1 00:00:02,300 --> 00:00:06,360 [Music] 2 00:00:12,160 --> 00:00:18,040 Okay, 3 00:00:14,480 --> 00:00:18,040 I get the 4 00:00:36,000 --> 00:00:40,399 Welcome to Sputnik orbiting the world 5 00:00:38,000 --> 00:00:42,079 with me George Galloway and No Guyatri. 6 00:00:40,399 --> 00:00:45,920 This week she's researching global 7 00:00:42,079 --> 00:00:48,399 warming in parts where it's warm. China 8 00:00:45,920 --> 00:00:50,960 is an economy like no other. It is the 9 00:00:48,399 --> 00:00:54,960 world's biggest and its disastrous 10 00:00:50,960 --> 00:00:58,160 growth rate has slumped to uh 7%. That 11 00:00:54,960 --> 00:01:00,480 is four times our own. China's is a 12 00:00:58,160 --> 00:01:03,120 mixed economy like ours used to be and 13 00:01:00,480 --> 00:01:05,360 then some. The state still plays the 14 00:01:03,120 --> 00:01:06,880 leading role in the economy which has 15 00:01:05,360 --> 00:01:09,280 protected it from the worst of the 16 00:01:06,880 --> 00:01:11,600 excesses which have devastated western 17 00:01:09,280 --> 00:01:14,159 economies whilst China's has gone from 18 00:01:11,600 --> 00:01:17,040 strength to strength. But no man is an 19 00:01:14,159 --> 00:01:19,360 island and no economy is either. Last 20 00:01:17,040 --> 00:01:22,400 month, the Chinese stock market suffered 21 00:01:19,360 --> 00:01:24,799 massive losses and sent a wave of panic 22 00:01:22,400 --> 00:01:26,880 cascading around the world. To make 23 00:01:24,799 --> 00:01:29,119 sense of it all, I've invited on board 24 00:01:26,880 --> 00:01:31,840 the Sputnik, a man who was once central 25 00:01:29,119 --> 00:01:34,240 to the London Malty of Ken Livingston 26 00:01:31,840 --> 00:01:36,640 and is now a senior fellow at the 27 00:01:34,240 --> 00:01:39,920 Chongyang Institute for Financial 28 00:01:36,640 --> 00:01:42,799 Studies at Renman University of China in 29 00:01:39,920 --> 00:01:45,600 the People's Republic. He's our China 30 00:01:42,799 --> 00:01:48,479 expert and he's John Ross. John, welcome 31 00:01:45,600 --> 00:01:51,520 uh to the Sputnik. Would you kindly 32 00:01:48,479 --> 00:01:54,079 sketch for the viewers the principal 33 00:01:51,520 --> 00:01:56,240 differences, structural differences 34 00:01:54,079 --> 00:01:57,920 between the Chinese economy and our own? 35 00:01:56,240 --> 00:01:59,840 Well, the fundamental difference is that 36 00:01:57,920 --> 00:02:01,920 the Chinese economy, the state has the 37 00:01:59,840 --> 00:02:04,000 power to take the fundamental decisions. 38 00:02:01,920 --> 00:02:06,399 It doesn't administer the economy. There 39 00:02:04,000 --> 00:02:08,879 are many medium-siz, smalls size, and 40 00:02:06,399 --> 00:02:10,239 even largesiz companies in China. But 41 00:02:08,879 --> 00:02:11,920 the crucial question is the largest 42 00:02:10,239 --> 00:02:13,520 companies in the country are owned by 43 00:02:11,920 --> 00:02:15,120 the state and in particular the banks 44 00:02:13,520 --> 00:02:16,640 are owned by the state. The four biggest 45 00:02:15,120 --> 00:02:19,200 banks. Now you have to understand 46 00:02:16,640 --> 00:02:21,360 they're colossal in scale. The annual 47 00:02:19,200 --> 00:02:23,920 savings going through the Chinese 48 00:02:21,360 --> 00:02:26,000 state-owned banks are twice in absolute 49 00:02:23,920 --> 00:02:27,680 terms the number of dollars by the whole 50 00:02:26,000 --> 00:02:30,319 private sector banking system in the 51 00:02:27,680 --> 00:02:32,160 United States. Therefore that the China 52 00:02:30,319 --> 00:02:33,920 does not have doesn't try to run 53 00:02:32,160 --> 00:02:35,360 everything doesn't try to run in Britain 54 00:02:33,920 --> 00:02:37,440 the equivalent your fish and chip shop 55 00:02:35,360 --> 00:02:39,599 or your local Chinese restaurant or 56 00:02:37,440 --> 00:02:41,360 anything like that but it has sufficient 57 00:02:39,599 --> 00:02:42,959 levers that if the economy goes down it 58 00:02:41,360 --> 00:02:45,200 can increase investment and the economy 59 00:02:42,959 --> 00:02:47,040 will go back up again. If the economy is 60 00:02:45,200 --> 00:02:48,959 overheating it can reduce the investment 61 00:02:47,040 --> 00:02:50,879 and the economy will cool down a bit. It 62 00:02:48,959 --> 00:02:52,560 could therefore it's like the state's a 63 00:02:50,879 --> 00:02:54,400 powerful rudder which can steer the 64 00:02:52,560 --> 00:02:56,480 economy without trying to run every 65 00:02:54,400 --> 00:03:00,000 single little bit of the economy. And 66 00:02:56,480 --> 00:03:03,599 the great helmsman uh was once uh the 67 00:03:00,000 --> 00:03:05,920 communist party of China. Is it still is 68 00:03:03,599 --> 00:03:06,560 the communist party still running things 69 00:03:05,920 --> 00:03:08,080 in China? 70 00:03:06,560 --> 00:03:10,800 The communist party takes all the 71 00:03:08,080 --> 00:03:12,000 fundamental decisions inside China. Also 72 00:03:10,800 --> 00:03:14,319 it should be understood this is an 73 00:03:12,000 --> 00:03:16,000 extremely intelligent communist party. I 74 00:03:14,319 --> 00:03:18,879 know a little bit about China because 75 00:03:16,000 --> 00:03:20,640 they do that. The you in the old Soviet 76 00:03:18,879 --> 00:03:22,480 Union to be truthful the communist party 77 00:03:20,640 --> 00:03:24,720 didn't want to hear anything except what 78 00:03:22,480 --> 00:03:27,200 it already believed. In China, I know 79 00:03:24,720 --> 00:03:28,560 that they get they get my view. They 80 00:03:27,200 --> 00:03:30,239 also get people who have completely 81 00:03:28,560 --> 00:03:32,080 different views, even monetarist views, 82 00:03:30,239 --> 00:03:33,920 people I would disagree with. There's a 83 00:03:32,080 --> 00:03:36,000 mechanism if there's a big decision 84 00:03:33,920 --> 00:03:38,799 coming up. Not always, but you'll find a 85 00:03:36,000 --> 00:03:40,319 very wide range of experts inside China 86 00:03:38,799 --> 00:03:42,720 who are then asked their opinions on 87 00:03:40,319 --> 00:03:44,319 these subjects. Nobody outside of the 88 00:03:42,720 --> 00:03:46,000 Chinese Communist Party then knows what 89 00:03:44,319 --> 00:03:48,480 is done with all this information. But 90 00:03:46,000 --> 00:03:50,000 it is absolutely not the case that what 91 00:03:48,480 --> 00:03:52,480 they want to hear is only what they 92 00:03:50,000 --> 00:03:54,560 already believe. they have very very big 93 00:03:52,480 --> 00:03:57,200 intelligence and big analysis. 94 00:03:54,560 --> 00:03:59,920 And was I right in my introduction in 95 00:03:57,200 --> 00:04:04,159 saying that the reason China's economy 96 00:03:59,920 --> 00:04:08,720 uh is still growing at rates we would we 97 00:04:04,159 --> 00:04:10,640 would die to achieve uh because of the 98 00:04:08,720 --> 00:04:12,480 role of the state in the economy. Has 99 00:04:10,640 --> 00:04:14,159 the state protected the economy? 100 00:04:12,480 --> 00:04:16,880 Yes. I mean frankly the talk about the 101 00:04:14,159 --> 00:04:18,560 Chinese economy in crisis is a joke. I 102 00:04:16,880 --> 00:04:20,000 mean you have a situation whereby its 103 00:04:18,560 --> 00:04:21,680 economy has grown approximately three 104 00:04:20,000 --> 00:04:22,880 times as fast as the United States and 105 00:04:21,680 --> 00:04:25,680 the people right and there's a big 106 00:04:22,880 --> 00:04:28,800 crisis in China. It is impossible to 107 00:04:25,680 --> 00:04:30,560 have an economy with 1.3 million billion 108 00:04:28,800 --> 00:04:32,479 people in it that never encounters any 109 00:04:30,560 --> 00:04:34,960 problems. Of course the situation in 110 00:04:32,479 --> 00:04:36,800 China you have if you go back 10 years 111 00:04:34,960 --> 00:04:38,880 or 20 years ago in Beijing they had 112 00:04:36,800 --> 00:04:40,400 everybody was riding bicycles there were 113 00:04:38,880 --> 00:04:42,080 no problems of traffic jams. Now they 114 00:04:40,400 --> 00:04:44,479 have a very serious problem of traffic 115 00:04:42,080 --> 00:04:46,639 jams in Beijing because so many people 116 00:04:44,479 --> 00:04:48,160 have cars. So there are problems that 117 00:04:46,639 --> 00:04:49,600 arise all the time but the crucial 118 00:04:48,160 --> 00:04:51,919 question is they don't bring the economy 119 00:04:49,600 --> 00:04:54,080 to a halt and yes that the Chinese 120 00:04:51,919 --> 00:04:56,160 developed an economic system which had 121 00:04:54,080 --> 00:04:57,759 never been seen in the world before 122 00:04:56,160 --> 00:04:59,360 prior prior to that there are only two 123 00:04:57,759 --> 00:05:01,680 economies. One was the capitalist 124 00:04:59,360 --> 00:05:03,680 economy let's say described by Adam 125 00:05:01,680 --> 00:05:06,720 Smith and the second was the economy 126 00:05:03,680 --> 00:05:08,720 which was created by Stalin in 1929 in 127 00:05:06,720 --> 00:05:10,479 the Soviet Union in which the state 128 00:05:08,720 --> 00:05:14,160 owned not only the large industry but 129 00:05:10,479 --> 00:05:16,080 all small local shops every farm etc. 130 00:05:14,160 --> 00:05:18,400 This was a mistake. There's no 131 00:05:16,080 --> 00:05:20,000 justification of having small companies, 132 00:05:18,400 --> 00:05:22,000 medium-sized companies owned by the 133 00:05:20,000 --> 00:05:23,280 state. It makes them inefficient. And on 134 00:05:22,000 --> 00:05:24,800 the other hand, the capitalist economy 135 00:05:23,280 --> 00:05:27,520 because it doesn't control the largest 136 00:05:24,800 --> 00:05:29,199 economy has huge falls in investment as 137 00:05:27,520 --> 00:05:30,720 you saw in the Great Recession. The 138 00:05:29,199 --> 00:05:33,440 great recession is really the great 139 00:05:30,720 --> 00:05:35,280 investment collapse and Osborne is 140 00:05:33,440 --> 00:05:36,960 keeping for example in the UK that 141 00:05:35,280 --> 00:05:38,639 investment level down. China can 142 00:05:36,960 --> 00:05:41,600 overcome that. It has the most 143 00:05:38,639 --> 00:05:43,759 intelligent economic policy in the world 144 00:05:41,600 --> 00:05:45,440 and it is because they don't try to run 145 00:05:43,759 --> 00:05:47,199 everything through the state but they 146 00:05:45,440 --> 00:05:50,080 have powerful levers which the state can 147 00:05:47,199 --> 00:05:54,720 use. Yes. What happened then a couple of 148 00:05:50,080 --> 00:05:58,800 weeks ago when uh one woke up to massive 149 00:05:54,720 --> 00:06:02,080 falls in Shanghai in stocks and shares 150 00:05:58,800 --> 00:06:04,400 in China which then sent this wave of 151 00:06:02,080 --> 00:06:06,400 panic around the world huge losses 152 00:06:04,400 --> 00:06:08,400 everywhere. What was the cause of that 153 00:06:06,400 --> 00:06:09,680 and what are the implications of it? 154 00:06:08,400 --> 00:06:11,680 Well, firstly, you've got to understand 155 00:06:09,680 --> 00:06:14,639 the Chinese stock market, two things. 156 00:06:11,680 --> 00:06:15,919 One is it's still up about 30% compared 157 00:06:14,639 --> 00:06:17,840 to it was at the beginning of this 158 00:06:15,919 --> 00:06:19,919 process. It was only it's only fallen 159 00:06:17,840 --> 00:06:21,680 from already high level. But but 160 00:06:19,919 --> 00:06:23,280 secondly, this the Chinese stock market 161 00:06:21,680 --> 00:06:25,919 doesn't really play an important role in 162 00:06:23,280 --> 00:06:27,680 China's economy. Um we could argue about 163 00:06:25,919 --> 00:06:29,360 whether it does in any economy, but it 164 00:06:27,680 --> 00:06:32,000 certainly doesn't in China for two 165 00:06:29,360 --> 00:06:33,440 reasons. There's two ways that the stock 166 00:06:32,000 --> 00:06:35,440 market could affect the real economy. 167 00:06:33,440 --> 00:06:37,360 One would be through investment but the 168 00:06:35,440 --> 00:06:39,360 reality is that very little investment 169 00:06:37,360 --> 00:06:41,280 money is raised on the Chinese stock 170 00:06:39,360 --> 00:06:43,680 exchange. They have you have some IPOs, 171 00:06:41,280 --> 00:06:45,520 people become rich, etc. But the great 172 00:06:43,680 --> 00:06:48,080 bulk of the investment is by the 173 00:06:45,520 --> 00:06:49,919 stateowned banks or it could affect the 174 00:06:48,080 --> 00:06:51,680 economy via so therefore there's not 175 00:06:49,919 --> 00:06:53,120 going to be a big fall in investment or 176 00:06:51,680 --> 00:06:55,600 it could affect the economy via 177 00:06:53,120 --> 00:06:58,720 consumption but less than 10% of China's 178 00:06:55,600 --> 00:07:00,560 economy uh population owns shares. So it 179 00:06:58,720 --> 00:07:02,160 has no great consumption effect on the 180 00:07:00,560 --> 00:07:04,160 economy either. So there's there's no 181 00:07:02,160 --> 00:07:07,520 big transmission effect into the real 182 00:07:04,160 --> 00:07:09,520 economy. I think the real incidentally 183 00:07:07,520 --> 00:07:11,360 shock wave way wasn't the stock market. 184 00:07:09,520 --> 00:07:14,000 I think it was the small devaluation the 185 00:07:11,360 --> 00:07:15,680 R&B because although China's financial 186 00:07:14,000 --> 00:07:17,360 system is very weakly connected to the 187 00:07:15,680 --> 00:07:19,919 world economy it's real economy is very 188 00:07:17,360 --> 00:07:22,000 big and people got the idea that China 189 00:07:19,919 --> 00:07:24,080 was going to join the currency wars I 190 00:07:22,000 --> 00:07:26,560 mean the euro has been devalued by 20% 191 00:07:24,080 --> 00:07:28,880 the yen's going to be devalued by 30%. 192 00:07:26,560 --> 00:07:30,400 If China decided to devalue by the R&B 193 00:07:28,880 --> 00:07:31,840 by 20 cent that would have one 194 00:07:30,400 --> 00:07:33,840 tremendous impact through the world but 195 00:07:31,840 --> 00:07:36,160 it never had any intention of doing so 196 00:07:33,840 --> 00:07:38,160 doesn't need to. Its economy is 197 00:07:36,160 --> 00:07:41,120 competitive. It's carried out small 3% 198 00:07:38,160 --> 00:07:45,280 devaluation. That's all. It used to be 199 00:07:41,120 --> 00:07:48,400 said uh when America sneezed uh everyone 200 00:07:45,280 --> 00:07:51,599 else in the world caught the cold. uh 201 00:07:48,400 --> 00:07:54,160 have we now what were the events of a 202 00:07:51,599 --> 00:07:57,120 couple of weeks ago a sign that that 203 00:07:54,160 --> 00:07:59,360 position has now been taken by China? 204 00:07:57,120 --> 00:08:01,039 There are two economies in the world 205 00:07:59,360 --> 00:08:03,840 now. What it means? Yes. I mean the 206 00:08:01,039 --> 00:08:05,599 effect was very big. As I say, I was 207 00:08:03,840 --> 00:08:08,000 even I'm even being asked about this by 208 00:08:05,599 --> 00:08:09,680 foreign companies etc. The the real fear 209 00:08:08,000 --> 00:08:12,560 was China was going to carry out a big 210 00:08:09,680 --> 00:08:15,840 devaluation that would send mayhem 211 00:08:12,560 --> 00:08:17,599 through the world. The realization got 212 00:08:15,840 --> 00:08:19,280 through to the United States that it 213 00:08:17,599 --> 00:08:21,199 used to be the case that the only person 214 00:08:19,280 --> 00:08:23,520 who could call the shots was the United 215 00:08:21,199 --> 00:08:25,520 States. Now they realize China can. If 216 00:08:23,520 --> 00:08:27,599 China, for example, decided, we are 217 00:08:25,520 --> 00:08:29,360 really fed up with the way that the 218 00:08:27,599 --> 00:08:31,360 United States is acting and therefore 219 00:08:29,360 --> 00:08:32,959 we're going to really devalue the R&B, 220 00:08:31,360 --> 00:08:34,719 this could have a shattering polit 221 00:08:32,959 --> 00:08:35,120 economic effect inside the United 222 00:08:34,719 --> 00:08:36,719 States. 223 00:08:35,120 --> 00:08:38,959 Tell me what what would that effect be? 224 00:08:36,719 --> 00:08:41,120 Well, because China's China's exports 225 00:08:38,959 --> 00:08:43,279 are already tremendously competitive. 226 00:08:41,120 --> 00:08:44,880 It's the world's largest trading nation 227 00:08:43,279 --> 00:08:47,200 already over has overtaken the United 228 00:08:44,880 --> 00:08:49,279 States in invisible goods. Therefore, if 229 00:08:47,200 --> 00:08:50,800 it wanted to if if it thought, for 230 00:08:49,279 --> 00:08:53,200 example, its currency was being forced 231 00:08:50,800 --> 00:08:54,800 too high and it was going to have to 232 00:08:53,200 --> 00:08:56,720 therefore not be able to competitive and 233 00:08:54,800 --> 00:08:59,360 devalued the currency, it could trigger 234 00:08:56,720 --> 00:09:01,279 a gigantic export wave. It doesn't need 235 00:08:59,360 --> 00:09:02,880 to because its industry is very 236 00:09:01,279 --> 00:09:04,720 competitive. That was why it was never 237 00:09:02,880 --> 00:09:07,920 going to have a big devaluation, but it 238 00:09:04,720 --> 00:09:09,839 could. Secondly, the financial firepower 239 00:09:07,920 --> 00:09:12,000 of China is now much bigger than the 240 00:09:09,839 --> 00:09:14,160 United States. There is only one 241 00:09:12,000 --> 00:09:16,959 financial superpower in the world, which 242 00:09:14,160 --> 00:09:18,720 is China. The United States economy 243 00:09:16,959 --> 00:09:20,399 measured at market price is still a bit 244 00:09:18,720 --> 00:09:22,160 bigger. You measure that parity 245 00:09:20,399 --> 00:09:24,560 purchasing powers. That's realistic. 246 00:09:22,160 --> 00:09:26,240 Exchange rate is a bit smaller. But in 247 00:09:24,560 --> 00:09:28,720 finance, the power is in China. The 248 00:09:26,240 --> 00:09:30,959 total finance available for investment 249 00:09:28,720 --> 00:09:34,160 in China is now twice that of the United 250 00:09:30,959 --> 00:09:36,880 States. About $4.6 trillion compared to 251 00:09:34,160 --> 00:09:39,920 about $2.3 trillion. It's twice as big 252 00:09:36,880 --> 00:09:42,640 in absolute terms. That's why China is 253 00:09:39,920 --> 00:09:45,200 able to take things like the Asian in 254 00:09:42,640 --> 00:09:47,440 investment bank uh that it's that 255 00:09:45,200 --> 00:09:49,440 created and other things. The China is 256 00:09:47,440 --> 00:09:52,320 now in financial terms in its bank 257 00:09:49,440 --> 00:09:55,760 stronger than the US. 258 00:09:52,320 --> 00:09:57,519 This might become a bigger question. Uh, 259 00:09:55,760 --> 00:10:00,160 if Jeremy Corbin wins the Labor 260 00:09:57,519 --> 00:10:02,959 leadership and Labor looks like it might 261 00:10:00,160 --> 00:10:06,800 come to power in 2020, 262 00:10:02,959 --> 00:10:11,440 how could a a a socialist party in 263 00:10:06,800 --> 00:10:13,120 Britain uh put forward an economic plan 264 00:10:11,440 --> 00:10:14,240 that would make us look a bit more like 265 00:10:13,120 --> 00:10:16,160 China? 266 00:10:14,240 --> 00:10:17,920 Well, the the crucial question would be 267 00:10:16,160 --> 00:10:20,560 you would have to have you would have to 268 00:10:17,920 --> 00:10:22,480 expand the state sector of the economy. 269 00:10:20,560 --> 00:10:23,920 not not not to nationalize everything 270 00:10:22,480 --> 00:10:25,760 but you would have to have sufficient 271 00:10:23,920 --> 00:10:28,160 levers say that you could you could 272 00:10:25,760 --> 00:10:30,079 double the rate of state investment uh 273 00:10:28,160 --> 00:10:32,160 you would have to then create a state 274 00:10:30,079 --> 00:10:34,160 structure capable of carrying this out 275 00:10:32,160 --> 00:10:35,839 you would have to have uh some state 276 00:10:34,160 --> 00:10:37,519 control under the banks there's nothing 277 00:10:35,839 --> 00:10:40,560 in principle that stops you moving 278 00:10:37,519 --> 00:10:42,480 towards um Chinese type system um it's a 279 00:10:40,560 --> 00:10:45,200 mixed economy as I described at the 280 00:10:42,480 --> 00:10:47,680 beginning as once we had perhaps the 281 00:10:45,200 --> 00:10:50,640 state element in China is greater than 282 00:10:47,680 --> 00:10:53,360 what we ever had but not greater than 283 00:10:50,640 --> 00:10:57,440 what people like Jeremy Corbin, Ken 284 00:10:53,360 --> 00:10:59,760 Livingston, myself uh have consistently 285 00:10:57,440 --> 00:11:00,240 advocated in labor politics over the 286 00:10:59,760 --> 00:11:02,240 decades. 287 00:11:00,240 --> 00:11:04,959 Yes. I I think that the position of the 288 00:11:02,240 --> 00:11:06,560 left on China has not really been very 289 00:11:04,959 --> 00:11:08,640 good. It hasn't understood how giant 290 00:11:06,560 --> 00:11:12,160 digantic is the achievement. I mean, 291 00:11:08,640 --> 00:11:14,320 China has taken 630 million people out 292 00:11:12,160 --> 00:11:16,800 of poverty. To give you an idea, that is 293 00:11:14,320 --> 00:11:19,040 larger than the population entire 294 00:11:16,800 --> 00:11:20,720 European Union. Now, some people have 295 00:11:19,040 --> 00:11:22,560 the foolish idea this is capitalism, 296 00:11:20,720 --> 00:11:24,640 which is not. It's socialism with 297 00:11:22,560 --> 00:11:26,640 Chinese characteristics. If capitalism 298 00:11:24,640 --> 00:11:27,920 is actually capable of taking 630 299 00:11:26,640 --> 00:11:29,839 million people out of poverty, we'd have 300 00:11:27,920 --> 00:11:31,839 to decide it's a rather good thing, but 301 00:11:29,839 --> 00:11:33,519 it's not. And and the left hasn't paid 302 00:11:31,839 --> 00:11:36,720 enough attention to this. China's had 303 00:11:33,519 --> 00:11:38,160 the fastest growth rate in human history 304 00:11:36,720 --> 00:11:40,240 for 35 years. 305 00:11:38,160 --> 00:11:42,079 It's 150% over that period. 306 00:11:40,240 --> 00:11:44,240 Oh, even more. Even more, much more than 307 00:11:42,079 --> 00:11:46,240 that. Right. It's but and the left 308 00:11:44,240 --> 00:11:47,600 hasn't paid enough attention to this be 309 00:11:46,240 --> 00:11:49,279 because China was an underdeveloped 310 00:11:47,600 --> 00:11:50,640 country. It's not now. Now people in 311 00:11:49,279 --> 00:11:52,480 places like Latin America are beginning 312 00:11:50,640 --> 00:11:54,399 to pay huge amount of attention to it 313 00:11:52,480 --> 00:11:56,240 because it's China's living stand has 314 00:11:54,399 --> 00:11:58,160 gone from one of the poorest countries 315 00:11:56,240 --> 00:11:59,600 in the world to the majority of the 316 00:11:58,160 --> 00:12:01,600 population of the world now has a lower 317 00:11:59,600 --> 00:12:03,920 living standard than China and we 318 00:12:01,600 --> 00:12:06,000 shouldn't mechanically copy the Chinese 319 00:12:03,920 --> 00:12:07,920 model. We couldn't do so but the 320 00:12:06,000 --> 00:12:10,880 fundamental principles which it has 321 00:12:07,920 --> 00:12:14,160 which is the state should control and 322 00:12:10,880 --> 00:12:16,959 take the economy. Now is or incidentally 323 00:12:14,160 --> 00:12:19,760 Kanes himself wrote this. Kanes said 324 00:12:16,959 --> 00:12:22,959 that regulating the level of investment 325 00:12:19,760 --> 00:12:25,120 cannot safely be left to the private 326 00:12:22,959 --> 00:12:28,000 sector. He called for what he called a 327 00:12:25,120 --> 00:12:30,240 somewhat comprehensive socialization of 328 00:12:28,000 --> 00:12:33,279 investment by which the somewhat meaning 329 00:12:30,240 --> 00:12:36,079 not wholly stateowned. You could see it 330 00:12:33,279 --> 00:12:37,839 from either a left-wing Keynesian point 331 00:12:36,079 --> 00:12:39,680 of view or you could see it from a 332 00:12:37,839 --> 00:12:41,839 Chinese point of view. It's not really 333 00:12:39,680 --> 00:12:43,600 terribly important which you do. It's 334 00:12:41,839 --> 00:12:45,120 that the state must have sufficiently 335 00:12:43,600 --> 00:12:46,639 large instruments that if the economy 336 00:12:45,120 --> 00:12:49,040 turns down, it can raise the level of 337 00:12:46,639 --> 00:12:50,560 investment and speed the economy up. If 338 00:12:49,040 --> 00:12:52,240 the economy is overheating, it can cut 339 00:12:50,560 --> 00:12:54,160 the level of investment. That's the key 340 00:12:52,240 --> 00:12:56,560 principle. It's the failure of 341 00:12:54,160 --> 00:12:58,399 investment in Britain and the and the 342 00:12:56,560 --> 00:13:00,639 United States which has condemned us to 343 00:12:58,399 --> 00:13:03,120 the great stagnation. It's not terribly 344 00:13:00,639 --> 00:13:05,040 extreme. I mean, even people like Martin 345 00:13:03,120 --> 00:13:06,720 Wolf in the Financial Times says it's 346 00:13:05,040 --> 00:13:08,560 absolutely ridiculous. The government 347 00:13:06,720 --> 00:13:11,040 can borrow in real terms at close to 348 00:13:08,560 --> 00:13:12,399 zero% but it refuses to invest. This is 349 00:13:11,040 --> 00:13:15,360 ludicrous. 350 00:13:12,399 --> 00:13:17,839 John Ross, fascinating talking to you uh 351 00:13:15,360 --> 00:13:21,040 in a week when all eyes have been on 352 00:13:17,839 --> 00:13:23,120 China with the victory parade uh and so 353 00:13:21,040 --> 00:13:25,040 on. Thanks very much indeed for coming 354 00:13:23,120 --> 00:13:27,440 on board the Sputnik. Coming up after 355 00:13:25,040 --> 00:13:29,360 the break is a woman who is emerging as 356 00:13:27,440 --> 00:13:31,600 the clearest thinker on Britain's 357 00:13:29,360 --> 00:13:34,399 chronic housing crisis about which 358 00:13:31,600 --> 00:13:38,650 everybody talks and absolutely nobody 359 00:13:34,399 --> 00:13:41,279 does. I'll be right back. 360 00:13:38,650 --> 00:13:43,920 [Music] 361 00:13:41,279 --> 00:13:46,000 Welcome back to Sputnik. Hardly a day 362 00:13:43,920 --> 00:13:48,399 passes without a recognition of 363 00:13:46,000 --> 00:13:50,560 Britain's housing crisis. Virtually no 364 00:13:48,399 --> 00:13:53,200 social housing is built. Prices and 365 00:13:50,560 --> 00:13:55,680 rents move ever upwards, as does the 366 00:13:53,200 --> 00:13:58,240 rate of homelessness, overcrowding, and 367 00:13:55,680 --> 00:14:00,399 slum landlordism. In the capital, this 368 00:13:58,240 --> 00:14:03,040 is leading to the shipping out like 369 00:14:00,399 --> 00:14:05,120 refugees of homegrown Londoners to 370 00:14:03,040 --> 00:14:07,040 points north in order that someone 371 00:14:05,120 --> 00:14:09,760 somewhere can find them a roof to put 372 00:14:07,040 --> 00:14:12,399 over their heads. Britain is full up, 373 00:14:09,760 --> 00:14:15,040 say the Cassandras, about Calala, when 374 00:14:12,399 --> 00:14:17,440 in fact Britain is practically empty, as 375 00:14:15,040 --> 00:14:20,560 anyone who's ever flown over it knows. 376 00:14:17,440 --> 00:14:23,360 Just 2% of Britain's land mass is built 377 00:14:20,560 --> 00:14:25,279 upon. unmet need, unused economic 378 00:14:23,360 --> 00:14:28,000 resources ought to have led to a 379 00:14:25,279 --> 00:14:30,720 building boom, but it has not. To find 380 00:14:28,000 --> 00:14:32,880 out why, I've invited the brightest of 381 00:14:30,720 --> 00:14:35,120 the young housing economists from the 382 00:14:32,880 --> 00:14:37,600 University of Leeds, Dr. Mary Robertson, 383 00:14:35,120 --> 00:14:40,079 and she joins me now. Dr. Robertson, 384 00:14:37,600 --> 00:14:43,279 thank you very much for coming on the 385 00:14:40,079 --> 00:14:46,720 Sputnik. Describe for the viewers the 386 00:14:43,279 --> 00:14:48,480 extent of this housing crisis. 387 00:14:46,720 --> 00:14:50,160 Well, 388 00:14:48,480 --> 00:14:52,399 I think we can see currently many 389 00:14:50,160 --> 00:14:54,639 manifestations of the crisis. Uh, as you 390 00:14:52,399 --> 00:14:57,920 said, rising homelessness, rising rents, 391 00:14:54,639 --> 00:14:59,360 rising prices, um, people from London 392 00:14:57,920 --> 00:15:00,800 being shipped out because we just don't 393 00:14:59,360 --> 00:15:02,399 have enough social accommodation. So, 394 00:15:00,800 --> 00:15:04,880 across the whole stretch of the housing 395 00:15:02,399 --> 00:15:06,720 system, we're getting signs that the 396 00:15:04,880 --> 00:15:08,000 system is just falling apart basically. 397 00:15:06,720 --> 00:15:10,480 And this is a crisis that has been 398 00:15:08,000 --> 00:15:12,160 accumulating for over 30 years now. I 399 00:15:10,480 --> 00:15:13,760 think it dates back to the 1980s when 400 00:15:12,160 --> 00:15:16,079 the right to buy was introduced by 401 00:15:13,760 --> 00:15:17,440 Margaret Thatcher. Uh up until then we'd 402 00:15:16,079 --> 00:15:19,199 had a system in which some people own 403 00:15:17,440 --> 00:15:21,040 their own home, some people rented 404 00:15:19,199 --> 00:15:24,000 social accommodation and so we had two 405 00:15:21,040 --> 00:15:25,199 sources of supply which catered to those 406 00:15:24,000 --> 00:15:26,720 through the those who were able to 407 00:15:25,199 --> 00:15:29,120 access housing through the market and 408 00:15:26,720 --> 00:15:31,440 those who weren't. Now the right to buy 409 00:15:29,120 --> 00:15:33,040 privatized the social housing stock on a 410 00:15:31,440 --> 00:15:34,880 massive scale and also prevented 411 00:15:33,040 --> 00:15:36,399 councils from building and ever since 412 00:15:34,880 --> 00:15:38,639 then we just haven't built enough houses 413 00:15:36,399 --> 00:15:40,720 to house our population which is growing 414 00:15:38,639 --> 00:15:42,480 at quite a rapid rate. Uh and in 415 00:15:40,720 --> 00:15:44,639 particular we haven't built any house or 416 00:15:42,480 --> 00:15:46,560 nearly enough houses to house people for 417 00:15:44,639 --> 00:15:48,240 whom accessing housing through the 418 00:15:46,560 --> 00:15:50,720 market is not possible because their 419 00:15:48,240 --> 00:15:54,560 incomes aren't high enough. 420 00:15:50,720 --> 00:15:56,480 Even within capitalist logic that 421 00:15:54,560 --> 00:15:59,040 doesn't make any sense does it? You've 422 00:15:56,480 --> 00:16:01,839 got potentially a large number of 423 00:15:59,040 --> 00:16:06,320 people, many, many millions who would 424 00:16:01,839 --> 00:16:08,560 like to secure a home. You've got unused 425 00:16:06,320 --> 00:16:11,839 building workers, supplies, materials, 426 00:16:08,560 --> 00:16:15,279 bricks could be quickly made. Uh steel, 427 00:16:11,839 --> 00:16:17,680 electricity, wire, and uh so on. What is 428 00:16:15,279 --> 00:16:19,360 stopping those two things from coming 429 00:16:17,680 --> 00:16:20,639 together? 430 00:16:19,360 --> 00:16:22,079 So, I think it depends on the point of 431 00:16:20,639 --> 00:16:23,759 view of which capitalist you're talking 432 00:16:22,079 --> 00:16:27,040 about. There are many harmful effects on 433 00:16:23,759 --> 00:16:29,519 the economy um from lacking the lack of 434 00:16:27,040 --> 00:16:31,920 housing that we've got at the moment. Uh 435 00:16:29,519 --> 00:16:35,120 rising housing costs puts pressure on 436 00:16:31,920 --> 00:16:36,800 wages. Uh we have huge geographic 437 00:16:35,120 --> 00:16:38,320 variability in the country. So it's much 438 00:16:36,800 --> 00:16:39,759 harder most employment is in the 439 00:16:38,320 --> 00:16:41,920 southeast and London, but it's much 440 00:16:39,759 --> 00:16:43,360 harder to harder to access housing there 441 00:16:41,920 --> 00:16:45,680 which means for employers it's hard 442 00:16:43,360 --> 00:16:47,600 harder to access labor force and so on. 443 00:16:45,680 --> 00:16:50,079 And of course we've had very low growth 444 00:16:47,600 --> 00:16:51,759 since the financial crisis and a big 445 00:16:50,079 --> 00:16:52,720 program of house building really helped 446 00:16:51,759 --> 00:16:53,920 to boost the economy. 447 00:16:52,720 --> 00:16:55,839 Yeah. It would be a multiplier. 448 00:16:53,920 --> 00:16:57,360 It would be a multiplier. Exactly. The 449 00:16:55,839 --> 00:16:59,360 problem is is there are some groups of 450 00:16:57,360 --> 00:17:01,120 people who benefit from the way that the 451 00:16:59,360 --> 00:17:03,279 housing system is organized currently. 452 00:17:01,120 --> 00:17:04,959 So in particular mortgage lenders who 453 00:17:03,279 --> 00:17:07,520 have been able to reap great profits 454 00:17:04,959 --> 00:17:10,240 from lending ever higher mortgages. uh 455 00:17:07,520 --> 00:17:12,160 they get the interest payments as profit 456 00:17:10,240 --> 00:17:13,679 but we've also seen uh as which 457 00:17:12,160 --> 00:17:16,240 culminated in the financial crisis 458 00:17:13,679 --> 00:17:18,160 processes of securitization whereby the 459 00:17:16,240 --> 00:17:20,480 financial sector has turned mortgages 460 00:17:18,160 --> 00:17:22,480 into tradable financial assets and 461 00:17:20,480 --> 00:17:24,160 traded them at huge profits. So for 462 00:17:22,480 --> 00:17:26,079 parts of the financial sector the system 463 00:17:24,160 --> 00:17:27,760 currently works very well and of course 464 00:17:26,079 --> 00:17:29,600 it works very well for land owners. 465 00:17:27,760 --> 00:17:31,520 Britain has one of the highest most 466 00:17:29,600 --> 00:17:33,360 concentrated uh structures of land 467 00:17:31,520 --> 00:17:35,120 ownership in the world. 468 00:17:33,360 --> 00:17:36,960 Wouldn't many of these land owners 469 00:17:35,120 --> 00:17:38,960 profit from more house building? What 470 00:17:36,960 --> 00:17:42,240 I'm getting at is if only 2% of the 471 00:17:38,960 --> 00:17:44,640 country is built upon, 98% of it is 472 00:17:42,240 --> 00:17:46,640 unbuilt upon, there's a lot of people 473 00:17:44,640 --> 00:17:48,320 need houses, why don't we use some of 474 00:17:46,640 --> 00:17:50,080 that land to build houses? 475 00:17:48,320 --> 00:17:52,160 It's because housing and indeed land has 476 00:17:50,080 --> 00:17:54,240 come to be treated like an asset, which 477 00:17:52,160 --> 00:17:56,559 means that the owners want its value to 478 00:17:54,240 --> 00:17:58,080 increase as as much as possible. And 479 00:17:56,559 --> 00:18:00,480 that has been happening in Britain 480 00:17:58,080 --> 00:18:02,080 because supply has not lived up to 481 00:18:00,480 --> 00:18:04,400 matched up to demand. So you've got 482 00:18:02,080 --> 00:18:05,760 growing demand, supply not even up to 483 00:18:04,400 --> 00:18:07,360 which has driven up prices which means 484 00:18:05,760 --> 00:18:09,039 that homeowners and land owners have 485 00:18:07,360 --> 00:18:11,120 seen the value of the their land or 486 00:18:09,039 --> 00:18:13,440 housing assets increase. So it's been a 487 00:18:11,120 --> 00:18:15,919 huge boom in wealth for those who own 488 00:18:13,440 --> 00:18:18,000 these types of asset. Uh but the flip 489 00:18:15,919 --> 00:18:19,039 side has been that more and more people 490 00:18:18,000 --> 00:18:20,960 find it difficult to 491 00:18:19,039 --> 00:18:23,280 Yeah. And and you know trees don't vote 492 00:18:20,960 --> 00:18:25,280 but people do. Uh you would think that 493 00:18:23,280 --> 00:18:27,440 the political class would feel the 494 00:18:25,280 --> 00:18:30,400 pressure. It's kind of obvious 495 00:18:27,440 --> 00:18:33,440 generation rent. Uh people's children 496 00:18:30,400 --> 00:18:35,520 even in their 40s can't buy property. 497 00:18:33,440 --> 00:18:37,760 There's even men, no doubt women in 498 00:18:35,520 --> 00:18:39,360 their 30s living in their parents' 499 00:18:37,760 --> 00:18:42,000 houses when once they would have been 500 00:18:39,360 --> 00:18:44,320 gone when they were 18 or or 19 and so 501 00:18:42,000 --> 00:18:45,840 on. It's changing the whole social mix 502 00:18:44,320 --> 00:18:47,840 in the country. 503 00:18:45,840 --> 00:18:49,520 That's true. And I think there are signs 504 00:18:47,840 --> 00:18:51,039 that the political pressures around 505 00:18:49,520 --> 00:18:53,360 housing are starting to shift in the 506 00:18:51,039 --> 00:18:56,240 right direction. But for decades, so 507 00:18:53,360 --> 00:18:58,480 under under that right through to Blair, 508 00:18:56,240 --> 00:19:00,000 uh we were sold the idea that everyone 509 00:18:58,480 --> 00:19:01,679 should be a homeowner and have this 510 00:19:00,000 --> 00:19:03,440 asset. People were encouraged to tie up 511 00:19:01,679 --> 00:19:05,679 their wealth in their housing. 512 00:19:03,440 --> 00:19:06,799 Um and this means that I think for a 513 00:19:05,679 --> 00:19:08,320 long time politicians have been 514 00:19:06,799 --> 00:19:10,720 terrified of taking measures that would 515 00:19:08,320 --> 00:19:13,120 lead house prices to fall because you 516 00:19:10,720 --> 00:19:16,799 have a big constituency which tend to be 517 00:19:13,120 --> 00:19:18,320 quite affluent voters anyway who would 518 00:19:16,799 --> 00:19:19,760 be furious if the value of their 519 00:19:18,320 --> 00:19:20,720 property suddenly dropped. you know, 520 00:19:19,760 --> 00:19:22,000 that would be their pension, their 521 00:19:20,720 --> 00:19:25,200 inheritance for their kids, their 522 00:19:22,000 --> 00:19:26,880 savings, and a serious effort to make 523 00:19:25,200 --> 00:19:28,880 housing more affordable in general would 524 00:19:26,880 --> 00:19:30,160 imply fall in house prices. And it 525 00:19:28,880 --> 00:19:31,200 would, 526 00:19:30,160 --> 00:19:34,480 you know, 527 00:19:31,200 --> 00:19:37,520 but you know, most of our viewers, I'm 528 00:19:34,480 --> 00:19:39,760 guessing, are city people. We keep 529 00:19:37,520 --> 00:19:42,799 hearing about the green belt, the 530 00:19:39,760 --> 00:19:45,600 inviability of the of the green belt. 531 00:19:42,799 --> 00:19:48,960 How much green belt do we actually want 532 00:19:45,600 --> 00:19:51,280 need? If 98% of the country is not built 533 00:19:48,960 --> 00:19:54,640 upon that's a lot of green belt 534 00:19:51,280 --> 00:19:56,320 shouldn't we be building more towns more 535 00:19:54,640 --> 00:19:57,679 cities 536 00:19:56,320 --> 00:20:01,280 there's definitely a case to be made for 537 00:19:57,679 --> 00:20:03,360 that I think yeah uh the problem is 538 00:20:01,280 --> 00:20:05,280 where demand is how do you make sure 539 00:20:03,360 --> 00:20:06,880 that the new supply matches to where the 540 00:20:05,280 --> 00:20:08,320 demand is which reflects of course the 541 00:20:06,880 --> 00:20:10,080 economic organization of the country and 542 00:20:08,320 --> 00:20:12,400 it's heavily very heavily weighted 543 00:20:10,080 --> 00:20:14,559 towards the southeast uh so there is 544 00:20:12,400 --> 00:20:16,000 much more house prices are much cheaper 545 00:20:14,559 --> 00:20:17,039 in the north of England but part of The 546 00:20:16,000 --> 00:20:18,320 problem is that people don't want to 547 00:20:17,039 --> 00:20:20,000 live there because they can't find the 548 00:20:18,320 --> 00:20:22,240 same employment opportunities. Yeah. So 549 00:20:20,000 --> 00:20:23,840 the challenge is how do we build more 550 00:20:22,240 --> 00:20:27,039 house? Well, there's two challenges and 551 00:20:23,840 --> 00:20:28,640 they're both quite enormous. Um, one is 552 00:20:27,039 --> 00:20:30,480 can we restructure the British economy 553 00:20:28,640 --> 00:20:32,240 so it's no longer so heavily focused on 554 00:20:30,480 --> 00:20:34,720 the southeast which would take pressure 555 00:20:32,240 --> 00:20:36,320 of the housing system there. Uh, and the 556 00:20:34,720 --> 00:20:39,520 other one is can we figure out ways to 557 00:20:36,320 --> 00:20:41,840 build more housing in the southeast. Um 558 00:20:39,520 --> 00:20:43,919 but you know people I think accepting 559 00:20:41,840 --> 00:20:46,480 that we need to live in higher density 560 00:20:43,919 --> 00:20:48,080 forms is something that in the age of 561 00:20:46,480 --> 00:20:48,960 global warming people need to accept. 562 00:20:48,080 --> 00:20:50,720 For example, 563 00:20:48,960 --> 00:20:52,720 let let me just raise uh another 564 00:20:50,720 --> 00:20:56,000 important issue then that I know you've 565 00:20:52,720 --> 00:20:57,600 got some expertise in. David Cameron the 566 00:20:56,000 --> 00:21:00,720 catastrophe of the sale of council 567 00:20:57,600 --> 00:21:02,640 houses was seen by politically active 568 00:21:00,720 --> 00:21:05,120 people like myself at the time that it 569 00:21:02,640 --> 00:21:06,799 happened. We predicted absolutely 570 00:21:05,120 --> 00:21:08,880 everything that has happened and as 571 00:21:06,799 --> 00:21:11,200 you've just described. But now David 572 00:21:08,880 --> 00:21:14,720 Cameron wants a second wave. He wants 573 00:21:11,200 --> 00:21:18,000 privatization of other than council 574 00:21:14,720 --> 00:21:21,280 houses, other forms of social housing, 575 00:21:18,000 --> 00:21:23,840 housing association, uh right to buy. 576 00:21:21,280 --> 00:21:25,600 That's going to add uh disaster on top 577 00:21:23,840 --> 00:21:27,280 of disaster. Surely 578 00:21:25,600 --> 00:21:27,600 absolutely. I think it's a complete 579 00:21:27,280 --> 00:21:28,640 disaster. Are 580 00:21:27,600 --> 00:21:30,000 you serious about that? You going to go 581 00:21:28,640 --> 00:21:31,280 ahead with it? So there's an interesting 582 00:21:30,000 --> 00:21:32,880 question about this because this was 583 00:21:31,280 --> 00:21:34,480 something that the tries pulled out in 584 00:21:32,880 --> 00:21:36,320 the leading to the general election 585 00:21:34,480 --> 00:21:38,320 quite last minute and people have 586 00:21:36,320 --> 00:21:40,159 speculated that they weren't expecting 587 00:21:38,320 --> 00:21:41,600 to win the election. They knew that in 588 00:21:40,159 --> 00:21:43,440 the 1980s the right to buy had been 589 00:21:41,600 --> 00:21:45,360 extremely popular. So it is an electoral 590 00:21:43,440 --> 00:21:46,720 ploy basically that they kind of hoped 591 00:21:45,360 --> 00:21:48,320 that because they didn't expect to get 592 00:21:46,720 --> 00:21:51,039 an absolute majority. they hope that 593 00:21:48,320 --> 00:21:52,400 they wouldn't have to fulfill and now 594 00:21:51,039 --> 00:21:54,080 much to everyone's surprise they do have 595 00:21:52,400 --> 00:21:56,320 an absolute majority and so it is going 596 00:21:54,080 --> 00:21:58,159 through but criticisms are coming from 597 00:21:56,320 --> 00:21:59,600 across the political spectrum and across 598 00:21:58,159 --> 00:22:00,880 different types of agents involved in 599 00:21:59,600 --> 00:22:03,840 the housing system as well. 600 00:22:00,880 --> 00:22:07,520 Do you expect the same demand to buy 601 00:22:03,840 --> 00:22:08,960 from tenants of housing associations? 602 00:22:07,520 --> 00:22:10,640 I don't think there's any reason not to 603 00:22:08,960 --> 00:22:11,760 expect that because for the individual 604 00:22:10,640 --> 00:22:14,159 household 605 00:22:11,760 --> 00:22:16,799 it's a it's a huge bri. Exactly. You 606 00:22:14,159 --> 00:22:18,799 offered a house for cheap. Um, so you'd 607 00:22:16,799 --> 00:22:20,799 be mad to turn it down. The problem is 608 00:22:18,799 --> 00:22:23,200 is that housing people housed in housing 609 00:22:20,799 --> 00:22:24,480 associations currently are relatively 610 00:22:23,200 --> 00:22:26,080 speaking for the kind of people who 611 00:22:24,480 --> 00:22:27,600 demand social housing 612 00:22:26,080 --> 00:22:28,559 welloused. You know, these are the 613 00:22:27,600 --> 00:22:30,159 people we shouldn't be worrying about 614 00:22:28,559 --> 00:22:30,640 because they have decent long-term 615 00:22:30,159 --> 00:22:32,240 accommodation. 616 00:22:30,640 --> 00:22:33,120 Better than council housing used to be 617 00:22:32,240 --> 00:22:36,559 by and large 618 00:22:33,120 --> 00:22:37,919 can be. Yeah. Meantime, we have 100,000 619 00:22:36,559 --> 00:22:39,120 people in temporary housing because 620 00:22:37,919 --> 00:22:40,960 there just aren't enough housing 621 00:22:39,120 --> 00:22:43,360 association or council homes to house 622 00:22:40,960 --> 00:22:44,880 them in. Uh so it's directing huge 623 00:22:43,360 --> 00:22:48,320 amounts of money and the estimates range 624 00:22:44,880 --> 00:22:50,159 between 5.8 billion and 20 billion uh to 625 00:22:48,320 --> 00:22:51,919 help people whose housing needs are 626 00:22:50,159 --> 00:22:53,440 relatively 627 00:22:51,919 --> 00:22:53,919 well dealt with compared to other 628 00:22:53,440 --> 00:22:56,640 groups. 629 00:22:53,919 --> 00:22:58,960 That brings me to my last point then um 630 00:22:56,640 --> 00:23:02,080 one of the things that uh I've been 631 00:22:58,960 --> 00:23:05,120 looking at is the scale of the money the 632 00:23:02,080 --> 00:23:08,240 taxpayer is handing to private landlords 633 00:23:05,120 --> 00:23:10,960 in terms of housing benefit. It's now 634 00:23:08,240 --> 00:23:13,520 capped uh but capped at quite a high 635 00:23:10,960 --> 00:23:15,600 level. I mean it's uh a phenomenal sum 636 00:23:13,520 --> 00:23:19,760 that the taxpayer is giving to private 637 00:23:15,600 --> 00:23:22,480 landlords as compared with the tiny sum 638 00:23:19,760 --> 00:23:25,200 that the taxpayer is paying to build new 639 00:23:22,480 --> 00:23:26,960 social uh housing. How how have they 640 00:23:25,200 --> 00:23:29,280 gotten away with it's a kind of grand 641 00:23:26,960 --> 00:23:30,880 lararseny of the public this 642 00:23:29,280 --> 00:23:33,520 it's a policy that makes no sense 643 00:23:30,880 --> 00:23:34,880 whatsoever. Um I think it's 24 billion 644 00:23:33,520 --> 00:23:35,520 the housing benefit bill now 645 00:23:34,880 --> 00:23:38,480 25 billion 646 00:23:35,520 --> 00:23:40,720 25 billion and it's uh it's notable that 647 00:23:38,480 --> 00:23:42,880 40% of that goes to private landlords 648 00:23:40,720 --> 00:23:44,159 and of the properties originally sold on 649 00:23:42,880 --> 00:23:45,600 the right to buy a lot of those have 650 00:23:44,159 --> 00:23:47,200 moved into the private sector. So the 651 00:23:45,600 --> 00:23:48,880 landlords who own these formal council 652 00:23:47,200 --> 00:23:50,720 properties are getting a three-fold 653 00:23:48,880 --> 00:23:52,960 subsidy in from the original building of 654 00:23:50,720 --> 00:23:55,440 the house from the discount sale and now 655 00:23:52,960 --> 00:23:56,960 in the rental income that they receive. 656 00:23:55,440 --> 00:23:58,480 So this idea that the right to buyers 657 00:23:56,960 --> 00:24:00,480 help people realize a dream of home 658 00:23:58,480 --> 00:24:02,960 ownership is often not the case. it's 659 00:24:00,480 --> 00:24:05,280 just transferred state property or state 660 00:24:02,960 --> 00:24:06,480 subsidized properties into to private 661 00:24:05,280 --> 00:24:09,679 individuals. 662 00:24:06,480 --> 00:24:11,440 Um, how has this been allowed to happen? 663 00:24:09,679 --> 00:24:15,360 I think 664 00:24:11,440 --> 00:24:17,919 the tone was set in the 1980s and thus 665 00:24:15,360 --> 00:24:21,200 far it hasn't really been challenged 666 00:24:17,919 --> 00:24:23,279 that the state is allowed to intervene 667 00:24:21,200 --> 00:24:24,880 on the demand side but it should not 668 00:24:23,279 --> 00:24:27,200 provide 669 00:24:24,880 --> 00:24:29,679 goods and services itself. So the supply 670 00:24:27,200 --> 00:24:31,279 side has been sidelined very heavily and 671 00:24:29,679 --> 00:24:32,960 you that's reflected in privatization 672 00:24:31,279 --> 00:24:34,720 across the board. This idea that the 673 00:24:32,960 --> 00:24:35,760 state is inefficient and it should not 674 00:24:34,720 --> 00:24:39,520 be providing these kind of 675 00:24:35,760 --> 00:24:42,799 just uh briefly uh a Jeremy Corbin 676 00:24:39,520 --> 00:24:47,120 leadership a new look for labor new 677 00:24:42,799 --> 00:24:50,799 policies one presume is a return to 678 00:24:47,120 --> 00:24:52,880 social housing as a desirable norm for 679 00:24:50,799 --> 00:24:54,880 many millions of people likely to 680 00:24:52,880 --> 00:24:56,640 happen. 681 00:24:54,880 --> 00:24:59,360 Jeremy Corbyn has an excellent housing 682 00:24:56,640 --> 00:25:01,919 manifesto and that the key point in that 683 00:24:59,360 --> 00:25:04,480 I think is allowing councils to borrow 684 00:25:01,919 --> 00:25:06,640 in order to invest in new housing. Uh so 685 00:25:04,480 --> 00:25:08,640 he's signed up to doing that and I think 686 00:25:06,640 --> 00:25:10,159 it could make as in the 1930s when 687 00:25:08,640 --> 00:25:13,440 council started building on a grand 688 00:25:10,159 --> 00:25:14,720 scale uh and gave h good housing to 689 00:25:13,440 --> 00:25:17,760 people had been living in slum 690 00:25:14,720 --> 00:25:19,760 conditions. Uh it's possible definitely 691 00:25:17,760 --> 00:25:22,880 another reason to be cheerful about 692 00:25:19,760 --> 00:25:25,760 Jeremy Corbin. Thanks very much Dr. Mary 693 00:25:22,880 --> 00:25:25,760 Robertson. 694 00:25:28,320 --> 00:25:33,039 Alas, that's all we've got time for on 695 00:25:30,480 --> 00:25:35,679 board the Sputnik this week. By the time 696 00:25:33,039 --> 00:25:38,640 you join me next week, it'll be a new 697 00:25:35,679 --> 00:25:42,070 political era, at least in Britain. 698 00:25:38,640 --> 00:25:45,190 Until then, it's been marvelous. 699 00:25:42,070 --> 00:25:45,190 [Music] 700 00:25:53,370 --> 00:25:56,440 [Music]