Watch this space

Posted by: Jules Birch

13/05/2010

As the coalition cabinet meets for the first time, what do we know so far?

We know that Eric Pickles is the new communities and local government secretary - returning to a brief he held in opposition before switching to become party chairman.

We know that at least £6bn of cuts this year will be discussed - and we know that housing is not one of the areas that will be protected from them. 

We know that radical welfare changes are on the way after the appointment of Iain Duncan Smith as work and pensions secretary. 

We know from full text of the coalition agreement that it will adopt the Liberal Democrat policy of increasing capital gains tax on non-business assets from 18% to 40%. That will have a big impact on second home owners and buy-to-let investors and there are already warnings about a hiatus in the housing market as they rush to sell before it comes into force.

And what do we think we know? 

The housing minister seems to have been demoted by losing his or her right to attend cabinet meetings. Appointments of ministers who will attend cabinet without being full members were announced last night and the housing minister was not on the list. 

The apparent loss of status is not a surprise but it could hardly come at a worse time. Cuts of more than £6bn could be on the way given the extra spending commitments and tax reductions specified in the joint policy document. 

Speakers at the Council of Mortgage Lenders affordable housing conference yesterday were already gloomy enough before that became clear. While the Lib manifesto seemed the most housing-friendly of the three major parties and featured a big programme of brining empty properties back into use, the coalition deal has ruled out the mansion tax that would have paid for it. 

In any case, the track record of Eric Pickles suggests that the emphasis will be firmly on the local government side of his brief. A Tory hero of the 1980s when he led them to unlikely power in Bradford, he’s been heavily involved in developing the new Conservative policy on localism.

So it should be full steam ahead on Conservative plans to scrap regional spatial strategies, free local authorities from them where they have already been agreed and give them incentives through the council tax to agree to more homes. Nothing was mentioned in the joint policy statement but the Lib Dem manifesto also pledged to abolish government housebuilding targets.

Critics - who include major housebuilders - say that could turn into a charter for nimbys. Supporters say the targets were already failing and local communities will for the first time have a positive reason to agree to new homes.

Pickles should also be well placed to finesse a deal on housing revenue account (HRA) debt. His first chair of housing all those years ago in Bradford was Margaret Eaton - now chairman of the Local Government Association. 

But well-paid local authority (and housing association?) bosses watch out: attacks on town hall ‘fat cats’ were a highlight of his spell shadowing the job he now holds. 

We don’t yet know who the housing minister will be - an appointment is expected shortly. Between 15 and 20 Lib Dem junior ministers are thought likely to be appointed so the new person could come from either party. Watch this space.