The decline and fall of Trussonomics

Originally written on Tuesday October 18 (before the resignation of Liz Truss) as a column for Inside Housing.

Growth, growth, growth? Little survives of Trussonomics after a series of astonishing u-turns but in housing at least is still seems to be half-steam ahead.

Just two of the tax cuts announced by former chancellor Kwasi Kwarteng in his statement last month and only because the legislation for them had already gone through parliament.

The scrapping of the health and social care levy obviously begs big questions about funding for both but the increase in stamp duty thresholds now looks even more of a spare part than it did at the time.

While stamp duty is fundamentally a bad tax because it inhibits transactions, cutting it without wider reform of property taxation benefits sellers more than buyers as savings are capitalised into higher prices.

Cutting it permanently now rules out what has always been the first lever the Treasury pulls in a housing market downturn: a stamp duty holiday.

Even on the Treasury’s own figures, it will only generate an extra 29,000 house moves a year. But the limited growth in the wider property sector this generates will come at a cost to the taxpayer of £7 billion over the next five years.

New chancellor Jeremy Hunt has signalled that ‘eye-watering decisions’ about spending cuts and tax rises are on the way, mortgage costs have soared since the not a Budget and the energy price guarantee is now only guaranteed until April.

With even the pensions triple lock not guaranteed, the battle that was already looming over the uprating of benefits next year will now be even more intense.

Further freezes in the benefit cap and – despite rising rents – local housing allowance look more likely with devastating consequences for poverty and homelessness.

All this will be the acid test of  Hunt’s promised return to ‘core compassionate Conservative values’.

The implication of the fiscal position for the Department of Levelling Up, Housing and Communities must be that any budget that is not already nailed down is up for grabs.

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A tale of two Conservative parties

Originally written as a column for Inside Housing.

If the Liz Truss government is serious about delivering growth and getting Britain moving then it has to be serious about housebuilding and planning reform.

The superficial signs are that it is: the promised programme of investment zones; promises of further reforms to boost housebuilding and home ownership in the Autumn; prime ministerial support for growth, growth and growth.

The underlying ideology shouts that it is: take a quick look at this briefing paper on housing from the Free Market Forum, an offshoot of the Institute of Economic Affairs whose parliamentary backers include Truss, chancellor Kwasi Kwarteng, housing secretary Simon Clarke and housing and planning minister Lee Rowley.

But history still suggests a need for caution: exactly the same thing could have been said in 1983/84, 1988/89, 2010/11 and 2020/21, when Conservative ministers proposing planning liberalisation were thwarted by more cautious colleagues or rebellious backbenchers or both.

Because there are two poles of Conservatism: the libertarian, economic liberal one that is currently in the ascendancy and a social conservative one that sees green belts and planning regulations as a good way to conserve things.

Between those two poles, more pragmatic Tories recognise that they have to take account of both if they are to deliver more homes – and that their political success or failure in future could depend on that delivery.

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The big questions facing Simon Clarke

Originally published as a column for Inside Housing.

Simon Clarke has yet to reveal much of his thinking on the key issues facing his new department but the early signals coming from the new government mean it’s already clear that tough choices lie ahead.

As chief secretary to the Treasury since September 2021 he was responsible for scrutinising and departmental requests for more public spending. Now he replaces Greg Clark at the Department for Levelling Up, Housing and Communities (DLUHC), where he briefly served as a minister for regional growth and local government in 2020.

As a prominent supporter of Liz Truss, Clarke will have some influence with the prime minister and could be heard acting as her spokesman on energy costs on the Today programme on Thursday.

Like any secretary of state he will fight for the departmental interest and but it seems doubtful whether he will have as much heft in Whitehall as his predecessor but one Michael Gove.

Indeed there are already some straws in the wind. Consider a story leaked to the Telegraph over the weekend about a £1.5bn underspend at the DLUHC.

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Tory leadership debate misses the target

Originally written as a column for Inside Housing.

This is a Conservative leadership race in which the number of toilets we should have has often seemed a bigger issue than the number of homes we need.

Even allowing for the fact that the candidates have to appeal to electorates made up of Tory MPs and elderly Conservative members who appreciate anti-wokery, the level of debate in the race to be the next prime minister as well as party leader has been beyond depressing.

The only candidate who made housing explicitly part of his pitch was Sajid Javid as he called for ‘a massive programme of garden villages and new towns’ and incentives for longer-term tenancies – but he was one of the first to be eliminated.

The debate has otherwise been dominated by tax cuts and the general message is that whoever wins will cut public spending to create space for them.

Calls by multiple candidates to reverse the increase in National Insurance make the prospects of meaningful reform of social care look even more remote.

‘Common sense’ calls for people to be given back ‘their own money’ ignore attempts up to now to target cost of living support on the poorest.

And you have to wonder whether benefits will really be uprated in line with inflation next year and whether the Treasury will allow a potentially double digit increase in social rents.

The levelling up agenda looks to be on shaky ground, with Liz Truss, for example, calling for ‘levelling up in a Conservative way’, which appears to mean tax cuts for entrepreneurs rather than a rebalancing of public spending.

The 2050 net zero target is only opposed by one of the remaining five candidates (Kemi Badenoch) but none of them have shown much enthusiasm for a strategy to achieve it.

On the opening weekend of the leadership race, the Sunday Telegraph devoted tens of thousands of words to the candidates and what they plan to do. The only mention of housing came in a piece about where Boris Johnson plans to live next and which of his two sets of tenants should be evicted to make way for him.

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Housing in the Queen’s Speech

Originally written as a column for Inside Housing.

It certainly looks like Her Majesty’s Government is doing something on housing – but is that the limit of the ambitions expressed in the Queen’s Speech?

As ever, background briefing notes provide more detail than the speech delivered this year by the future King.

Two promised headline Bills fulfil commitments to reform private renting and the regulation of social housing but both are long overdue.

A third pointedly does not include plans announced in the 2021 Queen’s Speech to reform the planning system to deliver more homes.

And there are vague promises of further ‘housing reform’ but no specifics or commitments to legislation to back them up.

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Can Gove put the social back in ‘affordable’?

Originally written as a column for Inside Housing.

Michael Gove’s challenge to ‘Thatcher-worshipping’ Tories to want more social rented housing feels like another significant milestone in the Conservative journey on the issue but the final destination remains unclear.

Speaking at a conference organised by Shelter, the levelling up secretary said he was exploring ways to increase support for social rent and change rules that restrict funding for it outside of the most unaffordable parts of the country.

He also admitted that previous Tory policies have ‘tilted more towards a particular set of products that are not truly affordable and have not enabled housing associations and others to generate the housing at the social rent that they need’.

The speech followed a report in the Sunday Telegraph that he is set to scrap the Section 106 of planning contributions and replace it with an infrastructure fund that will pave the way for a ‘council housing explosion’.

John Rentoul in The Independent sees all this, plus his success in bullying developers into paying up for building safety, as evidence that Gove will be a strong contender in the undeclared 2022 Conservative leadership contest.

At the same time, Telegraph columnist Liam Halligan, another speaker at the Shelter conference, argues that ‘council housing should be central to the Conservative brand’ and that the party should shift subsidies from benefits to bricks. 

Now keen-eyed readers may spot the odd example of cognitive dissonance in this reversal of 40 years of Conservative orthodoxy.

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Cutting the Goveian knot

Originally published on November 10 as a column for Inside Housing.

In a two-hour appearance before MPs, Michael Gove made most of the right noises but can he really come up with meaningful solutions to the intractable problems that come with his new job?

The man in charge of the Department for Levelling Up, Housing and Communities (DLUHC) was facing questions from what is still called the Housing, Communities and Local Government Committee. You can watch it back here.

The reorganisation of his department added responsibilities for levelling up and preserving the union to the tangled threads of building safety, planning, home ownership and homelessness that were already crowding his in-tray. You might almost call it a Goveian Knot.

What was striking was not just Mr Gove’s willingness to engage with committee members but also his multiple hints of bolder answers on the way.

The levelling up secretary signalled pauses and rethinks and resets on several of the most contentious issues he faces. This is reflected in this morning’s press coverage of his hints that housebuilding targets will be scrapped, his pledge that controversial fire safety advice will be withdrawn soon and his criticism of ‘overcautious’ lending by banks to first-time buyers.  

It also became clear that he sees a direct link between levelling up and the H side of his brief.

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An empty vision from the Conservatives

So now we know. The way to tackle the affordability crisis is to pretend that it does not exist.

There is no official confirmation yet but the clear message from the Conservative Party conference is that radical planning reform and the attempt to force through new housebuilding in the least affordable parts of the country are both dead.

In their place are vague assurances that building more homes in the North will help both to level up the country and take the pressure off the South East. 

It was there front and centre in Boris Johnson’s invitation in his conference speech  to: 

‘Look at this country from the air. Go on google maps, you can also see how much room there is to build the homes that young families need in this country, not on green fields, not just jammed in the South East, but beautiful homes on brownfield sites in places where homes make sense.’

The prime minister still talked about ‘fixing the broken housing market’ but that is no longer a goal to be achieved by building more homes in expensive areas but a means to a different end:

‘Housing in the right place at an affordable price will add massively not just to your general joie de vivre but to your productivity. And that is how we solve the national productivity puzzle by fixing the broken housing market by plugging in the gigabit, by putting in decent safe bus routes and all other transport infrastructure and by investing in skills, skills, skills and that by the way is how we help to cut the cost of living for everyone because housing, energy, transport are now huge parts of our monthly bills.’

There was more in the same vein and some guff about ‘the dream of home ownership’ but you get the picture. Needless to say he had nothing to say about fixing parts of the market that are most broken for tens of thousands of leaseholders stuck in dangerous and defective flats. 

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The levelling up of MHCLG

Originally published as a column for Inside Housing on September 23.

So it’s farewell to the Ministry for Housing, Communities and Local Government and hello to the Department of Levelling Up, Housing and Communities. 

As rumoured last week, we have new brass plates and stationery to go with new secretary of state Michael Gove at Marsham Street and its new office in Wolverhampton. 

So what’s the difference between MHCLG and DLUHC? First, and most obvious, is that top billing for levelling up, as DLUHC becomes the unpronounceable in pursuit of the undefinable.

Second, it’s worth remembering why the rebranding to MHCLG seemed so significant when it happened three and a half years and three secretaries of state ago. 

It was not just the H in the title, it was the way it was a deliberate echo of the 1950s and 1960s, when the two main parties competed with each other to build more council houses, and Macmillan rather than Thatcher seemed the reference point for the Tories on housing.  

Third, an important caveat to that: although relegated to second billing, housing is still there in the name, which is more than can be said for its predecessors since the 1970s. 

Within a department with significant extra responsibilities (not just levelling up but preserving the union as well) housing is at least still a priority of sorts. Local government has disappeared. 

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New secretary of state, same old problems

Originally written as a column for Inside Housing.

So it’s farewell to Robert Jenrick and time to ‘welcome’ a new housing secretary in Michael Gove. 

The removal of Mr Jenrick is not a great surprise given a record that includes Westferry, failure to fix the building safety crisis and a flagship policy on planning reform that seems to be sinking. 

Still more so when he ranked third bottom in Conservative Home’s survey of grassroots Tories on how they see members of the Cabinet. Only Gavin Williamson (sacked) and Amanda Milling (demoted) were less popular than him. 

But he also got more money out of the Treasury for building safety than either of his two predecessors and that unpopularity may deserve more respect if it was based on nimby opposition to his planning reform agenda to deliver more homes 

The former housing secretary was an early supporter of Boris Johnson and was loyal to the point of defending government policies on the Sunday morning talk shows that were scrapped in u-turns an hour later.

But loyalty is not always what counts in politics and as if to prove the point he is replaced by Michael Gove, the man who famously stabbed Johnson in the back in the 2016 Tory leadership contest. 

The former Chancellor of the Duchy of Lancaster is the longest-serving current cabinet minister and brings with him cross-departmental clout that will include driving forward the manifesto commitments to deliver 300,000 new homes a year by the mid-2020s and end rough sleeping by the end of this parliament

He was the shadow housing minister before Grant Shapps so he will be familiar with the issues and the main players and he will get an early reminder today of the biggest new issue in his in-tray when leaseholders and building safety campaigners hold a rally in Westminster.

However, such an apparently known quantity still leaves plenty of questions about what his priorities will be and he retains a capacity to surprise (not least on the dance floor). 

He comes with a reputation for delivery forged in the Cabinet Office but while some of this morning’s papers see his new job as central to the government’s mission to level up, others see it as a demotion or disappointment compared to his hopes of higher office. 

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