Will it work? GB Energy

It’s election season. Politicians are giving us a barrage of policies. But we often forget to ask the most important question: will they actually work? In this column Sam Fowles takes policies on their own terms and asks whether they solve the problem they’re supposed to solve. This week: Labour’s green investment plan.

What’s the plan?

Labour proposes £8.3bn for a new energy investment vehicle, “Great British Energy”, which will partner with the private sector to deliver green energy projects. This will be paired with a £7.3bn green investment strategy. Simultaneously, the party promises to “rewire Britain” by expanding the National Grid, along with various smaller measures, such as funding for insulating homes.

Finally, some ambition! Regular readers will know I often criticise policies for tokenism. Labour’s green growth strategy, however, looks genuinely radical (to see a potential government talking positively about an “industrial strategy” warms my little Keynesian heart).

Reasons to get excited

The plan gets three important things right. First, it tackles net zero as an opportunity rather than a burden. The plan aims to simultaneously enhance energy independence and (consequently) security, bring down prices, provide a much-needed economic stimulus and hit net zero by 2030.

Second, it recognises that the state needs to lead in this area. Energy has never been a free market. Since 2015 the government has pumped at least £140bn in subsidies into the sector. The bulk of these go to fossil fuels (in addition picking up the tab for fossil fuel’s externalities, worth at least £11bn per year). If subsidy is inevitable, it should be targeted better. State investment in green energy will reduce upfront costs of financing new green projects, allow them to stay the course when they hit snags and facilitate a strategic approach to green investment. Labour’s plan might finally allow renewables to compete with fossil fuels on something like even terms.

Third, it treats the challenge with a package of interconnected measures. There’s no point investing in new green projects if the National Grid isn’t upgraded. Currently projects are waiting up to 10 years for a grid connection, potentially locking £200bn of private investment out of the market. This forces developers to choose sites based on where there is an existing grid connection rather than where they are most appropriate. This generates tensions with local communities, reduces buy-in for net zero and means essential projects are refused planning permission.

Cause for concern

If Labour’s plan is to work, the industry needs to play ball. The energy industry has a history of taking supply-side boons (like falls in wholesale prices) and pocketing the profits, rather than passing the benefits on to consumers. The plan has little value if the benefits just end up in the pockets of energy shareholders. Labour may need to reform the energy price cap to ensure the benefits of the scheme filter through into the wider economy.

Does it add up?

Potentially. The plan is ostensibly funded by closing loopholes in the windfall tax on oil and gas. Given it’s mostly stimulus and investment, there would also be a case for funding it through borrowing. The question remains, however, whether the plan will generate the impacts it promises. The investment strategy relies heavily on private sector buy-in, with a target of raising three times as much private investment as the government puts in. Even if this is achieved, the total package only amounts to around £80bn over the course of the next parliament (depending on how it is calculated). It’s estimated that, to break out of the current stagnation, the government needs to generate nearly that amount of investment every year.

How does it score?

Overall: 14/20

VERDICT: It’s (at least the shape of) the right solution to the right problem. But, unless the private sector rides in to save the day, it might sink without a trace.

Square Mile and Me – Conservative City candidate Tim Barnes: ‘I live here, so I understand the everyday problems’

Ahead of the the election, we’re asking the candidates for the Cities of London and Westminster to introduce themselves. Today, Conservative candidate and Centre for Entrepreneurs CEO Timothy Barnes gives his pitch to the Square Mile

What was your first job? 

As a teenager, I did quite a lot of things that might have felt like work, but were probably volunteering! My first paid job was when I was 18 and I spent a couple of months doing graphic design and layout for a small charity that trained and supported community volunteers across Cambridge. It was my first experience of the daily routine of heading into an office and helped me understand that I would always like work that has a creative element involved.

When did you decide to try your hand at politics and what were you doing before?

 I ran successfully to be the finance and societies officer for the student union at UCL, where I had been studying, and led to me taking a year out after university. I first ran to become a councillor over fifteen years ago and have always combined politics with having a day job. For the last two years, I have been the CEO of a charity based on the borders of the City. We promote entrepreneurship and help push policies that make it easier for those who want to help themselves to get going. Before that I have worked in universities, management consultancy, venture capital and set up my own businesses.

What’s one thing you love about the City of London? 

The Dragon boundary markers! Also, so many of the interesting and quirky old venues. I was saddened by the closure of Simpson’s Tavern and it would be great to see it revived as the site is still unoccupied and just falling into abandonment. The coverage in City A.M. has really saddened me. One of the wonderful things about the City are the little pockets of heritage among the daily bustle. If we lose those, things will just be a little too bland. Am still sad about the closure of the Wig and Pen, opposite the Royal Courts of Justice, as much for the idea of the place as anything.

And one thing you would change? 

One of the first meetings I had after I was selected as a candidate for the election was with some of the Aldermen and women in the City to understand its needs and issues. I would like to see more outreach and support for the residents who live here. The Corporation has done a huge amount to improve the liveability of the City in recent years, but there’s more that can be done for those who reside here permanently in terms of housing and having access to a ladder of opportunity, which are two of the six core themes of my campaign. 

Why should people vote for you?

I want to see the City flourish as a financial and service centre and as a place to live. My background in entrepreneurship policy and teaching at universities including UCL and Cambridge underline my belief in the value of business and wealth creation and I would like to see the regulatory frameworks adapted to reflect UK capital and market needs. The Mansion House reforms were a good starting point but we need to see more to attract new listings and deeper pools of capital. Residents should know I am the only candidate of any major party who lives in the constituency, so the services I use and the problems I experience everyday are the same as theirs. 

What’s been your most memorable moment of your political career? 

Four years ago, I led the development of a new class of business rates relief that applied to grassroots music venues, a first in the UK that’s since been copied. We launched it at the 100 Club on Oxford Street and it was reported in the NME complete with a photo of me on stage. Making it into the hallowed pages of the NME has to be one of the most unexpected and memorable moments of my political life to date!

And any political faux pas?  

Am really not sure I have one, but if I do I am absolutely not going to bring up again! 

What’s been your proudest moment?

 As a councillor during Covid, it was the work we did to support residents and businesses at an unprecedented time of disruption. Individuals who had never had to turn to the council for help before came to see what we could and how to navigate things. As the cabinet member for young people and learning, we brought in the first scheme in the country to buy digital devices for the children who needed to learn from home during the pandemic, to ensure those from less affluent families didn’t fall behind those with easy access to laptops and tablets.

And who do you look up to?

In politics, Ken Clarke. He was a real influence on me in my formative years as I was working through my own beliefs and attitudes to politics. I don’t agree with everything he said or did, but his capacity to find the things that mattered and bring about change in what he did, his reputation as a heavy weight with a bit of personality thrown in, left his mark. My mum is a bit of a hero, too, but that’s probably not quite the original insight you are hoping for!

Are you optimistic for the year ahead?

Inflation is coming down and I think the Bank of England will cut rates in the second half of the year, so it should be a year of things getting better. England should do well in the T20 Cricket World Cup, too, and that would make me smile. But I might need you to ask me my thoughts on the rest of the year after 4 July! If Labour wins the election, taxes and inflation may well be back up by Christmas. 

What does a typical day in your life look like? 

Days vary a lot, to be honest. Mondays tend to start early as I have a lot of team and board calls first thing to get ready for, so that’s a 5.30am start or so. If there’s been a late work night the night before, I try and sleep a bit extra. Two or three days each week, I walk from home through Leicester Square and Covent Garden to my day job office on the Strand. Work is usually a mixture of team meetings and calls through the day with a nip out to one of the sandwich shops at lunchtime. Evenings are always work or political events with at least five a week, and sometimes two or three on an evening! Right now, that’s getting in the way of eating in the evenings, which is my main form of regular relaxation, whether I am going out or cooking it. The evenings are for social media and messaging catch ups and bed by midnight before it all rolls around again!

We’re going for lunch, and you’re picking – where are we going?

So many places I could recommend or feel like. Eating and drinking out is one of the reasons I love living and working here. There’s a bit of me that would love to be a restaurant critic or even opening one of my own. 

There are a lot of chains now in the City, so perhaps we should head out for somewhere that will have something for every palette but still feels a little bit more like a one-off? How about Cabotte on Gresham Street? Classic French cooking and a glass of wine if you don’t have anything too important to do in the afternoon? If you want something a little less formal, I am quite a fan of a good food truck, so perhaps we could wander and see what comes up?

And if we’re grabbing a drink after work?

There’s always a buzz standing outside of the New Moon in Leadenhall Market.

Where’s home during the week?

 I live in Soho, which also means I can walk to work!

And where might we find you at the weekend?

Here! You don’t live in the West End to disappear from the city at weekends – it’s so you can walk home after a night out whether that’s eating, drinking, film, theatre or cultural life!

You’ve got two weeks off. Where are you going and who with?  

Over the years, I have been lucky enough to have travelled to some pretty far off places across Africa and Asia – next time I am hoping that will be somewhere in West Africa. I like to alternate between those adventures and somewhere more relaxing and try as I might to be original, the answer is Italy: the weather, the food, the people, the history and the views – it really is the complete package.

Quickfire: 

To Sir George Iacobescu, who left his indelible mark on London

Should you find yourself in the company of London-inclined urban studies professors – a more enjoyable crowd than you might think – a fun parlour game is to try and name those who’ve made their mark on the modern capital.

Ken Livingstone is on the list; so are architects Richard Rogers and Norman Foster.

Claudia Jones gave us Carnival, and Hannah Dadds changed the face of TfL. Nobody, however, can compete with the claims of Sir George Iacobescu.

Success has many fathers and failure has few. Iacobescu, at Canary Wharf since 1988, has been there for the good times and the bad.

And throughout it he, like the hundreds then thousands then tens of thousands who roll in every day, has remained an ardent believer in what is surely the most successful property development in the world. 

 Today Canary Wharf is a mixed-use, thriving development that is becoming ever more a part of the capital’s fabric. You can kayak amongst the skyscrapers, nip to the shopping mall for homewares.

More than ever, despite the pandemic doomsayers, Canary Wharf has become a place of life and vibrancy. Iacobescu’s vision has been the driving force behind that all.

It is hard to imagine a better leadership dream team than Shobi Khan, Canary Wharf Group’s CEO, and Sir Nigel Wilson. The first is an innovative thinker, a clear communicator and hugely bright.

So is Sir Nigel, who became the voice and indeed the conscience of the City’s C-suite in his time at L&G. 

The Wharf was a gamble when Iacobescu first laid eyes on it in 1988. Now it seems a safe bet.

Build, Baby, Build: How to make development popular

Until the British public have much greater confidence that development will improve, rather than degrade lives, then the politics of planning will remain brutal, says David Milner

Believe it or not but just two per cent of British people trust developers to make existing places better. And seven per cent trust planners. Do not adjust your set. Neither of those figures are typos.

Are you infuriated by your fellow citizens‘ boundless ability to discover views, tell you the roads are clogged or find procedural enormities which somehow render new homes right here right now, the most profound imaginable affront to democracy, common law and personal liberty? 

Are you exasperated by politicians’ infinite capacity to agree that we desperately need more homes in principle but, for one reason or another, somehow never need them right here right now? 

Until the British public have much greater confidence in our collective ability as a society to make better places which improve rather than degrade the lives of those around the corner, then the politics of development will remain brutal. If you don’t believe me, then study any of the attempts to “fix planning” over the last 30 years. Each is an exercise of initial ambition, vanquished by subsequent timidity. 

British planning certainly needs reform. It is highly peculiar in both historic and comparative terms. 

The right to develop in the UK has been nationalised. But the implementation of that nationalised planning right is profoundly unpredictable. A new building needs planning permission; a case-by-case judgement by a planning officer. This judgement is based on the local plan which has been a policy document not a regulatory one. It gives principles and guidance. It doesn’t set rules. “Winning” permission (a telling phrase) takes time, judgement, experience – and money.

This is fundamentally different to most other countries where the right to develop is not nationalised but regulated. In countries as diverse as (parts of) America, France and Germany, as long as landowners follow the local regulations, the difficulty, complexity and cost of achieving development is very modest compared to the UK. 

As a way of regulating an entire section of the economy, our approach is inadequate. All standard frameworks of good regulation suggest that regulation should be predictable, certain, not subject to producer capture or to “who you know”. When this is not the case then markets become “hard to enter” and are unduly influenced by an oligopoly of large firms and producer, not consumer, interests. 

This is what has happened in England. Greater uncertainty and a slow process with major expense up-front before the right to build is certain has increased planning risk, enormously pushed up land prices with permission to build and acted as a major barrier to entry for small developers, minor landowners, self and custom builders and innovators generally. 

This lack of choice leads to too many poor homes and not enough of them. Developers sell at the speed “the current market” will bear. Unlike the rest of the world, there is no meaningful competition from small builders or self-commissioned homes to meet demand and constrain prices. 

England should introduce more predictable planning for mass market new homes and for simpler situations. But this is why political consent is so crucial.

This is why Create Streets has been arguing for a planning system where reforms link a really clear and locally popular ask for new development with derisked development rights for landowners and developers. That has to be the deal: greater clarity in return for greater quality that local people can live with. We are making progress.  

But there is much more to do. Look up our manifesto, published next week, to learn about our suggested next steps on the path to an ample and generous supply of desperately needed new homes.

David Milner is managing director of Create Streets

Build, Baby, Build: Gen Z have been radicalised by the housing crisis

Young people are at the sharp end of Britain’s failure to build – and it’s not just turning them against a government that’s let them down, but against democracy itself, says Reem Ibrahim

The housing crisis isn’t just unfair on young people, it’s making us feel that the political system is failing.

The Centre for Cities estimates Britain has a backlog of 4.3m “missing homes” compared to the average European country. This has resulted in house prices jumping to eight times the average salary. 

So why aren’t we building?

Older generations, who already own their own homes and reflexively declare ‘not in my backyard,’ have come to dominate our politics. In more than half of constituencies in the UK, a majority of expected voters (based on historical voting trends) are over the age of 55.

This is especially the case on the right. This week, Deltapoll published data showing that the age at which a person is more likely to vote Conservative than Labour is now 71 years old. In 2019, that ‘crossover’ age was 40.

For the Tories, this a self-perpetuating cycle: young people are overwhelmingly left wing leaving Conservatives with little incentive to cater to young people, so they disregard policies that young people want (like housebuilding) and focus on policies that older people want (like ‘protecting pensions’). Hardly surprising then that so many young people remain overwhelmingly left wing.

In the past, it was generally assumed that each new generation would become more conservative as it grew older. But this is no longer the case. That’s at least partly because they are no longer able to acquire capital (like houses!), earn more, start families, and feel as though they have a stake in society. Could this change under a Labour government? 

Keir Starmer has promised to reintroduce housing targets on local councils, construct a series of ‘new towns’ and liberalise rules for infrastructure and major projects. The devil will inevitably be in the detail, and it remains to be seen whether Labour’s plans will be watered down under Nimby pressure once they are in government, like previous reform proposals.

Worryingly, some of the interventions Labour are proposing could actively undermine the property market. For example, strict new affordable housing requirements could limit the amount of actual new developments coming forward. Labour would also pursue the Renters Reform Bill, including a ban on no-fault evictions. Preventing Generation Z getting chucked out of their flats sounds well intentioned enough, but making it more difficult for landlords to evict tenants would ultimately discourage them from leasing their properties, constraining supply and pushing up rents. 

So, 4 July may not be a watershed moment in solving the crisis.

Far too many young people have been led to believe that ever more intervention is the answer. The housing crisis has radicalised a generation, not just against a conservative party that’s let them down, but against the entire capitalism edifice on which our freedom and prosperity rests.

Yet it is only through free markets that we can solve this problem. Competition is the surest way to make housing more affordable, improve quality and expand choice. That means removing red tape and the political chokehold of the Nimbys. A government that has the courage to do this has a chance not just to regain the confidence of young people, but to restore their faith in democracy.

Reem Ibrahim is the communications officer and Linda Whetstone scholar at the Institute of Economic Affairs

End of an era: The man behind Canary Wharf’s rise to step away after 36 years

Sir George Iacobescu – who has been a driving force behind Canary Wharf since its inception – will step down as chairman of the board of directors, it was announced today, to be replaced by City grandee Sir Nigel Wilson.

Iacobescu took his first job at the Wharf in 1988 for then-developer Olympia & York, becoming construction director and then CEO of the new Canary Wharf Group in 1997. He held that job until 2019, handing over the reins to Shobi Khan.

He will hand over the chairmanship to Sir Nigel Wilson, who recently stepped away from the CEO’s job at Legal & General, where he became known as the voice and indeed conscience of the City of London’s C-suite.

Sir George Iacobescu said: “It has been the honour and the challenge of a lifetime to have worked with an extraordinary group of people transforming a derelict dock into a thriving mixed-use city district. CWG is the first company on the planet to have built an entirely new central business district from scratch.

“Today, Canary Wharf is home to thousands of residents, businesses large and small across many sectors, one of the U.K.’s busiest shopping centres as well as parks, gardens, shops, restaurants and bars. It is a thriving community in the heart of the old East End.”

The Wharf’s rise from nothingness to a thriving hub – now including residential and life sciences plays in addition to financial services – is used as an example of urban development the world over.

Iacobescu has also overseen the work of joint ventures including 20 Fenchurch Street – better known as the Walkie Talkie – and was knighted for services to charity in 2011.

Sir Nigel Wilson said: “For over three decades, Sir George’s visionary leadership, design prowess, and engineering acumen have transformed Canary Wharf into a mini-city that competes on a global stage.

“I have had the privilege of observing his contribution as a force for progressive change for the
UK economy, generating jobs, supporting construction firms and bolstering the wider business
community. I am honoured to be stepping into his role as Chair.

“Canary Wharf is becoming a city within a city with approximately 20 million square feet of
vibrant space across offices, housing, retail and leisure. Its great transport links are driving
record footfall numbers with over 67.2 million visitors last year. I am excited about the
opportunity to leverage my experience to support its growth strategy and to collaborate with
Shobi Khan, Chief Executive, and his dynamic management team.”

Build, Baby, Build: Why this election will change the politics of housing

There’s good reasons to be optimistic that the next government will finally get a grip on the housing crisis. First, all parties have made manifesto commitments on building targets. Second, Labour voters are much more positively disposed to development, argues Shreya Nanda

The housing crisis is a key issue facing the country at this election. The most common living arrangement for 18-34-year-olds is now with their parents. And stagnant economic growth is a threat to living standards. Increasing the supply of housing – of all tenures – is a crucial part of addressing this. So what do the main parties’ manifestos have to say on the subject?

Labour, the Liberal Democrats and the Conservatives all have annual housing supply targets – at 300,000, 380,000 and 320,000 per year, respectively. These are in the same region as the current government’s housing target of 300,000 homes a year by the mid-2020s. We are currently falling short – in 2023, just under 190,000 were built.

But even 380,000 homes per year is well short of what we should be aiming for. The Centre for Cities puts the UK’s housing backlog at 4.3m homes (or 860,000 per year over a Parliament) just to bring us in-line with countries across Europe – many of which are facing housing crises of their own.

Caution on the issue is understandable – the politics of building new housing is notoriously difficult. The current government attempted to increase housing supply by imposing mandatory local housing targets and loosening planning restrictions in designated “renewal” and “growth” zones. They then scrapped these plans after a backlash from Conservative MPs in the shies; in particular, there was concern that these measures had been responsible for the Conservatives’ loss in the 2021 Chesham and Amersham by-election to the Liberal Democrats.

Will the next government face the same barriers to pushing housing though? One difference is that any reforms it attempts will have been included in a general election manifesto. Labour are pledging to build on “grey belt” land, create a new generation of new towns, and reimpose mandatory local housing targets. The Liberal Democrats have pledged to build ten new garden cities; while the Conservatives have promised to create a new fast-track route for homes in large cities.

Another factor is the distribution of support for new housing across the country. Yougov polling shows that Labour voters are significantly more likely to support new housing, including in their local area, than the general population; while Liberal Democrat voters are slightly more likely, and Conservative voters are less likely than average to support it. Work by professor Ben Ansell on the estimated geographical distribution of support for new housing also shows a clear link between support for new housing and Labour’s electoral performance in 2019. By contrast, Chesham and Amersham comes 495th out of 650 constituencies in its estimated support for new housing. Labour voters are more likely than average to privately rent, and less likely to own outright. If Labour forms the next government, as seems likely on current polling, then the pressures it faces will be different to those faced by a Conservative or Liberal Democrat government.

Finally, action on devolution to metro mayors and others provides a potential route to increasing housing supply. While the Conservative manifesto talks about continuing the government’s current devolution proposals and applying more pressure to London’s mayor to deliver housing, Labour has proposed to devolve and consolidate new powers on housing and planning.

Strong action on housing supply is needed. The politics of achieving this deserve careful thought, but there are plenty of reasons to be optimistic about the ability of a future government to meet this goal.

Shreya Nanda is a senior fellow at the Social Market Foundation

Build, Baby,Build: Yimbys are London’s future

Despite a few naysayers, all the evidence suggests London is the most likely part of the country to say “yes in my backyard!” The next government must ignore the noisy minority and listen to the voices of progress, says John Myers

London is the most Yimby part of the country, with seven of its boroughs in the top ten council areas most supportive of new development. But our system leaves councillors vulnerable to small, overrepresented groups – grumpy opponents of all development. To fix the problem, we need better ways to deliver high-quality homes that can win broad community support, despite a few naysayers. 

The current planning system was designed when London’s population was declining but that’s no longer the case: in fact it has grown by 2m people since the 90s. Yet house building has utterly failed to keep pace, with only three new homes built for every 10 new jobs.

That is why rents are so unaffordable, why so many homes are overcrowded, and why so many are outdated, badly insulated, and small. Over 300,000 families are on social housing waiting lists. Tens of thousands more families have to live in expensive, overcrowded private rented homes or in temporary accommodation far from home. 

Millions live in a smaller home than they could afford under a better system. The cost of building the structure of a new London home is often only a third of what it could sell for. In 2023, the Office for National Statistics estimated that the value of UK land under homes had hit its highest ever level. That is because we have blocked building in so many places. Land with no chance of being built on is not expensive. The shortage is of places where the current system will allow development. And yet London has plenty of land for more homes.

It is too late to fix all this with one or two minor measures. Tackling it will require being both smart and determined – by drawing on policies that have been proven to work and maintain popular support.

The next Government will need to pull out all the stops to unlock the potential of London.

Labour has sensibly promised to build homes on ‘grey belt’. It makes no sense for ‘green belt’ labels to block new development on the sites of former quarries or disused petrol stations near to commuter stations. It should be easier for councils to review green belt designations where they no longer make sense. London has unused wasteland near to stations that should be used for homes.

Another promising route is regeneration. The Mayor’s estate ballots have had huge success in delivering better homes for tenants while adding more council homes through cross-subsidy with more market homes. But many tenants’ desire for estate renewal remains unmet. We need to help social landlords move faster, while ensuring proper safeguards to ensure fair treatment of all residents.

And the success of Haringey’s highly popular policy to allow harmonious upward extensions of Edwardian and Victorian family homes in South Tottenham shows that we can be responsive to community needs and accommodate growing families. That sort of policy, working with homeowners to allow extensions and ‘granny flats’, has had huge success in many parts of the United States. We should learn from those examples. Careful measures like those to enable more ‘gentle density’ will not fix the problem on their own, but they can help reduce the pressure.

I am encouraged by Labour’s focus on fixing planning. They should have the courage to build a consensus to override the entrenched naysayers and listen to the voices of London’s future when they say “Yes in my backyard!”

John Myers is director of YIMBY Alliance, a campaign to end the housing crisis with the support of local communities.

Build, Baby, Build: The rental market and the rise of the DFL (that’s down from London)

A rental market that drains bank balances and instils constant dread of eviction is driving people away from London. The capital can’t survive unless it can sustain its young workers, says Morgan Jones

I lived in London for the best part of a decade, and for most of that time assumed that I probably always would, not out of well-I’m-here-now passivity, but real enthusiasm. I love London; I love going on the tube in winter and I love the parks in summer at dusk. But I don’t live there anymore, because the city in the right light can be heaven, but the rental market is hell. 

It’s money, of course. In my final year at university in 2018 I lived in a shared flat at the top of Brick Lane; rent was £500 a month plus fairly minimal bills. In 2023 I lived in a (significantly less well connected) shared flat in Camberwell and paid £740 a month, plus varying but distinctly unminimal bills. My income has stayed pretty flat across my 20s, liveable but not keeping pace with London’s spiralling prices. But it wasn’t, in bald terms, the money that prompted my decision to leave: it was the market, the uncertainty, the ever-present possibility of eviction (I’d had it happen before, and there was always the thought: what if the landlord wants to sell, or to move their family in? Or jack up the rent massively?) followed by the ordeal of finding a new place. 

It was bad enough when I last rented in London in 2021 (fraught mass viewings and competitive applications based on income were the order of the day), but watching friends trying to rent in the ensuing years I could see that it was getting worse and worse. I’m lucky in that I mostly work remotely, and when my contract came up I decided to leave. For around half of what I was paying in London, I’m now one of the hoard of DFLs (that’s Down From Londons) on the Kent coast. It’s nice here, by the sea. While I’d be lying if I said I didn’t miss the city, a moment’s reflection on what it would actually be like to try and find a new place in London is enough to make me discard the idea entirely.

A drained bank balance and a constant low-level fear about having to move at short notice are not conducive to people like me, who have the option to leave, staying in London. The housing market is an active deterrent to people moving to London, staying in London, working and spending money in London. I don’t want to be overly mercantile; the city is more than the economic exchanges of its young middle classes. However, it remains true that a capital which can’t hold onto young people with good jobs is a capital that is not thriving, nor is it likely to do so in the near future unless the trend is seriously addressed. 

Solving the housing crisis has not been a priority for successive Conservative administrations. They committed to banning no-fault evictions in 2019, but comprehensively failed to actually do it while also allowing Nimby backbenchers to get rid of housebuilding targets. Our almost-Prime Minister Keir Starmer has promised a politics that treads a little more lightly on people’s lives; if Labour can make good on their housing offer (which includes the no-fault eviction ban and a plan to build 1.5m homes in the next parliament) and begin to relieve the pressure that housing stress places on my life and the lives of everyone I know, he will have gone a significant way towards doing just that.

Morgan Jones is a freelance journalist and former Labour aide. She is a contributing editor of Renewal

Build, Baby, Build: The private sector alone won’t fix the housing crisis

The private sector has never delivered the 300,000 homes a year the government says we need; local authorities must be part of the solution, say Gideon Salutin and Niamh O Regan

All the major parties are promising more homes at this election. Labour has promised 300,000 a year for England, while the Conservatives have pledged 320,000 a year. The Liberal Democrats committed to 380,000 a year over the whole of the UK. While the ambition is clearly high, whether it is actually feasible is a different story altogether.

Housing targets are an unusual tradition in British politics. You rarely see Biden or Trump one-upping each other based on how many millions of homes they can build, as responsibility for housing is spread across various branches of government. Yet in the UK’s centralised system these stump-speech bidding wars are commonplace. They can be traced at least as far back as 1951, when Churchill outflanked Atlee by promising to build 300,000 homes per year, seen as inconceivable at the time. Rab Butler, who would soon become chancellor, was hesitantly asked “Could we do it?” 

The Tories not only hit that number but surpassed it, reaching 350,000 per year before the end of their first term. For most of the next 25 years, Westminster parties kept annual construction above 300,000 a year, with a whopping 426,000 homes in a single year in 1968. 

What was their secret? Council housing. During the 1951 parliament, 74 per cent of homes were built by local authorities. Less than a quarter were made by the private sector, with the rest made by housing associations. Local authorities continued to play a deciding role throughout Britain’s housebuilding boom years from 1950 to 1980. Since then, private sector building has ranged from 100,000 to 200,000 per year, and local authority construction has been near zero. While private sector construction has fallen relative to population, the loss in local authority construction was by far the largest factor.

UK permanent dwellings completed by sector

A graph of different colored lines Description automatically generated

Source: ONS

On council housing, we are going in the wrong direction. As highlighted in a recent SMF report funded by the Nuffield Foundation, stock lost through sales and demolition is not being replaced at an equivalent rate, continuously shrinking what little is available. All the while, the waiting list for social housing has grown to 1.2m households. 

Cumulative sales, demolitions and completions of social housing since 1980

Source: ONS

Politicians seem to have forgotten past successes. Of the three major parties, only the Lib Dems have actually set a target for social housing construction which, if private sector building remained stable, would be sufficient to reach their target. Labour and the Tories remain committed to providing “more” social housing, but without a specific measurable pledge, instead relying on planning reform to boost their numbers. This would cut red tape for the private sector to (supposedly) unleash a wave of new homebuilding.

While planning reform is welcome, it is unlikely that it can alone meet the parties’ lofty ambitions. Even in the 1930s, when homebuilders benefited from advances in transport technology, unchecked urban sprawl, government stimulus packages, and weak investment alternatives, the private sector alone couldn’t crack 300,000. And since the Second World War, the UK’s businesses have never built more than 226,100 homes in a single year. Nevertheless, policymakers are claiming that red tape is all that restrains private sector construction. 

In fact, the sector faces challenges well beyond planning bottlenecks. Inflation has increased the cost of housing materials 34 per cent since 2020. Labour shortages, meanwhile, are challenging construction trades, with the Construction Skills Network estimating a shortfall of 250,000 by 2028. Building homes has become more expensive and takes longer. 

Competition is also a problem. The market share controlled by large developers reached 60 per cent in 2015, and a House of Lords report concluded that the UK housebuilding industry now displays “all characteristics of an oligopoly” while a Housing Minister likened the sector to a ‘cartel.’ A CMA report this Spring found that “Private developers produce houses at a rate which they can be sold without needing to reduce their prices, rather than diversifying the types and numbers of homes they build to meet the needs of different communities.” The monetary principles of supply and demand inevitably create perverse incentives for builders to limit construction rather than increase it.

As a result, the private sector has never built more than 226,070 UK homes in a single year – 200,000 less than the UK’s record in a year. Last year, this number was just 144,000.  

The private sector has delivered inadequate levels of housing since 1945, yet Labour and the Conservatives are continuing to pitch businesses as the key agents capable of meeting abstract targets and boosting construction. The parties do not want to admit it but the reality is that ambitious targets for housebuilding cannot be met by the private sector alone: council housing must be part of the solution.

Neither major party has a credible plan to meet housing demand. Ask Rab Butler today if government can reach its target, and you’d likely get a different answer.

Gideon Salutin is senior researcher and Niamh O Regan is researcher at the Social Market Foundation