Theresa May needs two Cabinets to fix housing

Westminster obsesses with an upcoming reshuffle, but there is a need for bold ideas in government, too

This week, Theresa May declared it her “personal mission” to fix Britain’s housing crisis, a pledge she has made several times over recent months. So far, though, the Government’s policies to address the country’s chronic homes shortage have been weak and counter-productive.

Ahead of Parliament reconvening, many think May must carry out a reshuffle to assert her authority. More important, to my mind, is that the Conservatives take bold steps to increase house-building, lest May pave the way for Jeremy Corbyn to take power, buoyed by support from rightly aggrieved younger voters.

Over the past three decades, around 2.5 million too few homes have been built in the UK. Unaffordability is now a major problem. Average house prices are eight times the average wage – a historically high multiple, impossible for most first-time buyers to finance with a regular mortgage.

Millions of hard-working people – even educated professionals, who should be natural Tories – cannot afford to buy. The share of 25- to 34-year-old owner-occupiers has plunged from 59 per cent in 2004 to just 36 per cent today. This is Generation Rent, which overwhelmingly voted for Corbyn last June. Locked out of the housing market, they took the most Left-wing Labour leader of modern times to within a whisker of Downing Street – and, since then, the Tories have failed to respond adequately.

Yet Westminster obsesses over a reshuffle. Having survived the first stage of the Brexit negotiations, perhaps May should refresh her Government – if only to prove that she can. But clearing out the old guard to make way for fresh faces creates enemies within the party.

The Prime Minister’s most troublesome Tory opponents – Nicky Morgan, Lord Heseltine and George Osborne – are all people she sacked since entering No 10. Given her fragile majority, and reams of Brexit legislation to pass, May must avoid swelling the ranks of backbench malcontents any further.

That’s why the Prime Minister needs to be imaginative, filling the usual Cabinet positions, while creating a separate Brexit Cabinet. May should rearrange, rather than oust – keeping Britain’s Brexit talks centre-stage, but providing more definition to her Government’s efforts to tackle nonbrexit issues, not least housing. This twin-track approach provides room for the new blood the party needs, including more women, without slinging out old hands with relevant experience and, just as important, the ability to be formidable adversaries.

There is a need for new ideas, too. On Wednesday, a video distributed over Twitter showed May meeting “Laura from Wokingham” – who had just bought her first home under the Government’s Help-to-buy scheme. Conveying positive housing messages, and over social media, Tory high command has finally grasped the utmost political importance of helping “the millennials” buy a home.

But while I am genuinely happy for Laura, Help-to-buy does more harm than good. Subsidising first-time buyers via cheap loans is useful for those who can access such schemes. But the overwhelming impact is to further juice up the demand side of the market for everyone else, while doing little to address the real problem by boosting the number of homes.

Help-to-buy also lines the pockets of the UK’S large housing developers

– a group of companies a House of Lords report described as “displaying all the characteristics of an oligopoly”. That’s why, after May announced another £10 billion tranche of funding for the scheme at last October’s party conference, the big developers added more than £1 billion to their combined share price valuation in a single day.

The same is true of the stamp duty cut announced in the November budget. Again, abolishing stamp duty on homes up to £300,000 for first- time buyers, and on the first £300,000 of properties worth up to £500,000, is smart politics. But with more money chasing the same number of homes, lower duty eventually also pushes up prices, helping sellers rather than buyers, at the taxpayer’s expense.

The measures the Government has outlined to boost actual housing supply, meanwhile, have been vague and feeble. More than a year ago, Communities Secretary Sajid Javid, based on research conducted by his department, rightly stated that the “big developers” have “a stranglehold on supply”, and are “sitting on landbanks”, while “delaying buildout” of homes in order to keep prices and profits as high as possible. Across the UK, we already know planning permission has been given on over one million homes not yet built – reflecting a deliberate building goslow that should be penalised. So why has Oliver Letwin just been asked to conduct a year-long “review” into the subject? And why has the Government vowed to ensure 300,000 homes are built annually – roughly the figure required – only by the “mid-2020s”?

The Westminster village is fixated on an upcoming reshuffle. But it’s the lack of urgency on house-building that will cost the Tories the next election, and deservedly so.