One of my favourite pastimes is raging at the TV, especially when Newcastle United are on, but mainly at political shows.
As I’m a BBC person, I idle my way through the Daily Politics (Andrew Neil is the best interviewer on TV but I find the programme’s topic selection highly anti-Labour and his mocking attitude to Ed Miliband unprofessional), Question Time (the selection of panellists is a disgrace and it is so badly chaired that I might join those who have given it up for Lent) and Newsnight (much improved since the retirement of the infuriatingly smug Paxman). The latter has many of the best reporters, especially on international matters.
So it was joyous, amongst the dross, to come across a wonderful little lecture on housing economics from Evan Davis on newsnight on Tuesday. It was an interlude between pieces about Natalie Bennett’s bad day trying to answer questions about how the Greens would finance their promised 500,000 new social homes.
Photo by Peter Searle (firstname.lastname@example.org).
Davis is of course an economist. His Wikipaedia entry shows him to be no lefty. Like so many people in the Establishment, he did PPE at Oxford (getting the mandatory first). He was the BBC’s main economics editor before going to the Today programme on radio and then on to Newsnight. He also does a business programme for Radio 4 and fronts Dragon’s Den, the programme that proves that success in business is mainly random.
Anyway, enough of the intro. This is what he said:
It is possible by the way to answer the question Natalie Bennett was struggling with as to how you finance half a million councils houses.
You get the land cheaply by buying without permission to build on it. Once you’ve acquired it you give it building permission. Half a million homes at a hundred thousand pounds each costs £50 bn, chuck in another £50 bn for infrastructure around the homes, and all you need to borrow is £100 bn and at current government borrowing rates that’s about £2 bn a year.
You finance that by the rents you make on the homes. You’ll be fine if the rents are £400 a month for each home.
Property development can be a profitable business which is why so many rich people do it. Anyway that is not the answer Natalie Bennett gave.
Simple, isn’t it? The BBC normally seems to operate on the complete assumption that ‘austerity’ is the only available economic policy, ‘the deficit’ is the biggest economic issue, and ‘public borrowing’ is an evil activity. So it was wonderful to see someone knowledgeable make the case for good borrowing – building capital assets, paying for itself, and meeting community needs for generations to come.
Thanks Evan, I’ll watch again.