During the 2015 General Election, Ed Miliband’s flagship pledge to cap energy prices was derided by conservatives as a deranged idea from the 1970s. The then-PM David Cameron accused “Red Ed” of “wanting to live in a Marxist universe”. Yet within two years, the idea had found its way into the Conservative election manifesto, along with plans for a £9 minimum wage that surpassed anything promised by the opposition in 2015.
We saw the repercussions of the misguided strategy to “out-Labour” the Labour Party last week, when the Shadow Business Minister Rebecca Long-Bailey criticised the Conservatives for failing to implement the energy cap sooner. In doing so, she claimed, the Government has cost British households nearly £1,000 in energy costs over the past seven years.
It’s hard to dispute the logic of this. By endorsing price caps in the first place, rather than critiquing the shaky economic logic behind them, the Conservatives opened themselves up to accusations of inaction. You can’t beat Labour at its own game.
And if recent developments are anything to go by, the Conservatives also seem to have accepted a Left-wing diagnosis of the housing crisis and its causes.
Some of the proposals set out in the updated National Planning Policy Framework (NPPF), such as reforms to building heights and plans for new garden towns between Oxford and Cambridge, are reasonable. But much of the narrative is still recycling Left-wing tropes, assigning blame to “greedy” developers and speculators, while ignoring the root causes of the housing crisis.
In her speech last week, the Prime Minister vowed to tackle the practice of “land-banking”: buying up land, and deliberately not using it, to increase profits.
“I want to see planning permissions going to people who are actually going to build houses,” she said, “not just sit on land and watch its value rise.”
Contrary to common belief, Britain has one of the highest rates of social housing in Europe (only the Netherlands and Austria, proportionally, have more than us). On the continent, private sector housebuilding is very much the norm – and it used to be the norm here in Britain. In 1934-35, before the introduction of Green Belt restrictions, the number of houses built annually by the UK private sector hit close to 300,000, with a much smaller population.
I don’t envy the Conservatives the task ahead of them. Their survival depends on older voters in the Green Belt whose properties (and the continual appreciation in value of their properties) are, effectively, their pension fund. These same protections have, simultaneously, rendered it impossible for the vast majority of young people to own their own homes.
Far more than energy bills, or even Europe, getting housing right is an existential matter for the Conservatives. But even a mild embrace of liberalisation and market forces could solve many of their problems.
Originally published by Madeline Grant, Digital Officer of the Institute for Economic Affairs for CapX (Find the original article here bit.ly/2HXNED8)
