The Chamberlain effect

Theresa May is a fan of the great Joseph Chamberlain, the statesman who transformed Birmingham in the late 19th century by “nationalising” competing gas and water companies, clearing slums, erecting great civic buildings and creating Haussmann-style vistas. His record on municipal housebuilding is patchy but nonetheless he believed in state intervention to fix failing markets, something that the new Conservative regime appears to be edging towards, at least in housing.

Gavin Barwell has talked of the need for a range of tenures including social rented homes and Philip Hammond has scrapped the Help to Buy mortgage guarantee scheme, a product that stimulated house prices rather than production. Hammond has also promised to borrow to invest. Sajid Javid has promised to confront the nimbys who are responsible for so much stagnation. Housing fringe events in Birmingham were full to the seams. More and more conservatives appear to believe that the market on its own will never solve the housing crisis.

“Housing fringe events in Birmingham were full to the seams.”

The SHOUT campaign welcomes this change of tone. Last year we published a report showing that the Treasury could save up to a trillion pounds in little more than a generation by investing in 100,000 social-rent homes a year.

SHOUT has now updated this analysis for a post-Brexit world setting out four potential scenarios for future growth ranging from Japan-style stagflaton to strong economic growth. The report by City consultancy Capital Economics, in partnership with the National Federation of ALMOs and ARCH shows that our basic premise – 100,000 social rented homes a year – would still yield significant savings of up to £320 billion on the Housing Benefit bill under each of the four scenarios. In the early years more borrowing would be required of up to £7 billion but this is the equivalent of just 2 weeks’ spending on the NHS and would create a surplus for the government by year 26 at the latest under all four scenarios. This is good value by any standard.

Other knock-on benefits include a real and lasting stimulus to the economy and improvements in health and general wellbeing.

Unfortunately, too many conservatives still believe that mass council house-building means Labour voters, but this is too simplistic in a post-Corbyn, post-May, post-Brexit world. In the referendum six in every ten social housing tenants voted Leave. Most political commentators believe that a Corbyn-led  Labour Party will never achieve power. Even if a charismatic leader of the left were to emerge (Clive Lewis perhaps?) to replace Corbyn Labour still has a mountain to climb with boundary changes and the loss of Scotland. If the Tories had any sense they would rush to occupy the centre ground abandoned by Labour before the Lib Dems do so. One way to do this is by announcing a major programme of social housebuilding, evoking the memory of Joseph Chamberlain and Harold Macmillan. The housing crisis underpinsalmost every social and economic problem, so this one-nation Conservatism would do more to help the people who are “just getting by” in Theresa May’s words than any other policy. The notion that these people would then automatically vote Labour is fanciful.

The SHOUT proposals would add more than four million homes to Britain’s housing stock over 50 years and have a major impact on the country’s housing woes, providing decent, affordable homes, helping to reduce private rents and house prices overall and creating a society that is more at ease with itself. When the SHOUT campaign was launched over two years ago this seemed a distant prospect. There is still a long way to go, but the times have nudged a little in our direction.

(This blog first appeared at Inside Housing on the 4th October 2016)


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