Want to get out of recession? Start building houses

August 24, 2012

This week’s dire borrowing figures are a reminder the double-dip recession is hitting both pay packets and the government’s deficit reduction plan. The Coalition is desperate for policies that can rapidly get the economy going. Of these, the one that ministers are perhaps most focused on is housing. There is broad agreement at the top of Government that if we can increase house-building then this will boost jobs and growth, stop rents spiralling and reduce the fear that young families will never able to afford a decent quality home.

Fortunately there are relatively uncontroversial and popular policies out there that don’t cost the taxpayer a penny. For example, Policy Exchange proposed on Monday that we could sell off the most expensive social housing and build more decent quality homes. We think this could be the biggest social housing building scheme since the 1970s. But time and again these proposals run into civil service inertia.

Take another similar proposal. Converting empty shops and offices into homes. This policy is free, redevelops brownfield sites, and would boost growth. The Chancellor endorsed it in his 2011 Budget. But then the civil service got to work. By the time reform had dribbled out the other end of the Government machine it was basically a plea to councils to consider occasionally being a bit more flexible when it came to these issues. But you got the impression this was only if it wasn’t too much bother, and that the Coalition were embarrassed to even be asking.

Mandarins are aware they must serve democratically elected Ministers. Where Cabinet Ministers are powerful figures, accountable for tackling a big problem senior civil servants feel required and empowered to push their reforms through. Michael Gove is doing it in education. Iain Duncan Smith is doing it in welfare. The big problem in housing is that it has no one responsible for it. Housing currently sits unloved and forlorn in the Department for Communities and Local Government. This Department, a Prescott style mishmash of various policies, largely exists so that town hall Sir Humphrey and central government Sir Humphrey can talk to each other. It certainly doesn’t exist to build more homes. Indeed, since housing was abolished from the title of the Department of the Environment in the 1970s housing numbers have been on a relentless downward trend.

Government needs to show it is serious about housing. The forthcoming reshuffle is the perfect opportunity. Government needs a Secretary of State for Housing and Planning, backed to the hilt by the Prime Minister. This doesn’t need to cost anything. It could sit within DCLG’s existing building. A talented Tory MP or one of the existing DCLG Ministers should be made into the Secretary of State and told they have two years to make housing a success. After all, this was how Harold Macmillan, the Prime Minister’s idol, made his reputation.

The Coalition knows we need more homes both to help struggling families and get the economy moving. If the Government doesn’t get a grip on the economy soon it may blow apart the deficit reduction plan that unites the Coalition. By showing he is serious on housing Cameron can regain the momentum and begin a fightback on the economy.

This article originally appeared on The Daily Telegraph’s website

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