Housing and planning policy continues to provoke controversy across the country. The UK desperately needs more homes, particularly decent, affordable homes. But instead, too many politicians are only interested in point-scoring, attacking their opponents as either NIMBYs who will block any housebuilding, or in the pocket of developers who want to concrete over the countryside.
For years this Conservative government has paid lip-service to increasing housebuilding, but then repeatedly u-turned under pressure from their backbenchers, who simply don’t want new homes built.
It is in this context that the Liberal Democrats, at conference, will be discussing our new policy paper: Tackling the Housing Crisis. Our attempt to find a positive way forward in the face of a dysfunctional national debate.
The paper is positive about the need for new homes. It makes clear that councils should have well-evidenced 15-year housing targets – ensuring that there is no backsliding from building homes. Yet it also goes further encouraging the expansion and strengthening of Neighbourhood Plans, including genuine engagement with local communities in finding innovative ways of providing more homes and the sustainable expansion of existing towns.
As the former Mayor of Watford I’m well aware of how urban renewal and bringing back residential communities to town and city centres can be a sustainable housing solution that drives regeneration. But this development can only work if it’s combined with investment in infrastructure too. The government’s controversial new infrastructure levy is said to address this, but it will take a decade to be fully implemented.
We also need to ensure that we deliver homes that people can genuinely afford. Affordability is the major issue that no one is addressing. That’s why our paper is positive about delivering more social housing. It doesn’t shy away from setting a target for these homes, empowering councils with more powers to borrow in order to build. It is scandalous that the delivery of social homes has been given such a low priority.
In England’s beauty spots the issue of second homes and holiday lets is also not helping. This paper tackles that tricky question. People are entitled to buy properties from themselves or as a way of generating an income, but in some areas the market is so seriously skewed it prices out local people. So where councils can demonstrate that these homes are having a negative effect on their communities then they should have powers to address this including new planning classes to limit their numbers if needed.
The question of having a national house building target has been much debated. I have always felt that targets are irrelevant as no government has met them in decades. There are so many variables – a crude national target becomes at best a rhetorical device and at worst a hostage to fortune.
Liberal Democrat councils have shown repeatedly that they are able to deliver the homes people need. In Eastleigh, Liberal Democrats have delivered thousands of homes, in South Lakeland we’ve built over 1,000 new social homes and Oadby and Wigston we’ve delivered new homes, while protecting green space and have won re-election on our record. It is clear that electing Liberal Democrats is the best way to deliver the new homes we need.
There is no political leadership coming from the Conservative government, a serious abrogation of responsibility. Ministers are happy to use strong rhetoric, but have no plan to deliver more homes at a price local people can afford. With this paper the Liberal Democrats will empower local communities to build the right homes in the right places, vital if we are to end the housing crisis.
* Baroness Dorothy Thornhill was the first directly elected Mayor of Watford.
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12 Comments
Over the past few weeks we have benefited from a healthy discussion on Policy Papaer 155 Tackling the Housing Crisis.
We have heard from both sides of the “should we, shoudn’t we have a national housing target” arguement. And there in lies the rub, that question is the only thing that divides the two sides, and try as we might, a hostile press will undoubtably concentrate on this division and we will lose getting the coverage this Policy Paper deserves as it sets out very positive, distinctively Liberal Democrat ways of tackling the housing crisis.
This excellent article by Baroness Dorothy Thornhill draws out these positives with references to what Liberal Democrats have achieved on councils across the country and comes to the conclusion in the penultimate paragraph “It is clear that electing Liberal Democrats is the best way to deliver the new homes we need.”
She also talks about the wider aspects of housing, the infrastructure, but omits the importance also of of putting PP155 into the context of the wider political landscape. Many councils don’t benefit from Liberal Democrat leadership. To make the impact needed to resolve the housing crisis following a General Election we need to add the one thing that is missing, something which would enable us to hold none Lib Dem Councils to account. Having an arbitrary national target would in this context give us the ability to turn an ideal into a reality should we find ourselves in a balance of power situation post the next GE.
It should be a fiscally led solution: the comprehensive collection of annual ground rent for the land we each occupy and use instead of fleecing the worker or investor in the productive economy (The Single Tax of Henry George that so inspired our party’s predecessor 140 years ago and gave us our unofficial anthem) would generate lots of development as people realise the cost of underoccupying in demand areas and densify to reduce their tax bill and create opportunity where it is needed and in the quantity it is needed. Nother else will do. As one of our more famous party leaders once said:
“It is all very well to produce ‘Housing of Working Class’ bills. They will never be effective until you tackle the taxation of land values.”
(something every one of our housing/planning policy working groups since I was on one in the early 2000s have basically been forbidden to even discuss seriously, yet the only economically literate long term solution)
The argument being put forward for national housing targets is based on the premise that political rhetoric will trump evidence based policy and that somehow making promises that everyone knows are beyond our power to deliver is OK to avoid criticism from other parties.
The housing crisis is not limited to London and the SE. It is countrywide. Bristol, Birmingham, Manchester, Liverpool and pretty much everywhere else face the same issues with escalating rents and house prices.
Daisy Cooper has been getting good press coverage on the LibDem proposal of focusing targets on building social homes with an interview and phone-in this week on Ian Dale’s in the evening broadcast on LBC. This short clip from the Weekly Times today addresses the issue of housing targets LibDem deputy leader on housing targets
The issue I have with PP155, good as it is, is that it may not be radical enough for the extent of the crisis. I think we may soon have to consider the action taken by Lloyd George in 1915 i.e. emergency rent controls and combine this with Land Value Taxation to urgently address the situation. Nick Bano, a lawyer and housing activist relates the history of rent controls in Rent controls: a retrospective
The subject of land and rents does seem to be particularly close to Lib Dem hearts. There’s scarcely a week goes by without someone suggesting that this of that economic ill would be rectified, if only the government had the sense to introduce a Land Value Tax.
From my historical understanding it’s a left over from a 19th century clash between the newly emerging capitalist class, represented by the Whigs and later the Liberals, and the older aristocratic class (Tory) which owned the land. The capitalists begrudged the levels of rent charged whenever they wanted to build a factory.
Of course they did, and do, have a point. The socialist solution would be to Nationalise the land, and if it were up to some, there would be no compensation. The land would then be rented out by the State to whoever wished to use it. Consider the rent to be a tax and, hey presto, we have a working LVT!
So maybe we do have some scope for finding common ground between the Lib Dems and the far left? An electoral pact with the SWP perhaps? 🙂
As Martin Wolf in February this year in the FT The case for a land value tax is overwhelming
writes:
“I have long been a supporter of taxing land value. Such a tax would be economically efficient and morally just. But it has been politically impossible: the landowning interest, which now includes a large part of the population as owner-occupiers, has been too strong. This is a tragedy. Now that western politicians are struggling with low growth, stressed public finances, high inequality, intergenerational tensions and an unstable financial system, they need to consider such a fundamental change in what is taxed”.
“The political power of landowners, big and small, is why the longstanding arguments of great economists have been ignored for so long. But there is also the intellectual mistake of mixing land together with produced capital as if they were the same thing”.
“Evidently, there would be sizeable transitional problems, not least the changes in the valuations on which mortgages have been agreed. One way around this could be to introduce the new taxes on land only on values above those of today. Another would be to phase in the new taxes slowly”.
“Crucially, if there exist reforms able to make the country as a whole better off it is in principle possible to compensate the losers we care about and still make everybody else better off. There are few such policies. Be bold. Try this one.”
Peter Martin: when the Liberals adopted LVT as a main plank of policy in, I think, 1886, the then British Socialists (less so Marxists) were very much on side with it. One of their chants was “those who shall not work shall not eat” meaning people who lived off the labour of others through land rents. Philip Snowden wrote a foreword to a 30s edition of one of Henry George’s other books “Protection or Free Trade” – in the era when the Liberals and Labour were the advocates of Free Trade and the Tories regularly protectionists.
Housing targets have never been met, not because they are a flawed concept, but because of the Tories’ incompetence. We should have the courage of our convictions to say that a Lib Dem government would meet the targets it sets itself.
Suggesting the Tories have failed to meet targets because targets are inherently unworkable gives them too much credit, in my view.
If amendment 1 falls tomorrow, we will be turning our back on Britain’s young people once again. I don’t think I need to remind anyone how that ended for us last time.
The problem with expecting every local authority to set its own target is that there is no mechanism to ensure those targets meet the overall need. Housing need crosses local authority boundaries and so must our policy response to this housing crisis.
I might have more sympathy if the powers that be were proposing a regional approach, as clearly the pressures in the South East are different to those in the North East. But what we have instead is carte blanche for local authorities to set targets that simply do not adequately address the problem.
Remember that the people who can vote in local elections are only the existing residents. There is no representation for those excluded if local authorities bow to NIMBY pressures. It is inevitable that many – most – local authorities will do exactly that.
Maybe Lib Dem local authorities will stand firm. I’d like to think so. But can we really really on all the others that we don’t control?
We need a strong framework to ensure that can’t happen, combined with a sensible approach to how that national target is allocated between local areas. That’s what amendment 1 offers.
Larry Elliott writing in the Guardian in 2017 The UK housing market’s perfect storm, and five steps to avoid it said “The alternative to yet another boom-bust is to try to construct a saner housing market. There are five steps to this.
The first is to stop doing more harm through counter-productive policies such as help to buy.
The second is to change the tax system, starting with council tax reform and action to prevent land hoarding.
The third is to increase supply, and the housing expert Kate Barker has suggested ways the government could do so, such as identifying large sites abutting urban areas and acquiring them at a modest premium to the value of their existing use.
Step four is for the Bank of England to adopt a kid-glove approach to raising interest rates. The idea is to engineer a gradual fall in real – inflation-adjusted – house prices, not a recession that leads to a sharp increase in unemployment.
Step five is to find a way of boosting wages, because there are two ways in which houses can become more affordable. Earnings can rise or house prices can fall. The housing market will only become less dysfunctional when Britain becomes more productive.”
It is already too late for Step Four and so a housing market crash and recession is looming. It is not too late for the other four steps.
“Step four is for the Bank of England to adopt a kid-glove approach to raising interest rates. The idea is to engineer a gradual fall in real – inflation-adjusted – house prices, not a recession that leads to a sharp increase in unemployment”
This is probably the most important of Larry Elliott’s five steps and as you say it’s too late for that now. I’m not sure though that ‘recession’ is the right word for a interest rate rise induced crash. The government has been putting more money into the economy as interest rates have risen so this can be argued to be reflationary. The money supply as defined by the level of positive financial assets actually increases.
However the rise in interest rates does convert a high level of private sector debt into a high level of bad private sector debt which then leads to more bad private sector debt. It can all break down very quickly rather like an avalanche falling. So we have a crash because everyone is scared of not being paid rather than because there shortage of money per se in the economy. It’s not gone anywhere! The government hasn’t taxed it away.
That’s what they should have done to slow down inflation. That would have been putting the brakes on rather than crashing the economy.