Government Strategy - Laying the Foundations

Unrestrained optimism is our great weakness. Whilst we always want to look on the bright side of life, it’s a risky business, particularly when it leads us to inapt conclusions.

The publication of Laying the Foundations: A Housing Strategy for England late last year made many commentators, looking for a theme, seem confused. Initially grasping at individual policy initiatives as harbingers of great doom, those commentaries are now giving way to practitioners tunnelling for useful, workable solutions.

The Strategy calls for new build of high quality homes, mortgage indemnity that will help some people, there’s some more funding, an increase in the Right to Buy (RtB) to meet ownership aspirations, a commitment to deliver Zero Carbon homes. As ever, there’s little detail on how any of this will be delivered. The early naysayers have taken breath and stepped aside to allow the analysts to translate policy into action and define the new direction of housing policy under a coalition government.

But there’s a great misunderstanding. This is neither a great new policy trail nor a return to a free market in housing. This Strategy is not deliberately targeting the poor, homeless or undeserving.

This is about politics. We now know that the next election will be held on 7th May 2015. And on that date, the electorate will judge this government on one issue alone, its handling of the economy. Since the emergence of toxic debt in 2007 this insatiable crisis has grown to threaten some of the most advanced economic sovereign states. In 2015 the electorate will decide whether this coalition government has put in place the right policies for the UK. The reputation of both Conservative and Liberal Democrat parties will rest on this analysis and every policy coming from this government is designed to support a UK economic recovery. Their political future depends on success.

So don’t look at the Housing Strategy for the future of housing policy; look at the Chancellor’s Autumn Statement published just eight days later. The 2012 growth forecast revised down to 0.7% from 2.5%, an extra £111bn in borrowing over the next five years, 1% cap on public sector pay rises for two years after the end of current freeze next year, the rise in state pension to 67 to be brought forward to 2026 from 2034, total public sector job losses estimated up from 400,000 to 710,000.

The promise to eliminate the budget deficit by the next election has been replaced with a new promise that an additional two years will be needed to meet the deficit target. There will be more spending cuts in the years after the next election.

Trudging back to work after a Christmas break, it dawned on me. To argue that people will be harmed, that tenants will be forced to move out of London, that the poor will be hurt, that the disabled will be disadvantaged, cuts no ice.

These are not policy goals to achieve growth with redistribution. These are policies to achieve financial stability and growth. Any arguments of opposition can only be based on strong financial and economic evidence. What matters to ministers is what works. Their reputation, and ultimately their re-election depend on it.

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