Policy capture, busy work and the housing problem

It is tempting to think that the UK housing system is uniquely dysfunctional. Policy over so many years has so manifestly failed to get the measure of the problem and failed to take sufficiently radical action that we might be tempted to consider those in charge uniquely inept. If it’s a choice between cock up and conspiracy, go for cock up every time. Type of thing.

We might, however, review the recent policy past in the light of a paper by Gurran and Phibbs entitled Are governments really interested in fixing the housing problem? (£), which has just appeared online in Housing Studies. It tells a story of policy inadequacy in the face of chronic housing affordability problems that feels rather familiar. But the authors take Australian housing policy at federal level and in New South Wales as their subject.

The themes of their policy story have features strongly in the British context over the same period: placing the blame for sluggish housing supply on overly burdensome regulation and state attempts to capture value from rising prices for public benefit; in the face of calls for more radical action, rejecting public housing as a solution to affordability problems. Gurran and Phibbs offer some examples of high profile policy pronouncements that seek to carefully construct the issue as one to which income redistribution or public housebuilding cannot be seen as effective solutions. The policy response is therefore to dilute planning regulations and lift requirements to provide affordable housing and infrastructure through the planning system. Significant funding for public housing only featured as part of the extraordinary response to the Global Financial Crisis of 2008. All the while prices and rents continue to rise.

Gurran and Phibbs are, however, very much not on the side of the cock up theory of inadequate policy. [Read more…]

Changing behaviour

At the end of last month Stephen Tall posted an essay entitled A liberal approach to evidence-based policy making on his blog. The essay had originally been submitted for last year’s CentreForum essay competition on The Challenges Facing Contemporary Liberalism but, for whatever reason, hadn’t appeared. I keep meaning to write a response to Stephen’s post, but I don’t seen to have managed it yet.

More to the point, I submitted an essay to the CentreForum competition but it wasn’t ever going to be published in that form. There is the possibility that I might develop a longer version of the argument. But I’m not sure when that’s going to happen. In the meantime I thought I’d follow Stephen’s lead and post it on the blog, rather than let it languish. So here it is.

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Governments have traditionally relied on “shove”. When market failures result in inefficiency governments have used regulation to “shove” economic actors in directions perceived as socially beneficial. This is a relatively blunt instrument. More recently, policymakers have been persuaded of the power of fiscal incentives. Taxes, subsidies, and manufactured markets have increasingly been the preferred shoving mechanism.

Similarly, many liberals have robustly, but not uncritically, advocated choice and competition in the reform of public services. This is an attempt to capture the benefits of market mechanisms without wholesale privatisation. Some of the enthusiasm for this approach flows from a desire to combat the inefficiencies inherent in monopoly provision and the risks of government failure.

Concern about the cumulative burden of individually well-intentioned regulations is evident in the Orange Book. In addition, not only were market mechanisms within public services advocated but also manufactured markets to achieve environmental policy goals.(1) The subsequent decade has seen the embedding and extension of Better Regulation and the creation of substantial artificial markets such as the continent-wide European Emissions Trading Scheme.

Much can be said about the success, or otherwise, of these initiatives. But I want to explore the broadening of the policy agenda. Concern with market failure and government failure is longstanding; over the last decade it has been joined by a concern with “individual failure”. Indeed policy in some fields has become rather preoccupied with individual failure and “behaviour change”. The agenda poses potential challenges for liberals. [Read more…]

Capitalism’s real enemies

7134884983_5301865c77_zMuch of the political commentariat is currently obsessed with the soap opera of the Labour leadership election. The peculiar dynamics of the contest itself are fascinating. It is easy to forget how quickly we’ve moved from the prospect of a continuity Blairite Labour party to a party reshaped in the image of the Corbynistas. The prominence of the language of purge and putsch is remarkable. Commentators seek to frame proceedings in a particularly unfavourable light by seeing unflattering historical resonance with the grisly history of socialism. Beyond the unfolding drama of the process everyone is seeking to grapple with the implications of a Corbyn victory, if such a thing were to occur. Does this signal the rise of unelectable hard-left anticapitalism, as many of the right proclaim – and fervently hope? Or is it a reawakening of a genuinely rejuvenating socialism, as supporters claim?

In this context, Tim Montgomerie’s recent post at the Spectator is intriguing. Montgomerie dismisses much of what is happening as so much sound and fury, signifying nothing. It poses no real threat to the existing social order. The anticapitalist sentiment that has emerged in the wake of the rise of JC emanates from the paper tigers of the hard left.

Montgomerie looks elsewhere for what he sees as the real threat to capitalism. [Read more…]

Towards postcapitalism?

postcapitalismPaul Mason’s new book Postcapitalism: a guide to our future is a serious book with an ambitious agenda.

But you wouldn’t necessarily have picked that up from some of the early reviews. Political commentators from the centre and right were pretty quick to the pages of the Times or the Spectator to offer their dismissal. Even some reviews from the centre-left have been a bit tepid.

The book should, we’re told, be viewed as some form of regression by Mason to the driveling Marxism of his youth. The book indicates bankruptcy of the intellectual left. Mason’s argument that we may be seeing the beginning of the end of capitalism is taken to indicate his failure to understand the remarkable resilience of capitalism.

Quite a bit of the commentary on Mason’s book doesn’t do it justice. It isn’t entirely clear that some of those commenting on the book have done Mason the courtesy of actually reading what he’s written, or engaging with it seriously. Those who have taken time to do so, such as David Runciman in today’s Guardian, find plenty of interest. Which isn’t to say that Mason’s argument is unproblematic. Or, for that matter, that criticism isn’t justified. [Read more…]

Slums as a housing solution

6605979025_d5b50310c2_zAt the end of last week there was a bit of a furore generated by a blogpost published by the Adam Smith Institute. A young man called Theo Clifford argued that the solution to the British housing crisis lies in deregulation. That in itself is not, perhaps, an earth-shattering observation to find emerging from a libertarian think tank. Clifford, though, takes the argument a stage further than we usually see. He argues that Britain’s housing problem is an absence of slums. Social welfare would be improved if we were to deregulate so that housing consumers can “choose” poor quality, cramped, overcrowded and/or insecure accommodation, if that is the amount of accommodation that would satisfy their preferences.

This argument can be criticised from a number of directions. And it has been. [Read more…]

Finance, housing and the ageing population

Last week I went to a meeting in London to talk housing and the ageing society. I was invited to do a quick three minute introduction to the financial aspects of the topic of housing and an ageing population. I thought I’d write up my remarks and amplify them a bit. I’ve also reordered the points a little so they flow better. And, for no real reason other than it’s a bit of a change, I’ve posted at Medium rather than here (click on the title below to go to the post). I’ve also, for a bit of a change, added references to some of the recent work in the relevant academic literature.

Finance, housing and the ageing population

Lost souls

I find it hard not to feel a little sorry for Labour.  It is being offered plenty of advice, much of it conflicting. Move left to recapture ground lost to the SNP in Scotland. Move right to combat the threat from UKIP in white working-class areas in England. Offer a radical vision of hope sufficient to stir the dispossessed and disenfranchised to engage with the political process. Position a millimetre to the left of the Conservatives to demonstrate fiscal rectitude and appeal to the few thousand fickle voters that constitute the political ‘centre’, who are conventionally seen as the key to victory.

Of course, there is more than a suspicion that the party has to pursue all these strategies simultaneously if it is to form a government again. To implement such a multidimensional strategy successfully, and avoid descending into abject incoherence, would truly be a work of political genius. It may quite possibly be a feat beyond even the subtlest of political intelligence.

Political genius has not been much in evidence during the current party leadership campaign. [Read more…]

Policy-induced uncertainty

[Originally posted on The Policy Press blog, 24/07/15, under a different title. Reposted here under the original title.]

Choices of a businessmanGeorge Osborne’s recent “emergency” budget proposed many changes to state support to lower income households in a bid to fulfil the Conservatives’ manifesto pledge to cut £12bn from welfare spending.

One unexpected aspect of this package was the proposal to cut housing association rents by 1% each year for the next four years.

This proposal was justified with reference to social housing rent rises over the last few years. These have pushed up the already substantial housing benefit bill. Households have needed greater state assistance in order to afford the rents being set. Bearing down on rents over the next few years will, it is claimed, both reduce the housing benefit bill and force social landlords to deliver efficiency gains.

To the unwary or unfamiliar this argument could appear entirely plausible. It is surely time to try to rein in this sort of behaviour: landlords extracting income at the taxpayers’ expense.

Yet, it is important to understand how we have arrived at the current situation and what the consequences of this policy change are likely to be. [Read more…]

Through a glass, darkly

414585868_2c8513d269_nThe community of housing bloggers has already offered plenty of comment on the implications of the Chancellor’s “emergency” budget for housing. Comment from almost all quarters – be it Jules, Ken, Joe, SteveTom or Gavin – highlights, in more or less lurid terms, the challenges the budget measures are going to present the housing sector.

Some of the changes announced in the budget – the reduction in the benefit cap, cuts in tax credits, and the benefit freeze – were heavily trailed. However unwelcome they might be, they didn’t come as a huge surprise. Yet, the precise dimensions of the change – the reduction of the cap to £20,000 outside London and the inclusion of LHA in the benefit freeze – made for grimmer reading than many might have hoped.

But other policy changes were rather more of a surprise. [Read more…]

The Q#2 quintet (the decidedly liberal left edition)

Here are the five posts on this blog that recorded the most hits between April and June 2015:

  1. Why is Owen Jones so annoying? (4th July 2013)
  2. Selling off social housing (14th Apr)
  3. Labour, leadership and the catastrophic benefit cap (11th Jun)
  4. Social liberalism and the Liberal Democrats (26 May)
  5. Liberalism redux (12 May)

So my venerable ‘Owen Jones’ post continues to attract plenty of traffic. In fact, this may have been its biggest quarter so far.

[Read more…]