In the flurry of economic statements and announcements that have taken place over the last couple of days, the word ‘housing’ has featured. But only just.
Yesterday the Chief Secretary to the Treasury, LibDem Danny Alexander MP, unveiled the latest ‘National Infrastructure Plan’ – the annual excuse for the Government to re-announce its capital programme. Almost as an aside, he declared that the ‘Affordable Housing Programme’ (in inverted commas because most of it isn’t affordable at all) would be extended for a further two years, spending a miserable £957m over 2018/19 and 2019/20, continuing the steep downward trend of housing funding.
Some might ask, surely that’s a lot of money? Well, not really. £957m over 2 years for housing can be compared with £15billion over 5 years for roads. And today the Chancellor cut Stamp Duty on the purchase of homes by £800m each year. For this Government, housing is miserably low on its order of priorities, and affordable housing is right down at the bottom.
The National Infrastructure Plan makes it clear that the Government does not regard housing as ‘infrastructure’. Given the Wiki definition that ‘Infrastructure is the basic physical and organizational structure needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function’, that would include housing in my book.
Yet in this large document, with long lists of schemes, there are very few mentions of housing: it features largely as something that might be facilitated by transport investment. Indeed there are so few big plans for housing that they can be listed individually. There is a loan for an extension to the London Overground to open up Barking Riverside, land remediation and other works to enable the Ebbsflett ‘garden city’ (since when did 15,000 homes constitute a ‘city’?), early plans for a second garden city at Bicester (this time 13,000 homes), and the nationalisation of new homes delivery for the development at Northstowe. Of broader interest, there are to be reforms of compulsory purchase procedures to hasten development on brownfield land and further reforms to speed up planning decisions and s.106 negotiations. That’s it.
George Osborne’s reform of Stamp Duty seems to be a sensible way of restructuring the tax, avoiding the steep ‘cliff edges’ between bands that have distorted the market. But is it the priority use of £800m when the problem is building more homes? At a political level, it is a success for the Mansion Tax campaign: Osborne has felt it necessary to respond to the demand for the owners of very valuable houses to pay more tax. His reform shifts the burden up, reducing the tax for cheaper homes and increasing it for more expensive homes. But, as Ed Balls pointed out, this is a tax that is only levied when a home is bought and sold, it is not an annual levy on housing wealth – wealth that has increased rapidly due to the property bubble but not been earned.
It will be interesting to go into an Election with the parties competing with their alternative forms of taxing mansions and very valuable homes. But it would be even nicer if the debate could, for once, revolve around competing offers to invest in genuinely affordable homes.