Planning to Blame Immigrants? Get Your Facts Straight & Get Rid of Your Prejudices, Nick Boles

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By Jim Grundy

In today’s ‘Daily Telegraph’ Tory Planning Minister Nick Boles, who recently announced the partial deregulation of the Planning system, said the fault for the resulting ‘concreting over’ of the countryside lay with the Labour Party and its immigration policy [1]. That, he said, was the reason why there was no alternative to weakening local councils’ control on new housing development in the countryside. The need for more houses and, thus, the requirement to weaken planning controls, was principally to provide accommodation for immigrants and he had no choice but to facilitate this. But does that claim stand up?

The first question to be considered is whether the number of new homes being developed is hindered by the way the Planning system operates at present, irrespective of the drivers behind demand. As recently as 12th September 2012, the same newspaper reported that developers were “sitting on 400,000 undeveloped plots of land with planning permission.” [2] The Tory Chairman of the Local Government Association, Sir Merrick Cockell, said the figures “should finally lay to rest the myth that the lack of new homes being built is the fault of the planning system… Even if planning departments did not receive another new home application for the next three years, there are sufficient approved developments ready to go to last until 2016 at the current rate of construction.” [3]

If those in charge of the Planning system can dismiss that it is to blame for a lack of new homes, and the revelation that 400,000 homes have permission right now supports that contention, then what is limiting development?

The building industry and most housing & planning professionals are quite clear that there is huge pent-up demand for new homes – but that the main reason for that not being met is the state of the economy. With growth flat-lining (at best), threats to job security increasing and the expansion of low-paid temporary work means that even if adequate mortgage finance was available – and it isn’t – then people simply cannot afford to buy. And if they can’t buy then the developers are not going to build. Is that so hard to understand, Minister?

It is not difficult, therefore, to dismiss the Minister’s case that the Planning system is hindering development. “It’s the economy, stupid,” as a former U.S. President Bill Clinton once said. But does his case that the underlying demand for new homes comes mostly from international migration – and that he is just a prisoner of the previous Labour Government’s immigration policies – have any merit?

The Office for National Statistics produces regular population projections. It considers the changes to the demography of the nation, its numbers, age make-up and household size. The estimates are reviewed periodically but within all the projections is a wide margin of error for international migration because it is so much harder to predict, given its link to economic cycles. And this, can, to paraphrase a banking expression, go down as well as up.

It seems somewhat ironic, therefore, that Nick Boles chose this week to link new housing for immigrants to the need to scrap safeguards for our ‘green and pleasant land’. According to the Office for National Statistics’ latest figures net migration had fallen by 25% in the past year [4]. David Cameron used the results to trumpet the success of his own immigration policy, whilst Nick Boles insists, or so it seems, that he is powerless to do anything about it. Had he been ‘on message’ with the Prime Minister, he might have argued that the success of their approach had lessened the requirement to ‘concrete over the countryside’ and yet he’s argued the opposite to be the case.

The reality is that the two principal drivers for the need for new housing is the growth of single person households and increasing life-expectancy; two not unrelated factors. Indeed, checking the 1911 Census shows that the house I live in now was home for ten people a century ago. It now provides rather less cramped accommodation for two – and a cat. If we want to return to those times, then a return to those levels of over-occupation would indeed limit household growth. And the Tories’ intention to withdraw housing benefits from under-25s shows which direction they think we’re travelling in.

So if the Planning system isn’t preventing development and international immigration – now falling – is not the main driver for household growth, what is the rationale for weakening the ability of local councils to prevent development on previously undeveloped sites? And, note, this latest proposed change comes on top of the introduction of the new ‘National Planning Policy Framework’ [5] that marked a significant shift in the balance of power between council planning departments and housing developers. Indeed, the ‘Daily Telegraph’ itself referred to it as the “builders’ charter” [6] in September 2011.

Having said all of that, even if none of the above is a fair reflection of what has happened since Planning was taken over by the Tories, just about their first act was the abolition of Regional Spatial Strategies – or Regional Plans as they were known [7]. These plans included targets for the numbers of new houses that were required over the coming years. But these targets, along with the plans, have been scrapped. So Mr. Boles would have us believe that he has no choice but to follow targets that have long been abolished. What’s he going to claim next, that he has to collect the Hearth Tax whilst he’s at it?

The run-up to the 2010 General Election saw the Tories campaign against new house building, particularly in rural areas. And Caroline Spelman, then Shadow Secretary of State for the Department of Communities and Local Government, even wrote to Tory councils advising them to hold back from granting permission to new sites that might undermine their anti-development credentials [8].

No, the changes to the Planning system have been implemented with one aim in mind and one only – to allow housing developers to build what they like and where they like, irrespective of local housing needs. And that translates into a simple bottom-line – the bottom-line of the developers. They can be freed up to build on ‘easier’ sites and not have to do any of that other nasty stuff, like building affordable housing.

In that context, the Tories’ relaxation of local democratic controls over councils’ planning powers will make easier the very thing they argued was wrong before the election does appear to be somewhat hypocritical of them. Ok, it’s colossally hypocritical. But we enter new ground when all of this is laid at the feet of immigrants, not known for their plan-making powers.

It is hardly shocking these days to discover another element of Tory/Lib Dem hypocrisy. And the scapegoating of vulnerable groups by them, be they the unemployed, disabled, ethnic minorities, Muslims, gypsies, whoever has long lost its ability to shock, if not enrage. However, this is surely one of the most pernicious acts of a very nasty collection of individuals.

They have played upon the fear of the foreigner, so ably stoked by their friends in the right-wing press, already well-prepped to think that the country is being ‘swamped by houses we don’t need for people we don’t like’. Yet, at the same time, have made it so much easier to achieve the one thing they gained so much political capital out of opposing – the expansion of new housing into rural areas.

I hope people manage to consider the contradictions built-in to the Tories’ position. They blame foreigners for the need to build more homes in the countryside, whilst relaxing the powers that could limit that. At the same time they peddle the myth that the average immigrant is just a workshy scrounger, who only comes here to live off benefits. If anyone accepts this set of circumstances, then they must believe that the average occupant of a brand-new house in leafy southern England is going to be a Lithuanian on Disability Living Allowance. Orwelllian double-think has nothing on them.

If this is an example of what we can continue to expect from Mr. Boles, I would not be surprised if he is thought by some to be risking the incitement of racial hatred. In any event, he is playing a dangerous game pandering to a line being put out by people who most certainly do not even try to hide their personal prejudices. He should be ashamed.

[1]http://www.telegraph.co.uk/news/politics/9715889/Minister-blames-Labours-immigration-policies-for-plans-to-concrete-over-countryside.html.

[2] http://www.telegraph.co.uk/earth/hands-off-our-land/9522902/House-builders-sitting-on-400000-undeveloped-plots-of-land-with-planning-permission.html.

[3] Ibid.

[4]http://www.ons.gov.uk/ons/rel/migration1/migration-statistics-quarterly-report/november-2012/index.html.

[5]https://www.gov.uk/government/policies/making-the-planning-system-work-more-efficiently-and-effectively.

[6]http://www.telegraph.co.uk/earth/greenpolitics/planning/8736480/Planning-reforms-blight-of-the-builders-charter.html.

[7] http://www.govtoday.co.uk/nature/8394-government-moves-ahead-with-plans-to-abolish-regional-plans-and-protect-the-green-belt.

[8] http://www.guardian.co.uk/business/2009/aug/30/conservatives-housing-property-delay.

BRITAIN’S EXPORT PERFORMANCE IS WOEFUL

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BRITAIN’S EXPORT PERFORMANCE IS WOEFUL

By Michael Burke

 

A number of commentators have recently called for a currency devaluation as a way to revive the British economy and outgoing bank of England Governor Mervyn King has described a recent very modest rise in the value of Sterling as ‘unwelcome’.These calls tend to ignore the fact that Britain has already had very substantial devaluation. As the Bank of England chart shown in Fig. 1 below shows the decline in the pound’s exchange rate index (ERI) from 2008 onwards. The ERI fall was nearly 30%, with a slightly larger fall against the US Dollar and a less pronounced fall versus the Euro. The recovery in the currency’s exchange rate has only been a partial one.

Figure 1
12 11 29 Chart 1

There are usually two main effects arsing from a sharp currency devaluation. One is to increase the price of all imported goods which cause inflation. This is what happened and the British economy was the only major economy to experience both a sharp economic downturn and a rapid rise in inflation during the crisis. The other usual effect of currency depreciation is to cheapen the price of exports in foreign currency terms, and so provide a boost to exports and the growth and jobs that depend on them. But following that devaluation exports have barely grown in volume terms.

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12 11 29 Chart 2

From their pre-recession peak exports fell by 11.3% to their low-point. They have since recovered but were still 0.8% below that peak in the 2nd quarter of 2012. Since George Osborne announced the ‘march of the makers’ as the theme of his first budget in 2010 export volumes have actually fallen by 0.4%. This is possibly the only time in British history where there has been a very substantial currency depreciation and no recorded improvement in export performance.

This is a remarkably bad performance given that world trade has expanded since the recession of 2008 to 2009, according to the World Trade Organisation, by 13.8% in 2010 and by 5% in 2011. It is also a remarkably poor performance even compared to sluggish major trading partners. Fig. 3 below shows export volumes compared to both the US and the Euro Area. Euro Area export volumes are now 3.6% above their pre-recession peak while US exports have increased by 8.3%.

Figure 3
12 11 29 Chart 3

Of course, these are not the strongest performers. As a group, Newly Industrialising Countries’ exports have risen by approximately 50% over the same period according to WTO data.

There are numerous reasons for the exceptionally poor export performance of the British exports over the recent period. Patterns of trade are highly dependent on the weak export markets of the industrialised countries, financial services played a disproportionate part in the exports of services during the upturn, exporters responded to the devaluation by raising prices rather than winning market share, and so on. But all of these can be essentially reduced to the current problem of not producing enough goods or services that the rest of the world needs to buy. To correct that requires investment.

Given that the private sector remains on an investment strike, the government could respond as a minimum by investing in high-speed rail links, improved port facilities, super-fast broadband and through investing in education by scrapping fees and bringing back EMA. It could also remove the restrictions on visas including student visas so as to increase trade and educational ‘exports’. A government committed to creating hi-tech jobs would invest directly in carbon-reduction and renewable technologies for which there are very large and growing export markets. But that would all require a very different type of government.

Addendum:

Michael Meacher MP wrote in July 2012:

The UK trading performance is much more serious than most people realise.   The last time Britain had a current account surplus was in 1983, 29 years ago.   In the last 55 years Britain has only had a surplus on its traded goods in 6 years.   Initially in the 1970s the surplus in services (insurance, shipping, etc. as well as banking) covered the deficit in goods, but from 1987 the deficit in goods rose much more sharply and a large net deficit between goods and services grew ever wider.   By 2010 the deficit in traded goods had reached the staggering level of £99bn and the surplus on services at £49bn could cover only half of this.   A yawning deficit of this magnitude cannot continue for long without the creditors (like any bank manager) calling time.

Why has this happened, and how can it be reversed?   Our manufacturing capability has been allowed to decline long-term following Thatcher’s elevation of the City after Big Bang 1986 and the converse privatisation and selling-off of so much of the industrial landscape.   The neo-liberal market made the manufacturing decline all the sharper by the preference for mergers and acquisitions over long-term investment, the sale of key British firms to foreign interests, the damaging break-up of crucial supply chains, the relentless emphasis on short-term profiteering over long-term market share, and the neglect of apprenticeships and quality training which along with the decline of R&D stunted UK productivity.

Britain heads for biggest trade deficit ever

Yet in his 2012 budget, Osborne had the ‘nerve’ to trumpet the ‘march of the makers’ – the renaissance of manufacturing industry.

In the event the UK deficit in traded goods hit an all-time high at £100bn in 2010, a level nearly reached again even against a background of fading growth.   There has been no rebalancing of the economy towards industry, no restructuring of finance, no spurt of entrepreneurship – just austerity and rising inequality.

*Definition of ‘Trade Deficit’

An economic measure of a negative balance of trade in which a country’s imports exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets.