Magazine article Public Finance

It's All Coming Home

Magazine article Public Finance

It's All Coming Home

Article excerpt

People of a certain age remember when housing was the most valued political currency. Throughout the consensus 'Butskellite' politics of the 1950s and 60s, both main parties competed to build as many homes as possible in the shortest time. Harold Macmillan, as Conservative housing minister, managed more than 350,000 in 1954. Labour's Hugh Gaitskell promised more. In the mid1960s, when beginning my working life, I vividly recall a Conservative election ad promising that a Tory government would outbuild Labour in a public spending spree.

How times change. Now the very mention of new housing sets intruder alarms ringing in the shires, with some Tory backwoodsmen and women fearing that their rural idyll is about to be threatened by an invasion of concrete and brick.

But the party leadership knows differently. With house prices soaring, younger people in the key marginals of the Southeast cannot afford a first step on the housing ladder unless parents step in with a deposit - which explains this week's move by shadow chancellor George Osborne to remove stamp duty for first-time buyers on homes worth £250,000 or less.

But the Cameron camp also knows that this is not enough. Last year the then housing spokesman, Michael Gove, challenged the party's old guard by calling for more housing in greenf ields to satisfy demand.

Now, after the Blair years, when housing barely figured on the Downing Street agenda, PM Gordon Brown has joined in, pledging to make affordable housing 'one of the great causes of our time' in his speech to Labour's conference last week.

The urgency of the issue was underlined this week, with government figures showing that the number of young people able to afford a mortgage is dropping significantly, while those seeking privately rented accommodation is rising.

Housing minister Yvette Cooper was busier than most on the conference fringe circuit with calls for a national consensus on the need for new housing. Even if that is achieved, she knows there are problems. Ministers believe the building industry is not geared up to meet a target of 3 million more homes by 2020. That's some goal - government figures in the summer showed that over the past 12 months housing 'starts' had dropped by 6% to 173,000.

While it is unfair to doubt the government's commitment, in reality ministers have few of the levers available to previous administrations. The state, in thrall to the market, is no longer all-powerful. Much as Brown would like much more housing, his government is in no position to follow earlier postwar administrations by buying land at agricultural values compulsorily if necessary - and giving Whitehall-funded development corporations the powers to let rip with a string of new towns. …

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