Looking back on 100 years since the Wheatley Act

He built on the legacy of the Addison Act of 1919 (named after Christopher Addison, the Liberal health minister) that established the principles of council housing, but which was derailed by soaring building costs and abruptly scrapped two years later.

That was succeeded by the Conservative (Neville) Chamberlain Act of 1923 that reserved most subsidy for private housebuilding and only funded council housing where the private sector could not meet identified need.

The Wheatley Act was the major achievement of that first Labour government, but it was born out of pragmatic agreement with building employers and unions, rather than ideology. A long-term council housebuilding programme backed by more generous subsidies would guarantee long-term work for builders, as well as provide homes for skilled workers.

The act set a subsidy of £9 a year per house, with more in rural areas. This was 50% more generous than the Chamberlain Act, but not the open-ended subsidy of the Addison Act, and the contribution from the rates was capped at £4.50 per house.

“The Wheatley Act was the major achievement of that first Labour government, but it was born out of pragmatic agreement with building employers and unions, rather than ideology”

Mr Wheatley himself described his legislation as “anything but socialistic” and said it retained Mr Chamberlain’s subsidy of private housing for sale on the grounds that it was producing homes.

But he also argued that it was “private enterprise that is killing private enterprise”, as suppliers put up their prices to achieve higher profits in a process that “chokes off the little builder who relies on cheap production”.

He went on: “By promoting a larger market for houses, I am creating a field for private enterprise that it could not possibly have in anything but these proposals. It required Labour proposals, socialist proposals if you like, in order that private enterprise could get going again.”

The Labour government did not last long in that first term and the act never met Mr Wheatley’s original target of 2.5 million new homes over 15 years. However, it still produced more than half a million council homes – half of those completed between the wars – by the time it was cancelled in 1933.

By comparison, the Addison Act produced 170,000, and the slum clearances of the 1930s led to 265,000 homes of lower quality.

The Wheatley Act laid the foundations for the inter-war boom in housebuilding and set the standard model for housing subsidy for the next 40 years. Mr Wheatley himself is remembered in the name of Scotland’s biggest housing association.

Against that, subsidies and space standards were less generous than under the Addison Act and rents were only affordable by the better paid in regular work, rather than the poorest tenants living in the worst housing.

However, in an echo of the case now sometimes made for building expensive homes for sale, the argument was that as tenants would vacate their current private rented homes, that would filter down to others as increased supply reduced rents overall.

“It’s easy to forget what’s been lost in the past 45 years, not just in terms of the Right to Buy, but also the clarity of the idea of council housing as a way of meeting the housing needs of millions of families failed by the market”

So what lessons can be drawn from what happened a century ago?

Circumstances are obviously very different: for all the multiple housing crises we face now, housing conditions were much worse for far more people 100 years ago.

But so, too, was the imperative for political action in the wake of World War I, the threat of revolution and the unfulfilled promise of ‘homes fit for heroes’.

It’s significant that the ideas behind council housing – well-designed homes based on central government subsidy and a contribution from the rates developed and managed by local authorities – were able to survive in a period dominated by Conservative-led governments and marked by two rounds of severe cuts in public spending.

A determined minister like Mr Wheatley could make a difference even in a short-lived Labour government without a majority.

It’s easy to forget what’s been lost in the past 45 years, not just in terms of the Right to Buy, but also the clarity of the idea of council housing as a way of meeting the housing needs of millions of families failed by the market.

A century later we have another Labour government, this time with the second-biggest majority in the party’s history.

Will it remain wedded to market-led solutions, or will the party take inspiration from what Mr Wheatley achieved 100 years ago?

Jules Birch, columnist, Inside Housing