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