The book looks at several themes. Part 1 considers the evolution of housing policy. Part 2 looks at the interaction between it and the agents and households involved in the production, consumption and exchange of housing. Part 3 examines in more detail the relationship between housing and households. Each of the themes deserve a few remarks in this introductory chapter.
Housing and the state
The ‘why’ of state involvement State involvement in housing comes about through the political demands of different agents. Three broad types of agent can be identified. First, there are those capital interests such as builders and landlords who are directly involved with housing production and consumption. They want their interests secured and they lobby government to that end. Second, there are those interests indirectly concerned with housing. Industrial capital, for example, is mainly concerned with producing commodities, but it requires a labour force which requires housing. Industrial capital thus wants a sufficient quantity of cheap, readily accessible housing so that workers’ efficiency is not impaired and labour costs are kept low. Industrial capital could provide housing for the workers but this is a costly business: its demand for state involvement is mainly a demand for the off-loading of the costs of reproducing labour power on to the public sector. Third, because housing is such an important part of the individual household’s life it has figured in the collective demands for social advancement and material gains. The articulated demands of working people for the social improvement of their lot has included calls for better, cheaper housing. State involvement has also been suggested by those seeking to vitiate disruptive social action. The Victorian social reformers pointed out that better housing not only produced more efficient workers, it could prevent potential social unrest caused by poor housing. As we shall see, this latter theme was an important element in the evolution of housing policy in the late nineteenth century.
The limits of state involvement There are limits to state involvement in housing matters. First, there are the self-imposed limits of a state in capitalist society which confines problem-solving to acceptable solutions. For example, the inefficiency of the house-building industry is approached through introducing methods of industrialized building and hidden subsidies, not through complete state monopoly of house construction. Then there are the politically acceptable solutions. For example, a great deal of money could be saved by abolishing income tax relief on mortgage repayments, but with owner-occupiers being a majority, this partial solution to the perceived problem of spiralling public expenditure is never seriously raised. The heat in housing-policy debates is caused by the political friction of proposed policies rubbing against these limits. Second, there is the limit of public expenditure. Public expenditure comes from government taxation. There is a finite limit to this taxation and when the state spends more than it takes it experiences a fiscal crisis. Since much of state involvement in housing matters entails state expenditure, housing is dragged into the debates on the need to reduce public expenditure. Throughout the post-war period, the quality and level of state housing have been affected by changes in public expenditure. I shall seek to identify the broad nature of these changes and the particular areas of housing provision most affected. The main conclusion drawn is that the provision of local authority housing has been worst affected.
The form of state involvement The form of state involvement in housing is shaped by three factors. First, in the medium to long term the balance of political power is important. British housing policy over the long term has been shaped in broad outline by the nature of this balance. At various times landed interests, industrial capital and working-class interests have been important in shaping policy. These interests have been mediated through the representation of political parties. At times the political parties have directly represented material interests. But because the main political parties also carry ideological baggage from previous times, memories of the past and an intellectual articulation of their position relative to other parties, they can be relatively autonomous of the interests of any one specific group. Consider the case of the Conservative party and free enterprise. Its commitment to free enterprise, expressed in terms of freeing the market from government controls, owes more to nineteenth-century debates and responses to the socialist intellectual and political challenge than a full understanding of modern capitalism. In similar vein the Labour party has a commitment to nationalization which owes more to the inter-war experience than to an analysis of how to promote industrial democracy. This observation does not lead to the conclusion that the political parties are completely independent of material interests. They are not. They express material interests through the medium of political representation. One has to be wary of the surface expression since all parties represent their policies in terms of the national interest and universal principles. In a democracy this is the way to achieve power. In Part 1 I shall seek to show how, despite the claims of universality, housing policies in post-war Britain have benefited certain groups and constrained others. The impact of the policies has had definite redistributional consequences.
Second, in the short to medium term, state policy is shaped by the economic context: in other words, the state of the economy. This affects housing in a number of ways. In the private sector, for example, the cyclical nature of economic growth is important. Booms and slumps seem to be endemic to capitalist economies. And the roller-coaster of economic expansion and contraction is reflected in the peaks and troughs of housing starts in the private sector. In booms credit is available, business confidence is high and more houses are built. In slumps housing starts to fall off dramatically as builders find it difficult to get credit and households are strapped for cash. Net additions to the housing stock thus depend on the state of the economy and, in general, during slumps house building declines and it is more difficult for new households to obtain accommodation. State policy is affected to the extent that political pressures are generated for the state to intervene in the level of house building and to secure the entry of new households into the housing market. In the public sector the state of the economy impinges on policies most directly through the direction and level of state expenditure. Two phases can be identified. In the first, during the 1950s and 1960s, housing was used as a Keynesian regulator to increase effective demand in the economy. In the second phase, from the mid-1960s onwards, the worsening economic crisis was reflected in calls for reductions in public expenditure. Housing, and local-authority housing in particular, was badly affected by expenditure cutbacks. This two-phase categorization is crude. There were reductions in housing expenditure during the 1950s and 1960s. However, the simple division captures the essence of the post-war period, as we shall see.
The economic context does not fix set courses for state action. There is no one path set by the nature of external economic constraints. The state of the economy affects policies through the filter of political action. The constraints and opportunities afforded by the economic background will be perceived differently according to the balance of political forces. There is no inexorable policy course set by economic logic above the domain of politics.
Finally, in the short term, state policies are shaped by previous policies. Previous policies provide the legislative and political frame of reference for subsequent policies; they are the blueprint for small-scale incremental changes. Moreover, the effect of previous policies on different groups and institutions will in some measure form the shape of demands for new and revised policies. The unfolding consequences of previous policies shape the course of future policies.
The three factors outlined above can be related in a hierarchical manner to policy changes. Fundamental shifts in housing policy reflect broad changes in political power. There have been two such shifts in twentieth-century Britain. The first was immediately after the First World War and the second was immediately after the Second World War. In both periods, housing policies reflected popular demands for a higher ‘social wage’ in general, and for better housing in particular. These fundamental shifts placed state involvement in housing on new levels. New solutions to old housing problems were conceived. Subsequent policies after each of these major shifts were then shaped by the political response to the changing economic context. As the balance of political power changed, so did the perception of the economic constraints which in turn guided the nature of the political response to changing economic conditions; at the level of incremental change policies were shaped by the monitoring of previous policies and the lobbying of various housing agents. The general argument I put forward in Part 1 is that post-war housing policy in Britain represents one coherent period. The fundamental change in policy was expressed in the immediate post-war years, thereafter policy changes were of the medium-scale and incremental type.
Housing policy and housing protest A distinction can be drawn between state policies that affect housing and those policies specifically tailored to meet some expressed housing need, pacify some housing interest or placate housing protests. In the former case almost all government economic, social and planning policies affect the housing market to some extent. A recurring feature of the post-war housing story has been the way in which housing has been affected by economic policies. In managing the economy through controlling (or not as the case may be) credit rates, limiting the money supply, formulating wage and price policies, etc., the state has continually affected the housing market. In terms of the latter we can make a further distinction between policies designed to deal with specific issues and a set of linked measures which form a coherent, long-term policy. Coherent housing policies are rare; measures tend to be designed by the politics of the moment in the light of expediency. The one enduring feature of post-war housing measures has been the encouragement of owner-occupation. This has emerged as the single most important measure pursued by successive governments.
In the previous section I noted that state involvement in Britain was shaped by the balance of political power, the economic context and the unfolding consequences of previous policies. The first is self-explanatory. The second is fairly obvious and will be alluded to throughout the book. The third deserves further elaboration. Three elements are relevant. The most important has been the monitoring of previous measures by the bureaucracy. At the local level the relevant institution is the Housing Department, while the departmental responsibility at central government level has shifted. From 1945 to 1951 the department most directly responsible for housing was the Ministry of Health. In 1951 the Ministry of Housing and Local Government was established. Later, in 1970, housing came under the huge Department of the Environment. These government departments have dealt directly with housing matters. But perhaps the mo...
