FAREWELL WELFARE?

September 22nd was the 50th anniversary of the climax of the St Pancras rent strikes, which I’ve written about here before. During the 1950s, the Tory government wanted to limit the creation of social housing by increasing rents, so that people would be forced to look to the private sector for more affordable tenancies. In 1959, when the Tories won St Pancras Borough Council from Labour, they squeezed Council tenants even further by introducing the “differential rent scheme,” which increased rents for the majority of tenants.

The Council tenants of the day, who only 15 years earlier had fought a war for democracy and a welfare state, saw their achievements being eroded. They acted as one and went on strike. But as 1959 became 1960, more and more tenants gave up the strike, until only two – Don Cook and Arthur Rowe – were left. “We had a ship’s bell on Ellen’s balcony that we’d ring if we saw the bailiffs,” recalls Don’s wife Edie today. “People came streaming out of their flats as Ellen rang the bell. The support was unbelievable – there were thousands of people there. Leighton Road was chock-a-block.”

On September 22nd, the police and bailiffs arrived at Kennistoun House in Kentish Town, where the Cooks had barricaded themselves in. After a struggle, they gained entry, emptied the flats of the Cooks’ possessions, and evicted them. “We had just started getting a decent home together, a nice little respectable home,” Edie recalls. “Seeing all of our possessions being thrown over the top of the balconies and smashing down on the ground below... well, I was heartbroken. I lost so much personal stuff – photographs, things you couldn’t replace.”

In a case of history repeating, on Wednesday a Tory Chancellor will announce the biggest series of cuts the British public sector has ever seen. Councils up and down the country are planning for a number of scenarios – in the worst case, they will be forced to reduce budgets by 40%; if they only have to cut by 20%, they will have got away lightly. This will clearly impact upon social housing, and Councils are likely to move as many people as possible into the private sector.

Except that this won’t work either. The National Housing Federation has predicted that cuts to Housing Benefit will leave a million people at risk of being driven into debt, falling into arrears or losing their home. The government itself predicts that almost a million of the poorest people in Britain will lose an average of £12 per week next year, and more than 40,000 households will lose more than £1,000 per year. More importantly, the capping of Local Housing Allowance could make 750,000 private-rented sector tenants in London and the South East homeless (Newham is the only London Borough whose rents fall at or below the new LHA rate caps). This will increase the pressure on Councils (whose budgets may have been slashed by 40%) to provide housing at affordable rates.

There are two facts which are blindingly obvious, but which have been blacked out by the media and the government, so bear repeating. The first is that the deficit was caused by the government’s intervention to save the financial sector in 2008/09, and the reduction in tax revenue arising from the recession. It has nothing, repeat nothing, to do with public-sector spending. Even when New Labour spending was at its highest in the mid-2000s, the public debt was lower than it had been for 30 years.

The second point is that there is no rush to pay off this deficit. The majority of the loans do not need to be paid back for years, or even decades. For the party of business to start paying back debts that don’t mature for so long, when it doesn’t have the money to do so, and when this risks Britain falling into a double-dip recession, is extraordinary – but it also makes a kind of sense. As John Gray has recently written, the Lib Dems, no less than the Tories, have a deep ideological aversion to the public sector. Their brand of liberalism is entirely in hock to the market, even if the market makes people less free.

But there are rumblings. I have spoken to colleagues – lapsed lefties, people who don’t consider themselves to be political animals, even people who voted Lib Dem and now regret it – who are planning to strike for the first time in decades, or even for the first time in their lives. What Gray says about Greece applies to Britain too: “no democracy will accept steeply declining living standards in return for nebulous promises of growth in a hypothetical future.” The resistance begins on Wednesday with a rally outside Downing Street. For the first time in my life, I expect to see a hell of a lot of new faces.