How Labour can improve its five-point plan

In previous weeks, the Labour leadership has received heavy criticism by the mainstream Left for ‘abandoning renters’. This argument was levelled at the Party after it released its ‘five-point plan’ to help private renters during the Covid pandemic. Here is the plan:

  • Ban evictions for six months

  • Equal protection for private and commercial tenants

  • Ban evictions based on arrears accrued during the crisis

  • At least 2 years for renters to pay back rent arrears (overdue payments)

  • Improve the provision of Universal Credit (UC) and introduce a temporary increase in Local Housing Allowance

When compared to how the Tories have been dealing with renters, Starmer’s proposed improvements are truly lukewarm at best. The virus is going to cause a huge economic downturn and those who are at the top of the economic food chain are those who are best prepared to share the larger portion of the burden, not the rest of the country who are clearly not being covered enough by the Tories or this five-point plan.

Labour don’t want a situation where it becomes unclear over who they are aiming to protect most from this economic hardship, especially since the most vital lesson that the pandemic has taught the country is the primacy of labour over capital. The Party that is meant to protect labour -the clue is in the name- doesn’t want to appear like it is failing to do its duty.

What makes matters worse for Starmer is that he seems to be breaking his promise to much of the Labour membership that he would stay loyal to the Party’s ‘radical values’ – a promise made during the leadership election. This conservative approach from Starmer creates the feeling that after years of leading the country’s economic conversation with anti-austerity politics, Labour is starting to go missing under the big shadow of Rishi Sunak’s seemingly big, bold policy ideas.

So, how can Labour improve its plan for renters? Firstly, here are some stats from the New Economic Foundation that the Party needs to consider:

  • 35% of private renters already live in poverty.

  • During this crisis, an estimated 5.6 million workers could lose their jobs and 1.6 million of those workers are private renters.

  • Those who lose their jobs will be forced onto the treacherous and calamitous UC and this could take months to go through, leaving people in the lurch.

  • A minimum wage worker will face around a 45% wage decrease if they go onto UC.

  • Those who are furloughed will be paid 80% of their wages (up to £2,500 a month).

Bearing these facts in mind, and returning to Labour’s five-point plan, it is undeniable that not enough is being done to protect those who are most at risk from the economic hardship this crisis is causing.

To add a bit of balance to this argument, it must be mentioned that Labour isn’t here to simply appease its membership – it has to appeal to the country and, ultimately, win elections. So, an all-out universal scheme of rent forgiveness, like some on the Left are suggesting, may not be appealing to the country as a whole.

Labour doesn’t want to seem to be living up to its age-old stereotype of being ‘anti-ambitious’. Therefore, there needs to be some sort of compromise so the Party can protect small-scale landlords who aren’t the landed aristocratic elites patrolling their estate on horseback like much of the Left see them as. Many of these landlords find that their tenants’ rent isn’t enough to replace a salary. Furthermore, most of these landlords would fall into financial peril if not given some sort of safety net. So, in the name of supporting Labour but also finding a middle-ground to protect the lower-middle/middle-class here are some suggestions to improve the policy:

  • Ban rent increases during the crisis. Have strong regulation over rent increases during the recovery period.

  • Ban rentfor those who have become unemployed during the crisis.

  • Extend the window of time renters have to pay back arrears.

  • Lower rent rates to 80%for those who have been furloughed.

  • Provide low-interest loans and other forms of income protection to small-scale landlords.

Overall, these changes would correct the conservative approach the leadership have used, and improve the Party's appeal to a rump of the electorate it lost in 2019.

George Shealy

24 Jun 2020

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How Labour can improve its five-point plan