Johnson, Partygate and manifesto commitments

Posted: January 31, 2022 | Author: julesbirch | Filed under: First Homes, Home ownership, Homelessness, Housebuilding, Levelling up | Tags: Boris Johnson |Leave a comment

Originally written as a column for Inside Housing.

It’s been just over two years but thanks to Covid-19 it feels like a lifetime ago.

Leaving aside the question of whether he has really delivered on his headline promise to ‘Get Brexit Done’ how much of Boris Johnson’s 2019 election manifesto has survived into the post-Coronavirus age?

The question was originally prompted by the outcome of the judicial review over Everyone In. The scheme launched at the start of the pandemic to get rough sleepers off the streets and into hotels within a few days was a great success.

It also signalled that the manifesto promise to ‘end the blight of rough sleeping by the end of the next parliament’ should be well within reach.

Except that, for all that rhetoric, Everyone In morphed from a policy into an initiative with an asterisk attached. From around May 2020, it was no longer a promise but branding for an initiative exhorting local authorities to act without giving them any extra resources.

And then I realised the wider context as we continue the seemingly interminable wait for Sue Gray’s report.

Because manifesto promises were at the heart of the wider debate over whether to postpone or cancel the Health and Social Care Levy due in April.

The decision to go ahead, now confirmed by Boris Johnson and Rishi Sunak, breaks the manifesto pledge not to increase income tax, national insurance or VAT.

However, postponing or cancelling it would have broken another pledge by leaving ‘a long-term solution for social care’ without any money to pay for it.

More details are due to emerge later this week on another key manifesto pledge with publication of a white paper on levelling up. Will the Department for Levelling Up, Housing and Communities really have enough funding to deliver on the first part of its new name without compromising the other two parts?

The same tensions are evident in delivery on the modest 2019 manifesto promises that relate specifically to housing. Some of this was already clear in the metrics for success published alongside the Spending Review. Ending rough sleeping, for example, relates to the total in the annual count rather than the higher numbers revealed by Everyone In.

There has been progress on some of the manifesto, with First Homes being piloted and a social housing regulation bill appearing potentially within the next few weeks.

The sale of new leasehold houses is banned and a Bill is going through parliament to ban ground rents in new leasehold homes but ministers acknowledge this is only a small first step to wider reform. Reports over the weekend suggest that another Bill in the Queen’s Speech will do more for existing leaseholders.

There is a scheme to  guarantee 95 per cent mortgages but not much sign yet of ‘a new market in long-term fixed-rate mortgages which slash the cost of deposits’ let alone ‘opening up a secure path to home ownership for first-time buyers in all parts of the United Kingdom’.

Instead the pandemic saw house prices rise and higher loan-to-value lending collapse. The Bank of England may be reviewing its mortgage affordability stress test but, as Neal Hudson argues, homes remain fundamentally unaffordable even before rising interest rates and cost of living pressures.

For those excluded from buying, the manifesto pledged a ‘Better Deal for Renters’ and an end to no-fault evictions but these remain just promises and there is still no sign of a white paper let alone legislation.

The promise to ensure that ‘every home is safe and secure’ has still not been delivered despite the ramping up of the rhetoric under Michael Gove against developers, product manufacturers and insurers.

We also know from the leaked letter from Treasury chief secretary Simon Clarke that Gove has promised to ‘put safety before supply’ and that existing departmental budgets will be the ‘backstop’ if he fails to raise enough money from the construction industry to fix mid-rise buildings.

The government has delivered on the manifesto promise to ‘renewing the Affordable Homes Programme’ but can we really rely on that in the longer term?

And then there’s new build in general. Even before the leaked letter there were hints that Gove is not convinced that problems of unaffordability can be solved by new supply and housebuilding targets in general.

The manifesto promised to ‘continue our progress towards 300,000 new homes a year by mid 2020s’ with ‘at least a million of all tenures over the next parliament’.

The latter should be well within reach on the government’s chosen metric of net additional dwellings: 216,490 were delivered in 2020/21, a financial year dominated by the pandemic that saw building sites closed in its early stages. 

The 300,000 will be much more of a stretch but it was important precisely because it encouraged the government to consider things (such as greater support for affordable housing and planning reform) that it would otherwise have left alone.

The commitment on discounted First Homes was always contradictory, since the scheme cannibalises planning contributions that would otherwise go to affordable homes.

However, it is actually even worse than that. As Matthew Bailes argues, they will also adversely affect development economics for market homes: ‘To sum up, First Homes will redirect subsidy from those that need it to those that don’t and will reduce the number of new homes we build. It is not exactly a nailed-on winner.’

All this has to be seen against a political backdrop that suggests a return to more traditional Conservatism.

Even if Boris Johnson survives the police investigation, Sue Gray report and possible confidence vote, he will be a weakened prime minister more beholden to right-wing Tory MPs. If he loses and there is a leadership contest, the candidates will have to tack to the right to win support.

Whoever is in charge will face a cost of living crisis at the same time as taxes rise to their highest level since the 1950s. Housing may be more unaffordable than ever but where will it really rank as a priority?

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