Dominic Raab is the new housing minister. So what are his big ideas?

Housing minister Dominic Raab. Image: Getty.

It’s safe to say the housing world has been on a bit of a rollercoaster journey over the past 48 hours. We’ve had rumours about a dedicated housing minister role in the cabinet, quickly put to bed by its integration into the newly named Ministry of Housing, Communities & Local Government (or MHCLG – not an acronym that rolls off the tongue too easily). And finally, yesterday, came the shock news that Alok Sharma is to be replaced as housing minister by Dominic Raab.

So whilst many see the cabinet re-shuffle as more of a re-brand, in the housing sector, we are seeing real change occur. Alok Sharma has certainly been playing a key role in community engagement and consultation during one of the most turbulent and tragic eras in housing to date. I sincerely hope we can still see the legacy of his work.

However, Raab’s appointment has the potential to shake things up a little – and perhaps that’s what we need. After all, you can’t keep doing the same things and expect different results. And, let’s be honest, the housing sector has had a bit of a reputation for its ‘traditional’ approach over the years.

So we need a visionary. We need something new and brave to finally get to grips with this housing crisis.

Is Dominic Raab that visionary? Well, if we look back to his 2012 report with the Centre for Policy Studies, Unleashing the Underdog, we can perhaps catch a glimpse of what’s to come. 

Raab pushes for equality – but he sees innovation as key to achieving this. Ever heard of tenants having a “right to own”? This bold concept he talked of in 2012 involved releasing “dead equity” and gifting social housing tenants with a percentage of the capital, “to incentivise home ownership and finance new social housing”.


This report was written over five years ago, but it shows imaginative solutions to housing issues. These are bold concepts and we can work together to shape them into deliverable and practical solutions.

Secondly, this specific “Right to Own” idea sets out a desire to increase ownership opportunities for all aspiring homeowners – not just the privileged few – and he notes just how important homeownership can be in achieving social mobility. This is something that we, as a sector, embrace. Home Group only recently asked its customers if they wanted to own their own homes, and a huge 87 per cent said yes. We also know through recent YouGov research that raising a deposit remains the biggest barrier to ownership.

This is why we launched our own home ownership product, “Deposit Builder”, to respond to the challenge and meet customer aspirations. It shares the same goal as Raab’s “Right to Own” – helping social housing customers into homeownership. It works by enabling customers to save a deposit while they are renting – through a discount on their tenancy, price freezes and match-funding the government’s Help to Buy ISA.

So perhaps through this appointment what we might start to see is much bigger and bolder thinking that inspires the sector in this way. And if Raab does meet barriers along the way, let’s work together to come up with new ways to overcome them.

But better still, if we are led by a visionary housing minister, we might just see that there is a power to remove such barriers for the greater good.

Mark Henderson is chief executive of the housing association Home Group.

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“Stop worrying about hairdressers”: The UK government has misdiagnosed its productivity problem

We’re going as fast as we can, here. Image: Getty.

Gonna level with you here, I have mixed feelings about this one. On the one hand, I’m a huge fan of schadenfreude, so learning that it the government has messed up in a previously unsuspected way gives me this sort of warm glow inside. On the other hand, the way it’s been screwing up is probably making the country poorer, and exacerbating the north south divide. So, mixed reviews really.

Here’s the story. This week the Centre for Cities (CfC) published a major report on Britain’s productivity problem. For the last 200 years, ever since the industrial revolution, this country has got steadily richer. Since the financial crash, though, that seems to have stopped.

The standard narrative on this has it that the problem lies in the ‘long tail’ of unproductive businesses – that is, those that produce less value per hour. Get those guys humming, the thinking goes, and the productivity problem is sorted.

But the CfC’s new report says that this is exactly wrong. The wrong tail: Why Britain’s ‘long tail’ is not the cause of its productivity problems (excellent pun, there) delves into the data on productivity in different types of businesses and different cities, to demonstrate two big points.

The first is that the long tail is the wrong place to look for productivity gains. Many low productivity businesses are low productivity for a reason:

The ability of manufacturing to automate certain processes, or the development of ever more sophisticated computer software in information and communications have greatly increased the output that a worker produces in these industries. But while a fitness instructor may use a smartphone today in place of a ghetto blaster in 1990, he or she can still only instruct one class at a time. And a waiter or waitress can only serve so many tables. Of course, improvements such as the introduction of handheld electronic devices allow orders to be sent to the kitchen more efficiently, will bring benefits, but this improvements won’t radically increase the output of the waiter.

I’d add to that: there is only so fast that people want to eat. There’s a physical limit on the number of diners any restaurant can actually feed.

At any rate, the result of this is that it’s stupid to expect local service businesses to make step changes in productivity. If we actually want to improve productivity we should focus on those which are exporting services to a bigger market.  There are fewer of these, but the potential gains are much bigger. Here’s a chart:

The y-axis reflects number of businesses at different productivities, shown on the x-axis. So bigger numbers on the left are bad; bigger numbers on the right are good. 

The question of which exporting businesses are struggling to expand productivity is what leads to the report’s second insight:

Specifically it is the underperformance of exporting businesses in cities outside of the Greater South East that causes not only divergences across the country in wages and standards of living, but also hampers national productivity. These cities in particular should be of greatest concern to policy makers attempting to improve UK productivity overall.

In other words, it turned out, again, to the north-south divide that did it. I’m shocked. Are you shocked? This is my shocked face.

The best way to demonstrate this shocking insight is with some more graphs. This first one shows the distribution of productivity in local services business in four different types of place: cities in the south east (GSE) in light green, cities in the rest of the country (RoGB) in dark green, non-urban areas in the south east in purple, non-urban areas everywhere else in turquoise.

The four lines are fairly consistent. The light green, representing south eastern cities has a lower peak on the left, meaning slightly fewer low productivity businesses, but is slightly higher on the right, meaning slightly more high productivity businesses. In other words, local services businesses in the south eastern cities are more productive than those elsewhere – but the gap is pretty narrow. 

Now check out the same graph for exporting businesses:

The differences are much more pronounced. Areas outside those south eastern cities have many more lower productivity businesses (the peaks on the left) and significantly fewer high productivity ones (the lower numbers on the right).

In fact, outside the south east, cities are actually less productive than non-urban areas. This is really not what you’d expect to see, and no a good sign for the health of the economy:

The report also uses a few specific examples to illustrate this point. Compare Reading, one of Britain’s richest medium sized cities, with Hull, one of its poorest:

Or, looking to bigger cities, here’s Bristol and Sheffield:

In both cases, the poorer northern cities are clearly lacking in high-value exporting businesses. This is a problem because these don’t just provide well-paying jobs now: they’re also the ones that have the potential to make productivity gains that can lead to even better jobs. The report concludes:

This is a major cause for concern for the national economy – the underperformance of these cities goes a long way to explain both why the rest of Britain lags behind the Greater South East and why it performs poorly on a

European level. To illustrate the impact, if all cities were as productive as those in the Greater South East, the British economy would be 15 per cent more productive and £225bn larger. This is equivalent to Britain being home to four extra city economies the size of Birmingham.

In other words, the lesson here is: stop worrying about the productivity of hairdressers. Start worrying about the productivity of Hull.


You can read the Centre for Cities’ full report here.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites

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