Yahoo Finance Labour must engage with housebuilders to save UK from "Seventies stagnation"
Industrial strategies, plans for growth, key business sectors in receipt of government support, an economy which has suffered from a sustained period of once termed stagflation, and topped with an October election which will likely see a Labour government. This could well be 1974 all over again.
Except that then, unlike now, the UK was still managing to deliver a reasonable number of new homes per year and housing unaffordability was not acting as a significant barrier to productivity and business growth.
Fifty years later and while Keir Starmer is likely to win a far bigger majority than Harold Wilson, the challenges are arguably more acute. Of course, there are some similarities with that decade. A growing sense by a resigned population that nothing works and a belief that we are incapable of fixing it, an economy mired in strife, and an ever-increasing set of international challenges.
However, unlike then, we have a rapidly increasing population to accommodate, no huge pool of SME housebuilders to build out the last of the old bomb sites, no mass council housebuilding programme, and a sense that no one is really interested in building homes anymore.
But this is more than simply a housing crisis resulting in a lack of hope. Ahead of a general election centred squarely on the economy, this is purely and simply an economic crisis of huge proportions.
In my opinion, London remains, quite rightly, the most significant generator of economic growth of any region in the UK. Without the capital, the UK would be poorer per head than Mississippi . Yet that growth is being severely curtailed by an erosion of productivity as a result of many businesses across key identified high-growth sectors struggling to attract and retain the brightest and the best workforce across all levels.
Evidence for this can be seen from our polling of 1000 Londoners aged 25-45 last year which delivered a political and economic bombshell that nearly 25% were considering quitting the capital in the next 12-months due to high housing costs. Given that only 15% of the working population can afford to rent a newly built one-bedroom apartment in London, this isn't surprising.
Access to top talent is a key driver for investment and in ensuring that London retains its competitive edge over other global and UK rival destinations. In fact, improving the competitiveness of an area was once judged to be the key objective of urban regeneration projects.
To achieve this, we need a clear plan from the next government. A plan encompassing serious reform of the planning system, encouraging many more SMEs back to building new homes, major capital investment on supporting infrastructure, and a radical take on further devolution to city-regions of fiscal and planning powers to play a stronger development role in partnership with the private sector.
On this, we have not been silent. We’ve lobbied hard for a small sites planning policy to ease the delivery of new homes on small brownfield sites, called for greater support for SMEs to get back to building, and developed housing products to appeal to businesses and Londoners alike.
As we now wait for Labour to implement their housing strategy, I ask of two things: first, for Labour leaders to engage with the house building industry immediately, and secondly, for Starmer, Reeves, and Reynolds to personally involve themselves in the discussion to avoid the mistake of technicians dictating the direction of travel, as has too often been the case in previous administrations.
Marc Vlessing is CEO of Pocket Living
