Houses in Bristol. Photo: Getty
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Leader: For the sake of growth and our young people, build more houses

The Conservatives’ true priorities were exposed by the Budget.

It is a truth now universally acknowledged that a young man in possession of a fortune must be in want of a house. Even the Prime Minister accepts that the housing market is in a state of crisis, conceding in an interview with the news website BuzzFeed that the prospect of a home of one’s own is rapidly receding out of sight for an entire generation. The number of owner-­occupiers has fallen to 65.2 per cent, the lowest level since 1985 and below the supposedly socialist France. The average age of a first-time homebuyer without parental assistance is now 37 and is ­expected to exceed 40 within the next decade. Meanwhile, tenants struggle with record rents and distant landlords.

The Conservatives’ true priorities were exposed by the Budget, which did little to address the crisis. George Osborne’s plan to raise the inheritance tax threshold for main properties to £1m, at a cost of £1bn, will do nothing to aid the growing number who are locked out of the housing market and are trapped into renting at exorbitant rates.

The treatment of tenants is one area where Labour has an appealing offer. Caps on rent increases, measures to secure longer-term tenancies and a ban on fees by letting agents will all make renting a less baleful experience. But the defining problem remains too much demand chasing too little supply.

In 2004, Tony Blair’s government asked the economist Kate Barker to investigate the pressures on the housing market. She estimated that reducing annual house price rises to just 1.1 per cent – compared with the double-digit rises that have become the norm – would require the construction of 250,000 houses per year. Just once, in 2007, has Britain come close to meeting that ambition, with 219,000 new houses. Without a major shift in policy, there will be damaging consequences for what Ed Miliband has termed “the British promise”: that each generation will do better than the last.

There must be an easing of regulation to allow development on the green belt – much of which is not the image of a rural idyll that the name suggests – and to clear the path for small- and medium-sized builders to start construction.

But if deregulation is necessary, it is also insufficient. The great housebuilding boom of the postwar period was ­triggered and powered by state activism. A sustained programme of slum clearance and council house-building started by the government of Clement Attlee was accelerated by the Conservative ministries of the 1950s. The construction of vast tower blocks by local authorities, which housed a generation, was made possible by largesse from the government of Harold Wilson and the zeal of local council leaders.

A programme of mass housebuilding, of the kind pursued in the early 1950s, when 300,000 homes a year were built, would stimulate growth (for every £100 that is invested in such projects, around £350 is generated in return), create employment and reduce welfare spending.

If Labour can persuade the electorate that it – and not the Conservatives – is best placed to revive the goal of a property-owning democracy, it could finally attract the popular enthusiasm that has so far eluded it.

This article first appeared in the 19 March 2015 issue of the New Statesman, British politics is broken

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Free movement isn't free: the truth about EU immigration

The UK does not need to leave the single market to restrict European migration - it already can.

In the Brext negotiations, the government has unashamedly prioritised immigration control over the economy. The UK must leave the single market, ministers say, in order to restrict free movement. For decades, they lament, European immigration has been "uncontrolled", making it impossible to meet the government's target of reducing net migration to "tens of thousands" a year.

It's worth noting that non-EU immigration alone (which ministers can limit) remains more than ten times this level (owing to the economic benefits). But more importantly, liberals and conservatives alike talk of "free movement" as if it is entirely free - it isn't.

Though EU citizens are initially permitted to live in any member state, after three months they must prove that they are working (employed or self-employed), a registered student or have "sufficient resources" (savings or a pension) to support themselves and not be "a burden on the benefits system". Far from being unconditional, then, the right to free movement is highly qualified.

The irony is that the supposedly immigration-averse UK has never enforced these conditions. Even under Theresa May, the Home Office judged that the cost of recording entry and exit dates was too high. Since most EU migrants are employed (and contribute significantly more in taxes than they do in benefits), there was no economic incentive to do so.

For some Brexiteers, of course, a job is not adequate grounds for an immigrant to remain. But even beyond implementing existing law, there is potential for further reform of free movement - even within the single market.

As Nick Clegg recently noted, shortly after the referendum, "a number of senior EU figures" were exploring a possible trade-off: "a commitment by the UK to pursue the least economically disruptive Brexit by maintaining participation in the single market and customs union, in return for a commitment to the reform of freedom of movement, including an 'emergency brake' on unusually high levels of intra-EU immigration." Liechtenstein, a member of the single market, has recently imposed quotas on EU migrants.

Yet with some exceptions, these facts are rarely heard in British political debate. Many Labour MPs, like their Conservative counterparts, support single market withdrawal to end free movement. The unheard truth that it isn't "free" could yet lead the UK to commit an avoidable act of economic self-harm.

George Eaton is political editor of the New Statesman.

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