Class action

We need to think differently about the class divisions in today’s society, says Kitty Ussher

Sometimes it feels very un-British to talk about class. But, without it, we struggle to get a handle on the tensions in British society today, let alone what can be done about them.

The importance of class considerations in the foundation of our party is well known. But still, half a century later, even among the revisionist wing of the party, discussion of class was explicit. In The Future of Socialism in 1956, Tony Crosland concluded that to remove tension in society equality of opportunity was not enough and needed to be combined with proactive measures ‘to equalise the distribution of rewards and privileges so as to diminish the degree of class stratification’.

Back then he pinpointed education as the key area for intervention, eulogising that a successful outcome would be when school choice ‘is a matter of personal preference and local accident … all will provide routes to the Universities and every kind of occupation … and it will cease to occur to employers what school job-applicants have been to.’

What would Crosland have picked out as the defining class issue were he writing today? Although there are still big issues to overcome in education, as progressive organisations like Teach First remind us, there have also been significant improvements. In fact, Mike Savage at the London School of Economics argues in his 2015 book, Social Class in the 21st Century, that there are ‘considerable limitations’ to calls for more education as a means of encouraging social mobility and addressing class inequalities.

Instead, he emphasises the ‘mundane and ordinary accumulation’ of the ‘ordinary’ wealth elite. This accumulation occurs through the ownership of houses that rise in value, through the acquisition of status from association with specific institutions such as the elite universities and parliament, and through access to ‘highbrow’ culture that is located in places that are in London or feel similar to London (including French restaurants and jazz, apparently). Looking at these findings, alongside the voting patterns and the debate on elites that emerged after the referendum, it seems to me that, were he writing today, Crosland may have pinpointed issues to do with geography, house prices and cosmopolitan/London-ness as the defining class variables.

This analysis is harder for today’s Labour party than the easy, if unacceptable, stratification that emerged from the industrial revolution. The divisions exposed are more embedded and real than having a quick pop at the top one per cent. They cut to the heart of the way our country is structured, with the combined middle and elite groupings making up over half of all households. Meanwhile, the most vulnerable group in the LSE typology, the ‘precariat’ on 15 per cent, is unorganised and disengaged and so cannot of itself deliver an electoral mandate. While a Labour government will always be concerned with providing greater security for the precariat, many of the divides that cause class stratification and resentment are actually situated higher up, around issues to do with house prices and cultural capital, rather than between those who live hand to mouth and those who do not.

If class still matters – and I would suggest that insofar as it causes resentment then it does – then the political challenge is to find an offer that diminishes the stratification but is sufficiently broad-based to command support.

We explored some of these issues in some recent research for the Smith Institute that used the new official data series on wealth and assets to create a typology of all UK households based on their asset-ownership (see box opposite). The key point is that housing ownership is such an important variable that it simply is not possible to discuss the distribution of wealth without it.

This takes us straight back to the analysis about class divides: over their lives people in Britain invest in bricks and mortar before pensions and other forms of assets, which means that wealth depends crucially on what happens to house prices during that time. And if status partly comes from the cultural capital associated with London-ness, and you are priced out of London-type markets, it is hard not to feel that other people have things that you simply cannot have.

The policy implications are large and, equally as largely, absent from the current political debate. First, we need to understand that housing policy cannot be considered in isolation from regional policy. It is not about the number of houses that are being built, it is about where people want to live. The Office for National Statistics currently projects the population of London to rise by a further two million in the next 25 years; it will take a lot of houses in the Thames Estuary to match that increase in demand. And London is also expected to grow proportionately faster than any other region; without action, the north-south divide in house prices will continue relentlessly.

It is time to think differently about housing and regional policy. The reasons people buy homes are for security, and – in areas of rising prices – for financial speculation. Imagine a world where both those motivations were removed. The middle classes could instead save in other ways, rather than spending a fortune in bank interest over their lifetime to invest in bricks and mortar (This would also make life far easier if they divorced, got a job elsewhere or needed to downsize). Security of tenure could be provided through new permanent private tenancies, created explicitly for that purpose. This would start to break the link between class and location. It is miles away from where we are now but is it as fanciful as Crosland writing in 1956 of a world where, ‘it will cease to occur to employers what school job-applicants have been to’?

The trick is to achieve consensus for a process that could start soon and achieve this type of change in a generation. It would be important to emphasise that the changes are not an attack on ‘ordinary wealth’ but a nudge to hold that wealth in different ways. To kick things off, I would propose two main changes.

First, a new national housing bank that blows away the current equity release market by offering decent prices for any proportion of existing homes in return for security of tenure at reasonable rent. It will require a public body to have the ability to provide capital upfront in return for a long-term rental yield. It should start operation in higher-price areas with a long-term aim of preserving mixed communities. Lifetime tenancies could be passed on at death but could not be sold – to prevent them attracting high net present values similar to long leasehold properties today.

Second, a new tax on housing ownership in high-price areas, introduced gradually, levied annually and used as an explicit tool of regional policy: zero in low demand areas and rising in higher demand areas, with the revenues ringfenced for regeneration projects to increase the attractiveness of low-value areas. Homeowners who are cash-constrained in high-value areas would be free to use the equity release option above to remain in their homes.

This ownership tax would also be levied on landlords in high-value areas who would only be able to avoid it if they converted to offering secure lifetime tenancies akin to those offered by the national housing bank. For landlords with housing benefit tenants there may be immediate savings to the public purse through negotiating long-term tenancies at lower rents.

Introduced gradually, this package would provide progressive policy tools to counter house price rises, yet provide more options for families and support mixed communities in ways that provided additional tax income for the government. Attempts to introduce a broad-based tax on housing ownership will fail if they are seen as an attack on ordinary wealth; instead they are just part of the policy kit that needs to be deployed in pursuit of a wider aim to heal the geographic divisions of status and class within our nation.

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Kitty Ussher is managing director of Tooley Street Research and a contributing editor to Progress

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Comments: 5...

  1. On October 11, 2016 at 10:37 am Alf responded with... #

    We just need a proper socialist government. That’s why a Tory-lite Labour party simply won’t do. I blame the Blair/Thatcher consensus people.

  2. On October 11, 2016 at 10:51 am Tony responded with... #

    As a homeowner in an area which is fast becoming a high-price area, how will being forced to either pay additional tax or release equity be beneficial to me? How also will this not end up being another tax on Londoners’ who want full ownership? Why should I be forced to release equity just because I want to remain in an area I’ve lived all my life?

    On first look, this policy would look to be an attack on ordinary wealth and aspiration. The very thing the author didn’t want.

  3. On October 11, 2016 at 4:59 pm wayne green responded with... #

    An interesting article .I do think one has to work at the fundamental levels of how societies have changed over time for any real progressive c changes to occur. One has to take into account the philosophical, political economic issue over time and space, the role of how societies have been influenced and socially disciplined. For example, one has to take account of the social politcal history of the nation state, the role political economics and also the disciplining fractions of capital, the birth of neo-liberalism and the disciplining on the social conditions of humans. For example one has to view the issue of the nature of the welfare state to a competition state, and the politcal philosophical concepts at work in with the fracturing of the working classes to the fractured middle working classes to the new managerial classes or professional class to the new trans national classes in with the positioning of epistemic communities, and the process of a new managerialism. The dynamic at work in this process, is in the role of this new managerial class, a trans national cadre class, fractions of epistemic or knowledge communities. These knowledge communities in the global political economy act that act as ‘trans-national knowledge based experts with shared understanding’the positioning of epistemic communities, and the process of a new managerialism. The dynamic at work in this process, is in the role of this new managerial class, the trans national cadre class, the fractions of epistemic or knowledge communities These knowledge communities in the global political economy act that act as ‘trans-national knowledge based experts with shared understanding’ (Owen Greene: 1999:325) developing ideas, advising and influencing decision and policy makers by providing the ‘necessary prerequisites for rational choice’ (P. M. Haas: 1992:369). Again, their must be an examination or understanding of influence and power flows of key planning groups at work from the Rhodes Miner Group, Oxford University and the understanding of the role of its colleges such as All Souls and Nuffield College etc. Then one has to view the influence of structure and system of globalisation and the role of identity and the issue of repositioning of multiply identities and the issue of what is social exclusion as a political word ..being the rupture of the social bonds of society to new forms of poverty. One will requires a change to the DNA of the global political economic system for real change for a possible reconfiguration of social class relations at the state level within this new consciousness for change within the global political economy.

  4. On October 12, 2016 at 12:11 pm Barry Kendler responded with... #

    I do not agree that people bought homes (past tense) for security. When my wife and I bought our first home it was the only option available to us. Social housing was needs based and we did not qualify. Private renting was small and very expensive and not secure. What has happened over the 40 years since I became a home-owner is Mrs Thatcher’s promise of a property owning democracy has been turned on its head. Due to a lack of building house price inflation has pushed housing beyond the means of average or even above average earners. The ravages of right to buy and Tory hostility to genuine affordable housing has seen the social housing sector destroyed. So now people on low and average and even above average wages are renting from the private sector, just like before World War 2. The dynamics that worked post war have been destroyed by both Tory and Labour Governments. Now we have Jeremy promising thousands of new homes most of them Council housing. The problem he has is that the supply side is so constrained the existing problems of badly managed and expensive private renting will just get worse until his supply start to comes through. Need to look at a more devolved policy involving CPO’, rent caps, tax breaks for buy-to-let landlords to let people on a long-term basis. This would enable us to rebuild communities. Also, the low interest rates are a massive turn off to save which is how my wife and I built up the money to make our first buy. Housing is a mess and neither the policies of Jeremy or May are going to fix it.

  5. On October 12, 2016 at 4:54 pm wayne green responded with... #

    It is interesting to note that after the national poverty hearing champaioned by the late Paul Goggins MP in 1996, a national enquiry took place for the churches of Great Britian and put into the largest report of its type called Unemployment nd the Future of Work. Within this report in 1997, Church Action On Poverty policy group made up of those in poverty have a policy paper included, in Appendix D. I offered under section 7.3 a policy of what needed to be done on rents and private rental sector. this was some years ago their has been a politcal failure do do anything regarding this isue of tenancy ageements and rents regardless of the other housing issues. I agree, housing is in a mess. But even now Tories still aim to sqeeze those in lowr incomes and those in private housing and unwaged.
    Do read this press release some months ago I gave to the local press and media on this whole subject.

    Dear Editor

    Regarding the recent local Adur and Worthing survey on council tax, I see the local Adur Tory/UKIP council with Worthing Council now engaged in hitting the poor, those unwaged and those struggling with families on low incomes to which I find totally immoral and unethical.

    What we really are seeing is a process of social cleansing of those in poverty and unwaged and low incomes in Adur.

    Already we know that housing benefit has risen in Adur with those on low incomes and in work, struggling to live, for example, in Adur the number of Housing benefit claimants in work from 2010 was 751, the number of Housing benefit claimants in work from 2014 was 1067 and increase of 42% according to Stat-Xplore DWP and this does not count those unwaged. Secondly, we also view in our area that the housing cap of £650 a month for a one bedroom flat is too low and that the cap has failed to stop rising rents in the private sector. We also have an acute housing shortage with an added influx of wealthier middle class professionals into the area for private rental adding to the problem.

    We also have seen before this imposed housing CAP, the local authorities had already a in-house housing rental cap. So we have seen in a sense two caps imposed. This then leads to those unwaged in private accommodation, having to top up their rents with their JSA and then leaving them in even more debt and poverty. Then a choice of having to go without food to pay bills which then leads to one having to go to a foodbank with a restriction of only three visits, then left to starve.

    We now see that the Adur council seek on one hand to freeze council tax bills as stated in the local paper, some weeks ago for those on average and higher earnings and yet also to seek to impose a charge on those unwaged and low income and in poverty by deception. For example, if one is to read this survey promoted by two so called leaders of the Worthing and Adur councils you will see they use the words ‘those on low income of working age’. And seek to weaken the deception effect by using a multiple choice survey. Then they also use the words ‘flexibility over the level of reduction in council tax bills’.

    Also, they state in the survey ‘some claimants currently have no council tax to pay because they have been awarded the maximum level of council tax support’. Rather than stating….. those unwaged in poverty or those poor and vulnerable on very low incomes. Clearly,one can see the use of key words and preconceived textual sentencing is at hand to influence the outcome and to create a simple them and us position. Infact it is shoddy, the policy decision has already been made it seems within the subtext, this is simply to view a clarification of a process to be seen as democratic, but really in truth, what we see, is a game of political smoke and mirrors by design by local, so called politicians, who think they know best.

    I find this survey outrageous in its wording and format and quite clearly again, puts the burden of the national debt on the poorest in society at the local level. These councils, should release the money, they have in their banks accounts, gaining interest for a rainy day or even cut the pay of the expenses of councillors and that of the senior staff and CEO.

    Even the IPPR in their report, The Conditions of Britain, Broad Rental Markets Areas (BRMAs), pages 186, para, 2-3 states, that in a sense the (BRMAs) do not work and local housing Allowance (LRAs) are failing and that the price values set are insensitive to the local areas. For example here in Adur, it should be around £750-£800. Just look at the local letting agencies for one or two bedroom flat, if you can find one in Shoreham.

    So what we are now seeing is a hidden and silent social cleansing of the area. And those that have families and children and those separated, divorced etc who have lived in these areas for years are being forced to move away from their families and this puts also more of a burden on those on low income in work. Infact these so called local politicians seem to revel in hitting the poor.

    I was a speaker at the first ever national poverty hearing with Church Action on Poverty and Paul Goggins MP in 1995-6, and as I have always stated, poverty and exclusion is a battle of invisibility and a lack of power to controls ones life, those in power need to help create a just and moral society to make the voices of the silent people visible towards a better life for the common good of all in society not condemn those poor and in poverty to a live of misery and social cleansing by design.

    These two so called political local leaders should be ashamed of themselves in support of such a survey and policy and fall on their swords immediately or be sacked as immoral and unethical local politicians, wanting to just put the political boot in on the poor, these are not leaders but charlatans of the people, bloated by power. A true leader walks with all, not the few and does not pick on the weakest in society but seeks to protect and offer hope.

    I wonder if such a survey is actually legal, as its wording is leading and unbalanced in my view and also has this survey been through a board of ethics of any kind and has a impact assessment been achieved before such a policy that leads to in a sense social cleaning of the poor in Adur.

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