Mary Riddell – We Dont just need New Houses We Need New Towns

Mary Riddell is spot on on the scale of ambition needed to tackle our housing shortage.

Political reputations are built in bricks and mortar. The post-war consensus decreed that Britons could and should hope to own their homes, and no prime minister, Conservative or Labour, wished to crush that aspiration. Harold Macmillan’s definition of Thatcherite dispossession may have been coined with Belgravia in mind (“First all the Georgian silver goes, and then all that nice furniture that used to be in the saloon. Then the Canalettos go”) but his heart was with Acacia Avenue.

In common with Attlee, Churchill, Wilson and Heath, he helped orchestrate a property expansion for those who wished to buy, underpinned by a supply of fairly priced rental properties. As proof that power is enshrined in breeze blocks, the 300,000 new homes a year Macmillan ordained as a housing minister in the Fifties helped keep the Tories in office for 13 years.

Fast forward to 2013 and a Britain where only the Canaletto-owning classes can feel secure. Nine million potential buyers are renting homes, often at outrageous cost; evictions are up and, if current building rates continue, Britain will have two million too few homes by 2020. Young people cannot afford to buy while – despite Government promises to the contrary – many pensioners may have to sell their homes to pay for care. Meanwhile, David Cameron is set to become the first Conservative prime minister since 1945 to preside over a fall in house-building (and a corresponding drop in Tory votes, since home-owners are more likely to favour the Conservatives than those who rent).

Having engineered the evolution of Bailiffs’ Britain, the Government is showing signs of panic. George Osborne’s Help-to-Buy scheme, allowing buyers to put a five per cent deposit on properties worth up to £600,000, will do nothing to help low-income families and much to bankroll those with a vested interest in rocketing house prices. With the head of Lloyds bank the latest expert to warn that the scheme risks creating a dangerous housing bubble, Conservative housing policy looks increasingly eccentric.

Why, for example, downgrade the post of housing minister in the latest reshuffle? Although the new incumbent, Kris Hopkins, has cross-party admiration (“He tells his party what it doesn’t want to hear,” says one Labour shadow cabinet member), he commands a lower status than his predecessor. With unease mounting, Mr Osborne is said to have “agitated for” the Communities Secretary, Eric Pickles, to come up with a game-changing suggestion.

If that is true, then housing should present an easy triumph for Ed Miliband, whose ambitions seem lofty in comparison. As he announced in his conference speech, he would build 200,000 new homes a year by the end of the parliament and threaten land-hoarding developers with a “use it or lose it” ultimatum. But even assuming Mr Miliband were to meet his target, he would fail significantly to match demand.

As Shelter points out, 250,000 new homes a year will be needed for the foreseeable future. The Fabian Commission on Future Spending Choices, which reports today, notes that the charity’s £12 billion price tag for one million affordable homes over the next parliament represents “an important and bold ambition”. Whether that can be achieved in the face of Nimbyism and planning blockages is – as the report also suggests – another matter entirely.

And yet it becomes ever more urgent that such obstacles are overcome. Yesterday’s revelation by the Office for National Statistics that English house prices rose by 4.1 per cent last year, surpassing their 2008 peak, reflects market madness. We now live in a country where the average property in the billionaires’ boulevard of London’s Kensington Palace Gardens will set you back £36 million and where, a few miles away, families are being driven from their homes because they are deemed to have one surplus bedroom.

As Jon Cruddas, Labour’s policy reviewer, pointed out in a Civitas speech on Monday, £95 of every £100 spent on housing now goes on benefits and only £5 on building. In this crazed culture, created partly by the fire sale of council properties devised by Margaret Thatcher and perpetuated by her Labour successors, the nation’s bankers are no longer bowler-hatted functionaries or City slickers, but more or less affluent parents. On Shelter’s estimates, the Bank of Mum and Dad ploughs £2 billion a year into housing for its offspring – almost twice the Government’s total annual housing spend of around £1.2 billion. Like eye colour, home ownership – passed on through social DNA – is now determined mainly by heredity.

Remedies such as shared ownership – under which people part-buy and part-rent their homes – are likely to be favoured by Labour’s new shadow housing minister, Emma Reynolds. Little progress, however, is feasible without the statesmanship shown by the post-war pioneers, who grasped that national emergencies demand the wholesale government intervention from which both Labour and the Tories instinctively recoil.

Labour’s growth reviewer, Andrew Adonis, believes the politics of housing divide not on Left/Right lines but on an action versus inaction faultline. Lord Adonis, who can fairly claim to have shown some past form as “Mr Action”, spent the months before the party conferences touring every post-war new town and speaking to their planners about future expansion.

The “right to grow” championed by Mr Miliband (and, presumably, being worked on by his housing commission head, Sir Michael Lyons) may be more fruitful than, say, Mr Cameron’s policy paper on new towns, promised two years ago and never delivered. None the less, simply expanding existing conurbations will not suffice. As Lord Adonis recognises, new towns in the mould of post-war developments, such as Stevenage and Harlow, must be built from scratch. Ebbsfleet, between St Pancras and the Channel Tunnel, is his first suggestion.

A route to a Britain fit for all its citizens must be driven by bulldozer through red tape, planning regulation and shire sensibilities. In peddling the dream of home ownership without offering the means of achieving it, Mr Cameron may be making the greatest error of his premiership. Even so, the greater pressure may be on Mr Miliband. If he cannot vastly increase housing supply, then he can also bid farewell to any chance of lowering the welfare bill or the cost of living.

The only certainty is that, in a country ravaged not by enemy bombs but by government neglect, only a leader capable of recapturing the post-war spirit can hope to win what is now destined to be a bricks-and-mortar election.