A leaked memo, a MAGA hat and a host of broken pledges – Labour’s ultimate housing betrayal | Aditya Chakraborty

IIf the name Steve Reed doesn’t mean much to you, rest assured that this is a hole he is eager to fill. After replacing Angela Rayner as housing minister, he walked around the Labor Party conference last month handing out red MAGA hats stamped with his creed “Build Baby Build!” The cap and logo were stolen from that very right-wing man in the White House — because Steve Reed, like Robert Jenrick, is what happens when self-proclaimed centrists turn populist.

Imagine that Donald Trump had years ago deviated from his TV fame to instead become a Brixton Hill neighborhood councillor. Imagine if Trump didn’t have towers, but knew his way around a Travelodge. Most important of all, Imagine this scene From the sidelines of the conference, Inside Housing magazine narrated:

“Steve Reid only entered the room when the well-coordinated cheering by members of his party was deemed loud enough to the tune of ‘We Built This City by Starship.’ He then took to the stage and proceeded to throw more signed and branded merchandise into the crowd, before opening a bottle of alcohol because ‘all builders need beer.’

“Dear God,” was one industry professional’s response to the proceedings.

Steve Reed: He built this city, he built this city on rock and roll.

Except there’s no building, baby. Labor was elected last year On a pledge of 1.5 m new homes by the end of this Parliament, but privately, Reid officials already accept they will end up breaking that promise. Take London, where the government wants to finish building 88,000 homes before January. This has always been a big goal but now it seems like a joke: so far this year only 3,248 new units have been built. This number It comes from Muliore ConsultingWhich says one in six major housing projects has been put on hold: “Plans are stalled, the gates are closed.”

The deficit is so large that it is sowing panic in the government and sending No 10 into a war room exercise over the last weekend as a team worked on a rescue package. The results will be announced as soon as next week, when Reid unveils the contingency plan, which is described as rebuilding London again.

I have seen a private memo circulating within the Ministry of Housing revealing the procedures and thinking behind the procedures. Although it may help the big property developers that ministers rely on, it will almost certainly exacerbate the affordable housing crisis that Labor has pledged to fix. London already has a bad reputation around the world for its inability to house ordinary Londoners, and this plan will add to the chaos already inflicted on families and local authorities.

The memo sent last week details extensive discussions with top executives at Barratt, Vestry and Berkeley — among other major homebuilders — to whom government officials coached their plans. This privileged access appears to have been reserved almost exclusively for the property industry, as representatives of housing associations were later invited to attend, while groups representing ordinary tenants, and even London councils, do not appear to have participated at all.

This fits with the plan’s logic, which focuses on reducing builders’ obligations to provide affordable social housing. When he was first elected mayor of the capital in 2016, Labor leader Sadiq Khan promised he would do just that. Building homes for LondonersNot “golden bricks for foreign investors.” As a first step, he introduced a threshold: If builders allocate 35% of a development project to affordable housing, their applications will be accelerated. The definition of affordability was loose (technically, any home worth up to 80% of market value is considered “affordable”). This was neither a goal nor a commitment, but the hallmark of a New Labor settlement – ​​an incentive for the market to do its bit.

However, under Keir Starmer, even New Labor can appear dangerously pro-state control, and the Reid administration is seriously considering lowering this threshold. To only 20% Homes are affordable, making building in London much more profitable. If that’s not enough, half of it will be paid for from public funds, so the cash received by local authorities from the sale of council homes will now go to padding developers’ profit margins.

Reed is planning other sweeteners, such as suspension Community tax Developers have long paid for amenities such as a new GP surgery or a school. Looking at government accounts, this giveaway alone could put around £1bn back into the pockets of wealthy developers. Not all of these proposals may make it into the final program, but the trend is clear.

“The key test is that developers welcome the package strongly on that day,” the memo says. The same industry that until recently was making billions in profits is now being pushed to the front of the queue by a Labor government that only last year promised “the biggest increase in the building of social and affordable homes in a generation” – another promise in the dustbin.

One former department insider recalls constant pressure from No 10 and the Treasury to de-emphasize social housing, something that Angela Rayner – who exercised the combined authority of deputy prime minister and deputy leader – and Housing Minister Matthew Pennycook always resisted. Until the government staff suddenly changed last month.

Lots of high politics; The reality on the ground is a housing crisis that continues to worsen. More than 13,000 people were sleeping rough in London in the period 2024-2025, four times the number before the austerity regime approved by David Cameron. At the beginning of this year, 73 thousand families throughout the capital They were in temporary housingincluding 90,000 children – an average of at least one child in every classroom in London Homeless. The capital’s councils pay £5.5 million a day just to put them in rooms that are often cramped, filled with mold and worse.

None of this will be improved by these measures, as described here. More than one source believes that developers will halt projects already underway, arguing that they should be allowed to turn into more profitable housing. A source at the Greater London Authority estimates that up to 20,000 affordable homes already planned, some partially built, could quickly disappear. In the long term, says Duncan Bowie, the project’s lead architect London plan Under Ken Livingstone, the memorandum will return Londoners to Boris Johnson’s housing policies. Consider the infinity pools in the sky, while thanks to George Osborne’s welfare cuts that Rachel Reeves did not reverse, low-income Londoners are exiled hundreds of miles away from their families and friends.

In response to my questions, the Housing Ministry issued a short statement that said in part: “We do not comment on leaks. No decisions have been made.”

Ministers might claim that 20% of something is better than 35% of nothing – except that the housing problem in London today is not primarily about over-regulation – it is about a lack of demand. Wages are barely rising, interest rates are far from their post-crisis lows, and housing prices remain unsustainably high. As Molior said: “No buyers = no construction starts.”

Just a few months before council elections in London and elsewhere, the Labor government is about to unveil a chart showing who it values ​​most – and it doesn’t look like ordinary Londoners. “This applies to developers,” says Aydin Dekerdem, Wandsworth Labor Council’s cabinet member for housing.

It’s not just Steve Reed’s baseball caps that look Trumpian.

• Aditya Chakraborty is a columnist for The Guardian

• Do you have an opinion on the issues raised in this article? If you would like to email a response of up to 300 words for consideration for publication in our letters section, please click here.