Regeneration plan dispute exposes faultlines in Labour

London Letter: Party’s anti-Corbyn MPs want controversial housing proposal to go ahead

Protesters carry banners demanding social housing not to be sold by the government. Photograph:  Gustavo Valiente via Getty Images

Protesters carry banners demanding social housing not to be sold by the government. Photograph: Gustavo Valiente via Getty Images

 

There’s been a mutinous mood at Westminster this week, as Conservative MPs argue over the precise timing of their defenestration of Theresa May. Should they give her a chance to make a further mess of Brexit negotiations ahead of a European Union summit in March? Or should they wait until many of the party’s councillors, particularly in London, are wiped out in May’s local elections? Or just do it now?

Across the aisle, you might expect Labour’s spirits to be buoyant in the face of the government’s disarray. But that would be to underestimate the steely determination of the party’s centrist MPs to sustain their melancholy, long, withdrawing sulk against Jeremy Corbyn’s leadership.

“He did better in the election than anyone expected so his position as leader is unassailable. He has complete freedom to go in whatever direction he chooses,” one anti-Corbyn MP told me this week.

Every so often, centrist anger boils over amid accusations that Corbyn’s supporters in Momentum are taking over the party and seeking to deselect sitting MPs. The latest flashpoint is in Haringey, where Labour council leader Claire Kober this week announced that she would not contest May’s local elections.

Labour members deselected 21 Haringey councillors in December, replacing them on the ballot with candidates who oppose the council’s controversial regeneration plan for some poor neighbourhoods. The council wants to transfer tens of millions of pounds worth of publicly-owned land to the Haringey Development Vehicle (HDV) a private company half owned by the council and half by Lendlease, a multinational developer.

The council claims that the plan will produce 5,000 high quality, affordable homes, as well as a library and sports facilities. It would involve demolishing hundreds of council homes but the council says that all council tenants would be guaranteed a home in the borough.

Housing crisis

For centrist Labour MPs, the Haringey plan was a bold initiative to use the private sector to help solve London’s housing crisis and to provide facilities that would otherwise be unaffordable. They view Kober as a martyr to Momentum, sacrificed on the altar of an ideology that will do nothing practical to address the needs of the poor.

The problem with this analysis is that opposition to the HDV extended well beyond Momentum and included both local Labour MPs as well as the Liberal Democrats on the council. Residents feared that they would have to move far from the borough and that the promise of a home in the new development could be an empty one.

Lendlease’s record elsewhere in London was not encouraging, particularly in the Heygate Estate in south London, where almost 1,200 social rented homes were replaced with fewer than 600 affordable or shared ownership or social rented homes. Affordable rents can be up to 80 per cent of market rents, which in London is a lot of money. And residents in privately rented properties would not be protected under the Haringey plan.

In his conference speech last year, Corbyn said tenants should be balloted before any regeneration schemes are allowed to go ahead. And Labour’s National Executive Council has called on Haringey council to enter mediation over the future of HDV, pointing out that there is unlikely to be a majority on the council for it after May’s election.

Luxury homes

Centrist MPs claim that the Haringey experience has sent a chill through other councils considering regeneration projects in partnership with private developers. The truth is that many such projects in London were already in trouble because falling demand for luxury flats in the city has undermined the business model.

The economics of these projects are based on the sale of luxury homes to fund the cost of social housing and improvements to the regenerated housing estates. House prices are falling all over London but the high end of the market has taken the biggest tumble, with more than half of the 1,900 luxury homes built last year still unsold.

If developers are unable to make enough profit from luxury homes in regeneration projects, they tend to cut the number of social and affordable homes. Haringey council has threatened to push ahead with HDV before May’s elections but that plan could be scuppered by London mayor Sadiq Khan, himself a Labour centrist.

Huffpost reported on Thursday that the mayor is about to announce his support for Corbyn’s proposal that tenants must approve all new regeneration projects, a move likely to kill off HDV for good.

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