Going nowhere with bells on.
If the idea behind this morning's announcement of a temporary relaxation of some of the planning rules was to ensure it stayed at the top of the news agenda all the day, then it singularly failed. Admittedly, this is somewhat down to the tragic news from France, but it's also down to it failing to set the world alight. A policy always ought to be seen as in trouble when it's announced from the sofa of Daybreak rather than the Today programme, or, heaven forfend, even the Commons, but then we really shouldn't be surprised when about the only politically inclined presenter both Cameron and Osborne are willing to let "interview" them is Andrew Marr, who has picked up the laid-back Sunday morning show baton so ably from David Frost.
As for whether it'll have much of a major impact, it seems dubious in the extreme. Apart from the likes of Lord Wolfson and other major business execs with a monomania for plonking massive warehouses, retail or otherwise on the outskirts of towns and cities, no one seriously claims that it's been the planning rules holding the economy back. As the Local Government Association pointed out, there's currently planning permission for 400,000 new homes; the problem is the lack of demand, the difficulty in getting a mortgage and the banks failing to lend. The same applies to extensions: the rough figures suggest that out of around 200,000 applications for extensions a year, only around 26,000, or 13% are rejected. Even if all of those now go ahead, with perhaps a few set on the idea by today's announcement, then it still seems unlikely to result in the number of jobs as claimed by David Cameron.
The fundamental problem is as, Kirsty Wark is currently trying to get into Nick Boles' thick skull on Newsnight, that many are now in negative equity and are using the disposable income they do have to pay off their debts, so they simply don't have the money for extensions or to move to a new house. And even if they wanted to borrow to invest, then the banks are still not lending. Even if the real reason behind the lack of house building when the margins are so tight is the stipulation that new developments include a certain percentage of social housing, which seems highly dubious when council houses are in such desperately short supply, then this is the kind of splurge which simply isn't sustainable.
None of this is to say that house building isn't part of the solution. It clearly is. It's that this should of been part of a package of measures, such as that suggested by Jonathan Portes for Policy Network. We should be using the low bond yields to borrow to invest in major infrastructure projects, cut national insurance contributions temporarily, reduce VAT and perhaps even consider helicopter money. The coalition has made a rod for its own back: they surely must know that their Plan A has failed, and yet they refuse to accept that it's time to try something different. This isn't about ideology, although it's certainly playing a role, it's fundamentally about loss of face. When you're getting booed by 80,000 people though, surely you can't sink much lower.
As for whether it'll have much of a major impact, it seems dubious in the extreme. Apart from the likes of Lord Wolfson and other major business execs with a monomania for plonking massive warehouses, retail or otherwise on the outskirts of towns and cities, no one seriously claims that it's been the planning rules holding the economy back. As the Local Government Association pointed out, there's currently planning permission for 400,000 new homes; the problem is the lack of demand, the difficulty in getting a mortgage and the banks failing to lend. The same applies to extensions: the rough figures suggest that out of around 200,000 applications for extensions a year, only around 26,000, or 13% are rejected. Even if all of those now go ahead, with perhaps a few set on the idea by today's announcement, then it still seems unlikely to result in the number of jobs as claimed by David Cameron.
The fundamental problem is as, Kirsty Wark is currently trying to get into Nick Boles' thick skull on Newsnight, that many are now in negative equity and are using the disposable income they do have to pay off their debts, so they simply don't have the money for extensions or to move to a new house. And even if they wanted to borrow to invest, then the banks are still not lending. Even if the real reason behind the lack of house building when the margins are so tight is the stipulation that new developments include a certain percentage of social housing, which seems highly dubious when council houses are in such desperately short supply, then this is the kind of splurge which simply isn't sustainable.
None of this is to say that house building isn't part of the solution. It clearly is. It's that this should of been part of a package of measures, such as that suggested by Jonathan Portes for Policy Network. We should be using the low bond yields to borrow to invest in major infrastructure projects, cut national insurance contributions temporarily, reduce VAT and perhaps even consider helicopter money. The coalition has made a rod for its own back: they surely must know that their Plan A has failed, and yet they refuse to accept that it's time to try something different. This isn't about ideology, although it's certainly playing a role, it's fundamentally about loss of face. When you're getting booed by 80,000 people though, surely you can't sink much lower.
Labels: Conservative-Liberal Democrat coalition, Conservatives, David Cameron, economics, planning, politics, recession, spending cuts
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