What will a new PM mean for housing?

Originally posted on May 20 as a column for Inside Housing.

What are the chances that the government’s shift to a more pragmatic position on housing will survive a change of Conservative leader?

The papers are already full of news and polls about the leadership race before Theresa May has even resigned, mostly reporting Boris Johnson as the overwhelming favourite but also noting the poor record of overwhelming favourites in previous Tory elections.

The stakes for housing start with the record of May’s government. While much of it is about rhetoric and saying the right things, especially since Grenfell, there is also some substance: the first funding for social housing since 2010; u-turns on key elements of the 2016 Housing Act; reforms to private renting culminating in the consultation on ending Section 21; and a willingness to consider new thinking on issues like land.

Does all of this represent a permanent shift in Conservative thinking on housing or will the Tories revert to type once May and her chief of staff, former housing minister Gavin Barwell, have vacated Downing Street?

Much obviously depends on who wins, with some candidates seemingly offering continuity while others are on record with anti-social housing positions, but a change of leader will probably mean a change of chancellor, housing secretary and housing minister too.

Boris Johnson has used his Telegraph column to call for more homes, cuts in stamp duty and tougher action against land-hoarding developers (at least he did when he was not attacking Ed Miliband for ‘Mugabe-style expropriations’ when he proposed the same thing).

True, the Telegraph was forced to argue recently that his columns are not to meant be taken seriously, but they are evidence of his political instincts on housing.

Johnson did at least show he had learned something as London mayor when he lobbied for changes to David Cameron’s plans for forced sales of empty council houses but those instincts were most clearly in evidence in his speech to a packed fringe meeting at the last Conservative conference.

While Theresa May was using her conference speech to scrap the borrowing cap for council housing, Johnson was telling a fringe meeting about a family in a damp council flat in Wolverhampton he met in his early days as a journalist:

‘It was a terrible scene.  They were sitting there and with the heating on full blast and a baby crying, and the condensation dripping down the window, and there were these great black spores all over the wall. The chap was in his socks in an armchair and in a state of total despair. He was worried about the baby’s cough – which was getting worse.

‘The council wouldn’t do anything, and he felt he couldn’t do anything – because it was not his property, and I could see that he felt somehow unmanned by the situation. And I felt very sorry for them both – because they were total prisoners of the system.’

Incredibly his solution to all that was the Right to Buy: ‘I thought what a difference it would make to that family if they had been able to take back control – to coin a phrase. To buy that flat.’

Johnson faces competition for the top job from a crowded field and I’ll return to the leadership race in a future blog.

For the moment, it’s enough to note that the contenders include former housing secretary Sajid Javid, former housing minister Dominic Raab and former shadow housing minister Michael Gove.

Further down the list, Liz Truss has been busily positioning herself as the most pro-market Tory in the race. She’s called for radical reform of the housing market to attract the ‘go-getting generation’ of younger voters and for the Tories to ‘stop bottling it’ on planning reform that she claims could cut housing costs by 30%.

However, other candidates will see her call to ‘take on’ the vested interests opposing development in the green belt as exactly what the Tories should not be doing if they want to appeal to suburban voters.

Their arguments will have been reinforced by the results of the recent local elections, in which opposition to housebuilding plans was one factor in the success of independent candidates.

And that brings us back to the general election that a new prime minister may see as a way out of the Brexit impasse.

Some indications of what’s at stake came in the result of the Australian election over the weekend in which Scott Morrison’s Coalition won a surprise victory.

Negative campaigning over Labor’s policies on climate change was seen as a key factor in the result but housing was also an important issue in the campaign.

The Coalition had few policies of its own but announced an Aussie version of Help to Buy (funded by guarantees rather than equity loans) for first-time buyers in the final week of the campaign that Labor felt obliged to match.

Labor promised a series of reforms including the halving of a capital gains tax discount for landlords and the abolition of negative gearing, the Australian system that allows landlords to offset losses on the homes they rent out against taxes on their other income.

You would have thought that would play well in a country that has seen house prices rocket and home ownership fall as landlord-‘investors’ rushed to take advantage.

Instead the Coalition concentrated on attacking Labour’s plans, claiming that they would damage property prices and increases rents – and that strategy seems to have worked.

Lessons on elections in Australia are usually absorbed pretty quickly in this country thanks to the ubiquity of the Murdoch press and the fact that Australian political consultants like Lynton Crosby have been prominent in campaigns for both the Australian Liberals and UK Conservatives (with mixed success).

The 2017 general election campaign was a disaster for the Tories (which May and Crosby blamed on each other).

That meant the press had little time a classic negative attack in the final week of the campaign – Boris Johnson led claims that tentative Labour support for a land value tax amounted to a ‘garden tax’ that would triple the council tax bills of middle class home owners – but it would not be a surprise to see a repeat at the next election.

You could see the 2019 Aussie election as a re-run of the UK in 2015, with the right-wing incumbents throwing everything into promises to boost home ownership, but you could also see it as a dry run for an election here, whether it comes in the next few months or not until 2022.

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