Croydon’s homes crisis is borough’s bitter Thatcher legacy

CROYDON COMMENTARY: DAVID CALLAM says that the council lost much of its ability to manage its own policies on business and housing to a premiership of 30 years ago

Margaret Thatcher is portrayed as a darling of the Home Counties – southern man’s political pin-up; hammer of the north and the heavy industries concentrated there.

Selling out: Margaret Thatcher, accompanied by Tory GLC leader Horace Cutler, hands over the keys to a council house in 1980. By 1987, more than 1 million council-owned homes had been flogged off, often at massive discounts, with councils banned from replacing their housing stocks

Selling out: Margaret Thatcher, accompanied by Tory GLC leader Horace Cutler, hands over the keys to a council house in 1980. By 1987, more than 1 million council-owned homes had been flogged off, often at massive discounts, with councils banned from replacing their housing stocks

I believe her ruthless determination to rule the roost caused lasting damage across the country, with some of her taxation changes still having a Draconian effect on places like Croydon.

Let me take you back to the halcyon days before the introduction of Council Tax and the unified business rate. In the late 1950s, the County Borough of Croydon, as it then was, saw a gap in the market for office accommodation and decided to fill it.

The London County Council, the predecessor of the Greater London Council, put a ban on office building within its area – more or less the present inner London boroughs. Croydon, with its fast railway connections to The City and the West End, saw itself as the ideal alternative location for so-called back-office operations: close enough to the centre of the capital to be convenient for transferred workers, but outside the LCC’s office “exclusion zone” and far enough away to be able to provide office space at significantly lower rents.

Croydon Council introduced a planning policy that saw large swathes of the town centre redeveloped as modern office blocks, starting in George Street and marching from Park Lane, up Wellesley Road to West Croydon.

Looked at from a 21st century, bottomless commercial property market perspective, that remodelling of the town centre may now seem short-sighted, the cause of many of our present economic ills. But in the 1960s, and for the two decades that followed, it had substantial advantages for borough residents.

By the early 1970s, Croydon Council could proudly claim, and do so truthfully, that it was providing residents with the highest standards of service in Greater London while charging among the lowest domestic rates.

The council was able to achieve this apparent piece of creative accounting and build a healthy cash reserve because it could pocket substantial sums of revenue in non-domestic rates from all the new offices and other commercial developments such as the Whitgift and Drummond shopping centres.

In the 1960s, the council built the Fairfield Halls arts complex and Taberner House without the need to seek a contribution from central government or to raise a loan. Later, it tapped the same reserves to build an award-winning library beside the Town Hall.

But the days of independently minded local authorities having the ability to raise their own income and spend it as they saw fit were numbered.

The Blessed Margaret, older readers will recall, was not a lady who liked to be thwarted: supporters call her single-minded; opponents call her bloody-minded.

Throughout her first term, Mrs T had spats with various local authorities, whose independent sources of income – domestic and business rates, which they set themselves – often allowed them to ignore government edicts.

Tory newspapers were full of the exploits of allegedly “loony left” councils that were so politically correct they wouldn’t allow staff to order black coffee in their canteens or let infants sing Baa, Baa Black Sheep in their nurseries. These papers subjected councils to all manner of half-truths and innuendo, in a similar way to how they attack the European Union today.

Council tax form 4

Lost control: Thatcher government policies took business rates out of the hands of local councils such as Croydon

Ken Livingstone, the leader of the Greater London Council, and “Red” Ted Knight, the leader of Lambeth Council, were both major bogey men, regularly vilified as revolutionaries in waiting.

After numerous ideological tussles with the GLC, Mrs Thatcher abolished it, leaving Britain’s capital without a regional assembly. It took 15 years, a change of government at Westminster and a referendum to restore some semblance of order, albeit with the addition of an executive mayor.

Closer to home, there was a time when businesses in the neighbouring borough of Lambeth were paying twice as much in rates as firms in similar sized premises over the road in Croydon. Knight and his councillor colleagues made no concessions to the businesses on their patch.

Cynics will say that Maggie set about emasculating local government in the same way she did Arthur Scargill, president of the National Union of Mineworkers and self-styled leader of the workers. Attila the Hen swung her handbag at both with equally devastating effect.

It was the appropriation of non-domestic rates that hit Croydon particularly hard. The replacement Unified Business Rate is set centrally, collected by Croydon Council but delivered to Whitehall, which apportions it on a per capita basis nationally.

Therefore, the size of a council’s grant and the amount of businesses in its area bear absolutely no relation to each other and there is no incentive for any local authority to encourage businesses to invest in its area. True blue Maggie created a situation in which Red Ted was right.

Government is only now beginning to address this problem, but the incentives on offer to local authorities are significantly less than the business rates that successful councils like Croydon were able to generate previously.

Big Eric Pickles likes to tell us that local authorities can now keep up to 70 per cent of non-domestic rates: he is less keen to talk about the umpteen pages of regulation that govern his apparent largesse.

IT WAS ALSO Margaret Thatcher who initiated the great council house sell-off, another disaster for Croydon.

Stefano Hatfield, self-confessed working-class Croydon boy and the executive editor of the i newspaper, reminded his readers on the day after Thatcher died that the too-good-to-be-true council house deal came at a wider cost.

His parents were among the many tenants who bought their council home. “I could not grasp the logic of Croydon Council buying back the property just three years later at a great loss – to them,” Hadfield wrote. “And that’s because there was no logic. It had sold off so much stock it was desperate.

“But we were all right, weren’t we? And that’s how society polarised.”

Mrs T’s legacy to Croydon and other local authorities across the country is that they are now only able to raise a proportion of their budget locally: the rest comes from or through central government, with increasing numbers of Whitehall strings attached.

Croydon residents might also indict Baroness Thatcher for the chronic shortage of affordable housing in the borough, since it was her government that refused to allow the council to replace the properties it sold.

Croydon is a formerly semi-autonomous authority where local decision-making is now substantially subordinated to the will of central government.

That is the restrictive legacy of a Prime Minister who talked about freedom in the loftiest terms, who sent men and women to die for freedom in the South Atlantic; but who really wanted us all to do as we were jolly well told.

  • David Callam spent 20 years as correspondent and editor, reporting business for a south London regional newspaper group
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News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email
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