There was a lot of detail in Michael Gove’s big housing speech yesterday. But whilst it can be picked through at leisure, the only thing which really matters is that his reforms will not solve the housing crisis – and not just because Labour have vowed to repeal them.
It wasn’t that there wasn’t good stuff in there. Most significant was a new development corporation to deliver 150,000 new homes in Cambridge (which managed to be the headline-grabbing bit of his last big speech despite actually appearing in this one). Bringing pressure to bear on laggardly councils may yet squeeze some blood from those stones.
Reviews of so-called green tape could also help to reduce friction and expense in the planning system – if they ever actually cut any, that is. We are still waiting on the Housing Secretary’s review into the ban on large windows his department put in the building regulations, and that was announced in June.
That’s as far as it goes, however. Gove told the press the measures would raise housebuilding from 230,000 to 300,000 completions per annum. That number is lower than the current level of net immigration, even if James Cleverly manages to shave 300,000 off it. We are four million homes short as it is.
But there doesn’t seem to be any firm basis for even that figure. Yesterday’s announcements comprise a Heath Robinson machine of carrots, sticks, guidelines, exemptions, and assessments; the sheer volume of discretionary decisions baked into the system seem to make any attempt to put a firm number on what results a fool’s errand.
Moreover, Gove’s critics are almost certainly right that the decision to scrap strict targets (which the Housing Secretary repeatedly stressed were only ever supposed to be “advisory”) will see councils deliver inadequate housing completions. It is precisely because resistance to development is so determined that the stick Robert Jenrick tried to wield, and which his successor has set down, was so big.
Councils are at the very core of the planning problem. They have been given control over planning, but have the very worst incentives. Councillors answer at the ballot box to an active minority of people who already live in an area; from housing to nightclubs to reservoirs, they have no incentive to face down local preferences for the sake of the wider needs of the city, county, or nation.
Gove was right to say yesterday that the benefits of development are often dispersed, whilst the costs are concentrated. What he didn’t say, but is just as important, is that the same is true of blocking it: vast housing wealth accrues to the few, whilst the costs of rising prices, spiralling rents, longer commutes, and a less-mobile workforce are imposed on everyone else.
In his heart, the Housing Secretary seems to know this. The best and truest section of his speech was the opening, which was an extended paean to the development regime of the Victorian era – a time when our major cities became “the homes to swelling millions”, when London absorbed outlying villages and turned them into elegant suburbs, and the UK’s social and economic fortunes were transformed.
(In truth, this regime endured until the end of the 1930s, the era of Metroland. At one point, the infrastructure built the homes!)
The core of the implicit argument there is that the Victorians were content to allow Britain’s human geography to evolve, as it always had. Population flowed from country to city. They raised chimney stacks and laid down railways. No coalition of vested interests and misty-eyed romantics was allowed to stop them.
That engine of progress and prosperity was deliberately broken. The original Town and Country Planning Act of 1948 created the Green Belt not to protect any natural beauty, but to stop our cities from growing. Government tried instead to pick and choose where industry would go, with disastrous results; it seized control of the railway network, and closed more than half the stations.
We live today with the accumulated costs of a system which looks entirely backwards, and they touch on almost every part of life.
Unless you’re lucky enough to own outright, or at least be near the end of your mortgage, housing costs consume an ever-increasing share of your post-tax income in what is already a high-tax, low-wage country.
Gove’s own department has mandated that new builds be ugly because it is easier to inflict dingy homes on first-time buyers than build more power stations, let alone the pylons needed to connect them to anything. Buyers clamour instead for century-old stock with features DLUHC has banned.
Logically, any building programme sufficient to fix this must result in a transformation as dramatic as that of the Victorian era. There is no way to build millions of new homes, with all the attendant infrastructure, whilst keeping our post-war skylines and urban footprint intact – especially if the goal is to deliver not just units but spacious apartments, nice family homes, and gardens.
Yet nor could any party realistically undertake the whole thing at once, not in the age of the universal franchise.
Again, Gove provides part of the answer. Whilst he “didn’t want to be too partisan”, the Housing Secretary singled out London as needing “radical action”, and stressed the need to densify the inner cities.
That’s a fine goal, not just because of the very real economic arguments for allowing cities to grow but also because Labour-voting urban cores are the obvious targets for Conservative policy.
In turn, Labour would come in, abandon his absurd suggestion that Tory-leaning suburbs such as Bexley and Barnet should be exempt from densification and put them to the spade in the national interest – ideally whilst letting London start absorbing some more villages too, creating the next generation of Highgates and Hornseys.
Sir Keir Starmer seems to have grasped the partisan benefits to be had from tackling the housing crisis. Unfortunately, the Tories have not. Despite 13 years in office, they have done nothing to drive housebuilding in the cities.
Gove, meanwhile, still refuses to wield what I once called the “neglected superweapon of anti-Nimbyism – development orders”. He did announce yesterday financial support for councils that want to use local development orders. But Section 59 of the Town and Country Planning Act 1990 gives him vast personal authority to reform the planning system, in whole or in part. He should use it while he can.
If the Conservatives can’t or won’t wrest their housing policy from the hands of a handful of suburban MPs, the political consequences could be catastrophic.
The picture at the top of this post is a fresh YouGov poll which shows the walls of one of the party’s political fortresses, home ownership, are well and truly breached. They are only four points ahead amongst those who own outright, but 20 points behind amongst voters with a mortgage.
Why should it be otherwise, though? People who bought in the last 20 years paid much more for much less than previous generations. According to the ONS, on average over 100,000 households a month are coming off fixed-rate mortgages and locking in higher costs thanks to interest rates.
It gets worse, too, because this ends up specifically hurting people who took up the various demand stimulus policies the party keeps trying to pretend are solutions.
The 1.3 million people who bought during Rishi Sunak’s stamp duty holiday would coming off three-year fixed rates around now; so too each year will be tens of thousands of people who took up the original Help to Buy scheme, which ran from 2013 to 2021 and only started charging interest after five years.
In fairness to the Housing Secretary, his is an impossible task. He can no more deliver a transformational housing policy by himself than could successive home secretaries slash immigration whilst the rest of government bid the numbers ever higher; you cannot treat symptoms without treating causes.
It may even save a seat or two. But an understandable failure is still a failure, and destroying the social base of the Conservative Party would be a very high price to pay for a four-year lease on Chipping Barnet.
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