new reality, for which most of them seem uniquely unprepared. This is a population in which the majority of families already have a stake in a capital asset. From a situation in 1872 when just 4.9 per cent of the population owned all land and most domestic dwellings were rented, over 70 per cent of domestic dwellings are now owned, not rented. And while the descendants of the owners of 1872 still own 69 per cent of the UK land mass, that ownership is now small in total value relative to the housing stock. Very approximately, the private housing stock of the UK is worth about £4 trillion; the land mass, most of it rural agricultural land, is worth a mere £250 billion.

In the past it was those who had the money and the land who dictated all political reality in the UK, internal and external. But the population itself now has the position of its former owners and rulers. The bulk of the population now own the most valuable asset pile in the country. But the government and the political parties carry on as though nothing had changed, with the Queen and the government acting as though they were still in command of the wealth of the country. The Queen is invoked here because of an extraordinary anomaly in the UK constitution, whereby she owns all land, with freehold home owners mere tenants of the Crown. This feudal nonsense is part of the power structure that refuses to acknowledge where real power now lies, if unexercised: with the homeowners.

But what crime have governments committed? Since about 1979, the historic trend towards increased home ownership has virtually stalled, with private ownership of the domestic dwelling stock then at about 65 per cent and at about 69 to 70 per cent now. The first stall came when the Conservative government under Margaret Thatcher started selling off the public housing stock. This was without calculating its impact on the private housing market or the construction industry, heedless of its impact on those who needed rented accommodation, and refusing social housing providers the use of the capital raised from sales in order to build new non-private housing. Over 500,000 jobs in the construction industry went and have never been replaced while housebuilding slowed almost to a standstill and has not yet recovered.

The Lamont/Major fiasco of 15 per cent interest rates and sudden unemployment in 1990 and 1991 led to a level of repossessions not seen since the Highland clearances. This was at a time when sections of the media ran a campaign against those who lost their jobs having their mortgages paid for out of unemployment benefit. This campaign overlooked the fact that the majority of those who lost their jobs and then their homes, had been paying between 40 and 50 per cent of their income in taxes and National Insurance.

But this particular campaign led straight to the heart of Thatcherism, which was an attempt to increase the level of insecurity in the population generally, by ending job security, increasing the level of landlordism in the housing market and stealing back the kind of deep security provided by homeownership. Neither she nor her successor did anything to create a homeowning democracy. They tried instead to roll back three generations of economic and social gains based on housing, and tried to reintroduce the insecurity of Victorian Britain. Their final blow to the growth of real prosperity in the general population was to end tax relief on mortgages.

Which brings us to the just ended Blair government. This government presided for 10 years over a housebuilding industry that last year managed to produce the same number of new homes as the country built in 1924. Under Blair there has been virtually no growth in private homeownership as a percentage of the housing stock. And tax relief on mortgage payments was not restored, something that exists in almost every other advanced economy.

But the Blair era is over, and the Brown era has begun with a volte face of stupendous proportions. On the back of a carefully nurtured clamour for affordable housing the new prime minister has made housing the top economic priority of his government. He has outfaced the backwoodsmen in the Campaign to Protect Rural England (CPRE) and their allies in the media, by putting the real needs of the real population at the heart of economics. But the spin isn’t quite gone. The Barker report, commissioned by Gordon Brown and written by Kate Barker, almost certainly the next governor of the Bank of England and its first female head, looks in curious places to see what level of housing we might need – to Germany where private homeownership is less than 50 per cent, but not to Ireland where it is 82 per cent, or Spain where it is roaring through the mid-70 per cents.

The table that is missing from the Barker report is the one above.

To compete with the Irish rate of housebuilding the UK should have been building three million houses a year. But the Irish are merely doing (or overdoing) what Brown is now proposing, which is to get the housing backlog, which probably is three million houses, built. (On a comparative basis with the US, the UK should have been building about 780,000 houses a year. This is excessive given the size of the UK, but is an indicator that the underbuild is not 150,000 or so homes a year as Barker says, but somewhere between the US rate and the proposed rate of about 250,000 new homes year).

What is now clear is that Gordon Brown – favouring another big rise in private home ownership – seems set to restart the economic growth that goes with a thriving housing market, a fully employed construction industry, and a greatly empowered population secure in its most basic need which is good quality shelter – a home of their own.

Kevin Cahill is the author of Who Owns Britain and Who Owns the World