Ryan Bourne: Sunak should not and cannot try today to restore pre-virus Britain. It’s gone – and we must now adapt.

7 Jul

Ryan Bourne holds the R Evan Scharf Chair in Public Understanding of Economics at the Cato Institute. 

Rishi Sunak earned plaudits for his dealing with the immediate economic fallout from Covid-19. Yet today’s summer statement presents a thornier challenge than playing Emergency Santa, dishing out funds to keep businesses alive. For today requires taking steps to further facilitate the “normalisation” of economic life.

Boris Johnson waded into economics last week, arguing (rather conveniently) that the Coronavirus highlighted the need for his pre-pandemic “leveling-up” agenda. Exactly how Covid-19 proves the need for, say, HS2 is unclear. But underpinning the Prime Minister’s argument was an assumption that, post-lockdowns, we can get back to focusing on pre-virus priorities – in the Government’s case, state-led economic rebalancing.

Similar “back to our future” thinking underpins business representations ahead of this statement. From calls for taxpayer-financed high street spending vouchers, to VAT cuts for hard-hit sectors, the prevailing discourse appears to be “now the virus is less of a threat, let’s incentivise returning to normal activity,” with “normal” meaning “what happened in early March 2020.”

Perhaps it’s because I’m in the U.S. and so have been to this reopening BBQ before, but I bear bad news: while the UK can expect a relatively sharp bounce-back in things such as retail activity, “normalisation” will not and should not mean a return to the economy of March 2020.

Before a vaccine, consumers will go where they feel safe, businesses from restaurants to cinemas will be supply constrained by social distancing, and certain behaviors (from the demand shift from restaurants to supermarkets, to the supply shift to working from home) will partially remain. That will bring major reallocation costs: businesses will close and lay off workers, while other sectors grow.

It was understandable that the Chancellor, not knowing which businesses would be viable after lockdown, set up a furlough scheme to avoid companies and jobs perishing. This helped protect important “job-matching capital” and “firm-specific capital” – i.e. people doing jobs they are good at and firms as important bundles of productive relationships. But one risk was always that businesses would interpret support not as mere lockdown relief, but a commitment to ensure their survival through the whole pandemic.

Some aspects of the campaign for arts subsidies, rumblings by MPs for ongoing aerospace supply-chain support, and the Resolution Foundation’s gimmicky “high street vouchers” idea suggest that some now do believe the Government should support sectors, even after full re-openings, precisely because consumers would otherwise continue to reject them, preferring not to fly as much, attend as many in-person events, or go to fewer restaurants or stores.

This is a very different policy proposition. Attempting to keep the March 2020 economy preserved as some eternal truth would mean workers and funds not being where businesses and consumers actually value them given today’s circumstances, bringing large economic costs beyond the fiscal.

For example, if more professionals now work from home semi-permanently, then tastes will shift from buying lunches within cities to local delis, online, or at supermarkets. Hence why Pret is laying off workers.

But as Julian Jessop has said, the purpose of economic policy should not be to protect Pret jobs. What normalisation should instead mean is the return to a functioning market economy where the rise and fall of businesses depends on their ability to meet our wants and needs in today’s circumstances. Sunak’s aim, in other words, should now be “market-led adaptation to the virus.”

We want businesses to figure out how to serve us in safe, cost-effective ways. The alternative – having the government tilt activity towards our early 2020 preferences – would not only encourage activity worse from a public health risk perspective, but also inevitably subsidise much that would take place anyway.

So Sunak should today reject “painting by numbers Keynesianism” that sees industry spending collapses as holes taxpayers should help fill in. He should snub VAT cuts or vouchers. If, with the virus still around, people would rather spend money on food to cook at home, Netflix subscriptions, and a hot tub for the back garden over restaurants, cinemas, and trips to the Lake District, workers and capital should flow accordingly. Economic activity serves consumers, not vice versa.

That’s not to say government cannot make this process less painful. But we need to be clear about the challenge we face: a supply-side shock we hid with relief. New realities mean workers in the wrong jobs, businesses serving customers in the wrong ways, and capital in the wrong places. Government policy should focus on removing barriers that gum up businesses, landlords, workers and entrepreneurs adjusting.

Sunak appears to get this on the worker side. He is tapering the furlough scheme gradually to give businesses breathing room, but inevitably those with newly uneconomic business models will make some permanent layoffs.

It’s crucial to try to get workers reallocated into new roles quickly to avoid the scarring effects of unemployment. Direct financial incentives for new hiring, even beyond subsidies for traineeships trailed in the papers, would encourage this. The reported plans for expansions of jobcentre capabilities are important too to try to speed up the matching process of unemployed workers to new roles, as would re-training efforts be. Some U.S. states are rolling back licensing restrictions on people shifting to different jobs too. With child-care difficult to come by, now would be a good time to review the UK’s oppressive childcare regulations, for example.

Yet the Conservatives should do more to facilitate the adaptation of businesses as well. Repurposing premises to earn consumers’ confidence often requires upfront investments that the Chancellor should write-off entirely for the basis of tax, through full expensing of investment. The planning law reforms should have an eye to business activities too – if more out-of-town activity is demanded, let it bloom.

The case for allowing existing businesses and property owners more flexibility – on how they operate, opening hours, what premises can be used for etc– is overwhelming as well. With apologies to my Editor, when we are seriously discussing throwing billions at retailers such as John Lewis or Topshop through vouchers, it seems daft to consider it beyond the pale that such retailers open beyond 6pm on a Sunday. Give freedom to businesses to adjust to what customers want: what barriers exist to entrepreneurs developing drive-through cinemas, for example? These are the sorts of supply-side questions that should animate government.

As always with fiscal events, any financial support to industries will be heralded as ‘good news’  and absence of it denounced as throwing sectors to the wolves. But it’s time for Sunak to be bold and honest: his task is not to “normalise” activity by resuscitating the composition of the March 2020 economy, but to “normalise” the market-led economy that makes us rich by meeting our demands.

Ryan Bourne: Sunak should not and cannot try today to restore pre-virus Britain. It’s gone – and we must now adapt.

7 Jul

Ryan Bourne holds the R Evan Scharf Chair in Public Understanding of Economics at the Cato Institute. 

Rishi Sunak earned plaudits for his dealing with the immediate economic fallout from Covid-19. Yet today’s summer statement presents a thornier challenge than playing Emergency Santa, dishing out funds to keep businesses alive. For today requires taking steps to further facilitate the “normalisation” of economic life.

Boris Johnson waded into economics last week, arguing (rather conveniently) that the Coronavirus highlighted the need for his pre-pandemic “leveling-up” agenda. Exactly how Covid-19 proves the need for, say, HS2 is unclear. But underpinning the Prime Minister’s argument was an assumption that, post-lockdowns, we can get back to focusing on pre-virus priorities – in the Government’s case, state-led economic rebalancing.

Similar “back to our future” thinking underpins business representations ahead of this statement. From calls for taxpayer-financed high stcororeet spending vouchers, to VAT cuts for hard-hit sectors, the prevailing discourse appears to be “now the virus is less of a threat, let’s incentivise returning to normal activity,” with “norma”l meaning “what happened in early March 2020.”

Perhaps it’s because I’m in the U.S. and so have been to this reopening BBQ before, but I bear bad news: while the UK can expect a relatively sharp bounce-back in things such as retail activity, “normalisation” will not and should not mean a return to the economy of March 2020.

Before a vaccine, consumers will go where they feel safe, businesses from restaurants to cinemas will be supply constrained by social distancing, and certain behaviors (from the demand shift from restaurants to supermarkets, to the supply shift to working from home) will partially remain. That will bring major reallocation costs: businesses will close and lay off workers, while other sectors grow.

It was understandable that the Chancellor, not knowing which businesses would be viable after lockdown, set up a furlough scheme to avoid companies and jobs perishing. This helped protect important “job-matching capital” and “firm-specific capital” – i.e. people doing jobs they are good at and firms as important bundles of productive relationships. But one risk was always that businesses would interpret support not as mere lockdown relief, but a commitment to ensure their survival through the whole pandemic.

Some aspects of the campaign for arts subsidies, rumblings by MPs for ongoing aerospace supply-chain support, and the Resolution Foundation’s gimmicky “high street vouchers” idea suggest that some now do believe the Government should support sectors, even after full re-openings, precisely because consumers would otherwise continue to reject them, preferring not to fly as much, attend as many in-person events, or go to fewer restaurants or stores.

This is a very different policy proposition. Attempting to keep the March 2020 economy preserved as some eternal truth would mean workers and funds not being where businesses and consumers actually value them given today’s circumstances, bringing large economic costs beyond the fiscal.

For example, if more professionals now work from home semi-permanently, then tastes will shift from buying lunches within cities to local delis, online, or at supermarkets. Hence why Pret is laying off workers.

But as Julian Jessop has said, the purpose of economic policy should not be to protect Pret jobs. What normalisation should instead mean is the return to a functioning market economy where the rise and fall of businesses depends on their ability to meet our wants and needs in today’s circumstances. Sunak’s aim, in other words, should now be “market-led adaptation to the virus.”

We want businesses to figure out how to serve us in safe, cost-effective ways. The alternative – having the government tilt activity towards our early 2020 preferences – would not only encourage activity worse from a public health risk perspective, but also inevitably subsidise much that would take place anyway.

So Sunak should today reject “painting by numbers Keynesianism” that sees industry spending collapses as holes taxpayers should help fill in. He should snub VAT cuts or vouchers. If, with the virus still around, people would rather spend money on food to cook at home, Netflix subscriptions, and a hot tub for the back garden over restaurants, cinemas, and trips to the Lake District, workers and capital should flow accordingly. Economic activity serves consumers, not vice versa.

That’s not to say government cannot make this process less painful. But we need to be clear about the challenge we face: a supply-side shock we hid with relief. New realities mean workers in the wrong jobs, businesses serving customers in the wrong ways, and capital in the wrong places. Government policy should focus on removing barriers that gum up businesses, landlords, workers and entrepreneurs adjusting.

Sunak appears to get this on the worker side. He is tapering the furlough scheme gradually to give businesses breathing room, but inevitably those with newly uneconomic business models will make some permanent layoffs.

It’s crucial to try to get workers reallocated into new roles quickly to avoid the scarring effects of unemployment. Direct financial incentives for new hiring, even beyond subsidies for traineeships trailed in the papers, would encourage this. The reported plans for expansions of jobcentre capabilities are important too to try to speed up the matching process of unemployed workers to new roles, as would re-training efforts be. Some U.S. states are rolling back licensing restrictions on people shifting to different jobs too. With child-care difficult to come by, now would be a good time to review the UK’s oppressive childcare regulations, for example.

Yet the Conservatives should do more to facilitate the adaptation of businesses as well. Repurposing premises to earn consumers’ confidence often requires upfront investments that the Chancellor should write-off entirely for the basis of tax, through full expensing of investment. The planning law reforms should have an eye to business activities too – if more out-of-town activity is demanded, let it bloom.

The case for allowing existing businesses and property owners more flexibility – on how they operate, opening hours, what premises can be used for etc– is overwhelming as well. With apologies to my Editor, when we are seriously discussing throwing billions at retailers such as John Lewis or Topshop through vouchers, it seems daft to consider it beyond the pale that such retailers open beyond 6pm on a Sunday. Give freedom to businesses to adjust to what customers want: what barriers exist to entrepreneurs developing drive-through cinemas, for example? These are the sorts of supply-side questions that should animate government.

As always with fiscal events, any financial support to industries will be heralded as ‘good news’  and absence of it denounced as throwing sectors to the wolves. But it’s time for Sunak to be bold and honest: his task is not to “normalise” activity by resuscitating the composition of the March 2020 economy, but to “normalise” the market-led economy that makes us rich by meeting our demands.

Peter Gibson: Set the high street free

2 Jul

Peter Gibson is the MP for Darlington

Nobody can doubt the scale of the challenge facing our high streets and town centres as we look to rebuild our economy following this pandemic.

As many towns bid against one another looking for funds from the ambitious Future High Street Fund, my patch of Darlington included, it is necessary to acknowledge that fundamentally what our town centres lack is people.

The bustling high street of yesteryear, stacked with BHS and Woolworths, will never exist again. We have generations of decisions to thank for that: out-of-town shopping, pedestrianisation making access and collection ever more difficult, and local authority car parking charges, to name just a few. Buttressed by shifts in lifestyles and technology, these changes have led us to a world in which every conceivable item can be purchased online.

Our town centres are firmly rooted in the idea of the marketplace, around which local economies have grown. Yet you no longer need to buy your bread from the baker or your meat from the butcher. Now the supermarket will deliver it. You don’t even need to drive into town because the inner ring-road circumnavigates it.

Planning in more recent times has either been the guardian or, more often, the be-devilment of the beating heart of our town centre. Our current restrictions are not fit for purpose and are damaging the very essence of our communities.

The classification of property into use-classes – tablets of stone that allow town halls up and down the land to tell us what we can and cannot do within our property – are the embodiment of this red tape, blocking the renewal of our high streets. They prevent vacant commercial property from being reclassified as residential property. Our enterprises need flexibility and adaptability in order to innovate and grow. As Conservatives, we should do all we can to unlock that innovation and growth.

At a time where we are seeing more and more vacant commercial properties in town centres, and with speculation rife that in a post-COVID world many more will be working remotely, this means red tape has been getting in the way of an enormous opportunity to build homes.

This is not only bad for city-dwellers, who lose out from housing shortages and get priced out of the market by a lack of supply, but also a missed opportunity for the economy, which could benefit from a low-cost way of mobilising private capital to improve macro-productivity.

Even before this pandemic truly struck our economy, we knew that swathes of our retail landscape were surplus to requirements. In March, figures showed a vacancy rate of 12.2%. And though the Government has provided unprecedented levels of support to our high street businesses – no business rates this year, the furlough scheme, and small business cash grants, to name just a few measures – we know that vacancy rates, sadly, will rise significantly over the next few months as these schemes are unwound and some businesses never return.

Many towns’ arterial roads that were filled with houses that have become shops and offices now see vacant spaces opening up, leaving gaps and sapping the spirit of the town centre. We need to enable those properties to more easily revert to residential use, and as the need for commercial and retail space in the centre contracts we need to ensure that a diverse range of people move in. Not just students, not just starter homes, but homes suitable for our elderly who can easily walk into town, homes suitable for our disabled people enabling them to access services directly, and homes suitable for growing families with children.

While businesses will always rise and fall, our national ‘animal spirit’ will always endure. This is why the planning reforms announced by the Prime Minister this week are so welcome. By removing the red tape around the use of property and brownfield land, we are giving high streets and town centres a chance to be reborn – as a place to live, take your kids, meet your friends, or whatever local people – rather than planners – want.

Andy Street: Our blueprint setting out the economic ambitions of the West Midlands

30 Jun

Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.

Last week saw the launch of a blueprint setting out the post-Coronavirus economic ambitions of the West Midlands. As a manufacturing heartland, where draftsmen drew up plans for everything from steam engines to Spitfires, blueprints are in our blood. They illuminate our history. This intentionally ambitious £3.2 billion business case draws a clear trajectory to our region’s future.

As Mayor of the West Midlands, it’s my job to attract as much investment as possible. Rishi Sunak’s bold and decisive actions – notably through the furlough scheme – have provided unprecedented economic support for jobs during lockdown. Now, demands on the public purse are high. All investment must be fully justified, diligently used and – crucially – deliver real results. Every penny counts.

Our region was the UK’s fastest growing outside the capital until Covid-19 struck, and as a hotbed of export, manufacturing, construction and professional services, we play a key role in the UK’s economic success. This new blueprint lays out a powerful business case for how continued investment can spark rapid and sustained recovery, not only for us here but for UK PLC.

Our ambition is deliberate because the stakes are high. Research suggests we could be hit harder than most by the lockdown. When coronavirus struck, the West Midlands was in a strong economic position, with record employment figures and productivity growth well ahead of the national rate. However, our economic mix – dependence on manufacturing and business tourism, as well as a significant contribution from universities – leaves us vulnerable.

By following the blueprint we have drawn up, the Government can demonstrate its commitment to ‘levelling-up’ by backing the people of the West Midlands to deliver.

We need to do everything we can to get back on our feet quickly and return to the levels of success we were enjoying before the outbreak hit. That means driving a rapid economic recovery, safeguarding more than 135,000 jobs while building thousands of new homes. It also means learning the lessons of the financial crash of 2008/09, and listening to business.

Investment is crucial. However, while we need significant investment from the Government – £3.2 billion over the next three years – this is broadly in line with the £2.7 billion investment we have secured since 2017, which supported strong economic success here.

Our business plan is to build on our success and on the investment we have already attracted from Government, while leveraging much more private and public sector investment locally, including from our universities.

The blueprint sets out a business case for investments, while outlining the economic benefits they would deliver. For example, it directly supports our automotive sector by harnessing clean technology and electrification. A major investment package, including £250 million towards a Gigafactory producing state-of-the-art batteries, will unlock 51,700 green jobs.

The building of HS2, next year’s Coventry City of Culture festivities and the Birmingham 2022 Commonwealth Games present opportunities to create jobs for local people. By accelerating major infrastructure investment and supporting the recovery of the tourism and cultural sector we can unlock 33,000 jobs.

Then there is the West Midlands’ growing reputation as a hotbed for health research. By investing in healthcare innovation we can protect 3,200 jobs, while improving the health of our population.

Improving transport, housing and digital infrastructure will play a key part in a rapid recovery, while laying the foundations for future economic strength. We can build better transport and digital links to drive productivity and create thousands of jobs in construction. Schemes include extending rail, metro and bus routes, with cash for enhanced digital connectivity and to accelerate fibre connectivity in deprived areas. Reopening long-closed railway stations will better connect people to employment opportunities, attract investment into once-isolated areas and improve productivity.

The West Midlands has pioneered the regeneration of brownfield sites to tackle the housing crisis, while protecting the environment. We even have our own regional definition of ‘affordable housing’ applied at planning level by the West Midlands Combined Authority. We want to build 35,000 new homes – 15,000 of which will be affordable – with a focus on housing key workers. Plans include using a £200m investment package to regenerate derelict eyesores and £24 million for a new National Brownfield Institute in Wolverhampton, which will be a centre of excellence for land reclamation.

Investment to equip people with the skills needed for the future aims to help get them back into work. This includes helping 38,400 young people obtain apprenticeships and work experience, retraining 20,000 workers for in-demand sectors such as health and social care, logistics and business services, and upskilling 24,000 for jobs for the future.

Finally, we want to back the region’s businesses with support schemes – including helping them navigate their way through the post-lockdown world – creating or safeguarding 43,900 jobs.

This ambitious business case is based on our region’s experiences not only of recovering from the last downturn, but on the successes of the last three years. The blueprint has been developed as a team effort between the region’s local enterprise partnerships, universities, business groups and local authorities.  Crucially, some of our biggest employers have also shared their insights about how the region can play its part in securing a strong national recovery, putting central investment to good use.

For the UK to fully recover, all of its regions must recover too – creating a stronger country with a more robust, balanced economy.

Iain Dale: The Jenrick row. What would the Daily Mail have against the former owner of the Daily Express?

26 Jun

Iain Dale presents the evening show on LBC Radio and the For the Many podcast with Jacqui Smith.

One of the grubbier aspects of Robert Jenrick’s woes at the moment is the position of the Daily Mail.

Yesterday, it printed four pages of bile against the Communities Secretary, with articles headlined as follows: “He sweated under the glare like a saveloy in a chip shop” – “Riddle of his £830k home makeover planners refused” – “This haughty and reckless Minister is now a drag on the Tories”.

And it’s been like that for days. It’s quite clear that it has little to do with the rights and wrongs of the case. It’s all bound up with the fact that their arch enemy and rival, Richard Desmond, is the one who stands to gain from the housing development on the Isle of Dogs.

He is, of course, the owner of the Daily Express until 2018. Now, given that the Express is hardly the paper it used to be, and the Mail’s circulation is now many times that of the Express, you might think the Mail would ignore it, in the way that Waitrose wouldn’t worry about the competition from the local independent Minimart. But newspaper owners have long memories and carry grudges longer than elephants do.

The original accusation of “cash for favours” has quietly been dropped. I wrote in this column last week that no politician is likely to be bought for £12,000, especially when the money wasn’t even a donation in the conventional sense – it bought tickets at a fundraising dinner.

The trouble is that there has been a drip of information ever since, culminating in Robert Jenrick publishing 129 pages worth of emails, texts and letters between him and Desmond, or his department and Desmond.

And on Wednesday, The Times published what it thought was a massive new angle whereby Conservative councillors in Westminster were alleged to have overturned a planning decision on Jenrick’s Westminster home in 2014. He only became an MP in June 2014, so it’s not clear what the accusation is here.

Downing Street are standing by their man, just as they did with Dominic Cummings. The letter from the Cabinet Secretary to Steve Reed seeks to close the matter down, but the fact that it was sent only hours after Jenrick released all the different communications with Desmond probably didn’t help, and it certainly hasn’t ‘drawn a line’ under it all.

Jenrick expended a lot of political capital with his parliamentary colleagues over this three home lockdown situation back in April. He’s expended a lot more over the last few weeks. He must hope that Number Ten remains staunch and that there is nothing else for the Mail to latch on to. But the warning to other ministers is clear. And, frankly, it should always have been clear to Jenrick. When it comes to Desmond, sup with a very long spoon.

– – – – – – – – – –

The fourth anniversary of the Brexit referendum passed this week with comparatively little comment.

On the actually Brexitversary on Monday night, I made the mistake of doing a phone-in on it. I started off by saying that I didn’t want to refight the referendum, but I might as well have saved my breath.

Remainer after Remainer phoned in, all seemingly having been to the same debating school, where they had been taught not to engage in a debate and instead just barge their way through without any recognition that there might just possibly be another viewpoint. It was like going back in a time machine.

By the end of the hour I had almost lost the will to live. In real life, my experience is that most moderate Remainers have long ago come to terms with the fact that we have left, and it’s up to the whole country to make the best of it.

I’m far more optimistic than that. It’s not a case of tolerating the new post-Brexit world, it should be a matter of embracing it. And after Coronavirus is over (assuming it ever is), I think there will be new spirit of entrepreneurialism in this country, which will able us to do great things, both domestically and internationally.

I can’t prove it, and there always will be those who attribute any bad bit of economic bad news to Brexit, but I am genuinely excited about the future.

– – – – – – – – – –

The end is in sight. The Government has advised those of us in vulnerable groups that we can emerge from isolation from the beginning of August.

This means I can leave the comfy confines of my bedroom and resume broadcasting from a proper studio at last. It will have been 137 days since I last did that.

I’ve rather enjoyed broadcasting from home and recording lots of podcasts on Zoom, taking part in video conferences on Teams or BlueJeans, but I am relishing some degree of normality returning.

The one thing I am certainly not looking forward to is wearing a facemask from the moment I step on to the train at Tonbridge each day. But I guess I’ll get used to it. Because it will be part of what we now have to refer to as the ‘new normal’.

Andrew Carter: A zoning system is needed to build the homes we need

26 Jun

Andrew Carter is Chief Executive of Centre for Cities.

You can almost guarantee that, however mad British politics gets, solving the housing crisis is never far from policy makers’ minds.

In Downing Street, Dominic Cummings and Robert Jenrick are reportedly working on a plan to ramp up homebuilding numbers as part of our recovery from the economic damage done by lockdown. I understand that very significant reforms are being suggested to Britain’s post-war planning rulebook.

Significant reforms are certainly needed. The shortage of homes, particularly for younger people who need move to our most high-demand cities and towns for work, remains one of the largest domestic challenges that we face as a country. It fuels huge social divisions: while homeownership remains a distant dream for many young people, existing homeowners – mostly older and living in urban south east England – have amassed huge fortunes in housing wealth.

Without a proper plan to fix this problem and help the younger generation, no political party should be confident about its own long-term survival. The Government must come up with a bold solution to get Britain building the homes we need, where we need them.

All too often our analysis of the housing crisis boils down to criticising the people operating around it: greedy developers; box-ticking town planners; selfish NIMBYs or frivolous millennials impulse-buying too many avocados to save for a deposit.

We say that if only these people changed their behaviours – built more, saved more, thought more about the next generation – then we wouldn’t have a housing crisis. This is a flawed view; the problem with our planning system is the system itself.

Most town planners that you speak to will quietly admit that the planning system is designed to prevent development, not permit it. Its discretionary case-by-case nature rations the development of land and chokes off the supply of new homes in the places where we need them most – close to jobs. Instead, it forces councils to build new homes where it is most politically expedient, not where they’re needed.

The consequence of this? Just four per cent of suburban neighbourhoods supplied 45 per cent of new homes in the past decade, while one in five neighbourhoods built no new homes at all. Some places have particularly poor records: in Oxford for example, no neighbourhood has built more than 25 homes a year in the last decade and as a result, many of the people drawn there for work and study struggle to afford decant housing. If this does not change our prosperity will suffer and the inequalities that we see in this country will become even more entrenched.

Clearly the bureaucratic case-by-case nature of the current planning system is a major hurdle to our ability to supply the homes that we need, where we need them. You can see alarming parallels in our own system with the ‘shortage economies’ of the former Eastern Bloc, where production was tightly controlled by the rationing of permits.

Tinkering around the edges is not enough. To solve the housing crisis and build the homes needed we should introduce a brand-new flexible zoning code, designed by the UK and devolved governments, to guide local authorities and city regions in the development of their own local plans.

Under this new code, any proposals that comply with a zone-based local plan and building regulations would automatically be granted planning permission. Areas would be zoned according to density – ranging from light residential up to industrial.

There would still be opportunities for public consultation under this model, but they would be frontloaded into the writing of the plan rather than giving the public effective sign off on every single development.

I appreciate that removing much of the public consultation element of the planning process would be a controversial move for many people, but the current system is simply too bureaucratic and unresponsive to allow for enough new homes to be built.

Many of the most common concerns that people have about development, such as aesthetics and density, could be addressed in the drafting of the local plan. So, for example, if people wanted to ensure that any new developments in their area were medium density mock-Georgian terraces they would still have the opportunity to do this under a zone-based system, but at the very beginning when the plan is developed.

A stable home need not be unaffordable, as it is for many people in Britain today. Our housing crisis is the result of a political choice that results from our tacit commitment to sustain a bureaucracy that deliberately undersupplies new homes. This fuels inequality between prosperous places and struggling one, between homeowners and their children, and between the haves and the have-nots.

We can change this with a more flexible zoned approach to development, but it requires genuine political will to make it happen. With a majority of 80 and no election on the horizon, the time is right for the Government to seize this opportunity to end the housing crisis.

Yet if it balks now and our housing crisis worsens, it will further entrench our economic and social divides and make Britain an even more unequal place.

You can read our new report ‘Planning for the Future: How flexible zoning will end the housing crisis’ here.

Paul Carter: We could see a housing recovery – if we give builders the incentives they need

25 Jun

Paul Carter was Leader of Kent County Council from 2005 to 2019. He is a Director of Localis.

If we are going to ‘build, build, build’ – and do it well – then we need to put people and communities at the heart of a new relationship between the Government and the construction industry.

The Government is taking positive steps to get Britain back building again – but much more will be needed to kickstart the industry.

The construction industry alone provides close to two million jobs or seven per cent of the national jobs total. New housebuilding delivered £47 billion of output in 2019 of which 60 per cent was delivered by smaller enterprises employing less than 100 people. Others will be employed in related trades and professions as utilities are connected, community infrastructure such as schools, roads, and hospitals are put in place, and property is maintained and managed. When the Construction Industry is building, the Country is working.

As a local government leader and senior councillor for many years, and with a lifelong career as a housebuilder, I have experienced, at first hand, significant economic recessions: the stockmarket collapse of 1987; the 9/11 tragedy of 2001, and the banking crisis of 2008. All had an immediate and long-lasting impact on the housebuilding industry and saw housing delivery fall dramatically. The worldwide recession post-Covid now presents an even greater challenge accepting that the pent-up demand and need for more new homes will not abate.

To support the Government’s drive for a million new homes by the end of this parliament and to avoid a housebuilding slump, Localis invited leading contributors from all sections of the industry to come forward with ideas and innovation that should help kickstart the post-Covid housebuilding recovery.

Their proposals and suggestions are contained in an essay collection published by Localis this week entitled “Building for renewal: Kickstarting the C19 housing recovery” with the aim of getting the housebuilding industry and the national economy firing again on all cylinders.

Contributions are challenging and insightful on the important role of housing in promoting opportunity and prosperity.

They major on two significant areas: the need for planning reform – and funding both infrastructure and all aspects of housing provision.

The essays and summary recommendations grapple with bringing forward new and innovative ways to fund infrastructure provision, ideally in advance of development. These include the suggestion to raise a new levy on the colossal windfall financial gains of landowners when residential planning is granted on greenfield/agricultural land.

They also include a whole range of incentives to get housebuilders building such as the extension of the Help to Buy scheme, alongside a new raft of incentives to support small builders and considerable support for the Government’s First Homes initiative with a specific focus on key worker housing.

On planning reform, there is support for the return of strong Spatial Planning Regulations to enable planning of essentially-needed infrastructure as a consequence of housing growth over a wider geography than individual Local Plans. There is general support for a reduction in the red tape and bureaucracy in the planning and building regulation process which can add delay to getting diggers on site.

The collection identifies the critical themes for action for national economic recovery led by the construction industry. To achieve this, a strong and effective partnership working will be essential. We need to put people and communities at the heart of this new relationship, working with local government, developers, and other public agencies and with a government which continues to put housing high in its order of priorities.

Above all, we must invest the funding necessary to avoid a housing recession, and recognise – as put so clearly in one essay – that “the fundamental basis of a healthy and successful life is a safer and secure home”.

Profile: Robert Jenrick, who rose without trace until he hit two bumps in the road

24 Jun

Until the age of 38, which he attained on 9th January this year, Robert Jenrick had ascended the political ladder at remarkable speed while remaining unknown to the wider public.

Nor can one yet say that as Secretary of State for Housing, Communities and Local Government he has become a household name, often though he appeared at the Downing Street press conferences on Covid-19.

For there is nothing distinctive in Jenrick’s manner: he does not lodge himself in the memory.

Labour is trying to change that. It wants people to remember him, if not by name, then as the Tory minister who “auctioned off the planning system to a billionaire donor at a Conservative Party fundraising dinner”, as Steve Reed, Jenrick’s Labour opposite number, recently put it.

And this afternoon in the Commons, Labour will press for the release of all documents to do with that affair.

The fundraising dinner took place last November. Jenrick found himself sitting next to Richard Desmond, former proprietor of The Daily Express, who is seeking permission for a one billion pound redevelopment of that paper’s disused Westferry Printworks in the Isle of Dogs, to include over 1500 flats.

Jenrick had already called in the scheme, and in January this year he approved it, on the day before Desmond would have become liable to pay Tower Hamlets Council a Community Infrastructure Levy of about £40 million on the scheme.

The council opened legal proceedings against Jenrick, who in May conceded that the timing of his decision “would lead the fair-minded and informed observer to conclude that there was a real possibility” of bias.

The Planning Court said the Housing Secretary had accepted the decision “was unlawful by reason of apparent bias and should be quashed”, which it proceeded to do.

Another minister will now decide whether to approve Desmond’s development, and Labour is doing all it can to exploit Jenrick’s embarrassment, as would the Conservatives if the positions were reversed.

When taking the decision to approve Desmond’s plan, Jenrick not only rejected the advice of the local council and planning inspector, which is usual enough, but is reported to have rejected the advice of his own chief planning officer, which is highly unusual.

Desmond paid £12,000 to attend the dinner, of which Jenrick recently said in the Commons:

“My department knew about my attendance at the event before I went to it. It knew about the fact that I had inadvertently sat next to the applicant. I did not know who I was going to be seated by until I sat at the table. I discussed and took advice from my officials within the department at all times.”

There is something hapless about the word “inadvertently”. A Tory MP told ConHome with considerable annoyance that Jenrick “should never have been sitting next to Desmond”, but blamed the organisers of the dinner, not Jenrick, for this, and described the Housing Secretary as “well-respected”.

Another senior Tory backbencher said of Jenrick:

“He is a decent man, a solicitor by training, highly diligent, and I would trust him over Mr Desmond any day.”

But a third backbencher, a former minister, said Jenrick is known as “Generic”

“because there’s nothing there. If he walked across a sieve he’d probably completely disappear. He’s a suit. What does he believe? He’s an example of the new kind of Cabinet Minister who forms up with a pair of shiny shoes, takes his orders from Dominic Cummings and goes and delivers them.

“He’s arrived from nowhere and as for all politicians who do that when he hits a bump he goes off the road.”

Jenrick has actually hit two bumps. In March, he repeatedly emphasised, in his role as one of the Government’s leading spokesmen on the pandemic, that people “should stay at home whenever possible”, but at the start of April he was found to have travelled to his house in Herefordshire:

“Under-fire minister Robert Jenrick has claimed the £1.1 million Grade I listed country mansion he drove 150 miles to during the coronavirus lockdown is his family home – but his official website says the opposite, MailOnline can reveal today.

“The Housing Secretary is also facing calls to quit unless he can offer a ‘very good explanation’ about a 40 mile trip to drop supplies at his parents’ house in Shropshire last weekend when neighbours said they were already delivering essentials.

“Mr Jenrick, a key player in the Government’s response to the pandemic that has claimed 7,978 lives in Britain, has repeatedly told the public to stay at home and not make unnecessary journeys to stop the spread of coronavirus, including travelling to any second homes.”

On the same day that report appeared, 9th April, Boris Johnson came out of intensive care at St Thomas’s Hospital, and three days later he delivered his heartfelt message of thanks to the NHS for saving his life.

Compared to that, the questionable conduct of an unknown Cabinet minister looked unimportant. It made nothing like the impact of the revelation on 22nd May of Dominic Cummings’ family trip during lockdown to County Durham.

Cummings presents a wonderful target. He is blamed by Remainers for steering the Leave campaign to victory, is close to the Prime Minister and loves riling the media. Piers Morgan and Alastair Campbell were among those who led the demands for Cummings to be sacked, and Tory MPs found their inboxes flooded by emails from members of the public who were furious that there seemed to be one rule for the ruling class, represented by Cummings, and another for everyone else.

Nobody regards Jenrick as an evil genius, and he has never intentionally riled the media. He has instead followed the more conventional course of giving the media nothing much to report, and most people have probably already forgotten about his travels during lockdown.

Jenrick was born in Wolverhampton in 1982, grew up in Herefordshire and Shropshire, and was educated at Wolverhampton Grammar School, a fee-paying establishment, followed by St John’s College, Cambridge, where he took a First in History, after which he spent a year studying Political Science at the University of Pennsylvania.

He proceeded to qualify, in 2008, as a solicitor, to work for two American law firms in Moscow and in London, and on the international business side of Christie’s Auction House.

In the same year, he gained selection as the Conservative candidate for Newcastle-under-Lyme, in Staffordshire, where in the general election of 2010 the Conservative vote rose by almost 5,000, but he was still 1500 votes short of taking the seat, which only went Tory last December.

During one week of the 2010 campaign, he contributed a diary to ConHome which included this passage:

“Unexpectedly this afternoon, a legal contact calls. He’s an environmental lawyer in Washington D.C. who is co-ordinating efforts in the U.S. to develop the first Green Investment Bank with the Obama administration. I put him in touch with the Shadow Environment team, some of whom it turns out will be in D.C. tomorrow and may be able to meet up. This follows on from bringing together the Environment team with Better Place, an Israeli company developing an electric car system that will soon be on the streets of Tel Aviv and San Francisco. Better Place’s CEO, Shai Agassi, is one of the most impressive men I’ve met: he is pragmatic and not a climate crusader and he puts privately-funded technological advancement at the heart of tackling climate change.”

We see Jenrick at the age of 28 proud of his ability to network, and remarkably at ease as he does so.

In 2013, Better Place went bankrupt, and Jenrick was adopted as the Conservative candidate in Newark, where it was expected that the scandal-afflicted Tory MP, Patrick Mercer, would stand down at the general election in 2015.

Mercer instead stood down in April 2014, precipitating a by-election in Newark where the Conservatives needed to beat off a strong challenge from UKIP in order to look like credible contenders for 2015.

Tory MPs were ordered to visit Newark three times during the campaign, Cabinet ministers were expected to put in five appearances, members of the House of Lords could be found delivering leaflets, and the party’s depleted reserves of activists were incentivised by the prospect of fighting alongside the officer class.

Jenrick found himself at the centre of a national campaign. Roger Helmer, the UKIP candidate, accused him of owning three homes, none of them anywhere near Newark.

The formidable Simon Walters, political editor of The Mail on Sunday, arrived to see what he could make of Jenrick:

Mr Jenrick presents himself as a ‘father, local man, son of a secretary and small businessman and state primary school-educated’ candidate.

But that is not quite the whole story.

In fact, he and American wife Michal own not one, but two, £2 million homes in London and a £1 million country pile built by an 18th Century slave-trader.

Their Newark ‘home’ is a rented house obtained when he was picked as a candidate six months ago.

And his Party CV omits to say he went to a £13,000-a-year private secondary school.

Together with his director’s  job at Christie’s auction house, it is just the type of posh Tory boy image Cameron and co can’t shrug off.

Mr Jenrick, who looks even younger than his 32 years, sticks rigidly to his Tory HQ autocue when asked about national issues.

During our interview at a cafeteria in Tuxford, near Newark, he is finally stirred when I ask whether, in his keenness to come across as a regular guy, he has misled voters.

To win the candidacy, he promised he would move his family lock, stock and barrel to Newark. A 250-mile round-trip  to Westminster if he becomes  MP – quite a commute for a  self-proclaimed family man  with two young daughters.

How many nights has the family actually spent in their Newark ‘home?’

‘Er, it has grown over time.’  He won’t say.

His election leaflets are also silent about the couple’s £2 million flat in Marylebone, London. It went up in value by £300,000 last year, more than twice the average price of a home in Newark.

Last October, the couple splashed out an extra £2.5 million on a house in fashionable Vincent Square, Westminster, less than a mile from Parliament, which they plan to move into soon.

On top of that they bought Grade I listed Eye Manor in Herefordshire for £1.1 million  in 2009.

Mr Jenrick says he is ‘almost sure’ they will sell it and move to Newark if he becomes MP.

It is to be hoped this interview is not the first Mrs Jenrick, a top commercial lawyer whose professional name is Michal Berkner, eight years Mr Jenrick’s senior, has heard of that.

The Conservatives won the Newark by-election by 7,403 votes from UKIP, and Jenrick’s majority has since risen to 21,816. Some vexation is nevertheless expressed in Newark that Jenrick has yet to sell Eye Manor, and appears to prefer going there with his wife and their three daughters.

As one constituent said, “It’s perfectly clear who wears the trousers and it isn’t him. She indulges his little hobby of being an MP.”

But if one were fortunate enough to own Eye Manor, parting with it might feel unbearable. Here is Marcus Binney, singing its praises in The Times before the Jenricks bought it:

For its size, Eye Manor, near Leominster in Herefordshire, has the most gorgeous series of Charles II interiors in England. Here is plasterwork as overflowing in richly sculpted fruit and flowers as carvings by the great Grinling Gibbons. It gets better: over the past 20 years the late owner, Margery Montcrieff, laid out an intricate, inventive and enchanting formal garden that almost vies with Sissinghurst in Kent. 

One of the sympathetic things about Jenrick is his love of history. When ConHome spoke to him during the Newark by-election, he “seemed reassuringly dull”, but

When asked who his political hero is, he became more animated, and vouchsafed that he is writing a book about the English Civil War, in which Newark played a prominent role: it was a royalist stronghold which was three times besieged unsuccessfully by the parliamentarians. The first siege was raised by no less a figure than Prince Rupert, the most dashing royalist of them all.

And Prince Rupert turns out to be Mr Jenrick’s hero. Beneath that somewhat impassive exterior perhaps there beats the heart of a true cavalier.

At Westminster, Jenrick remarked in his maiden speech that “there are, after all, no final victories in politics; all achievements, however hard won, can be and are undone.”

After the 2015 general election he became in rapid succession PPS to Esther McVey, Michael Gove, Liz Truss and Amber Rudd, before in January 2018 being appointed Exchequer Secretary by Theresa May.

He was climbing the ladder, and in the summer of 2019 he, Rishi Sunak and Oliver Dowden questioned Johnson for an hour at Jenrick’s house in Vincent Square, and at a well-judged moment put their names to a joint piece for The Times Red Box which appeared under the reasonably clear headline:

“The Tories are in deep trouble. Only Boris Johnson can save us.”

All three authors are now in the Cabinet. Jenrick has been lined up to carry out the radical reform of the planning system on which Johnson and Cummings are intent.

Will he still be in office to carry out this work? Johnson and Cummings have shown they do not like being pushed around by the newspapers, which are crawling over every planning decision in which Jenrick has been involved.

So perhaps he will hang on. He will need, however, to learn the art of sometimes saying no to people, including developers such as Desmond.