Economic Agenda has, for many years, banged on about the need to build more homes. This lack of focus on housing just cost the Conservatives their majority in the House of Commons. It was the misery felt by countless “priced-out” young adults of family-forming age, renting or still living with parents, that saw them vote Labour.
The Tories must now take immediate, bold and visible steps to ensure many more affordable homes are built, reining in the sky-high cost of housing. If not, a generation of natural Conservatives will increasingly back Jeremy Corbyn – and Britain will soon be run by a Marxist.
Last week’s Queen’s speech focused, by necessity, on Brexit. Proposed legislation will facilitate our departure from the European Union – including bills on immigration, customs and agriculture. The vital “repeal bill” then transfers 43 years of EU-derived law onto UK statute, so it can be amended, scrapped or left in tact, as our MPs see fit, over the course of future Parliaments.
The Prime Minister needs to make the positive case for Brexit she failed to do during the election campaign. Leaving the EU is about passing our own laws, diverting Brussels-bound funds back to UK public services and boosting trade with the fastest-growing parts of the world.
May must state, repeatedly, that numerous major economies conduct EU trade happily without the onerous and costly conditions of single market “membership” – the UK can do the same. She must highlight that powerful EU political and commercial interests want quickly to sign a comprehensive UK trade deal.
“I hope we will reach a good agreement, in our mutual interest,” said German Chancellor Angela Merkel last week, not least as she – in stark contrast to her new French counterpart Emmanuel Macron – backs a looser, less federal Europe. “The EU and Great Britain must absolutely avoid being left without an agreement in two years’ time,” added the President of VDMA, Germany’s engineering lobby group, the largest industrial association in Europe. VDMA members sold goods worth €7.3bn to British customers last year.
On the customs union, rather than hair-splitting with Labour, the government must clearly explain why the UK should quit this protectionist, backward-looking structure. Food and other non-EU imports will become cheaper and Britain will be able to make its own trade agreements.
The EU, negotiating as a huge bloc with untold internal conflicts, has failed to cut trade deals with the US, China or any major economy – despite years of trying. Brussels’ much-vaunted trade agreements cover nations making up less than 10pc of global GDP, while barely benefitting the UK’s world-beating services sector.
Nations acting alone, like Switzerland and South Korea, have secured trade deals with a global footprint over four-times that achieved by the EU, deals suiting their economies and exporters. The case for being outside the customs union, made properly, is a no-brainer. May needs to promote an upbeat vision for leaving, seizing the initiative from the anti-democratic “Soft Brexiteers” – whose arguments amount only to slogans.
During the election campaign, the Prime Minister acted as if Brexit is a cross she must bear. This is politically dangerous, deeply uninspiring and plain wrong. Leaving the EU, while presenting short-term challenges, is a chance for the UK to modernize, up-skill and recast its entire economy. Done properly, and used imaginatively, Brexit can generate a wave of prosperity that spreads beyond London and the south-east, enhancing living standards across the country.
Beyond Brexit, though, the domestic agenda must focus squarely on housing. This makes both political and economic sense. The under-25s may have voted for Corbyn’s promise to pay student tuition fees using his magic money tree. But it was upset 35- to 44-year-olds that destroyed May’s majority. Ordinarily, many of these people would be homeowners and, for the most part, natural Tory-voters. Not any more.
Ten years ago, 60pc of young adults owned their own home. Now it’s less than 40pc. House prices are so high, with demand so out-stripping demand, that over half of first-time buyers now get assistance from “the bank of Mum & Dad”, rising to two-thirds in London and the South East. The UK housing market, traditionally a source of social mobility, is now fuelling social immobility and resentment. Unfairly locked out of the property market, and alienated by “the system”, countless young professionals voted Corbyn. The Tories must win them back.
The Queen’s speech included a bill banning unscrupulous agents from charging tenants fees that should be paid by landlords. Without more homes, though – for rental and ownership – most landlords will anyway keep passing on those fees in rent. There was also, though, a pledge to “promote fairness and transparency in the housing market, and help ensure more homes are built”.
Our housing shortage is “chronic”. We need 250,000 new homes each year to meet population growth and household formation, yet house-building has fallen way short since the late 1970s. During 2010-15, just 123,560 were built annually on average, as home construction hit its lowest peacetime level since the 1926 general strike. This fundamental shortage, coupled with the Bank of England’s ultra-lose monetary policy, has sent house-prices into orbit.
The government must unleash a huge house-building program, making state land available, with strict conditions on developers to build quickly and also provide school and hospitals. The green-belt must be rethought, moved further out from our big cities. Above all, we need to reboot the “garden cities” movement, building attractive new towns that combine private and good quality social housing, rather than piling people into tower blocks.
During the 1950s, the Tories oversaw annual house-building of over 300,000. Britain desperately needs that same sense of post-war urgency and social justice.