ANDREW FISHER, the author of a new book on the failed economics of the last four decades, says that the same mistakes are being repeated in £1billion shopping centre-fixated Croydon

John Maynard Keynes: preferred the building of homes over burying money

In the 1930s, the economist John Maynard Keynes advocated the Treasury digging holes in the ground, filling them with banknotes and covering them up, and then leasing rights to dig them back up again. This would stimulate the economy.

Keynes’ prescription sounds absurd and utterly pointless, but it was better than the painful option chosen by British governments in the 1930s of letting unemployment rip.

To be fair to Keynes, he does add, “It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.”

Today, Croydon’s grand economic strategy is essentially knocking down a shopping centre and building another one. But are the obstacles to building something socially useful like council housing really so great that knocking down and rebuilding a shopping centre is the best we can do?

Croydon has a housing crisis. The council is deporting its own residents across the country due to the benefits cap and Bedroom Tax. Around 1 in 20 Croydon residents are on the waiting list for a home. Housing is so expensive that a graduate earning the average starting salary (£22,400) could not afford to rent a one-bedroom flat in Croydon, nor in any other London borough, according to analysis by the Financial Times.

So why has Croydon’s housing crisis not been addressed?

And at a time of weak consumer demand, with retail sales shifting from the High Street to the internet, is a new shopping centre really the best Croydon can do?

Since the late 1980s, Croydon Council, like every other, has been banned from borrowing to invest in new housing. At the same time, councils have been forced to sell-off council housing at significant discounts under right-to-buy, while denied the funds to replace it. Similarly, tax breaks were given to buy-to-let landlords, while councils have been stripped of their rights to control rents.

Housing became an investment opportunity rather than a home, and councils have been rendered virtually powerless to provide for the most basic needs of their residents. So today, local councils, like Croydon, are left to do little more than act as cheerleaders for whichever scheme private developers dream up, and they must then bend over backwards to dilute requirements for affordable housing within such schemes.

Thirty-five years on from a time when one-third of people paid their rent to their council, now councils, such as Croydon’s, cap people’s benefits, evict tenants from private landlords’ investments, and deport their own residents.

It would be remiss not to mention our railways. With the highest fares in Europe in the 20 years following privatisation, Britain’s travellers should be experiencing the cutting edge of rail travel. Instead, we’re over-budget and behind schedule on building one relatively short high speed rail line. Many passengers in Europe have had high-speed rail networks criss-crossing their countries for years – and passengers in China and Japan are light years ahead with magnetic levitation systems seeing trains whisk them to their destinations at speeds of 268mph!

This dearth of transport investment is evident in Croydon, too. The Mayor of London’s three-time pledge to extend the tram to Crystal Palace is not even close to being delivered. Putting my cynicism to one side, should our shiny new shopping centre materialise and attract more people to Croydon, where are the new roads, buses and trams to ferry people to shop?

The real story here is privatisation and deregulation. Housing and transport policy are now subject to the whim of developers, no longer subject to democratic control to ensure the best interests of communities are prioritised. This has now become  a secondary concern once the interests of under-taxed private investors have been sated.

Tony Benn once said, “Democracy transferred power from the wallet to the ballot, from the marketplace to the polling station. What people couldn’t afford to buy, they could vote for.”

In recent years, that movement has gone the other way: our gas and electricity are subject to private profit, and thus we have the phenomenon of fuel poverty. Postal services were sold off on the cheap – we all lost that income stream, the price of a stamp has gone up, sorting offices have been closed and sold off to developers, and staff are being laid off.

As Keynes reportedly said, free market ideology is “the astonishing belief that the nastiest motives of the nastiest men somehow or other work for the best results in the best of all possible worlds”.

The apogee of this delusion was the deregulation of the banking sector and financial markets by successive governments. It has resulted in the largest depression, from which our economy has barely begun to recover – and for many their standard of living is still getting worse.

The last 35 years have been a failed experiment of free market dogma, in which less of our economy is run as if people mattered. So instead of the housing we need, we get shopping centres we’ve already got. Or maybe not, if Bradford is anything to go by.

• Andrew Fisher is a Croydon resident. His  book The Failed Experiment … and how to build an economy that works is out on May 20, and can be ordered now by clicking here 

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