Ed McGuinness: Cities are still the most viable locations for new housing

19 Dec

Ed McGuinness is a former Chairman of Islington Conservative Federation, founder of Conservatives in the City, and contested Hornsey & Wood Green during last year’s General Election.

As someone who grew up in Belfast, the “city in the countryside”, I attest to what it is like to walk less than five miles and go from the dense central business district, through suburbia to the leafy hills and fields surrounding. I understand, from a personal perspective, the importance of the relationship, geographically and demographically between urban and green field development and so I welcome the Government’s shift towards prioritizing more urban home building than initially proposed in the summer. Not only that but it makes practical sense for three reasons: existing urban centres have infrastructure in place; cities are where the demand and supply imbalance is most prevalent; and regional economic development will be driven from urban centres tying in neatly with the Government’s levelling up strategy.

Existing infrastructure

Using the OECD definition of core cities we have 11. Belfast, Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield. Altogether they accounted for 25 per cent of the UK population, 24 per cent employment and 22 per cent gross value added in 2017. The UK’s major urban centres, outside of London, are in a better position, than blank canvas rural areas, to use existing infrastructure to support further home growth. Of the 11 cities included in the definition, nine have metro or light rail links however most, admittedly, still do remain highly reliant on cars. Shifting the focus from Greenfield sites to developing existing urban centres therefore yields two benefits.

The first presents a needs driven opportunity for investment in core infrastructure services that has been neglected in favour of public capital investment in cars, driving advancement towards climate and lifestyle benefits. Secondly, infrastructure development leads to an increase in general productivity, and, if applied to the urban centres in core cities outside of London, that relative increase in productivity per pound spent will drive recovery in the regions and place urban centres on a more sustainable footing to have a positive impact on their surrounding areas.

Supply and demand

Conservatism has traditionally been a values based political philosophy whereby our values remain constant, but the practical implementation of these values adapts over time – a key aspect of our success as a Party in navigating changing national landscapes over the last 100 years. A rare sustaining policy goal, of home ownership, has remained and for good reason; just like when someone owns a share of a company, owning a small share of the Nation, through homeownership, gives people a real sense of stake in their country and encourages a sense of care about what happens to that nation (back to values). House prices in core cities, whilst cheaper than the rest of the UK, are still high by international standards. To attract younger people to take a stake in society through homeownership, the supply and demand balance must be addressed. COVID has seen a temporary imbalance away from exiting urban sprawls in favour of the countryside. But throughout human history the trend has been to consolidate economic output in key areas and this is unlikely to be upended by the pandemic.

Cities drive regions

A process known as agglomeration makes a given worker or firm more productive in larger cities than in smaller cities. This relationship is robust in many countries but when comparing the core cities of the UK to other comparable cities across the world, the UK lags behind on the agglomeration effect by around three times. This presents a huge opportunity, with data suggesting that if core cities grew by ten per cent, and had comparable productivity improvements as those seen in France and Germany, the average productivity, relative to the national average, would increase by over four per cent. This is a lot of numbers but, bigger picture, when elevated to the national level such growth could see aggregate productivity increase by one per cent or £20 billion of GDP.

So-called Northern Powerhouse cities like Manchester, Leeds, and Newcastle could see improvements of between four and six per cent. Developing urban centres helps the surrounding region. Data from the OECD suggests that urban areas that are within 90 minutes travel time of London have on average a 3.5 per cent higher productivity than would be expected given the characteristics of their workforce, sector mix and population size. It therefore makes sense to prioritise housing development in urban centres as a centrepiece of the levelling up strategy.

Intercity links

Whilst prioritizing home building in urban centres now seems logical and beneficial, there is still the question of intercity and regional transportation. Given the complexities of devolved government – regional mayors, district councils, county councils and nationally devolved administrations, to name a handful – any home building, even inside existing urban boundaries, will need to be at least coordinated centrally, so as links between areas are built and sustained allowing economic development to be transmitted across and amongst regions. This ought to form a cornerstone of any development, should be factored into tendering processes from the outset, and will be a drag on development if not included properly.

Conclusion

Housing policy surely is the driver of the levelling up strategy. What is more significant to a person’s life than where they live? It determines where they shop, how they travel, where they send their children to school, where they work, who they are friends with, and what they believe about our country. To truly level up housing can have real positive effects as it will create an imperative for joined-up infrastructure. If supplied in quality and quantity, it will become affordable and attractive for young people, and as it does so, it will bring jobs and industry which will spread wealth like an ink spot across the region.

What would President Biden and Vice President Harris mean for the Special Relationship?

12 Aug

Ben Roback is Head of Trade and International Policy at Cicero Group.

Contrary to some of the analysis of late, Joe Biden is by no means a shoo-in for the presidency in November. Nationally, polls are tightening and at the same point with 84 days to go in 2016, Hillary Clinton’s lead in the Five Thirty Eight polling average was 6.6 per cent. The Biden campaign will begin to face accusations of losing momentum if Donald Trump continues to chip away at his lead. On that basis, it makes sense that Biden has sought to wrestle back the narrative by announcing Senator Kamala Harris as his running mate. If the Biden-Harris ticket is victorious in November, the White House will look like a very different place to the current occupants of 1600 Pennsylvania Avenue.

Biden on Britain and Brexit

Biden is no Brexiteer like Trump. Biden and his old boss, President Obama, fell into line with David Cameron when they effectively backed the Remain campaign by declaring an independent UK would be at the “back of the queue” when it came to negotiating a US trade deal. The day after the EU referendum in 2016, Biden was in Dublin and remarked “We’d have preferred a different outcome”.

Nevertheless, the political imperative of the Special Relationship means there is no chance that Biden would abandon the UK on day one of his presidency. On the contrary, one would expect a presidential visit to London, Edinburgh, Belfast and Dublin within the first six months of President Biden’s tenure. It is the final two stops of that likely trip that provide the most interesting topics for discussion.

Both presidential candidates have direct links to the UK. Donald Trump is an Anglophile and reveres his Scottish heritage. Biden’s proximity lies in Ireland. His great grandfather, James Finnegan, emigrated from County Louth as a child, in 1850. In advance of his 2016 visit to Ireland, Biden said: “James Joyce wrote, ‘When I die, Dublin will be written on my heart. Well, Northeast Pennsylvania will be written on my heart. But Ireland will be written on my soul.’” On a purely personal basis therefore, we have grounds for optimism that the Special Relationship is in safe hands no matter the election outcome.

Negotiating a US-UK FTA in a Biden presidency

Biden would almost certainly cool some of the Trump White House’s more aggressive trade policies such as obstructing the work of the World Trade Organization. But Biden’s 40 years of political experience means he knows which way the wind is blowing on trade. He will want to ensure any deal is seen to protect US jobs and domestic production, while maximising export potential.

What is more, Harris, Biden’s newly announced running mate, has said she would oppose any trade deals that don’t include high labour and environmental standards. She opposed the Trans-Pacific Partnership in 2016 citing insufficient protection for US workers.

That rings alarm bells for those hoping the UK could ascend to the CPTPP – assuming the United States would do the same – therefore subverting the need for a bilateral US-UK FTA. Furthermore, Harris has little experience of the Special Relationship to speak of. On the foreign policy section of her website, she lists as “key partners” Japan, India, Mexico, and Korea. The UK is conspicuous in its absence for a potential future Vice President of the US

Where Washington and Westminster could align

In four clear instances we see Washington and Westminster aligning under the prospective leadership of Biden and Johnson respectively.

First, the Trump campaign and Republican Party are trying to paint Biden as a puppet of China. Consequently, he is being pushed into a more hawkish corner. That will mean alignment with an increasingly Sino-scepetic Downing Street and Parliament. Trump initially courted Chinese President Xi Jinping but since then has made an aggressively anti-China stance a key plank of his presidency. Having banned Huawei from our 5G infrastructure, Downing Street looks set to be largely in lockstep with Washington regardless of the outcome in November.

Second, Johnson’s government has shown little interest in entertaining Trump’s more excessive foreign policy ideals. The Trump administration has done its best to erode the World Trade Organization, considering it too kind to China. Conversely, Johnson has nominated Liam Fox to be its next Director-General. Both Fox and his successor at DIT, Liz Truss, extol the virtues of global trade and the rules-based international order that governs it. The British government aspires to be an invisible link in the chain that connects trading nations. In that regard, Biden would be supportive.

Third, environmental policy is one area in which Johnson and Trump do not see eye to eye. The stark divergence in approach has become an awkward rift between the two allies. The UK was a key supporter of the Paris Climate Accord from which Trump removed the US. As the Chair of the COP26 summit in Glasgow, Downing Street would undoubtedly favour a US President who considers climate change one of the world’s biggest and most pressing priorities. That only applies to Biden.

Lastly, Iran. As Foreign Secretary, Johnson failed in his attempt to persuade the Trump administration to stay in the Iran nuclear deal. Biden would rejoin it in a heartbeat, having been a part of the Obama administration who orchestrated it in the first place.

In summary, the Special Relationship will endure irrespective of the winner in November. Built on a shared understanding and common values, the relationship transcends presidents and prime ministers. On China, the US and UK look set to form an even closer alliance alongside their Five Eyes allies. That is something both Trump and Biden appear to agree on.