Build on green belt and cut tax to end homes crisis, urges Rees-Mogg
SECTIONS of the green belt would be declassified and VAT on property restorations would be cut as part of a radical package of free-market reforms set out by Jacob Rees-Mogg to urgently tackle the housing crisis.
Writing in The Sunday Telegraph, the senior Tory, who is tipped to become Boris Johnson’s chief secretary to the Treasury, puts Britain’s homes shortage down to “distortive taxation” and the “most centralised planning system” in the world. “We must urgently renew a property-owning democracy in Britain once more,” he says.
The North East Somerset MP, who has written a housing manifesto for the Institute of Economic Affairs (IEA) think tank, warns that the green belt has “expanded much further” than was originally intended and calls for Theresa May’s successor to lift restrictions over building on brownfield or derelict sites within the currently protected zones.
Writing ahead of the report’s publication he also calls for radical tax cuts, including reducing stamp duty – which “penalises property transactions” – to 2010 levels and giving local councils the powers to reduce the levy further.
Mr Rees-Mogg’s paper comes as Priti Patel, the former international development secretary, sets out her own proposals for a Budget that could be overseen by the incoming prime minister to boost “sluggish” growth.
In what will be seen as a pitch to become Mr Johnson’s chancellor, Ms Patel uses a separate paper for the Centre for Policy Studies to advocate a series of tax cuts, including a £460 reduction for “ordinary workers” by raising the National Insurance threshold to £12,500 from the existing £8,636.
Mr Rees-Mogg, who co-founded a major investment fund, also proposes a “right to buy” for government land, under which residents could demand the sale of plots identified by ministers for release. His housing report for the IEA is due to be published tomorrow.
The green belt has become a totemic issue for the Conservatives, with Mrs May fiercely resistant to proposals to relax restrictions amid fears of a backlash from Tory supporters, including in her Maidenhead constituency which is covered by the Metropolitan Green Belt around Greater London.
Mr Rees-Mogg’s insistence that green belt reform is necessary to tackle the housing crisis will bolster arguments being made by other senior supporters of Mr Johnson including Liz Truss, the current chief secretary who is expected to be promoted this week.
“Critically, we must admit that some of the green belt no longer does its job,” Mr Rees-Mogg writes. “Classification has expanded much further than intended, more than doubling since the Seventies, causing ‘green belt-hopping’ to other sites.”
Intended to prevent urban sprawl, some green belt is now derelict or has already been built on but regulation ensures it cannot be re-used for housing. “Most green belt should remain: building a million homes would need just 3.9 per cent of London’s green belt. Declassifying already built-on or derelict green belt would make it more attractive, not less. Like all such reforms, benefits can be tested in a few places first,” Mr Rees-Mogg writes.
The IEA report, co-authored by Radomir Tylecote, a former Treasury official, calls for green belt land near transport hubs to be released as a priority. Last year, The Sunday Telegraph disclosed that at least four cabinet ministers were backing a plan to allow the construction of homes within half a mile of train stations in green belt areas, which was pushed by Sajid Javid while he was housing secretary.
If Mr Rees-Mogg’s views are shared by the new government, Mr Javid’s scheme is likely to be adopted by the Cabinet. The report also calls for the “cutting and devolving of stamp duty” and warns the “high rate of VAT on restoration [of properties] ... has helped disincentivise the re-use of cherished buildings for homes, causing them to fall into disrepair.” Mr Rees-Mogg calls for VAT on restorations to be cut, to boost “re-use of attractive buildings”.
‘Most green belt should remain: building a million homes would need just 3.9 per cent of London’s green belt’