Widely trailed, Boris Johnson’s speech at the CIH Presidential Dinner glossed over the dreadful failure of his housing and planning policy. But, clever chap, he got a good press with his ‘proposal’ that London should retain income from Stamp Duty.
There can be no doubt that putting an extra £1.3 billion a year for 25 years into London housing would have a beneficial effect. But Johnson knows fine well that the Treasury under Osborne will not allow such a thing. Transferring the income from a national tax to London would not raise an extra penny in total, so the Treasury would have to increase another tax or make more cuts elsewhere to fund it. He also appears not to understand that, even with an extra £1.3 billion income stream, he would not be allowed to go to the capital markets to borrow against it because that would count as additional public borrowing, which his Government says time and time again that it is opposed to.
However, we should welcome his apparent conversion to Keynesianism. Not only did he say ‘I am calling on the coalition to give us the tools and we will solve the crisis, supporting and creating hundreds of thousands of jobs and boosting economic growth across the UK along the way.’ But he also called for councils to be given more freedom to build homes by removing the borrowing limits placed on town halls by the Government. Perhaps he has been reading Red Brick.
I would even go so far as to agree with his statement that: ‘What is needed now is a radically different approach which optimises City Hall’s role, unlocks the potential of the capital’s boroughs, allows developers including housing associations to up their game and creates a stable supply of land for housing. Above all, London needs a stable funding stream which will support and accelerate its housing and infrastructure delivery.’
Behind his headline-grabbing Stamp Duty non-policy Johnson said a couple of interesting things that are worth noting – one encouraging and one worrying. The encouraging comment was calling for ‘a new affordable housing settlement for London from 2015 with rents reflecting incomes and within housing benefit levels’. That appears to be a complete about-turn from his previous positions on both rents and benefits but I would be happy to see a debate commenced based on what he said. The worrying one was his call for further measures to ‘deregulate house building’ which I suspect is closer to his real agenda.
Johnson habitually makes a grand statement to distract attention from his failures. His Stamp Duty plan gives the impression that he is a great radical held back by the dead weight of conventional thinking (the estuary airport dubbed ‘Boris Island’ comes to mind as another example) whilst his actual policies and programmes fail in the background. On his performance, he still claims to have built over 50,000 affordable homes in his first term when all that happened was that the programme agreed by Ken Livingstone and the Labour Government in 2008 was delivered (slowly it has to be said). And he still claims to be delivering 50,000 affordable homes in his second term knowing full well that the homes are unaffordable in any real sense of the term (eg rents at up to 80% of market).
So, a couple of points to press Johnson on in the future, but overall, as this was probably his biggest housing speech of the year, it was the usual mix of grand gestures, obfuscation, and diversion. No doubt the CIH Presidential Dinner got a laugh out of him – I prefer Eddie Izzard myself – but in housing policy terms it was a damp squib.