Visions and promisesPosted: September 29, 2014 | |
As the parties hold their final conferences before the 2015 general election, housing has a high political profile. Here are five themes I’ve noticed so far.
1) Priorities, priorities
‘Building as many homes as we need’ is the fifth of Ed Miliband’s six national goals by 2025. The big questions remain how we achieve that and whether it will be possible without substantial extra investment in new affordable homes. So it was definitely good news that the Labour leader had this to say too: ‘We will also make housing the top priority for additional capital investment in the next parliament.’ However, that can taken at face value or as an indication that it will not be top priority in its initial investment plans.
A 2015 Labour government will be taking power amid continuing austerity and housing will be competing with a range of other Policy areas that may have more priority. The speech by Ed Balls was a case in point. He has previously made clear that Labour will retain the freedom to borrow to invest. However, his job as shadow chancellor is to convince voters that Labour will be financially responsible with ‘tough fiscal rules’:
‘So in our manifesto there will be no proposals for any new spending paid for by additional borrowing. No spending commitments without saying where the money is coming from. Because we will not make promises we cannot keep and cannot afford.’
Balls also said that: ‘The next Labour government will raise the minimum wage, build more homes to get the housing benefit bill down and cap overall spending on social security.’ He will keep the benefit cap ‘but we will make sure it properly reflects local housing costs’.
Lower rents and more social housing can reduce the housing benefit bill, then release money for more investment to bring it down still further. But we still don’t know how far Labour will go in following through on previous signals that it will look to make a radical shift from personal to bricks and mortar subsidies. And the extra money that is being raised from housing – the estimated £1.2 billion a year from the mansion tax – will instead pay for spending commitments on the NHS.
2) The caps still fit
Where does that leave housing? And in particular where does it leave the longstanding campaign for greater borrowing freedom for council housing?
A succession of comments by shadow ministers at fringe meetings this week makes it pretty clear that Labour will not raise the borrowing caps. As bloggers for Red Brick have been pointing out all week, that will come as a big disappointment to those hoping the party would be more radical.
Shadow chief secretary Chris Leslie said that extra capital funding for housing would make a difference in an ideal world but added:
‘What I can’t do is raise your expectations and promise you that straight after the election there’s will be this splurge in borrowing. That’s not going to happen – we’ve said very clearly that the proposals that we have in our manifesto will not involve additional borrowing.’
And when shadow housing minister Emma Reynolds was urged to lift the borrowing caps by local council leaders she seemed to come up with another reason why not. According to Local Government Chronicle she said: ‘We have to be aware of what the opposition will say and how they will frame that at the next general election.’
And a third reason featured in Inside Housing’s story that the housing review by Sir Michael Lyons will recommend the sharing of borrowing capacity rather than the lifting of the caps. Carl Brown’s report quotes Emma Reynolds as saying:
‘I don’t think that lifting the HRA cap is going to suddenly unleash lots of new homes because frankly there are lots of councils in the country that are nowhere near the cap. Lifting the cap in its entirety is difficult and the borrowing would be on the government balance sheet. Michael is considering what to do within the cap in terms of sharing the headroom.’
3) Waiting for Lyons
Speaking of which, the general expectation was that the Lyons report would be published before or during the conference and provide some real substance on how to get to Labour’s target of 200,000 new homes a year by 2020. Now it is expected later this year. Pessimists see the delay as a worrying sign that Labour will play a cautious hand on housing. Optimists argue that it may just reflect a desire to avoid distracting attention from the party’s key messages for the week. The comment by Emma Reynolds above indicates that work on at least one part of the report is not finished yet.
Policy Exchange is asking whether Britain can ever build 300,000 new homes a year at fringe events at all three main party conferences. That 300,000 figure is Lib Dem policy but we’ve very little so far about how it would be achieved.
4) Two new pledges
The delay on Lyons deprived the conference of much in the way of new policy on housing. However, there were two exceptions to that.
First, Ed Miliband said over the pre-conference weekend that Labour would let councils set up new homes corporations in areas prioritised for development. They would receive government funding and work with housing associations and the private sector. It sounds a good idea that could build on the home zones already planned in London. It’s also good news that Labour wants councils to work with the wider private sector, not just existing housebuilders. However, it left me wondering about how far they will really be council-led. The whole point of previous versions of the development corporation model – the London Docklands Development Corporation and the Olympic Delivery Authority – was that they bypassed local authorities.
Second, one of the national goals promised by Miliband in his leader’s speech directly concerned housing: ‘Our fifth national goal is that by 2025, for the first time in fifty years, this country will be building as many homes as we need. Doubling the number of first time buyers in our country.’
It’s not quite clear from that whether the goal here is to build as many homes as we need or (as was trailed in advance) to double the number of first-time buyers – but neither is as ambitious at it sounds. The existing target of 200,000 homes a year by 2020 is of course still well short of the magic number of 250,000 but even so it will be challenging. Doubling the number of first-time buyers sounds much bolder on the surface but appears to mean 400,000 a year rather than the average of 200,000 seen between 2008 and 2012. However, the number of first-time buyer loans is already on the increase: there were 269,000 in 2013 and we are on course for around 300,000 this year.
5) That were trumped by the Tories
If Labour largely trod water on housing at its conference, the same cannot be said for the Conservatives. All the Saturday headlines (before they changed to defections and sex scandals) were made by David Cameron’s pledge to build 100,000 starter homes for sale to first-time buyers under 40 at a 20 per cent discount. The extension to Help to Buy would work by using cheap brownfield land and by exempting the developments from requirements on affordable housing, community infrastructure and zero carbon.
It all sounds to me like yet another nice little earner for housebuilders and it begs all sorts of questions that I’ll blog about another time. In response, Emma Reynolds pointed to the coalition’s miserable record on housebuilding and cutting investment in affordable homes. She went on: ‘Labour will make the fundamental changes to the market which are urgently needed and will double the number of first-time buyers in the next ten years.’
Whatever the merits of Dave’s Dream Homes, the point here is that the pledge forms part of a clear but divisive Conservative narrative about aspiration and enterprise. Yesterday’s carrot for the inevitable ‘people who work hard, who do the right thing’ is matched by today’s stick of withdrawing benefits for the 18 to 21-year-olds and cutting the benefit cap to £23,000. It’s the same ‘strivers and scroungers’ theme that I blogged about ahead of the Tory conference two years ago.
In contrast, despite some good ideas and hints of more to come, despite all the talk of ‘together’, I still can’t see the vision or the narrative behind Labour’s ‘fundamental changes’ on housing.
Originally published on my blog for Inside Housing