Social care reform – and why we can’t simply tax our way to better public services

6 Sep

Congratulations to the Government.  That’s a sentence written less on ConservativeHome than you might imagine – and, when it comes to public service reform, scarcely at all.

For while the last Conservative Manifesto promised more nurses, GP appointments and police, it provided little explanation, if any, of how these new nurses would provide better care, doctors’ appointments would become quicker to book and extra police would catch more criminals.

And now that Dominic Cummings has left Downing Street, no reforming “hard rain” will drive down on the civil service.  Meanwhile, Tory backbenchers have left the government’s flagship housing plan holed below the waterline.

So it’s to Boris Johnson’s credit that he wants to overhaul social care, even if he hasn’t had a “prepared plan” for it since entering Downing Street, as he claimed at the time.  However, we fear that this is almost as far as the good news goes – because, of all the services in need of change, social care is among the most difficult to tackle.

Here’s why. For a start, many voters don’t understand the difference between how healthcare and social care is provided in in England and Wales.

Health care is funded free at the point of use but social care usually isn’t.  This confusion played a major part in the Conservative general election disaster of 2017.  Many voters hadn’t grasped that the value of their homes is taken into account for residential but not domiciliary care, and revolted when the Tory manifesto proposed to level the playing field.

The source of the muddle is doubtless what Tim Bale, in an agonising blog about the fate of his parents, rightly categorised as optimism bias: namely, the belief that disability and dementia, say, “won’t happen to you – I mean, what are the chances?”

Next comes the question of which problem the Government is trying to solve.  For not all social care goes on elderly people: half of the spending on it is consumed by working age adults.  Demand is rising; more people want social care but fewer are receiving it; council budgets have fared less well than the NHS’s, and local government is responsible for delivery.

And “there is a basic concern among the public about quality,” according to the Kings’ Fund, perhaps especially in care homes.  Then there’s the separate-though-related issue of selling one’s home to help meet the costs.

Penultimately in our list of problems, we turn to manifesto commitments.  The Tory manifesto not only promised more spending for public services; it also ruled out raising certain taxes to pay for it.  “We will not raise the rate of income tax, VAT or national insurance,” it said baldly.  Finally, there is the matter of intergenerational justice.

Questionmarks over trust and fairness haunt the Government’s plan, which is concentrated on the final social care issue that we raise above – selling the family home to help meet costs.  (There will also be a big rise in the means-testing threshold for care homes.)

That means a floor beneath and a ceiling above which no-one will pay.  The higher the floor is, the more poorer people will be protected.  The lower the ceiling is, the less richer ones will pay. So there is an obvious north/south trade-off, broadly speaking, between the interests of, say, Batley & Spen, and those of, for example, Chesham and Amersham over where the ceiling and floor are set.

The Government’s plans are still being finalised, but it seems to be planning to raise national insurance to fund its plan.  Younger and poorer people would thus fork out to meet costs more often incurred by older and richer ones.  This would be unfair – especially in a country in which the latter hold an effective monopoly on capital.  Not to mention a breach of the manifesto.

How might Ministers respond to this formidable list of objections to their plan?  They might say one shouldn’t make the best the enemy of the good, and that even if only one of the main social care problems can be solved, the effort will be worthwhile.

And add that, since their proposals are based on the Dilnot Report, they at least command a degree of consensus.  They would doubtless say that older people tend to vote Conservative, and that it’s bad politics to alienate one’s base.  If Johnson also announces that the triple lock will be abandoned this year, they will claim that he has presented a package that “strikes the right balance”.

The Government’s model is the then Labour Government’s tax rise of the early 2000s to fund higher NHS spending.  Tony Blair got away with it, and the Prime Minister will hope that he does too.

Maybe Tory MPs will vote through a national insurance rise if Johnson, with his majority of 83, puts it to Parliament with the support of his Chancellor.  Downing Street will hope that the prospect of a reshuffle will keep Ministers in order – and that Labour opposition to the NI rise will minimise the Tory revolt.

None the less, we warn the Government that the cat of Conservative tax rises has fewer than nine lives.  Tory MPs won’t indefinitely nod hikes through.

Nor is the Blair precedent encouraging.  His national insurance rise failed to deliver the improvements he wanted.  Hence his later decision to support Alan Milburn as Health Secretary in delivering market-based reform.  Above all, governments can’t expect to break manifesto promises made in one election, and have those it makes at the next taken seriously.

It may be that Johnson will dress up any national insurance rise to pay for social care as a special levy, thus enabling him to claim that he’s not in breach of the pledge he made two years ago – technically, anyway.

But doing so wouldn’t ease this site’s wider concern: that just as government can’t tax its way to a more prosperous economy, it can’t tax its way to better public services.  And that once Ministers start reaching for tax increases to solve a problem, the reflex can become automatic.

At the heart of social care reform for any Conservative Government, two fundamentals conflict.  The first is: there’s no such thing as a free lunch.  The second is: wealth must cascade down the generations.

In other words, someone must pay for social care – be it the user, the taxpayer, or someone else.  If so, wealth risks not so much cascading as trickling down, especially if the main form of saving, the family home, is sold off to meet social care bills.  At the one of the policy spectrum, Policy Exchange proposes rolling social care into the NHS, which would certainly require new taxpayer funding.

At the other end are a long succession of Tory plans for insurance-based schemes.  Peter Lilley’s set out a variant recently on this site, supporting a state-backed voluntary system.

There is no shortage of objections to such a plan – not least potential voter resistance to any Conservative health-related insurance scheme.  But if the aim of government is to protect homeowners from Bale’s “Russian roulette”, this type of proposal has merit.

It would be consistent with the Conservative manifesto, avoid tax rises and a backbench revolt, be generationally fairer, and represent evolutionary rather than revolutionary change, since no-one would be forced to join the scheme.  Instead, the Prime Minister is rushing in where angels, or at least politicians, have feared to tread.

He isn’t always associated with prizing courage over guile, or attempting today what can be put off until tomorrow.  Not for the first time, we’re learning something about Johnson that we didn’t know before.

Toby Lloyd: Two years since Johnson promised to level up Britain, has the detail proven better than the spin?

27 Jul

Toby Lloyd is a former special adviser to Theresa May and Chair of the Create Streets Foundation’s No Place Left Behind Commission on prosperity and community placemaking.

It’s hard to believe that it’s been over two years since Boris Johnson stood on the steps of Downing Street for the first time and promised to “level up” the country. I missed the speech, as I was slipping out of the back door of No 10 at the time, having been stripped of my pass, phone and laptop, along with the rest of Theresa May’s advisers, as part of the brutally clinical hand-over ritual that each outgoing PM must go through.

To us policy hacks, regrouping in the sweltering heat of a nearby bar, “levelling-up” seemed like one of those sound bites that would be quickly dropped, to join May’s “burning injustices” and David Cameron’s Big Society in the pile of unifying concepts that never quite worked.

After all, few people know what it means, and many of those that do actively dislike the idea, as Rachel Wolf pointed out on this site – and even ministers have been accused of a “complete lack of understanding” of the agenda. In the wake of the Chesham and Amersham by-election, the logic goes, it’s time to drop all this nonsense and pivot back to the base.

But instead of dropping it, the Government has doubled down on levelling-up. There’s a £4.8 billion government fund bearing it’s name. The appointment of Neil O’Brien to lead the development of the forthcoming levelling-up white paper shows real commitment to the agenda – not just lip service to an electoral strategy. And Johnson chose to speak for a full hour on the subject recently. Clearly, levelling-up is here to stay.

Which makes it even odder that it’s still not clear what it actually means, and no agreed indicators to measure success or failure by. Last week Johnson seemed to imply that disparities in life expectancy were the best indicator of regional inequality, and even that he had single handedly raised the life expectancy of all Londoners in his term as Mayor.

Life expectancy is an excellent proxy for all sorts of things, and a very robust data point – so if the Government is making that it’s central metric of levelling-up it could silence the carping of the wonks.

And it’s obviously a good policy aim to level up life expectancy across the country. Given the new shift in electoral geography it may be smart politics too. But it’s not necessarily great comms to tell your new voters that they’re going to die sooner than your traditional base – especially if you don’t have a really good plan for how you’re going to change this.

In this regard, Johnson’s latest attempt to flesh out the vision was rather thinner. Much of his emphasis was on crime, big transport infrastructure, better broadband connections, and education. All of which are excellent subjects for public investment – but it’s hard to see how they will turn around the sense of neglect accumulated over decades in some of our most left behind places. HS2 is certainly not about to increase life expectancy in seaside towns that have seen better days.

Part of the problem is that whenever Johnson – or anyone else – tries to explain levelling-up, they have to grapple with big economic structural forces at the same time as hyper local factors; hard infrastructure as well as a more intangible senses of pride and community.

While big national kit is expensive, and often controversial, it’s at least something clear you can announce and eventually, hopefully, cut a ribbon in front of. Dealing with local issues from the Prime Ministerial pulpit can seem incongruous at best, patronising at worst. Although all politicians love a positive message of national pride for all, with or without implied criticism of all other nations for being just not quite as good as us, the resentments between different parts of the country are much harder for a PM to speak to.

The result can be vague, even incoherent, and easy to ridicule: you’re not going to reverse 50 years of deindustrialisation with a few quid for removing chewing gum from pavements. But despite all these vulnerabilities, it is the right approach, because the problems of left behind places, and of geographic inequality more broadly, really are both big and small, hard and soft, at the same time.

The dog mess and graffiti that spoil the local park really matters – as does the damage to town centres wrought by 1960s urban motorways and the decline of seaside tourism. Levelling-up, and left behind places, work as concepts precisely because they speak to both dimensions at once.

If you want proof that being left behindness cannot be boiled down purely to economic data, look no further than the Brexit referendum. The Index of Multiple Deprivation, an excellent source of data on poverty, tells you almost nothing about the likelihood of a place voting Leave or Remain.

By contrast, the Community Needs Index, formulated by Local Trust to identify which places really are left behind, has a strong correlation with voting leave. Poverty matters, hugely, but it doesn’t describe everything. We need a more subtle, more human, understanding of why some parts of the country feel neglected. Elected politicians often have a better nose for this sort of thing than policy wonks like me.

The politicians also have an answer to the technocrats’ critique that levelling-up lacks a precise metric. Goodhart’s law states that once a measure becomes a target, it ceases to be a good measure. This is because individual and organisational behaviour adjusts to hit the target, but frequently misses the point. This iron law of policy surely applies to concepts as messily human as levelling up: there can be no simple measure of levelling-up – but we’ll know it if we see it.

More serious is the risk that such a broad agenda creates the perfect conditions for waffly speeches with impressive but context-free numbers, and reports celebrating nice things happening in diverse places.

These are invariably a means of avoiding difficult decisions and trade-offs. Isn’t it lovely that this community group has got a grant to bring that abandoned Victorian workhouse building back into use as hub for local business and community activity! No need to ask why it had been left empty for decades, raise the spectre of tricky tax changes, or to worry about the future viability of those lovely new micro-enterprises.

The solution to these tensions is to return to the beginning. The entire levelling-up agenda is about place: places that feel left behind, people who live in places that have been poorly served by state and market alike for too long. Here the Government’s strategy is better than Johnson’s speech. There is real money on offer for improving town centres, for local transport, for communities to take ownership of the assets they need to shape change. To make this investment work, it has to be combined with a coherent attitude to localism, as Paul Goodman argued.

I would add that Whitehall also has to start trusting local people and, yes, local government a bit more and get over its addiction to competitive bidding for time limited pots. These waste huge amounts of energy as councils and community groups complete endless bids promising subtly different outcomes for the same projects – and inevitably mean that those best at playing this game win at the expense of the others.

This is no way to overcome division and level up. Better to follow the call for “localism on steroids” from Bill Grimsey, the former CEO of multiple high street business, and empower local communities to redesign their town centres to meet the needs of the 21st Century.

This is the territory that the Create Streets Foundation’s No Place Behind Commission is exploring – and in the next few months will be proposing real reforms and investments to turn the good intent into reality. The real test of the levelling-up agenda will not be how it scores on socioeconomic metrics, but whether it can start a process of empowerment, improvement and investment that makes left behind places look and feel better. for the communities that live in them.

David Gauke: There are signs that the Treasury is winning. And that more tax rises are coming.

19 Jul

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the 2019 general election.

When asked about the proposal by Henry Dimbleby that a new Salt and Sugar Reformulation Tax should be introduced, the Prime Minister responded by saying that he is ‘not attracted to extra taxes on hard working people’.

At one level, this is what one might expect him to say, given his reluctance to be the bearer of bad news. But some have taken this to be not just a holding response to the publication of the National Food Strategy, but a firm determination to hold the line against tax rises. If so, there may be problems ahead.

It was only a few months ago that Rishi Sunak delivered a tax-raising Budget, with the freezing of allowances and thresholds in the personal tax system, plus a hefty increase in the rate of Corporation Tax (which, in the end, will be paid by people because all taxes are). These increases may well be sufficient to meet the Chancellor’s fiscal rules ,but only if he maintains the current spending plans.

This looks unlikely. To take just three examples, the cost of Covid catch-up, social care reform and net zero could easily cost £10 billion a year a piece. Add to that the cost of levelling up, plus the risks that debt interest payments could increase significantly, the Chancellor’s target of current expenditure being paid for by current revenue and debt falling as a proportion of GDP looks precarious.

It would be fair to say that the cause of spending control has been strengthened in recent days. The Government saw off attempts to block the cut in overseas aid more comfortably than expected, with Sunak very heavily involved in talking round potential rebels.

The temporary uplift in Universal Credit is looking like it will indeed be temporary (although this is likely to store up problems, I suspect) and the Chancellor has – to all intents and purposes – ruled out a huge increase in the state pension, which would happen if the triple lock was applied in the normal manner. On the latter point, this is entirely sensible and has been met with little opposition.

A month ago, there were complaints from the Treasury that the Prime Minister was going around making unfunded spending commitments but Boris Johnson appears to have been reined in. Big promises on climate change seem to have been deferred to the autumn, and a supposedly big speech on levelling up involved a spending commitment of just £50 milliom. Whereas most observers considered the Coventry address to be one of the least impressive set-piece Prime Ministerial speeches ever delivered, the Treasury would have considered it a triumph.

An announcement on social care reform is imminent, but this does look like it may be properly funded by additional taxes, suggesting that ‘not attracted to extra taxes’ does not mean ‘no extra taxes’ after all. It is reported that it is the Chancellor who is sceptical about the proposed policy, although I suspect this is driven by Treasury doubts about pursuing a Dilnot-style cap on social care costs (which benefits those with the largest estates most), rather than by an objection to the principle that new spending commitments have to be paid for.

For the first time in a while, the cause of fiscal conservatism – ensuring that public finances are sustainable – is gaining the upper hand. There are two reasons for this.

First, the Chesham & Amersham by-election has caused some nervousness. The fear within Government is that high spending is all very well, but a section of the Conservative voting electorate will draw the conclusion that they are the ones who will have to pay for it. It was striking that the Prime Minister spent much of his levelling-up speech saying that he does not want to make rich places poorer, which may come as a disappointment to parts of the Red Wall, but is clearly designed to reassure the South East.

The second reason why a more cautious approach to the public finances might be pursued is the apparent return of inflation. This may be transitory as we return to some kind of normality, and adjust to Brexit frictions and labour shortages, but it may not be. If it results in higher interest rates, the costs for the exchequer in funding our debt could rise very quickly – as the Office for Budget Responsibility has pointed out. An increase in interest rates of one per cent would add £21 billion to our debt interest bill. If our fiscal policy is considered to lack credibility, our problems could be worse.

There remains, however, the question of how the Conservative Party maintains the support of the new supporters it gained in 2019, whose views on tax and spend are much closer to those of the Labour Party than the traditional Conservatives. On spending on public services in general ,plus investment in their localities, they will want to see evidence of delivery.

Boris Johnson will be given the benefit of the doubt and, I suspect, be able to retain most of the Red Wall at the next general election but the pressure to spend money – not least from Red Wall MPs – will be considerable. The Treasury has won a few battles of late, but with a Prime Minister prone to change direction like a shopping trolley (as one prominent Westminster pundit likes to put it), he may be on the other side of the aisle before long.

There is also another reason for raising taxes, as well as funding public services. Tax can be used as a lever to change behaviour. The Prime Minister has declared that he is on a mission to reduce obesity, and it is hard to see how this could be done without using tax to change behaviour.

Ultimately, this may not mean consumers paying much of a price because producers reformulate their products (as happened with the Soft Drink Industry Levy) in order to prevent consumers facing higher prices. It was an effective way of using the price mechanism to achieve a Government objective, but it did mean legislating for a new tax.

A similar argument can be made for using taxes to help achieve net zero. If we want people to consume less carbon, the most efficient way to do this is to ensure that the cost of carbon is incorporated into the price of products by using a carbon tax. (By the way, those of us who value markets as a means of allocating resources should be instinctively more sympathetic to meeting environmental objectives by using the price mechanism where possible, rather than through regulation which can be cumbersome and ill-targeted.)

In both cases, tax increases, as a behavioural stick, may be required. They are also likely to be regressive, which may mean compensating mechanisms of some description which – in turn – will need to be paid for.

All of this means that extra taxes on hard working people may be necessary to deliver sound public finances and to meet other Government objectives, however unattractive the Prime Minister considers them to be.

Profile of an ex-Prime Minister: Theresa May becomes the voice of Conservative conscience

24 Jun

“I think she has enhanced her reputation since leaving Downing Street, where she never looked comfortable.”

So said Andrew Mitchell, former International Development Secretary, of Theresa May, former Prime Minister.

Mitchell observed that as the only former PM in either the Commons or the Lords, she is “an important parliamentarian”:

“The first point is that she’s stayed in the House. Her interventions are incredibly telling. She speaks with enormous authority, she speaks up for her constituents, and she basically tries to keep the Government straight.”

Another former minister, an old friend of May, remarked on her “morality”, and added “there is a difference”.

He meant there is a difference between her and the present Prime Minister. Her contributions in the Commons, presented in easily accessible form by Hansard, display several qualities not always evinced by Boris Johnson.

She offers almost nothing in the way of entertainment, but concentrates on the matter in hand, to which she applies her prosaic but furiously logical mind, her mastery of detail and an icy Anglican conscientiousness.

These qualities did not suffice to make her a successful Prime Minister, but help fit her to hold the present incumbent to account.

When in her view he is behaving badly, she is on hand to tell him so. And because she is generally the first backbencher on the Conservative side to be called, he can quite often enjoy the pleasure of listening to her, and had to send her a note of apology after a recent occasion when he fled the Chamber just as she rose to speak.

The causes which command her attention include the Government’s handling of the pandemic; the proposed relaxation of planning laws; the abandonment of the 0.7 per cent manifesto commitment on international aid (no doubt one reason for Mitchell’s approval); sentences for causing death by dangerous driving (she wants life); modern slavery; mental health; domestic abuse; and various other tough, complicated, unfashionable matters on which she got a grip as Home Secretary.

As MP since 1997 for Maidenhead, she has always, as one long-term observer says, “been allergic to more houses in Maidenhead”, and can be relied on to demand: “Why can’t they put them somewhere else?”

Her majority at the general election of 2019 was 18,846, but in 2001 fell as low as 3,284. Nobody had to tell her the Lib Dems posed a danger in Chesham and Amersham.

May as PM found it impossible to assemble a sufficient coalition of parliamentary or popular support, but loss of office has liberated her to become the voice of a certain kind of Tory conscience.

She expresses a dutiful, deeply felt, traditional conservatism, and strives to expose the various ways in which, to some Conservatives, the present government is scandalously disreputable and unprofessional.

Here she is last September on the United Kingdom Internal Market Bill:

“I cannot emphasise enough how concerned I am that a Conservative Government are willing to go back on their word, to break an international agreement signed in good faith and to break international law.”

And here she is in the debate on 10th June on the aviation, travel and tourism industries, when Robert Courts, Parliamentary Under-Secretary for Transport, was on the receiving end of this reproof:

“This is a disappointing debate, because one year and one week ago this very issue was raised in this House… One year on, we are no further forward. Indeed, we have a devastated industry, jobs lost and global Britain shut for business.

More than not being any further forward, we have gone backwards. We now have more than 50 per cent of the adult population vaccinated—it is a wonderful programme—yet we are more restricted on travel than we were last year. In 2020, I went to Switzerland in August and South Korea in September. There was no vaccine but travel was possible. This year, there is a vaccine but travel is not possible. I really do not understand the Government’s stance.

Of course, it is permissible for a person to travel to countries on the amber list, provided that it is practicable for them to quarantine when they come back, but Government Ministers tell people that they must not travel and cannot go on holiday to places on the amber list. The messaging is mixed and the system is chaotic. Portugal was put on the green list, people went to the football, then Portugal was put on the amber list, leaving holidaymakers scrabbling for flights and devastated families having to cancel their plans… 

Business travel is practically impossible: global Britain has shut its doors to business and investors. In a normal pre-pandemic year, passengers travelling through Heathrow spent £16 billion throughout the country, including at places such as Legoland Windsor, which is partly in my constituency. That has been lost…

If the Government’s position is that we cannot open up travel until there are no new variants elsewhere in the world, we will never be able to travel abroad ever again…The Government may say all they have, as the Minister has, about the importance of the aviation industry, but they need to decide whether they want an airline industry and aviation sector in the UK or not, because at the rate they are going, they will not have one.”

“What’s her game?” people ask, but her style of debating is effective because there is no sign of any game being played. She is in deadly earnest.

“Most of the time I think she’s right and therefore effective,” the old friend and former minister quoted above said. “She shifts the dial.

“But one warning: don’t do too much of it.”

The obvious danger, he added, was that she would “turn into Ted Heath”.

It would be impossible for May to reach the stratospheric level of grumpiness maintained for a quarter of a century by Heath after he was overthrown by Margaret Thatcher, but one guesses she finds little to admire in her successor.

Heath – in the words of Douglas Hurd, who worked for him – struck, when attacking Harold Wilson’s style of government in the introduction to the 1970 Conservative manifesto,

“a note of genuine puritan protest, which is familiar in British history, sometimes in one party, sometimes in the other… It is the outraged assertion of a strict view of what public life is about, after a period in which its rules have been perverted and its atmosphere corrupted.”

Sir Keir Starmer hesitates to sound unrelentingly high-minded. May has no such qualms. At the time of the 1970 general election she was 13, and had already started working for the local Conservatives as a volunteer.

Another of May’s old friends says of her and Johnson: “She must despise him, and she must look at him and think how can he be there and I was dumped so humiliatingly.

“But honestly, I have no idea what goes on in her brain – nobody does.”

Yet in this week’s Spectator, James Forsyth offers a hint of what is going on there:

“I’m told that when May was canvassing at the Chesham and Amersham by-election, she took a certain pleasure in telling the campaign team about voters who said they weren’t voting Conservative because of Johnson.”

Lord Lexden, official historian to the Conservative Party, places the change in May’s demeanour in perspective:

“One might almost feel that it was worth the agony of the premiership to get this serene and rather impressive elder stateswoman. She is a powerful rebuke to Blair, Brown and Cameron who scuttled off indecorously after leaving Number 10. She is demonstrating again that ex-premiers can find a useful role in the Commons, which Heath’s unseemly behaviour had rather suggested might be impossible in modern politics.

“She remains at the political service of the nation, as no ex-premier since Douglas-Home has realistically been. Arthur Balfour left No 10 in 1905 after a disastrous three-year premiership with the party divided and in deep disarray. Rehabilitation followed quite quickly, and he held major offices in later governments, finally retiring at the age of eighty.  Here is an example for Mrs May to keep in mind.”

Nicholas Boys Smith: Planning reform is not just about numbers. We need development that people want.

24 Jun

Nicholas Boys Smith is the director of Create Streets and was co-chair of the Building Better Building Beautiful Commission with the late Sir Roger Scruton.

If you had forgotten that planning is the toxic third rail of British politics, the Chesham and Amersham by-election result last week will have reminded you. The facts are stark. A Conservative majority of 16,000 slain and reshaped overnight into a Liberal Democrat majority of 8,000. Liberal Democrat leaflets artfully evoked middle England’s worst fears: “automatic planning permission granted,“ “power handed to developers to build on green spaces,“ “residents’ right to oppose developments removed” – and “The Chilterns must be protected.” Incendiary quotations from the Campaign to Protect Rural England. Journalists opining that these messages “cut through.” Former Conservative leaders Theresa May and Iain Duncan Smith opposing the plans and Isle of Wight MP, Bob Seely, citing “significant pushback from communities on planning.”

So is that it? Is that the end of planning reform for another generation? I hope not. Because, despite the good intentions of many of its practitioners, the British planning and development process is one of the most complex and expensive, risky and regressive, anywhere in the world. Since 1947, the right to develop in the UK has been nationalised. But the implementation of that nationalised planning right is profoundly unpredictable. A new building in England needs a planning permission; a case-by-case judgement by a planning officer. This judgement is based on the local plan which is a policy document, not a regulatory one. It gives principles and guidance. It doesn’t set rules. Knowing what you can build, “winning” permission (a telling phrase) takes time, judgement, experience – and lots of money.

This is fundamentally different to most other countries where the right to develop is not nationalised but regulated. In countries as diverse as America, France and Germany, as long as landowners follow the local regulations, the complexity and cost of development is very modest compared to the UK. In Germany, for example, the freedom to build is a part of the constitutionally-guaranteed definition of property. Hardly surprisingly, far more homes than pretty much everywhere else are built by small developers or self-builders.

In contrast, our complex and risky process has not just retarded the rate of housebuilding, but created a near cartel of the largest developers as well as a boondoggle for consultants and lawyers who make a good living feeding the current process a constant diet of expensive reports and assessments. This adds up to a savage trick played by the old upon the young. A smaller proportion of people born between 1981 and 2,000 are homeowners, at this life stage, than for any previous generation since 1926. And their rent payments have increased from ten per cent of net income 30 years ago to around 30 per cent now. This has enhanced generational inequality on a seismic scale with immense political ramifications. Britain’s housing challenges are not just retarding the age of home ownership. They are fundamentally changing generational fairness, particularly in the south-east. The sight of those who espouse progressive principles supporting a system which requires inherited wealth, large cash flows, or expensive lawyers, to create homes is, to put it politely, quite surprising.

It is a question of how and what as well as how many. Our over-reliance on a small number of big developers has consequences. When I co-chaired the Building Better Building Beautiful Commission with the late Sir Roger Scruton, one of the most consistent messages we heard from members of the public was that they felt “done to”, “built at”. One told us:

“My local experience is that the community is seen as an inconvenience to be swept aside during the planning process. Consultation has fallen to almost nil…. developers hold considerable sway.”

The evidence strongly suggests our correspondents were correct. Polling shows homes built by smaller firms tend to be better. And a study of every property sale in six British cities found a premium associated with older neighbourhoods up to seven times greater than the premium for new build homes. Two thirds of British adults say they would never consider buying a newly-built home. And, given their lamentable build quality, you can hardly blame them. A recent survey by UCL found that at least three quarters of new developments were mediocre or poor. Where are the architects you ask? Sadly, too many (not all) are dismissive of public preference (“the public need educating to understand good design” is one of the most noxious concepts) and the volume housebuilders simply don’t employ them in consequence. Everyone loses.

As the results in Buckinghamshire show, the knee jerk assumption in Britain over the last 70 years has therefore firmly, and rationally, become that new development will be bad and is best prevented by anyone who loves their local neighbourhood. Frankly, I don’t blame NIMBYs for not wanting most new homes anywhere near them.

So the current situation is indefensible. We’re not building enough homes. We’re not creating good enough new places. And confidence in the process is so low (two per cent for developers, seven per cent for planning) that all attempts to improve the situation are meet with knee jerk and politically exploitable resistance.

If the government wants to win through, they’ll have to frame the debate, and the reality of what they are proposing, in very broad terms. The answer is not just about numbers or planning but about the location, nature and quality of the new places we are creating and our stewardship of the old. We need to engender a renaissance of civic pride and revitalise the great tradition of civic involvement. Beautiful, popular, healthy and sustainable new places should become the natural result of working within the system, not the consequence of working against it.

I would say this wouldn’t I – but I think the recommendations of the 2020 Building Better Building Beautiful Commission can point the way. Here are four key themes.

One theme is indeed planning and communities. We need shorter, more visual local plans, setting a predictable level playing field so that we cease to overly rely on the big boys. These shorter more visual plans should be very provably linked to what people locally like and prefer, making use of dramatically improving digital engagement and visual preference surveys.

Planning must aim to create what local people like and believe to be homely and beautiful. Development should be a net gain not just “no net harm.” We need to bring the democracy forward so that more of it takes place in setting the local plan. We then need to create multiple locally-led fast tracks to beauty and to locally-improved places or new homes. One idea with potential is “street votes” – voluntary intensification of the suburbs on a street by street basis. There should also be even stronger support for community-led development.

A second theme is stewardship and tax. We need to incentivise responsibility to the future, not penalise it. We need to move from a “build by unit” model to a ‘patient capital’ model. UK tax codes encourage a short-term approach to development by often doubling the proportional tax bill to landowners who co-operate or maintain a long term interest. This is unintended but it is perverse. It should be changed. There needs to be a level tax field between different approaches not an incentive to take a bad approach. Industry bodies, landowners and government should co-operate to create a new recognised stewardship “kitemark” which should have a series of legal and management standards on the approach to land and development.

A third theme has only grown in salience since we published last year and, possibly changed its nature due to the revolution in online working. It is regeneration and sustainability. We must end the scandal of “left-behind” places. Too many places are losing their identity or falling into dereliction. They are noisy, dilapidated, polluted or ugly, often scarred by fast roads through what should be their thriving centres. Such places provably create fewer jobs, attract fewer new businesses and have less good schools. They do not flourish.

Government has committed to ending the scandal of “left-behind” places. Excellent. But it is never enough to invest in roads or shiny “big box” infrastructure. Development should be regenerative not parasitic. A member of Cabinet should be responsible for ensuring that new places reach the right standards, co-ordinating perspectives between the ‘triangle’ of housing, nature and infrastructure.

At the local council level, there should be a Chief Placemaker in every senior team and a member of the local Cabinet who has responsibility for placemaking. Government should align VAT on housing renovation and repair with new build, in order to stop disincentivising the re-use of existing buildings. The built environment sector is currently responsible for 35-40 per cent of total greenhouse gas emissions in the UK. A new-build two bedroom house uses up the equivalent of 80 tonnes of CO2. Refurbishment uses eight tonnes. Even with the highest energy-efficient specification, new build would take over 100 years to catch up. The embodied energy in the bricks of a typical Victorian terraced house would drive a car more than ten times around the world. The greenest building is the one that is already built. Beautiful buildings are conserved and adapted. Ugly buildings are torn down and replaced.

A fourth theme is management and the way the public sector intervenes in our towns and streets. Too often over the last 70 years, the public sector has made places uglier and less prosperous. We need to change corporate performance targets for highways, housing and planning teams in public bodies. They should be targeted on objective measures for well-being, public health, nature recovery and beauty (measured inter alia via popular support). We should be measuring quality and outcomes as well as quantity. There is an urgent need to improve the procurement targets, process and scoring within central and local government and, Homes England. Finally, new public buildings should be popular and beautiful sources of civic pride with polling on local popular design preferences as a normal part of the procurement process.

This all amounts to a profound generational change from a vicious circle of parasitic development to a virtuous circle of regenerative development. As the recent by-election results show, trust in new places will not be reborn in one parliament. It will take many years. (And I have not even had space to touch on the need to re-green our streets with millions of street trees or improve architectural and planners’ education to be more practical with more focus on popular preferences and the associations of urban form and design with well-being and health).

The good news is that recent changes to what is called the National Planning Policy Framework following from our report are starting to move the dial in the right direction. This important overarching document now asks for beauty more clearly, makes it easier to refuse ugliness and expects a biodiversity ‘net gain’ on sites. At Create Streets we are starting to see this make a change, for the better, on the ground. But there is much more to do. And a wide discussion to have over a generation.

There is no fundamental reason of economics or technology that prevents us creating streets and squares, homes and places of humanity and beauty, places in which we can lead happy, healthy and connected lives, know more of our neighbours, and be more joyful as we go about our daily life. We, as a society, have just not done it and we are paying the consequences. Roger Scruton wrote that:

“Home is not occupied only by us: it is inhabited by the ghosts of our ancestors, and by the premonition of children who are yet to be. Its essence is continuity, and it provides the archetype of every experience of peace.”

I hope that, 50 years hence, more of our fellow citizens will be ‘living with beauty’ and leading happier, healthier, more sustainable and better-connected lives in consequence. To achieve this will require planning reform. But it will require far more. We have started the journey: neighbourhood groups planting street trees, new local community land trusts building local homes, the government facing into the wild winds of planning reform. I pray that, as a society, we are able to finish it.

Andrew Gimson’s PMQs sketch: Sir Keir for a moment or two makes Johnson struggle

23 Jun

“Why under this Government have rape convictions fallen to a record low?”

Sir Keir Starmer’s first question was short, and made Boris Johnson’s answer sound evasive.

For a time, Sir Keir maintained almost that level of brevity, and Johnson struggled to recover.

The Prime Minister could not explain why 98.4 per cent of rape cases end without anyone being charged, and was prevailed upon to say of the victims, “I’m sorry for the trauma they have been through.”

But we have not yet witnessed an occasion where the Leader of the Opposition has followed up a promising start and scored an overwhelming triumph.

Sir Keir at length yielded in the course of his six questions to the temptation to use more words, and Johnson found salvation in a soundbite which had nothing to do with rape convictions: “They jabber, we jab. They dither, we decide.”

The urge to stop Johnson having things all his own way was seen in the Chesham and Amersham byelection, and can also be detected in the Commons.

He must not be allowed to become a new Bonaparte: the British tradition of liberty, and indeed of equality, demands that at frequent intervals he be brought low.

Part of the point of PMQs is that he is exposed to danger. In the Commons, things can go wrong in the twinkling of an eye.

But no one today asked a question which was short and sharp enough to cause Johnson as much discomfort as Sir Keir had managed in those opening moments.

Joseph Baum: As a senior Chesham and Amersham Conservatives, I’m dismayed by our defeat. But there’s fight in us yet.

23 Jun

Joseph Baum is the Deputy Chairman (Political) of the Chesham and Amersham Conservative Association, A Councillor on Buckinghamshire Council and a Town Councillor on Chesham Town Council.

Waking up in Chesham on Friday June 18 was not an experience that I would ever like to repeat. As residents across the constituency were greeted to a torrential downpour that morning – a month’s worth of rain in one day I was later told – the pathetic fallacy of that moment was not lost on me.

As with any severe weather event, of course, the warning signs had been there for some time. I am afraid to say that the same is true of this by-election defeat. 

For those of you have never been to the constituency, Chesham and Amersham is a beautiful part of the world. Like many people in our country, we don’t like to make a fuss here in the Chilterns – we quietly get on with our lives and look out for each other in our community. Bubbling under the surface, however, was a quiet frustration – a concern about the future and the impact that this would have on what made our area special. 

The sudden death of our long serving Member of Parliament, Dame Cheryl Gillan, gave our residents the once in a generation opportunity to articulate that frustration without any risk of changing who runs our country. By now, most ConservativeHome readers will probably appreciate the key issues for residents in this area – HS2, the much anticipated planning reforms, not to mention the continued fallout of our exit from the European Union – something which many Liberal Democrat activists have long been at pains to stress that this constituency did not vote for.

In my view focusing on these issues distracts from the real problems that we must begin to respond to in order to properly recover – we must acknowledge what our opponents did well. From the outset, the Liberal Democrats ran an organised and well run campaign – using the momentum of the local elections to propel their candidate, Sarah Green, and sell her to the public as the only viable alternative to the Conservatives.

Despite the occasional ridicule on social media, few can deny the hunger of the Lib Dem activists who threw everything at this campaign, with daily leaflets, handwritten letters and targeted social media adverts. “Winning Here” posters were so common that they easily outnumbered the “For Sale” and “Sold” notices, let alone those of our Conservative supporters.

That is not to say, of course, that we did not work incredibly hard in this by-election campaign either – we simply could not have asked for a more hard working candidate in Peter Fleet, an eminently qualified man who led from the front from the start. Charges of complacency are misplaced; I fear that any candidate would have suffered a similar fate at this by-election due to the unique circumstances in which we found ourselves in. 

In time, there will be other reasons that we must acknowledge and other lessons that we must learn. Because if we don’t learn those lessons, then we run the real risk of repeating this at the general election, not to mention in other constituencies too. There are currently 80 seats where the Liberal Democrats are in second place. And of those 80 sets, 44 have a majority less than what we recently enjoyed here in Chesham and Amersham.

So, how do we turn this around? That is a question that will only be answered in the fullness of time, but in my view it starts by identifying what our opponents do not have. Despite fielding tellers at every polling station and seemingly Lib Dem activists on every street on polling day, the vast majority of those activists came from outside the area for one day only, arriving on the tube and in need of directions. As one teller said to me on polling day “By elections are a day out for us” – and wasn’t that true here.

Despite the enthusiasm, the fact remains that the local Liberal Democrats pale in comparison to our membership base, which totals more than 1,000. That is a huge asset that we should be proud of and make more of in the years ahead.

It is true that more people voted Liberal Democrat than Conservative at this by-election. And yet just over one month ago, at the same polling stations, the people of Chesham and Amersham also elected 27 local Councillors to Buckinghamshire Council, 26 of whom are Conservative. These 26 people are talented and capable individuals who are already delivering for communities across the area as members of a Conservative run Council. We need to champion that work and do more to communicate it to residents.

And if our opponents are going to scrutinise our record nationally, then let’s talk about our successes too. Let’s talk about a vaccine roll out that is the envy of the world. Let’s talk about the millions of small businesses that this government is supporting and helping to get back on their feet as soon as possible.

And yes – let’s never tire of reminding our opponents that this is a Government which continues to create the conditions within which more people can get a job, keep more of the money that they earn, get on the housing ladder, get a great education and live in an environment that is cleaner and greener.

Those are the terms on which we must weather the storm and fight the next election here in Chesham and Amersham. That task starts now and I look forward to working with others in the crucial months ahead.

Alex Morton: Ministers can have more houses or higher immigration. But they won’t be able to get away with both.

21 Jun

Alex Morton is Head of Policy at the Centre for Policy Studies, and is a former Number Ten Policy Unit Member.

A very large part of the Chesham and Amersham result was driven by the shamelessly and ruthlessly NIMBYist approach of the Liberal Democrats on both housing and HS2.

As Ed Davey put it just before the election, “we are seeing a promising number of Conservatives switching to us, because they want to say no… we don’t want these planning reforms.”

This now-notorious Lib Dem leaflet sets out the strategy: no policies bar opposing development. MPs who campaigned state the issues on the doorstep were new housing and HS2. Pure NIMBYism is a powerful force in the South of England.

So how do the Conservatives tackle the issue? The Government certainly needs to adjust its course – but it cannot ditch planning reform altogether. Ultimately, we still desperately need more homes, especially in London and the South-East where pressures are greatest. The current reforms contain a great deal of good.

But the truth is another issue sits alongside planning, which Westminster is not focusing on, but which sits on voters’ and MPs minds when contemplating new homes: immigration.

The politics of new homes in London and the South is complicated

A critical political argument for new housebuilding is it will protect the Conservatives majority longer term. Homeowners vote Tory, renters don’t. The argument made to Southern MPs is more homes and more homeowners will secure their electoral base.

But, while correct on a macro scale, this argument is not necessarily so on the micro. Many MPs note that the new homes built in their constituencies are often most attractive to, and affordable for, those leaving London. But as London’s housing pressures spill over into the Home Counties, so do London’s political attitudes.

This helps to explain why commuter constituencies like Canterbury and Bedford are becoming marginals: internal migration drives up anti-Conservative ex-London voter numbers. While Brexit accelerated this, between 2010 and 2015 Outer London (the ‘doughnut’ that twice elected Boris Johnson as Mayor) swung from Tory to Labour, even as the rest of the country moved the other way.

In the North, nice new homes often bring Tory voters – as Peter Mandelson noticed revisiting his old Hartlepool seat.  But new housing in the south annoys existing Conservative voters without always bringing new ones.  The conversion process will still probably work longer-term, as new voters relax into home ownership and shed London attitudes.  But MPs understandably think in five or ten year horizans.

Making things worse, many Southern MPs face not Labour, but the Lib Dems or the Greens, boasting to middle-class voters they are pro-immigration (unlike ‘nasty’ Tories), while also shamelessly arguing they will block new homes locally. Labour cannot do this, as it knows that it must deliver if it wins.

Meanwhile, Tory-inclined voters are susceptible to another simple message: new homes are only needed due to migration. They feel the problem is hundreds of thousands of new arrivals a year, who need extra homes, meaning concreting over the South-East.

The current system of housing targets enables a dishonest political debate

So how do Conservatives tackle this problem? This, I am afraid, is where it gets technical. But it first involves admitting voters have a point about immigration.

Currently, Government housing targets are based on a 2014 estimate (using data from 2012-2014) that we are creating 214,000 new households a year. Various tweaks are done to turn this household number into a housing target, including adjustments based on affordability. The end result is a national target for new housing of 297,000 a year.

The 214,000 households figure assumes net international migration (i.e. the difference between those arriving and leaving) of around 170,000 people annually (see here). So, under current estimates, around 37 per cent of all new homes are needed due to net international migration (see here). So the anti-immigration lobby have a point. But even with zero net migration, we would need many more homes.

However, immigration is very clearly pushing up the numbers needed, and has a disproportionate effect in the South. For the key years 2012-2014, around 50-60 per cent of net international migration went to London, the South East, and the East. This pushed up their housing need most. Even pre-pandemic, London’s population would be falling without international migration, but international migration drives it back up, rippling out over time in terms of housing targets across the South.

Why does this matter politically? It shows it is logically absurd for any party to promise both higher levels of net immigration and yet lower housebuilding in the South. But that is exactly what the Lib Dems and Greens do. And they get away with it because of the current lack of transparency around housing need calculations.

We need to include net migration figures in the local plans

We’d need more homes even if with zero net migration – because we have not built enough for years. As I pointed out in my day job at the Centre for Policy Studies, the 2010s were the worst modern decade for housebuilding – and every decade has got worse since the 1960s.

But one way for the Conservatives to change the politics of planning – and show their immigration controls are crucial – is a clearer link between migration numbers and local housing need. The new Planning Bill should ensure that each local plan periodically adjusts housing targets and housing need in line with net migration. This would inject honesty into the housing debate.

As noted, current housing plans are based on net international migration of 170,000 a year. If net migration fell to 50,000, we would need 60,000 fewer homes a year (assuming roughly one home for two new people). If it rose to 350,000, it would mean 90,000 more homes each year.

If the Liberal Democrats, or the Greens, want to argue for more immigration nationally, it should be clear this means more homes in each area. This would fundamentally change the debate in the South. In Chiltern District Council, home to Chesham and Amersham, the difference between annual national net immigration going down to 50,000 or up to 300,000 would be several thousand extra homes in the next ten years. Pro-migration, NIMBY parties would have to choose.

The worst outcome would be higher net immigration and weakened planning reform

The worst outcome for home ownership is higher net immigration plus weaker planning reform. Yet in the wake of Chesham & Amersham, this seems very likely. Currently, annual net migration is running at 281,000 – or around 110,000 more people a year than 2014 projections. This means 55,000 more homes a year since the 2014 projections – more than the entire rise planned last year after the planning reform row.

Higher migration but no planning reform is also the worst possible result for the Conservative Party. It would exacerbate London and the South’s problems – creating new voters who don’t vote Tory through higher migration, annoying existing Tory voters with new homes, but not delivering enough home ownership to capture new voters.

Housing numbers and migration are an example of Morton’s political triangle. You cannot please everyone. Government policy is currently pro-migration (in numbers not rhetoric) and pro-housebuilding. Both positions put off voters in Chesham. Yet ditching planning reforms while keeping higher migration dooms the Tories in London and the South longer term. The best shot for the Conservatives in the South is more homes and lower immigration – and this, not ditching planning reform, should be their next step.

Reports of Johnson’s political demise are greatly exaggerated

20 Jun

Vote Leave‘s successor was Change Britain – a name that says much about the country’s decision to leave the European Union five years ago.

Brexit was a vote for economic as well as constitutional change: to shift from a model based on financial services, high immigration and London’s hinterland to one more favourable to manufacturing, lower migration and the provinces.  You might call it “levelling up”

If you doubt it, look at this constituency-based map of the results.  West and South of London, you will find a kind of Remain Square.  Its eastern boundary is Hertford and Stortford, more or less.  Its western one is Stroud.

Its northern frontier ends at Milton Keynes and its southern one at Lewes.  Admittedly, this square has a mass of holes punched into it: much of Hampshire, for example, voted Leave.  And some of the Remain majorities within it, like some Leave ones, were narrow.

Levelling up is a term of art.  It can mean enterprise zones, freeports, better schools, improving skills, devolving power – none of which necessarily imply rises in or transfers of public spending.

But to some in that Remain Square, and elsewhere, it is coming to mean taking money in higher taxes from people who live in the south and transferring it to people who live in the north.

This truth would hold had the Chesham and Amersham contest never taken place.   Obviously, it was a lousy result for the Conservatives – for the Party to lose a by-election without seeing it coming, let alone by some eight thousand votes.

There should be a searching post-mortem. But why would any canny voter back the establishment in a by-election?  Isn’t it best to send it a message – namely: “don’t take our votes for granted”?

In the north, that establishment is still Labour.  Hence Hartlepool.  In the south, it’s the pro-levelling up, Red Wall-preoccupied Conservatives.  Hence Chesham and Amersham.  Now on to Batley and Spen.

Come the next general election, the Liberal Democrats won’t be able to concentrate their resources in a single seat, as they did last week.  Nor will they necessarily be the opposition front-runner in the Remain Square, or elsewhere.

Which suggests that last month’s local elections are a better guide to the future than last week’s by-election.  Crudely speaking, they found the right-of-centre vote uniting behind the Tories, and the left-of-centre equivalent divided between Labour, the LibDems and the Greens.

ConservativeHome will take no lectures from anyone about the potential threat to the so-called “Blue Wall” – to the seats within the Remain Square that we identify.  Henry Hill published an analysis of it on this site on May 11, which we re-ran last Friday in the by-election’s wake.

But the good news for Boris Johnson is that the Blue Wall is crumbling more slowly than the red one.  So time is on his side rather than Keir Starmer’s, which is why we still believe that the Prime Minister will be pondering a dash to the polls in 2023.

The bad news for him is that no party can hold a monopoly on much of the country forever.  Tony Blair had one even more extensive than Johnson.  He got three terms out of it (which will encourage the Prime Minister), but Labour eventually ran out of time and votes.

Its backing melted away at both ends.  In the blue corner, their new-won support from 1997 eventually returned to the Tories or went LibDem.  In the red one, their base was eaten away not so much by economics as by immigration and culture.

The medium-term danger to Johnson should start kicking in – unless inflation speeds the process up – in two to three years, when the vultures from post-Brexit and post-Covid spending really start coming home to roost.  He may well be on a second term by then.

But at that point the Prime Minister could find himself trapped in what William Hague, referring to potential British membership of the euro, described as “a burning building with no exits”.

The cornerstone of Government economic policy to date is “no return to austerity” – which we crudely interpret to mean questionable control of the country’s public finances.

This being so, the only weapon left for Ministers to deploy is tax rises: and the tax burden is already forecast to hit the highest level since the late 1960s – 35 per cent of GDP by 2025/26.

We all have a way of reading into by-election results whatever we want to read into them.  Undoubtedly, HS2 was a factor in Chesham and Amersham.  So was planning.  Above all, Blue Wall voters were asking for what Red Wall ones are getting: a little bit of love and attention.

Beyond that, anti-lockdown campaigners claim that the result was powered by opposition to shutdowns.  Pro-aid ones assert that Buckinghamshire’s voters stand behind the 0.7 per cent.

Those suffering from Johnson Derangement Syndrome, such as Dominic Grieve, claim that Buckinghamshire’s “sophisticated” voters see through the Prime Minister.  But if so, why did they chuck Grieve out of Beaconsfield less than two years ago?

So we make no special claim about what happened in Chesham & Amersham last week, other than to take some of the more exotic claims with a lorryload of salt.

But we do make a forecast about what will happen there and elsewhere within the Remain Square in future – regardless of whether or not the seat, like Newbury and Christchurch and Eastbourne and other Liberal by-election gains of the past, duly returns to the Tory column.

Namely, that the good voters of Chesham and Amersham won’t tolerate more tax rises for long.  Not that voters in Red Wall or provincial English seats would do so either.

But the private sector in the Remain Square is relatively big; employment in public services relatively smaller; exposure to property and pensions taxes relatively bigger.

Sooner or later, Johnson and Rishi Sunak will have to revisit the other side of the financial sustainability ledger: spending control.  With over a third of it going on pensions and healthcare, that will mean tough choices, in Chesham, Amersham – and everywhere else.

As for the Prime Minister’s prospects, we are where we were before. He can have all the Turkmenbashi statues he wants, and more, for getting Brexit done – and for saving the country from metaphorical if not literal Dreyfus affair-style strife.

ConHome believes that he should have his chance to “Change Britain” (with a majority of 80, he has earned it; anxious backbenchers please take note) while having little confidence that he actually will.

What’s left of this term risks being frittered away in bread, summits, and circuses, Roman-style.  The possibility is frighteningly plausible.  We devoutly hope that we’re proved wrong, as we sometimes are.