6/14/2007

Iain Dale is right - Ming's scheme does not add up


I hate to say it, but the points that Iain Dale makes in his blog about Ming Campbell's methods of allowing councils to build 1 million new homes do not add up or make sense. Also, to be honest, they don't all seem very liberal, except in the free market sense.

Not for one moment am I suggesting that we don't need the houses and I firmly support the principle of what Ming wants to achieve. With house prices in Norfolk set to reach ten times average salary levels here in 2030, there is no way any child of mine would be able to afford a house, and that is a crazy state of affairs.

Another solution needs to be found, more responsibility needs to be placed on developers and far from relaxing planning laws need to be strengthened to ensure that proper pressure can be placed on developers to ensure that affordable housing is build in much higher numbers.

I know Paul Walter disagrees with Iain Dale, but for the first time in my life, I'm having to side with the Tories.

Yuk !

6 comments:

Tim Leunig said...

Since Michael Gove has endorsed the LibDem proposals, you and Iain are opposing LibDem and Tory policy!

In what sense are CLAs illiberal?
They:
1) Allow local authorities total control over how many houses are built in their area
2) Allow local authorities total control over what proportion are social houses
3) Will lead to lower house price inflation, so that hopefully your child and mine can afford to leave home in 2030

Freedom and social justice: a good combination, surely?

Do let me know!

Tim Leunig
(original author of the idea)
t.leunig@lse.ac.uk

Jock Coats said...

Iain Dale's critique is based on a half baked story built from a badly explained press release.

The CLA process is a market mechanism to respond to a market failure. I don't happen to agree with its author, Tim Leunig, in one respect, that it will have the power to rapidly reduce house prices, but that I suspect is my failure of understanding - have a look at his paper on CentreForum for a far better epxlaination of it than Iain Dale could possibly muster, from the horse's mouth so to speak.

As to the million affordable social homes, that's the commitment that the government will not make. It's the number of affordable, not the overall build number Ming was talking about.

Norfolk Blogger said...

I am grateful for both your comments. The problem I have is with Council essentially predetermining planning applications. I think what is being offered here is a solution to the problem of a lack of housing. however, in itself, it should not be the only solution and it might be better to take parts of this proposal that are more liberal and fair and and also look at ways too.

Jock, if the Press release has let the party down by giving a wrong impression of the policy then someone ought to get a telling off !

Tim Leunig said...

Norfolk blogger,

Think of it more as a replacement for the current system of drawing up a local plan than as a replacement for the final stage of getting detailed planning permission.

Once the local plan is drawn up, planning permission is already essentially predetermined, and that would not change.

It is a way of getting landowners to offer land for development voluntarily at reasonable prices. It uses the same mechanism as we use on Tesco, Ford, or the local cafe: if you don't offer reasonable prices we will buy from someone else. In contrast the current system says "we will build on land x, whatever price the owner of land x wants". Imagine if the govt said "We will buy Ford cars, whatever price Ford wants to name" The govt would pay a fortune. It is the same here, but with land: ask around, get competitive bids, and you end up with a better price, gained not through compulsory purchase or through fiat, but by liberal, property rights respecting market mechanisms

I don't think Jock has got the wrong end of the stick at all - I think this scheme would be very effective at reducing house price booms, but it would not make houses dramatically cheaper in the short run (nor would we want it to - negative equity is very painful).

Jock Coats said...

I agree with your last point! See James Graham's lament on the same subject!

I too have some problems with the technicalities - it does stray into areas of "deemed consent" and so on, but those sort of things are implementation issues.

bgprior said...

Tim, You ask in what sense is "total control" by local authorities "illiberal"? If you need to ask, it's doubtful it could be explained to you. But you could try your more illustrious predecessor Hayek's Constitution of Liberty, for a start.

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