The housing road to serfdom

“Capitalism must not build a new road to serfdom” concludes an article by Peter Franklin – a previous Conservative speechwriter it turns out – so I was on my guard – but he seems to have been writing mostly for thoughtful Conservatives such as Oliver Letwin…

Although, in the article he was talking about the disasters of the American housing market, he seems to have missed completely that the same serfdom exists in the UK.

The methods are different but the results are entirely similar.

First there is the government’s refusal to classify affordable housing as anything other than costing no more than 80% of the average local market rent. Whereas Housing charity Shelter says affordable housing should cost no more than 35% of your household income after tax and benefits.

And second in areas where jobs are plentiful housing costs representing 50% or more of household income is not uncommon. The local government association reckons 1 in 7 private tenants are subject to this scenario.

This is pure rent extraction. You are working -mostly- to pay rent to someone else.

And the rent extracors are doing nicely out of the government too – as these figures from the Office of Budget Responsibility show. (Yellow stacks are pension benefits, blue are in work  – both in billions per annum). This is putting government money, relentlessly, into private hands – just as effectively as the US has done. New state social housing has been all but abolished but there is literally a wealth of opportunity for private housing subsidised by the state:

Although logically I cannot see how this is capitalism, because taking state handouts is not something capitalism is generally reckoned to condone.

But this is, I suggest, the oh so deceptive sub-brand of neoliberal capitalism.

And it is certainly not building the road to serfdom.

It is actually organising our journey on it.