Well, at least she hasn’t made things worse: on Theresa May’s latest housing speech

What a subtle background. Image: Getty.

There’s an idiosyncratic subgenre of the political speech that Theresa May tends to excel in. She’ll begin by cogently and persuasively diagnosing a problem – before immediately laying out a series of solutions that are very obviously not going to solve it, and may in fact make things worse.

Today’s speech on housing and planning, then, feels like a close relation of last week’s, “Brexit will make this country worse – here’s my plan for it” effort (which Stephen covered over at the mothership here).

The Prime Minister did a very good job of expressing the frustration felt by those, mostly young, people who are locked out of home ownership. But the best one can say about the policies she proposed to address this is that they probably won’t actually make things worse. This may not sound like much – but it is actually a genuinely improvement on the Cameron/Osborne approach to this stuff, so let’s give credit where it’s due.

I’m not going to annotate the entire speech – it’s nearly 4,000 words long, and nobody wants that, frankly. But some extracts follow, with my commentary.

On my first day as Prime Minister, I spoke on the steps of Downing Street about my desire to make this a country that works for everyone.

A country where, regardless of where you live, your race or religion, or what your parents do for a living, you have a fair chance to get on and build a life for yourself and your family.

It’s a philosophy that shapes everything this government does

This will no doubt come as a surprise to EU citizens, other migrants, Remain voters, public sector workers, and pretty much anyone who doesn’t vote Conservative, but never mind that now.

Talking to voters during last year’s election campaign, it was clear that many people, particularly younger people, are angry about [housing].

Angry that, regardless of how hard they work, they won’t be able to buy a place of their own. Angry when they’re forced to hand more and more of their wages to a landlord to whom their home is simply a business asset. Angry that, no matter how many sacrifices they make to save for a deposit, they’ll never be able to compete with someone whose parents have released equity from their own home to help their children buy.

They’re right to be angry.

Theresa May says you’re allowed to be angry, young people: please update your records accordingly.

Actually, we shouldn’t be too down on this bit – because this is as good as it’s going to get.

I still vividly remember the first home that I shared with my husband, Philip. Not only our pictures on the walls and our books on the shelves, but also the security that came from knowing we couldn’t be asked to move on at short notice.

And because we had that security, because we had a place to go back to, it was that much easier to play an active role in our community. To share in the common purpose of a free society.

This is where the wheels start to come off.

The personal anecdote feels like a very deliberate choice – May is not a politician prone to public displays of emotion. And it speaks to a real, and once widespread, experience, too. Perhaps the fact that a home is owned, not rented, rationally shouldn’t change the way it feels… but it very clearly does. Even with a quite absurd mortgage attached, home ownership brings a sensation of security, of being rooted in a particular place.

And yet – there are things the government could do to change the balance here a little, to give tenants more security: longer tenancies, stronger rights for renters, changing the law to allow tenants to redecorate or keep pets or have children…

Very little of that is on offer in this speech (longer tenancies are touched upon, but no detail is given). One suspects that this is because the corollary of stronger rights for tenants is weaker ones for landlords.

Now, this government is already taking action to help hard-pressed buyers. We’re putting an extra £10bn into Help to Buy, giving another 135,000 families a step up the property ladder. We’re scrapping stamp duty for 80 per cent of first-time buyers, and looking at ways to make the whole process of buying and selling homes quicker, easier and cheaper.

Both of these policies mean pumping more money into the housing market. What exactly does the prime minister imagine this will do to house prices?

But to stop the seemingly endless rise in house prices, we simply have to build more homes – especially in the places where unaffordability is greatest.

Good.

So this Government is rewriting the rules on planning. With the major overhaul being published today, we’re giving councils and developers the backing they need to get more homes built more quickly.

Less good. Almost before she’d finished speaking, the Local Government Association put out a statement describing the speech as “unhelpful and misguided” and suggested that removing council borrowing caps would do a lot more good. This does not sound like giving councils the backing they need to get more homes built.

We’ve changed the rules so authorities facing the greatest affordability pressures can access the finance they need to build more council homes for local people.

See above.

More money is available to councils – but it’s a pot they have to bid for, and central government gets the final say. Lifting the borrowing cap, allowing councils to borrow against future income streams, would allow them to bypass Whitehall. This would speed things up – but it would also add to government debt and more to the point would bypass Whitehall, so Whitehall doesn’t like it.

Anyway. Local government does not, by and large, expect this speech to change very much.

But it’s also time for builders and developers to step up and do their bit.

The bonuses paid to the heads of some of our biggest developers are based not on the number of homes they build but on their profits or share price. In a market where lower supply equals higher prices that creates a perverse incentive, one that does not encourage them to build the homes we need.

This is where things get really crazy.

I mean… yes, that’s how capitalism works, isn’t it? Apple executives are not paid based on how many people they can provide iPhones for, but on how much money they can make by selling those iPhones.

So I have some sympathy with the idea that – if we want to bring house prices down – we shouldn’t rely on a bunch of companies with an interest in keeping house prices high to do it. But that’s not what May is saying, and however annoying she may find the volume housebuilders’ behaviour, they’re always going to pay less attention to her than they are to their shareholders.

Oliver Letwin is currently reviewing the causes of the planning permission gap. If he finds evidence of unjustifiable delay, I will not rule out any options for ending such practices.

Oooh, I’m so scared.

That may include allowing councils to take a developer’s previous rate of build-out into account when deciding whether to grant planning permission. I want to see planning permissions going to people who are actually going to build houses, not just sit on land and watch its value rise.

That might help a bit, I guess? Developers claim that land banking isn’t a thing, but, well, they would, wouldn’t they?

Still, I’m not sold on the idea it’s going to make a huge difference. Because if it did, house prices would fall, house building would become less profitable, and those volume house builders would just stop buying land for fear they’d lose money on it. And…

Where councils are allocating sufficient land for the homes people need, our new planning rulebook will stop developers building on large sites that aren’t allocated in the plan – something that’s not fair on residents who agree to a plan only to see it ignored.

…reducing the sites on which building can happen probably isn’t going to help either. That, to me, seems likely just to bid up the price of the land included in local plans, which will make the homes built on them more expensive, too.

There are good arguments for stopping developers from ignoring local plans – but, “It’ll make them build more houses!” is absolutely not one of them.

And, by ending abuse of the “viability assessment” process, we’re going to make it much harder for unscrupulous developers to dodge their obligation to build homes local people can afford.

How? How you going to do that? Oh, you’ve already moved on.

This is not an overcrowded nation. Only around 10 per cent of England has been built on. We are not faced with a zero-sum choice between building the homes people need and protecting the open spaces we treasure. That’s why the answer to our housing crisis does not lie in tearing up the Green Belt.

I am shocked. This is my shocked face.

Also why would you quote the figures pointing out how little land has been built on if your conclusion is, “So we mustn’t build on any more”? What’s the logic here?

Planning rules already say that Green Belt boundaries should be changed only in “exceptional circumstances”. But too many local authorities and developers have been taking a lax view of what “exceptional” means. They’ve been allocating Green Belt sites for development as an easy option rather than a last resort.

To prevent this, we’re strengthening existing protections so that authorities can only amend Green Belt boundaries if they can prove they have fully explored every other reasonable option for building the homes their community needs.

Councils do not generally build on their green belts lightly, because doing so is about as popular as scrofula. That makes me suspect that those which do are largely doing so because they don’t have any other options.

So I bet those other reasonable options are getting a lot more explored than May suggests here.

We’ll expect any development, whether in the Green Belt or outside it, to look first at sites that have previously been built on rather than opting immediately for virgin countryside. I’d rather see an ugly, disused power station demolished and replaced with attractive housing than a wood or open field concreted over – even if the former is in the Green Belt and the latter is not.

Well, so would most people. But demolishing an ugly, disused power station, cleaning up the land it sits on and then building attractive housing to replace it is generally an expensive business. Even if developers are up for that, it’ll push them to build more expensive, not more affordable, housing.

But while ownership is a wonderful thing, there is nothing inherently wrong with renting your home. More than a third of English households rent at present, and almost all of us will do so at some point in our lives – I know I have. (…)

Whether you’re renting by choice or necessity, you’re not any less of a person for doing so and you should not be treated as such.

This is such a ludicrously obvious comment that the fact she felt the need to include it feels a lot more telling than the message itself.
Renters, one suspects, know they’re not any less of a person simply because they’re renters. This comment is instead aimed at landlords who think otherwise.

In 2018, in one of the world’s largest, strongest economies, nobody should be without a roof over their head. This isn’t just a British problem – in recent years homelessness has risen across Europe – but it is source of national shame nonetheless.

That’s why we pledged in our manifesto to halve rough sleeping by 2022 and eliminate it altogether by 2027.

Funny story: the last Labour government effectively did eliminate rough sleeping. Last January, we found out it had risen for the seventh year running.

Can anyone think of anything that might have happened in 2010 that could have caused that reverse?

But the size of the challenge is matched only by the strength of my ambition to tackle it. More home ownership. A rental market that works for tenants. Greater fairness for all.

That is what the people of this country need. That is what will make this a society that truly works for everyone. And, as Prime Minister, that is what I am determined to deliver.

The weird thing is: I sort of believe her. I think Theresa May is genuinely concerned about this, and understands that the housing crisis is a major problem both for the nation and for her party.

Yet there is nothing – nothing! – in this speech to suggest she is prepared to do any of the things that might actually led to a radical increase in build rates. No land reform. No stronger compulsory purchase rules, to enable densification. No council borrowing. Nothing here seems likely to change anything much.


Then again, at least she hasn’t actively made things worse, so for that, at least, we can only be grateful.

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

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Treating towns as bastions of Brexit ignores the reasons for the referendum result – and how to address them

Newcastle: not all cities are booming. Image: Getty.

The EU Referendum result has often been characterised as a revolt of Britain’s “left-behind” towns and rural areas against the “metropolitan elite”. But this view diverts attention from the underlying issues which drove the Brexit vote – and ironically has diverted policy attention away from addressing them too.

It’s true that a number of big urban authorities, led by London, voted to stay. And overall people living in cities were less likely to vote leave than towns. Setting aside Scottish cities and towns, which both voted very strongly for remain, Leave polled 51 per cent of the vote in English and Welsh cities, compared to 56 per cent in local authorities that include towns. (Consistent data isn’t available below local authority level.)

Yet there is a lot of variation underlying this average across towns. In Boston, 75 per cent voted Leave, and in Hartlepool and Grimsby it was 70 per cent. But at the other end of the scale, there were a number of towns that voted to stay. For example, Leave polled at 49 per cent in Horsham and Harrogate, and 46 per cent in Windsor and Hitchin. In places such as Winchester, Leamington Spa and Bath, the Leave voted amounted to less than 42 per cent of the vote.

What drives this variation across towns? Data from the Centre for Cities’ recent report Talk of the Town shows economic outcomes were the biggest factor – with towns that voted Remain also having stronger economies.

For a start, pro-Remain towns generally have smaller shares of people who were either unemployed or claiming long-term benefit. (This is based on 2011 data, the latest available.)

Towns which voted Remain also had a higher share of jobs in high-skilled exporting businesses – an indication of how successful they have been at attracting and retaining high-paid job opportunities.

And both measures will have been influenced by the skills of the residents in each town: the higher the share of residents with a degree, the stronger the Remain vote.

So the Brexit vote was reflective of the varying economic outcomes for people in different parts of the country. Places which have responded well to changes in the national economy voted to Remain in the EU, and those that have been ‘left behind’ – be they towns or cities – were more likely to have voted to Leave.

This sends a clear message to politicians about the need to improve the economic outcomes of the people that live in these towns and cities. But the irony is that the fallout from the Brexit has left no room for domestic policy, and little progress has been made on addressing the problem that, in part, is likely to have been responsible for the referendum outcome in the first place.

Indeed, politicians of all stripes have seemed more concerned about jostling for position within their parties, than setting out ideas for domestic policy agenda. Most worryingly, progress on devolution – a crucial way of giving areas a greater political voice – has stalled.


There was talk earlier this year of Theresa May relaunching her premiership next summer focusing on domestic policy. One of her biggest concerns should be that so many cities perform below the national average on a range of measures, and so do not make the contribution that they should to the national economy.

But addressing this problem wouldn’t ignore towns – quite the opposite. What Talk of the Town shows is that the underperformance of a number of cities is bad not just for their residents or the national economy, but also for the residents in surrounding towns too. A poorly performing neighbouring city limits both the job opportunities open to its residents and impacts on nearby towns’ ability to attract-in business investment and create higher paid jobs.

This isn’t the only factor – as the last chart above suggests, addressing poor skills should be central to any serious domestic policy agenda. But place has an influence on economic outcomes for people too, and policy needs recognise that different places play different roles. It also needs to reflect the importance of the relationships between places to improve the access that people across the country have to job opportunities and higher wages.

The Brexit vote didn’t result from a split between cities and towns. And if we are to address the reasons for it, we need to better understand the relationship between them, rather than seeing them as opposing entities.

Paul Swinney is head of policy & research at the Centre for Cities, on whose blog this article first appeared.

Read the Centre’s Talk of the Town report to find out more about the relationship between cities and towns, and what this means for policy.