Last night, Labour released its five point proposal to support renters during the Covid-19 crisis – to immediate criticism from renters and unions. Rather than the rent cancellation many had hoped for, the party instead promised to “grant renters at least two years to pay back any arrears accrued during this period.” This was combined with measures to speed up the already-announced scrapping of ‘no-fault’ evictions, make government assistance easier to access and extend commercial tenant rights to residential tenants.
But it was the insistence that renters would have to pay back the rent accrued during this crisis that met the stiffest opposition. Even before this crisis, a great number of families and workers across the UK were in financial difficulty. After wage stagnation, casualisation of work and increases in the cost of living, many on a low income have been living pay check to pay check. The latest figures suggest renters pay almost half of their income to landlords when Housing Benefit is excluded.
Even if the government agreed with Labour’s plan, and renters unable to keep up with payments are not evicted, they will at some point face making repayments on top of their usual bills. This will likely to be out of a lower wage than before the crisis and after months of limited income. Clearly, for many, this will not be possible. For renters’ union ACORN, Labour’s position “amounts to a betrayal of private tenants and a capitulation to the landlord lobby.”
It is also disappointing from a party which had, until recently, recognised that Britain was in a housing crisis. Recent government street counts show that the number of rough sleepers in England has increased by 250% since 2010. With very little affordable, let alone social, housing being built, it is increasingly challenging for people to find and afford a home. The latest ONS figures show that private renters are paying almost double the proportion of their income for rent compared to those paying a mortgage, and 2/3 private renters and 8/10 social renters have no savings.
The government’s response to this housing crisis meeting a pandemic crisis has been weak. Despite the efforts of charities and unions, it has shown no understanding of the impact the virus is having on people’s housing security. Currently, for homeowners, at least 3 months of mortgages payments will be deferred and added onto the end of the term – years, or decades down the line.
Renters, however, remain liable for their full rent throughout, with a tokenistic 3 month ban on evictions – an increase of only a month on the entitlements already available. And, while £500 million to help fund households experiencing financial hardship sounds generous, divided across the UK’s 20 million renters, this amounts to only £25.00 each. The role of the opposition is to oppose the government, especially when its measures are this insufficient – but far from a clear alternative, Labour’s plans barely amount to an adjustment.
There has been some debate as to whether the new Labour leadership had “watered down” the previous position from rent suspension to rent deferral during coronavirus lockdown. Under Labour’s former leadership, both Jeremy Corbyn and John McDonnell spoke in favour of rent “suspensions.” On March 18th, in response to the government’s claim to a “complete ban on evictions and additional protection for renters,” McDonnell tweeted “This is inadequate. This approach could lumber tenants with a mountain of debt. At best this policy risks only deferring evictions. The Government should cover rent for those who lose income due to coronavirus.”
On the same day, Jeremy Corbyn wrote to the prime minister calling for rent to be suspended. However, Labour’s official stance remained unclear. On March 25th, then Shadow Secretary John Healey wrote in the New Statesman that the government should “legislate for a further, manageable period for renters to pay back deferred rent.” Healey was always one of the more right-leaning figures in the old shadow cabinet, and it now seems as if this line has won out within the Labour Party under Keir Starmer.
Members of Parliament from all parties have been keen to sing the praises of our key workers during this crisis, but very few have been willing to back this sentiment with policy interventions. A large proportion of care workers, NHS staff, delivery drivers, refuse collectors and supermarket staff are on low or minimum wages and many are on zero-hour contracts. These workers, who are dubbed heroes, have received no pay increases in the wake of Covid-19. Now they face an enormous debt burden – under both the Conservative and Labour plans.
An ACORN petition launched in March made the case for “a rent waiver for the duration of the crisis meaning that any arrears accrued during the crisis cannot be expected or included in any future grounds for eviction on the basis of rent arrears.” It has over 43,000 signatures to date. Another petition was started yesterday by Labour members appealing directly to Keir Starmer and Thangam Debonnaire to drop the new policy and support rent cancellation.
Labour should respond to the reality of the Covid-19 crisis. This means pushing for an appropriately bold package of legislation to prevent people being saddled with unsustainable debt or becoming homeless. It is clearer with every passing week that those without capital or a resilient income move closer and closer to that cliff edge. Labour must listen to the voices of renters if they are to seek their votes in future. For workers and families, and subsequently the economy, to recover, Labour must push the government for a rent cancellation. Chancellor Sunak was keen to tell the public the government would do “whatever it takes” – Labour’s job is to hold him to account on that promise.