The Money Isn't Going To The Tenants, It's Going To The Landlords

[alexw]

So you're saying Thatcher is bad because she didn't privatise the NHS and slash benefit spending?

That's one I don't remember hearing from a lefty before.

In what way did I say that? Please don't put words into my mouth.

Edited April 7, 2013 by alexw

[MongerOfDoom]

Pretty obvious but seeing as you asked:

Because as soon as the Tories got back in they would have just sold them?

Perhaps you could also tell us why Labour bought two aircraft carriers without any aircraft to put on them. Were they worried the Tories might spend the money on something pointless?

[TheCountOfNowhere]

right to buy, right to take on mortgage debt more like.

[MarkG]

In what way did I say that? Please don't put words into my mouth.

You said, as I quoted:

It's also analogous to the spendthrift heir (Thatcher), blowing the inherited family wealth on an extravagant lifestyle (tax cuts, various other electoral bribes), instead of living off of the long term but low level income that that wealth would normally generate.

So Thatcher is apparently evil for spending more than the long-term low-level income taxes brought in. Most of that extra spending went to fund the bloated welfare state, so if you think she spent too much, you presumably must think she should have slashed that spending.

BTW, where did Labour leave her 'inherited family wealth'? Britain was on the verge of national bankruptcy in the 70s, which is the reason she was elected.

[gf3]

Perhaps you could also tell us why Labour bought two aircraft carriers without any aircraft to put on them. Were they worried the Tories might spend the money on something pointless?

You quite right of coarse I hate all of them.

[alexw]

You said, as I quoted:

So Thatcher is apparently evil for spending more than the long-term low-level income taxes brought in. Most of that extra spending went to fund the bloated welfare state, so if you think she spent too much, you presumably must think she should have slashed that spending.

BTW, where did Labour leave her 'inherited family wealth'? Britain was on the verge of national bankruptcy in the 70s, which is the reason she was elected.

Actually no. If you look at where the extra funding went it was electoral bribes for boomers, not on things considered to be part of typical "welfare for the poor" spending. It's gone on boomer pensions and old age health care.

The inherited family wealth labour left was everything that thatcher then sold off to fund electoral bribes. And yes the prior labour lot were an abysmal government too, but thatcher was even worse. She played a con trick on the electorate that has made many think she was an excellent prime minister. But of course your going to get a feel good effect by selling off assets and living high on the hog from the proceeds. That will only work for a few years though and when you run out of assets to sell, the party is over. The next labour gov though discovered a new trick and managed to keep the party going via a debt boom.

Well now we've run out of assets and we've overloaded on debt. The party can carry on no-longer.

Do I blame labour for a lot of this? yes. Do I blame thatcher? yes, and I blame her a lot more than I do labour, because it's far harder to end a party someone else started which everyone is enjoying, than to decide not to have the party in the first place.

Edited April 7, 2013 by alexw

[Lone_Twin]

Indisputably correct.

Whethere it's council houses, deregulating the banksters, privatising the energy and water companies, the railways etc etc

Even the doubling of household debt under Lawson.

One might suppose they'd learn from their errors, instead Osborne is repeating them.

Sorry for the delayed reply, I was just trying to persuade my bin man about the two pillars of the glorious labour years. Massive national level social housing building and low private debt increases.

He called me an idiot cn.ut and walked off.

Can't think why.

[byron78]

Perhaps you could also tell us why Labour bought two aircraft carriers without any aircraft to put on them. Were they worried the Tories might spend the money on something pointless?

You mean like a load of planes that can't land or take off from said new carriers? ;-)

http://www.huffingtonpost.co.uk/mobileweb/2013/02/04/ministry-of-defence-fighter-jets-switch_n_2616601.html

To be fair they did eventually correct the error and they're going to use the original planes selected by the previous government, but it's an error that cost well over 100 million (and a lot of time).

I'm a Tory by the way, but even I can see Thatcher set the foundations for an awful lot of what's happened since. Not sure why anyone would choose to blindly ignore the damage done by her.

Edited April 7, 2013 by byron78

[porca misèria]

"Right to buy" is classic deficit spending - extracting cash from council property today via a massive subsidy to buyers

As has already been pointed out, it was more a case of cutting losses. Building council houses was a huge pledge on future taxes. Selling them off reduced that pledge, at a time when the country was bust.

I was one of the generation who fell through the crack. When I graduated there were no more council houses, no private tenancies (killed off by the 1977 Housing Act), and no prospect of buying against 1980s HPI. Of course I resented the fact that my taxes were funding the council-house generation, and doubly so that they were pushing up rents. But how much worse might things have been if government spending on housing had just gone on rising without limit? Not that the IMF would permit it when they bailed us out.

[porca misèria]

The government can borrow money at 2%

What government? Ours today can borrow at 2% provided it prints it first.

The era of council housing led to a situation where government in the 1970s couldn't borrow at 20%, let alone 2%. That's why they had to go to the IMF and stop some of the worst profligacy.

[alexw]

As has already been pointed out, it was more a case of cutting losses. Building council houses was a huge pledge on future taxes. Selling them off reduced that pledge, at a time when the country was bust.

I was one of the generation who fell through the crack. When I graduated there were no more council houses, no private tenancies (killed off by the 1977 Housing Act), and no prospect of buying against 1980s HPI. Of course I resented the fact that my taxes were funding the council-house generation, and doubly so that they were pushing up rents. But how much worse might things have been if government spending on housing had just gone on rising without limit? Not that the IMF would permit it when they bailed us out.

You have proof of this, quoting figures for council house building vs the HB system we use instead now? Because it does sound like nonsense to me. Once the capital cost of social housing is paid back via rents collected (which will be low given a governments low borrowing cost), the government then has an effective zero cost revenue stream.

[porca misèria]

You have proof of this, quoting figures for council house building vs the HB system we use instead now? Because it does sound like nonsense to me. Once the capital cost of social housing is paid back via rents collected (which will be low given a governments low borrowing cost), the government then has an effective zero cost revenue stream.

Write off the capital cost. You still have maintenance costs.

And maintenance costs were rising throughout the era of council housing. By the time of the IMF bailout, rents weren't even covering maintenance for a large and growing proportion of the council housing stock.

[byron78]

Write off the capital cost. You still have maintenance costs.

And maintenance costs were rising throughout the era of council housing. By the time of the IMF bailout, rents weren't even covering maintenance for a large and growing proportion of the council housing stock.

Makes zero sense to me too I'm afraid.

Look at the system that replaced it.

What's housing benefit if it's not all high maintenance costs with zero rent return then??

Edited April 7, 2013 by byron78

[sleepwello'nights]

The inherited family wealth labour left was everything that thatcher then sold off to fund electoral bribes. And yes the prior labour lot were an abysmal government too, but thatcher was even worse. She played a con trick on the electorate that has made many think she was an excellent prime minister. But of course your going to get a feel good effect by selling off assets and living high on the hog from the proceeds. That will only work for a few years though and when you run out of assets to sell, the party is over. The next labour gov though discovered a new trick and managed to keep the party going via a debt boom.

Well now we've run out of assets and we've overloaded on debt. The party can carry on no-longer.

I think you missed the bit where the "nationalised assets" were costing so much to run they were a net consumer of taxes. After they had been de-nationalised; lots of individuals bought the shares so it was not quite selling off the family silver as some of the family owned some of the silver afterwards; they started contributing to taxes not just receiving them.

[alexw]

Makes zero sense to me too I'm afraid.

Look at the system that replaced it.

What's housing benefit if it's not all high maintenance costs with zero rent return then??

Agreed. If what he is saying is true then the obvious solution would have been to make tenants responsible for repairs and improvements. They had life-time tenancies so no issue with being forced to move. Set rents at capital cost, allow improvements to be offset against rents. Problem solved.

30-40 years later gov has a free income stream. Social tenants have high quality housing at low cost.

[porca misèria]

What's housing benefit if it's not all high maintenance costs with zero rent return then??

It's an abomination. A positive feedback loop: a system whose very existence drives up costs.

Your mistake is not in condemning it, but in presuming there was a better system on offer before the 1980s. That system had gone spectacularly bust (think Greece only much bigger) leaving us in a complete mess.

In 1983[1] Mrs Thatcher was under attack from the Guardianistas for putting a brutal cap on housing benefit. At least, a cap on how much you could get without having to answer questions and justify yourself.

So what was that cap? In London, £130/week for a single person. **** knows what it had been before that.

What were people paid in London? I have some idea of that, too, having done the graduate 'milk round'. A BBC job I interviewed for at Portland Place paid £4800. A graduate accountant or solicitor got about £5.2k. I got £6660 in an IT job. At the very top, Bain & Co (Mitt Romney's company) or Boston Consulting would pay £10-10.5k in the city - and both of them were open about not even looking at anyone non-Oxbridge.

After tax, £6660 left me £84/week in the pay packet. Scale that up, and even a graduate in the very top banking job wasn't getting £130/week take-home pay.

In other words, the housing benefit situation was a whole lot worse in the early '80s than today - and that was already an improvement on what preceded it. It took what seemed like an age, but things did improve towards the 'golden age' of the mid-'90s.

[1] A year etched in my memory because it's when life pitched me from the comfort of Cambridge into the horror of the London market.

[byron78]

It's an abomination. A positive feedback loop: a system whose very existence drives up costs.

Your mistake is not in condemning it, but in presuming there was a better system on offer before the 1980s. That system had gone spectacularly bust (think Greece only much bigger) leaving us in a complete mess.

In 1983[1] Mrs Thatcher was under attack from the Guardianistas for putting a brutal cap on housing benefit. At least, a cap on how much you could get without having to answer questions and justify yourself.

So what was that cap? In London, £130/week for a single person. **** knows what it had been before that.

What were people paid in London? I have some idea of that, too, having done the graduate 'milk round'. A BBC job I interviewed for at Portland Place paid £4800. A graduate accountant or solicitor got about £5.2k. I got £6660 in an IT job. At the very top, Bain & Co (Mitt Romney's company) or Boston Consulting would pay £10-10.5k in the city - and both of them were open about not even looking at anyone non-Oxbridge.

After tax, £6660 left me £84/week in the pay packet. Scale that up, and even a graduate in the very top banking job wasn't getting £130/week take-home pay.

In other words, the housing benefit situation was a whole lot worse in the early '80s than today - and that was already an improvement on what preceded it. It took what seemed like an age, but things did improve towards the 'golden age' of the mid-'90s.

[1] A year etched in my memory because it's when life pitched me from the comfort of Cambridge into the horror of the London market.

Statistics and figures please.

I'd like to see exactly how maintaining social housing cost more than the housing benefit bill now we've sold it all.

I don't want heresay. Statistics/figures please.

I'm sorry, but it just doesn't add up to me so I'd like to see some actual figures.

[erranta]

Statistics and figures please.

I'd like to see exactly how maintaining social housing cost more than the housing benefit bill now we've sold it all.

I don't want heresay. Statistics/figures please.

I'm sorry, but it just doesn't add up to me so I'd like to see some actual figures.

What ? is ranting on about but not telling you the full story is

Due to horrific quality of 50's/60's highrise flats (all damp due to design faults) they had to knock down and rehouse thousands all over the country. They also sussed by then that they were a disaster for maintaining social cohesion compared to an estate

At the same time all houses were being double glazed/roof condensation fans installed.

For older council houses grants for 100yr old slate roof replacements etc

Wartime prefab concrete walls were slowly being replaced with proper brick walls also

[gf3]

Statistics and figures please.

I'd like to see exactly how maintaining social housing cost more than the housing benefit bill now we've sold it all.

I don't want heresay. Statistics/figures please.

I'm sorry, but it just doesn't add up to me so I'd like to see some actual figures.

I agree with you.

Even if the private landlord isn't making a profit the private bank is.

Take away those profits and it's bound to be cheaper IMPO

Also the council has the power to grant planing permission on land it owns. So it could build without paying huge amounts of money for building land.

Edited April 7, 2013 by gf3

[RufflesTheGuineaPig]

Even if the private landlord isn't making a profit

The landlord will always make a profit. Eventually the loan used to buy the property will be paid back.

For most of the ex council places that would have happened within about 15 years due to inflation. (After 15 years the outstanding loan would be so little any outstanding debt could be paid with a years rent.)

[iamnumerate]

I agree with you.

Even if the private landlord isn't making a profit the private bank is.

Take away those profits and it's bound to be cheaper IMPO

Also the council has the power to grant planing permission on land it owns. So it could build without paying huge amounts of money for building land.

It is only bound to be cheaper if the council builds homes that last longer than the loan to build them - sadly not always the case.

And if maintenance is less than rent and the council house list doesn't provide perverse incentives to not work - Heather Frost is one example.

Although I am sure there are lots of slightly worse cases.

[iamnumerate]

It's also analogous to the spendthrift heir (Thatcher), blowing the inherited family wealth on an extravagant lifestyle (tax cuts, various other electoral bribes), instead of living off of the long term but low level income that that wealth would normally generate.

Thinking about it that analogy also applies to the utility sell offs, and north sea oil revenue.

The current boomers thought it was a great idea at the time, Well now we are all paying for it. May Thatcher rot in hell for this.

You do know that a lot of the utilities were losing money don't you? Selling a lost making business is often a good idea.

If it has been lost making for a long time even more so.

BTW Thatcher got rid of so many allowances than real income tax didn't decrease that much, if at all. She just fooled people into thinking she

did.

[@contradevian]

The landlord will always make a profit. Eventually the loan used to buy the property will be paid back.

For most of the ex council places that would have happened within about 15 years due to inflation. (After 15 years the outstanding loan would be so little any outstanding debt could be paid with a years rent.)

Depends on the "ex council" place. Some like mine had billions spent on them to remove asbestos, and to ensure all the bolts were put in properly, in case the private contractors had missed any (which they usually did).

Seem to recall an "ex council" semi being featured on `DIY SOS` once, which was described as a glorified two storey pre-fab (which is what is was basically).

I suspect many of these places have far exceeded their intended design life and have been sold on to private buyers who now assume the cost.

[iamnumerate]

I don't think we have had a good government in 30 years maybe longer.

Free market capitalism sounds ok but that would involve people living on the street with no food. so we do need welfare.

Yes but we don't need giving so much money to people that they are better off not working.

[@contradevian]

Yes but we don't need giving so much money to people that they are better off not working.

Looking at the Sunday papers and watching Andrew Marr yesterday, they are all missing the point.

Its the huge rise of "in work" benefits that are the problem, not "out of work" benefits and to really `profit` you need kids and an expensive private rental. Oh and pensioners of course, and the obscene amount of money paid to private scumlords.

Graphs have been posted on here today that have shown that "out of work" benefits have fallen since the 90's.

We are discussing this as the Government has done some polls suggesting it can win votes, by kicking the unemployed. Tackling the more expensive "in work" benefits would not be so popular!

Edited April 8, 2013 by Secure Tenant