Lib Dems welcome Mutual Home Ownership              home                                                                                                 
March 2005    
Liberal Democrat Housing Policy.
“Affordable Homes in safer, greener Communities” is the title of the Liberal Democrat Housing Policy Paper published last month.  Setting out the Party’s housing policy for the next Parliamentary session, the report deals with the need to provide affordable housing either for rent or purchase by people on modest incomes.  These low cost homes should be attractive to look at but also energy efficient and comfortable to live in.  High quality design both of the internal and external environment is essential for any development to be sustainable in the long term.  Generous provision of open spaces is also vital.   The Paper strongly supports co-operative and mutual solutions.  As well as dealing with housing issues, the Paper tackles the thorny issue of land reform.  This  has been an issue which has dominated radical Liberal thinking since the beginning of the last century. The favoured solution at that time was Land Value Taxation.   However, over the years, support for land value taxation faded .  It was quietly dropped from the old Liberal Party’s programme in the 1960s.  Today’s Liberal Democrats advocate community land trusts, community land auctions, and local property taxes.  But the link with earlier radical ideas is obvious. .   
Co-operators will welcome their support for co-operative schemes like mutual home ownership trusts, community land trusts and commonhold associations.  The idea of community land trusts is that they permanently remove socially useful land from the market place i.e. away from the clutches of greedy property speculators.  The land is either gifted to the trusts or leased to them for a peppercorn fee.  Mutual Home Ownership which was developed by CDS Co-operatives takes the process one stage further.  As the land is free, the cost of building the housing is halved.  When the tenants move in, they buy a stake in the Mutual Home Ownership Trust which is co-operatively owned and managed.  When they move out, they sell their shares.  They keep 90% of the rise in value which they could then use towards buying a place of their own.  As the whole system is based on long-term assignable leases, there is no Right to Buy so the homes remain permanently
The paper also calls for the introduction of Community Land Auctions.  These are intended to ensure that the community gets a share in the rise in the land value which takes place when a site is developed.  Various attempts to achieve this have been tried in the past including land value taxation, the post-war betterment levy through to section 106 planning agreements which apply today.  Few have been successful.  This is how the Liberal Democrat scheme would work.  The council would initiate land auctions.  The landowners would be invited to send in sealed bids with the details of their land and the sale price.  The council would decide which land was suitable for development and would then apply for planning permission.  Where planning permission was granted, the value of the land would rocket.  The council would then buy at the sealed bid price i.e. the lower price and then immediately re-sell it at the higher price keeping the profit for community purposes.  It seems to me to be fraught with difficulties.  The potential for conflicts of interest and abuse could be enormous.
Critics may argue that, as the third party, the Liberal Democrats can advocate any policy they like safe in the knowledge that they will never be put to the test.  That’s true.  But that doesn’t mean that their views should be dismissed out of hand. They have a large and growing presence in local government; a fact which large numbers of ex-Tory councillors will ruefully confirm.  But the Liberal Democrats could become a threat to Labour too.  In the Co-operative Movement, we should remind both parties that our movement was fighting for the rights of ordinary people long before either of them were even thought of.  It’s time that Labour also remembered its roots and supported co-operative values and principles albeit brought up to date to fit present day circumstances.  The Labour manifesto for the forthcoming General Election should be the first step in that direction.

This article was first published in the Co-op News