Thursday, 31 July 2014

Double crisis

From: Inside out

Ed Miliband devoted 212 words to housing in his conference speech in Brighton. That’s about 2.3 percent of a 9,000 word speech. Disappointing perhaps, but he did make three significant pledges. I will use his exact words as posted on the Labour Party website to avoid any ambiguity in what follows.

“So we’ll say to private developers, you can’t just sit on land and refuse to build. We will give them a very clear message - either use the land or lose the land, that is what the next Labour government will do.
 We’ll say to local authorities that they have a right to grow, and neighbouring authorities can’t just stop them. We’ll identify new towns and garden cities and we’ll have a clear aim that by the end of the parliament Britain will be building 200,000 homes a year, more than at any time in a generation.

I will pass over “use it or lose it” because it is just empty rhetoric, but the pledge on the right to grow is to be welcomed. It’s a firming-up of the duty to co-operate, as set out in the NPPF, and is designed to tackle recalcitrant local authorities  who refuse to allow expansion by neighbouring land-locked authorities. The North Hertfordshire and Stevenage case is often given as an example. Whether this will translate into an effective policy remains to be seen.

Despite its rather strange wording, the pledge to “identify new towns and garden cities” is something that I and others have been arguing for for a very long time and is to be welcomed. Whether this can be translated into a realistic policy (eco-towns anyone?) is another matter. It will only work well if land is purchased at sub-residential values and development funded through uplifts in land values.

But the pledge to build 200,000 homes a year is rather misleading. Had he been referring just to England the “more than at any time in a generation” would have been correct. But according to the CLG we built 205,050 homes in Britain in 2007/08 (218,530 if you include Northern Ireland to cover the whole of the UK). That is certainly less than a generation ago by my reckoning. The last time we built more than 200,000 in England was in 1988/89 when we built 202,930, which I guess is more than a generation ago. This is one of the problems with devolution – you can mix and match your countries and cause havoc with accuracy and understanding – a politician’s dream perhaps? Building 200,000 homes a year in Britain is nowhere near enough. We need to build 250,000 in England alone to meet demand and claw back past under-supply.

Miliband also said, “There are 9 million people in this country renting a home, many of whom who would like to buy. 9 million people - we don’t just have a cost of living crisis, we have a housing crisis too”. That seems a curious thing to say. If he is again referring to Britain and not England then I am assuming he just means those living in the private rented sector. Yet many in the social rented sector would also like to buy and many people living in the PRS do not want to buy. Odd.

But the fundamental point that the Labour Party have missed is that the “cost of living crisis” is fundamentally a housing crisis. They are not separate things but inextricably intertwined. Several recent reports have highlighted these issues, and I won’t rehearse them here, but when Londoners are having to find £64,000 to fund a deposit, when so-called “affordable rent” homes are being let at £180 a week and when Generation Rent is paying up to half of their wages in rent it is quite clear that tackling housing supply and afffordability would do more to improve the standard of living of millions of disadvantaged Britons than any other single measure. 

The Labour Party has listed a number of steps that it will take to address this “cost of living crisis” including abolition of the bedroom tax, freezing energy prices, extending childcare and rasing the minimum wage.  All well and good, but many of these are mere pinpricks in the bigger picture of housing supply and affordability across vast swathes of the country.  The bedroom tax may be controversial but it affects relatively few people and, as Joe Halewood has pointed out, Labour has completely missed the point in its pledge to scrap the tax. Too often, our politicians chase public opinion rather than forming it by their vision and leadership.

Our present housing system damages the dreams and aspirations of millions of people, it creates a mighty chasm of inequality between our two housing nations, the haves and the have-nots. Is there any issue that should be a greater priority for One Nation Labour than housing? We need to shout it from the rooftops that the cost of living crisis is fundamentally a housing crisis. 

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