Political parties shouldn’t over-promise on housing

The run-up to an election is a period of mixed emotions for Whitehall officials.

Naturally there is a bit of excitement. The prospect of a new government, or at least a new set of political masters, means a new set of challenges – quite appealing if you don’t feel blessed with sensible ministers or worthwhile policies.

But these opportunities come with plenty of risks and irritations, both before and after the election.

Issues that need immediate attention can be pushed back, not just in the run-up to the election but for an extended period afterwards, as a new government finds its feet. Don’t expect to see definitive answers on rents or supported housing any time soon.

“Manifestos are written without the normal checks and balances of policy development – things like civil service advice and public consultation.”

Then there’s the joy of manifestos. To start with, there’s an odd dance with the governing party, in which officials need to provide advice to the government but not (in theory) support the process of drawing up a manifesto.

If this makes Sir Humphrey of Yes Minister fame feel awkward, he is positively sweating at the prospect of political hacks – the people once described by Ken Clarke as “kids on scooters” – drawing up policy on the hoof.

There are two big problems with this process. First, manifestos are written without the normal checks and balances of policy development – things like civil service advice and public consultation. This greatly exacerbates the risk that hair-brained schemes turn into firm commitments.

Second, just about all the focus is on political advantage. Awkward questions on practical implementation and unintended consequences can be dealt with later, if you’ve actually formed a government.

Housing provided the perfect example of this problem in 2015. The risk that an announcement on Right to Buy would pique the Office of National Statistics’ interest in the knife-edge question of sector classification was very well-known. But it became a commitment anyway, and arguably the policy met its objective of nudging a few floating voters in marginal constituencies to vote Conservative.  

Similarly, even a cursory glance at the Starter Homes initiative should have set alarm bells ringing. If implemented it would have been a major intervention in an already distorted and uncertain market, with unpredictable results. But it probably played well with would-be first-time buyers.

Once manifestos are published, officials start thinking about implementation plans. This can be an invigorating process if you are working up serious reforms. But it is less inspiring if the proposals are irrelevant gimmicks. I remember getting landed with working on a particularly obscure issue – an idea that had no chance of registering even as a footnote in any history of housing policy. A colleague suggested my time would be better spent coming up with a plan to invade France.

Meanwhile, outside the Westminster bubble, extra uncertainty delays investment and increases the price of risk. Depending on the outcome of the election, these delays often turn out to be temporary. But some schemes will be abandoned, and other decisions may be kicked into the long grass – witness airport capacity and social care. 

The costs extend to damaging public trust of the political system. When big shiny promises are made at election time and not delivered, people start to notice. All of the major political parties have been guilty of this in the recent past; indeed, one could argue that it is a more or less inevitable by-product of our political system. 

“For the Conservatives, they are highly likely to have to live with the promises they make.” 

For example, promises have been made about fixing the housing market since at least 2004 (Kate Barker’s report), but the number in housing need has continued to go up, and the number of first-time buyers has continued to go down. Perhaps the outcome of the Brexit referendum would have been different had ministers kept their promises on net migration, or come up with more realistic targets in the first place?

It would be naïve to assume it will be much different this time, but there are at least some grounds for cautious optimism. For the Conservatives, in particular, the incentives have changed – they are highly likely to have to live with the promises they make. 

There is also a bit of crisis, or at least three giant problems, in the form of Brexit, the deficit and the escalating cost of an ageing population. Sometimes in democratic politics a crisis is needed as cover for the serious reforms that should have been made long ago.

There’s a housing crisis too, so let’s hope the politicians take housing policy seriously. This means avoiding eye-catching but unworkable commitments (and perhaps ditching one or two dubious legacy schemes), as well as setting out a coherent long-term strategy which is workable across the economic cycle. I’m crossing my fingers, but not holding my breath.

Matthew Bailes, chief executive, Paradigm