Posts Tagged ‘LSE Comment’

This general election is a choice between the end of democracy or the end of neoliberalism

In this general election, Britain faces a paradigm shift, argues Abby Innes: the essential choice is between a government of the economic hard right that will complete the already-failed supply-side revolution of the last forty years, and a government willing to implement a Green New Deal that in turn will end the era of Neoliberalism. She writes that we should be under no illusion as to which road offers a future worth having and which a dystopia.

Given the dismal empirical record of forty years of pro-market reforms, the only way this Conservative Government can create the low tax, low regulation, law and order state of Neoliberal fever dreams is under the cover of other projects. Brexit offers a unique opportunity: it allows a government of economic extremists to manipulate our cultural identity to endorse a rewriting of the entire institutional rule-book. The recent assertion by Michael Gove that Brexit offers no lesser a liberating moment than the fall of the Berlin Wall is exactly wrong. Electoral success for the Conservatives will complete the capture of state authority by private business actors and consolidate the Conservative Party as a self-serving broker, first and foremost, between the residual powers of the state and the now largely unrestrained economic power of large private business and increasingly extractive financial interests.

As we see in Russia, Hungary, Turkey and the US, such developments require the authoritarian redirection and suppression of social anger. Lest we be in any doubt, these techniques are already with us in the pre-election campaigning of the Conservative Party and its open deployment of the Bannonite playbook: a representative parliament is prorogued; only those journalists who act as transmission belts for the government message are granted access; opposition parties and the most senior judges in the country are ruled illegitimate players; the electorate in one of the most unequal societies in Europe is referred to as a single, undifferentiated whole, and flattered with the imagery of a ‘caged lion’.

The Conservatives have placed a landmine under the British constitution that they will detonate if gifted with a majority. It is there in the manifesto, where it says that ‘After Brexit we also need to take a look at the broader aspects of our constitution: the relationship between the government, parliament and the courts, the functioning of the Royal Prerogative…’. It is there in black and white that they intend to change the rules of the democratic game and by saying it here they can later claim this as an open mandate. The result will be the institutionalisation of a monologue of executive power. And while this should alarm us, it should certainly not surprise us, because this is a Cabinet that subscribes, as no other Conservative British Cabinet before it, to the doctrine of full blown economic libertarianism.

Contrary to what the name implies, economic libertarians are not democrats. Their most important thinkers, from James Buchanan to Friedrich Hayek, concluded that economic liberty must supersede all other forms. Democracy as we have historically understood it is rejected by libertarians as a sham: as a block on the freedom of the private individual and the private corporation to roam unhindered in the global commodity space. As the Chicago economist and Nobel Laureate George Stigler put it quite openly:

The alternative [to radically shrinking the state] is to abandon total acceptance of present day democratic institutions. I must hasten to say that this is not to argue for totalitarianism in any form. Indeed, some alternative political systems that would insure a substantial reduction in the government role could be even more democratic in the sense that public policies could be closer to the desires of individual citizens.

Not totalitarian then, so long as you are happy to accept unquestioning belief in the primacy of corporate rights over your legal, political, and social rights for the rest of your life, without the opportunity to change your mind.

So this is an important election, in case you were in any doubt. It is ideological ‘twist or bust’.

What is invaluable in liberal democracy by contrast is its institutionalised understanding that society is both imperfect and imperfect-able. It is in liberal democracy alone that we are allowed to learn from our inevitable mistakes. Today’s Conservative government in the meantime is demonstrably willing to up-end the hard-won institutional structures of liberal democracy for the sake of a future that can only ever exist in the reactionary economic utopias of the Chicago and Virginia schools and in the preferences of the obscenely rich.

UK governments since 1979 have induced an extraordinary set of political economic outcomes under their bipartisan acceptance of neoclassical economics as ‘science’. As a predominantly mathematics-driven, hypothetical-deductive body of work, its empirical basis was always astonishingly weak, and weakest of all in the ‘first-best-world’ variation beloved of the libertarians. It has followed then that no imaginable conspirator, of the libertarian right who wanted to dismantle the state and see all but its powers of law and order rescinded, or of the revolutionary Marxist left could ever have masterminded such an elaborate and comprehensive cock-up as that which becomes apparent in the UK political economy today.

This is not to say that enthusiastic conspirators didn’t exist: they did and still do. But for all their efforts you and I still have a choice, and a free one for now. But this is the point: if the history of communism teaches us anything, it is that you can force entire societies to bow under fully totalitarian control and ideas that cannot possibly work still won’t. We can explore this grotesque experiment to its bitter end, but it is no more likely to redeem itself than Soviet Communism was in 1989. Libertarianism is based on a neoclassical conception of the economy as an isolated system that operates independently of all others systems, including the biosphere. In the light of the climate emergency, any ‘ultimate’ victory for this diehard group of free market fantasists will prove the most Pyrrhic in all time.

It is the peculiar curse of supply-side doctrine, as it was with Leninism, that even in the face of ever more dire social consequences, the circularity of its doctrine – the understanding of the economy as a closed system machine driven by dependable laws of economic motion – invites the doubling down on the revolution in rhetorical and practical terms. The circularity of the belief system creates the reasoning that, if not now, it must be at the point of completion that the total validity of the programme will be shown. As a result, the energy of these doctrines only becomes fully unspooled once the disorder they create has spread to every corner of the polity: when the entropy is total. The more completely the doctrine is followed in practice, the greater the distortions and social dysfunction of the real institutions of capitalism will become. With this comes the growing detachment of public political language from social reality, another process on which we are already clearly embarked.

Where all the post-war political economic doctrines were built on the acceptance of radical uncertainty and inescapable human flaws in both states and markets, Neoliberalism, no less than Leninism promised to relieve us of our ethical duty as citizens to think about what might be prudent, practical, and socially just, as distinct from automatically ‘true’ or allegedly inescapable within the terms of [non-existent] ‘natural’ economic or historical laws.

Where the reality of Soviet Communism was one of continuous repression, the social division caused by an unmediated capitalism requires brutal authoritarianism like that of Augusto Pinochet in Chile, and the greater the drive to complete this revolution the greater the repression and misdirection must be. We are currently living under a government that in truth has nothing left to offer beyond a purely instrumental, populist approach to sustaining the orthodoxy of unrestrained corporate rights. However, the more pure the doctrine of free markets that any government attempts to institute the more the pathologies of markets will be left to play out unmediated: towards monopoly, human and ecological exploitation, and financial extraction instead of innovation or enterprise in any socially coherent, productive or sustainable sense.

The supply-side revolution has turned out to be a process of setting fires under the hard-won institutions of democracy but with economic gains that accrue only to an ever-shrinking group of winners. The most potent justification for radical reform in the 1980s was that the state by the late 1970s was in the throes of a ‘crisis of ungovernability’, but the supply-side revolution has induced a political-economic crisis far more complete than the original. Not only have the long decades of bi-partisan consensus over economic liberalisation aggravated the emerging social divisions of deindustrialisation, they have literally dis-integrated the historically high-functioning and economically comparatively disinterested state that went before. As a matter of urgency then we need a government that is willing to rebuild the capacity of the local and central state and the wider ecosystem of civic institutions in such a way that these can enable the heavy lifting of transition to a zero-carbon economy. At this point in the climate emergency it is only the state that can mobilise the full institutional and policy toolkit to enable public, civic, business, financial and private effort that is now so essential. The democratic state is the historical source of systemic treatments for the evolutionary crises of capitalism. Now would be quite a good time to remember that.

If instead we choose to become caught up within this utopian/religious mindset, the words of our opponents are necessarily no longer accepted as motivated by anything as reasonable as empirical facts, or experience, or analytical expertise in any given arena. Complaints are necessarily disregarded as a false consciousness. It has been a standard Neoliberal catch-all for forty years to insist, for example, that any form of public servant who defends public institutions has mistaken their self-interest for their principles, so that nothing but the preferred market values and the hopelessly inadequate governmental toolkit of quantification can survive.

This temptation to dismiss your critics without reflecting on their arguments is a risk in any ideological position. But it is an unusually powerful tendency in any ideology that claims to be ‘scientific’, as Neoliberalism claims to be, and most assuredly is not in any serious, i.e. empirical sense. But this is the problem with materialist utopias of left or right. Sooner rather than later, any political language that builds itself on a doctrine of human perfectability is doomed to create a culture of lies: in Boris Johnson we have its most apt exponent. But be in no doubt that such a culture can be institutionalised in turn. Indeed, what other option do political forces of the economic hard right now have for their project to survive?

So at what point is enacting this doctrine in good faith or bad, by whatever means, no longer acceptable? How much more divided, angry, and unwell are we prepared to allow our society to become? How much more asset stripped our economy? At what point do we acknowledge that this, the sixth historical mass extinction event and the first caused by man, has already started to include us? How much damage should a body of ideas originally cut and paste from Newtonian mechanics and built on metaphors impossible to re-attach to the actual economy be allowed to inflict before it is rejected as empirically unfounded and morally indefensible? Neoliberalism breaches every real natural limit of our resilience: psychologically and ecologically, but just as the citizens under communism turned out not to be the compliant, distracted, exhausted masses of the Communist Party’s cynical hopes, neither should we be.

A paradigm shift is coming, but which future are we going to choose? Will it be the urgently required transition to a zero carbon economy that is compelled by the scientific method as properly understood, internationally agreed, and confirmed every day by ever more terrifying proof of nature’s ultimate sovereignty? Will we really gift control of the entire constitutional framework that took our forebears centuries to build, to this Cabinet of people as deaf to factual evidence as they are to self-doubt, so that it may be dismantled within a matter of months in further pursuit of a fantasy whose destructive, divisive reality we already live with daily? Will we really hand such an extraordinary degree of power to this self-appointed vanguard of the preposterously wealthy, who at best must believe that they alone have solved the riddle of history and found the one true path to a perfect social order in which all true-born Englishmen may prosper: where nature itself will be made to conform to their genius?

The father of sociology Max Weber warned that “The charismatic leader gains and maintains authority solely by proving his strength in life. If he wants to be a prophet he must perform miracles… Above all, however, his divine mission must ‘prove’ itself in that those who faithfully surrender to him must fare well. If they do not fare well, he is obviously not the master sent by the gods.” The problem for us of course is that by the time that reality confirms that no miracles are in fact about to follow the election of Boris Johnson it will be too late to change our minds. The constitution will have been changed and the state more completely captured by those powerful few who have a great deal of wealth and interest to lose by the final rejection of this most profitable and unholy of theologies.

The hard right within the Conservative Party refer to themselves as the Spartans and Brexit is their Trojan Horse. So are we really going to open the gates and invite them in? Will we really learn nothing from history at all?

________________

About the Author

Abby Innes is an Assistant Professor of Political Economy at the LSE.

 

 

 

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science. Featured image credit: Pixabay/Public Domain.

Five reasons to vote in a safe seat

Why bother to vote in a safe seat, knowing your vote won’t make a difference to that constituency’s outcome? Jonathan Birch offers five key reasons why voting makes a difference to the legitimacy and stability of parliamentary democracy, even when individual seats don’t change hands.

Elections can be pretty demoralising if you live in a safe seat. Where I live, in Mid Sussex, the Conservatives have a majority of almost 20,000 and have held the seat since its creation in 1974. The outcome is a foregone conclusion. Nothing happens, no one visits. You’re lucky to get a single leaflet.

If I lived in a marginal seat, I’d have a realistic chance, albeit a very small one, of making a difference. In the 1997 election, the seat of Winchester was decided by a margin of 2 votes, so it was literally true that every vote for the winning candidate mattered. This happens every now and then in marginals. But not in safe seats.

The Electoral Reform Society estimates that over half the seats in the UK are safe, in the sense that the outcome is not in any serious doubt. Ideally, we’d have some sort of proportional representation that would give my vote a chance of influencing who gets elected. But we don’t. I know that the outcome of the election will be unaffected by my vote.

So why vote at all? Why bother when you know your vote won’t matter? I’m sure this is one big reason why, in every election, around 30-40% of eligible voters don’t vote. But I think there are still reasons to vote, in spite of our flawed electoral system. Here are five.

1: The seat might not be as safe as you think

We live in volatile times. In the 2017 election, some seats turned out to be far more competitive than anyone expected. One example is Canterbury, which had been held by the Conservatives since its creation (as a constituency) in 1918. Propelled by the student population, Labour overturned a majority of almost 10,000 from two years earlier. In recent years, Labour has lost all of its ‘safe seats’ in Scotland with the rise of the Scottish Nationalists. In 2017, they even lost Kirkcaldy & Cowdenbeath, which had a majority of 23,000 in 2010. These things happen. But they don’t happen very often.

2: To influence your MP’s behaviour

Even in a safe seat, your vote counts towards the totals for each party, so it can make the seat a tiny bit safer or a tiny bit less safe. This makes no difference, you might think: the same MP is elected either way. But the behaviour of the MP will be influenced by the safety of their seat.

MPs in safe seats are under no serious pressure to deliver benefits to their constituents. They might be diligent MPs anyway, but they are not compelled to be. If they want, they can skip votes and debates and spend their time doing after-dinner speeches, serving on company boards, indulging in schemes and plots for their own advancement, and so on. By contrast, an MP defending a tiny majority has a motivation to work hard.

Moreover, an MP in a safe seat can also happily follow the party whip, even if the party line harms their own constituency. By contrast, MPs in marginals often feel much greater pressure to put their own constituents before party loyalty. Brexit has given us some interesting examples. Many of the most high-profile Labour rebels over Brexit—e.g. John Mann, John Woodcock, Ruth Smeeth, Gareth Snell, Caroline Flint, Jon Cruddas, Gloria De Piero—are in vulnerable, pro-Leave marginals.

It might occasionally be a good thing for an MP to feel able to oppose the interests of their constituents. Sometimes, we might want our MPs to vote in the national interest, setting aside the interests of the people of one small area. But this is the exception rather than the rule.

3: To make future elections more (or less) competitive

Parties invest their resources according to how competitive they think a seat is. In a safe seat, you will see few leaflets, few signs, few activists and probably no candidates. Once a party starts regarding a seat as a serious target, they start to have a chance of taking it, even though the incumbent party will also start campaigning more vigorously.

You might want your seat to be more competitive next time, if you oppose the incumbent party. Or you might want your seat to become less competitive, if you support the incumbent party. Either way, your vote will make a difference to the seat’s competitiveness, and that will make a difference to the atmosphere surrounding future elections.

4: To influence national vote share

The effect of your vote on the parties’ national vote share is minuscule. But you might conceivably tip your party over some significant threshold: from 39.9% to 40.0%, for example. Because we don’t have proportional representation, the national vote share officially makes no difference. But it does make a difference to the perceived legitimacy of a government. Governments in this country are usually elected with a minority vote share, but the smaller the minority, the worse this looks. When Labour was elected in 1997 on a 43% vote share, I don’t remember anyone complaining about their legitimacy or using the result as an argument for electoral reform. But when they were re-elected in 2005 on a 35% vote share (a margin of victory of less than 3%), people did complain, and it did strengthen the argument for electoral reform.

5: To help keep democracy alive

Turnout matters because it affects the legitimacy and stability of parliament, the government, and all the institutions of a democracy. Imagine turnout fell to 35%. What kind of democracy would we have then? What sort of democratic mandate could a government claim for doing anything? The overwhelming message from a general election with a 35% turnout is that democracy is in trouble, and its institutions and parties are not perceived as legitimate. It would be a perilous situation for the whole country.

This isn’t hypothetical: it’s been the actual situation for a long time in elections to the European parliament. One of the problems MEPs have faced for decades is that turnout in European elections is low. The result is that people don’t generally see their MEPs as representing them, or know much about them or what they do, allowing the idea of the EU as ‘undemocratic’ to take root.

So, in a vague kind of way, a vote for any party is a vote of confidence in parliamentary democracy itself. As an individual, your effect on turnout is even less significant than that on national vote share, so the effect is still minuscule. It also cuts both ways. You might want to undermine confidence in a parliament elected by an antiquated electoral system, which would be a reason not to vote. But if you still believe in parliamentary democracy despite everything, you can be comforted by the thought that your vote makes a tiny difference to its legitimacy and stability.

________________

About the Author

Jonathan Birch is Associate Professor of Philosophy at the LSE.

 

 

 

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science. Featured image credit: Pixabay/Public Domain.

Different methods, similar outcome: comparing the Poll of Polls with MRP

The star of the show in 2017’s general election polling landscape was YouGov’s MRP model, which produced remarkably accurate estimates of the results in seats across the country. The equivalent model for this year’s election, explains Joe Greenwood, produces quite similar estimates to approaches based on the average figures from standard national polls.

At an excellent event on ‘Reading the 2019 election polls’ at LSE last week, the sense of anticipation regarding the shortly-to-be-released YouGov Multilevel Regression and Post-stratification (MRP) model was palpable. Indeed, the two academics who run the model using YouGov’s data, Ben Lauderdale and Jack Blumenau, made it a running theme of their presentation that they could not even hint at the model’s estimates of party vote shares or numbers of seats. Why the anticipation? Well, back in 2017 when many polling companies had a bad time estimating the vote shares of parties (especially Labour) in that year’s election, the previous incarnation of the MRP model was remarkably accurate at estimating, in particular, the seats that each party would end up with. Indeed, it predicted 93% of the constituency results correctly and anticipated shock outcomes such as those in Canterbury and Kensington.

Later that night, the model’s national and seat-by-seat estimates were released and indicated that, based on current voting intentions, the Conservatives would win a comfortable victory. Indeed, even at the lowest end of the estimates, Boris Johnson’s party was estimated to reach 328 seats, giving him a small majority (or a slightly larger one, once we take account of Sinn Fein MPs who do not take up their seats, and the seats of the Speaker and Deputy Speaker of the House of Commons).

How did the model produce this estimate? Well, MRP begins by estimating the relationship between voting intention and key characteristics such as age, gender, and education. It then applies these relationships in different constituencies based on characteristics of their populations (obtained from official statistics such as the Census and subsequent updates), whilst also adjusting for the characteristics of the seats themselves (such as whether they voted Leave or Remain, and even how many fish and chip shops they have). It is this process that gives the model is particular benefit: estimates of the outcome in each parliamentary constituency.

At a national level, though, how different is the estimate of vote share produced by the MRP model from the average of the estimates produced by the standard polls that we have seen up until now? In short: not very different. I start by comparing the national level vote share produced by the BBC’s poll of polls with the equivalent figure produced by the MRP. As can be seen in the first figure, the estimates are remarkably similar. Indeed, none of the party vote share estimates given by the MRP differ from the equivalent figures in the poll of polls by more than 2%. The MRP gives the Conservative and Labour parties each a 1% higher vote share than the poll of polls, whilst it estimates a 2% lower share for the Brexit Party and a 1% lower share for the SNP. The Liberal Democrat, Green, and Plaid Cymru vote shares are the same in both approaches.

But, this is not the most important part: MRP’s main benefit lies in its seat estimates. Turning to the second figure, we can see a little more difference in terms of the number of seats the different approaches estimate each party will obtain, but still considerable similarity.

To calculate the seat estimates stemming from the poll of polls I took its national vote share figures and fed them, first, into Election Polling’s UK Swingometer (labelled ‘Uniform Swing’ in the figure). Then, to make a basic adjustment for the differing voting patterns in Scotland from the rest of the UK, I fed those same national vote share figures into Electoral Calculus’ equivalent swingometer, which also allows separate vote share figures to be entered for Scotland (I took these from YouGov’s latest national voting intention poll, which provides estimates for Scotland, and the columns a labelled as ‘Separate Scottish Swing’ in the figure).

The largest difference is that the MRP model’s estimate of Conservative seats (359) is 13 higher than the estimate (346) stemming from the Scotland-adjusted swing. Otherwise, none of the seat estimates that the MRP model produces are more than eight seats different from either of the approaches using swing based on the average national vote share from the poll of polls. In line with its higher estimate of Conservative seats, the MRP model estimates fewer seats for Labour (seven below the Scotland-adjusted swing) and the Liberal Democrats (six below the Scotland-adjusted swing). In short, the MRP model, when compared with swing-based estimates drawing on average national polling vote share, suggests that the Conservative Party will do slightly better whilst Labour and the Liberal Democrats will do slightly worse.

Of course, neither of these estimates can account for something very important: what might change in the final days of the campaign. There could be major events and associated shifts in voting intentions in the population or certain sub-groups. This might lead the MRP model to predict a notably different outcome from an application of swing (uniform or otherwise) based on national voting intention figures. However, that seems unlikely, and if things stay roughly as they are now then, whatever estimate of seats we use, the Conservatives seem likely to have a comfortable majority.

______________

About the Author

Joe Greenwood @niceonecombo is an LSE Fellow in the LSE Department of Government, where he teaches on GV101 (Introduction to Political Science). He previously worked at YouGov and, before that, completed his PhD at the University of Essex. His research focuses on political participation, privilege, and perceptions in the British context.

 

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science.

The UK’s housing crisis: what should the next government do?

The real problem behind the ongoing housing crisis is unresponsive supply, write Paul Cheshire and Christian Hilber. They explain that the solution is not hard to fathom: to build more houses, there first has to be land, and then an incentive to build on that land. This straightforward solution nevertheless requires radical change in the inertia of UK housing policy.

Since 2015, neither the government nor any opposition party has had any effective policy to tackle our housing crisis symbolised most starkly by Starter Homes. To the extent there has been action, it is largely ineffective at best and counterproductive at worst. All that has happened is that affordability has continued to worsen – and to worsen most where people most want to live.

The ability of the under 40s to buy a house has continued to be eroded and both inter-generational and inter-regional inequalities increased. The young have lost out because, as the Institute for Fiscal Studies has shown in a series of studies, they are systematically losing access or even, for an increasing proportion, any hope of access, to the single accessible asset that has done best over the last generation: and now increasingly even the ability to rent decent housing in places where there are jobs. Those in failing local economies in the North are locked into hopelessness because access to housing where there are good jobs is way beyond their reach.

Demand-side policies are popular but doomed to fail

Boris Johnson’s government and its immediate predecessors have introduced a number of housing policies, with Help to Buy the most hyped. This claimed to help younger lower income households get access to home ownership. Far most popular among the various Help to Buy offers has been the Equity Loan scheme. This provides a loan for up to 20% of the house value (or inside London, up to 40%) to buy new build properties. Buyers of such properties also do not pay interest for the first five years after purchase.

The intention may have been to help would-be buyers to overcome their credit constraints, but the effective outcome has been to push house prices up further, without any measurable impact on construction, in those markets that are least affordable and where the productive jobs are concentrated – such as Greater London. The trouble is that in these markets, housing supply is extremely unresponsive (we’ll get to that later), so when the government stimulates housing demand, this only makes existing houses even dearer, making existing home owners better off. And, by the way, there is one other group that benefits: the policy helped to push up the profits of developers registered in the Help to Buy business. While Help to Buy did increase construction in more remote areas where it is easier to build, these were not the places abundant in good jobs. The ultimate outcome is that young would-be buyers are even more ‘priced out’ in areas with productive jobs, and workers have to commute ever longer distances from remote areas leapfrogging Green Belts.

Other demand-side policies have very similar effects. Consider the Stamp Duty Land Tax exemption to first-time buyers: economists have long argued that the stamp duty damages both the housing and labour markets, and a recent study suggests that it has a particularly bad effect on housing-related and short-distance moves. It discourages downsizing and makes it more difficult for young families to expand their housing consumption. Phasing out stamp duty and reforming other property taxes would be the right policy. An exemption to first-time buyers mainly increases the price of smaller homes in the least affordable areas – think of London or Oxford – with the most unresponsive housing supply.

The real problem: unresponsive housing supply

Demand-side policies are politically easy but since the true driver of the housing affordability crisis is too little supply, which cannot respond to prices, such policies are inevitably ineffective. Supply problems are triggered by three causes:

  • First, restrictions on land/space prevent cities from growing horizontally (Green Belts) or vertically (because of height restrictions and view corridors). Rebuilding at higher densities is also made difficult because of preservation policies, such as conservation areas or listed buildings.
  • Second, local communities have virtually no incentive to permit residential development. There are strains on local services from the new residents but no revenue flow generated to provide infrastructure and public services.
  • Third, the discretionary ‘development control’ planning system is dysfunctional, generating uncertainty (amplified by our system of Section 106 Agreements, supposedly to capture ‘planning gain’) and caters to NIMBY residents.

Playing with words

In measuring new supply, what matters is house building – completions – rather than the increasingly popular measure of ‘net additional dwellings’. This is popular with politicians because the greater the shortfall of new supply, the less the incentive to demolish obsolete houses. Instead, they are refurbished and sub-divided. Obsolete offices and industrial building are converted into sub-standard housing. So, the worse the shortage of houses is, the more the volume of net additional dwellings rises relative to actual building of new houses – completions. Looking at the data for completions reveals the scale of the problem starkly. In the 30 years 1959-1988, 7,449,160 houses were built in England: in the 30 years 1989-2018, only 3,328,850 were built. That suggests a shortfall of 3,120,310 homes – 104,000 a year – over the last 30 years.

We have not just been building too few houses: we have also been building the wrong sort of houses in the wrong places. Demand is for roomier houses in areas close to productive jobs. Satisfying that demand makes sense both for the welfare of people and for the productivity of the economy. Instead, we have been building relatively more houses where the local economy is slack (but there is lots of brownfield land) and population relatively slow growing.

Compare Barnsley and Doncaster with Oxford and Cambridge. If we look at population growth and house building, we find exactly the reverse pattern to that which logic would suggest: systematically fewer houses built in the more prosperous and faster growing local economies. In the nearly 40 years from 1980 to 2018, 56,340 houses were built in Barnsley and Doncaster combined but only 29,430 in Cambridge and Oxford combined. The pattern of relative population growth was almost the reverse: a 95,079 increase in Oxbridge against a 29,430 increase in the Barnsley and Doncaster pair.

The myth of ‘no shortage’

There is a narrative of ‘no shortage’ based on the fact that rents have been relatively stable over the past 15 years or so, even as house prices have risen. But rents, of course, are the price of housing services: not the price of houses as an asset.

The most important determinant of the demand for housing services is real incomes and these have barely regained the level they were at before the financial crash. Since the crash there has been an historically unprecedented fall in real interest rates, feeding through to low yields on all assets. That the fall in yields includes housing should surprise no one.

So rents not rising is not evidence that houses are in adequate supply. Rents are still unaffordable by historic standards, but the price of houses has ultimately been driven by falling yields, future expected real income growth and, crucially, their long-run shortage.

What should the next government do? A concrete policy proposal

The ‘no-shortage’ narrative is comforting, but it is fake news. And the only practical way to resolve our crisis is the uncomfortable process of building more houses. But in fact the process itself is easy: it is the politics that is difficult, especially when the payoff from success is well beyond the average politician’s time horizon.

A report for the Centre for Cities in 2019 showing how two million new homes could be built close to train stations serving major employment centres at no cost to government at all and at considerable gain to local communities where they were built. At present, incentives are so badly aligned that everyone resists new development. The community see eye watering capital gains made by a few land owners, but only costs to themselves because new development provides essentially no revenues but more residents to serve.

But if the owners of the stations (such as Transport for London or Network Rail) were given the sole right to develop, they could buy land cheaply – for not much more than agricultural prices instead of the £3.5 million per hectare minimum that currently has to be paid for housing land anywhere in southern England. If developing the land around stations were given incentives by tapering off subsidies to commuter rail and co-ordinated by a newly-created Development Corporation (along the lines of New Town Development Corporations created to address the housing crisis of the 1950s), it would ensure that the land was built out according to rail capacity and urgently. At the same time, the Development Corporation could ensure the new homes were built out in rail and cycle friendly fashion so current car-oriented developments were replaced by low carbon rail-oriented ones.

In addition, if current and extraordinarily inefficient negotiated planning obligations (Section 106 Agreements) and the Community Infrastructure Levy were abolished and replaced by a straight and completely predictable and transparent tax on the sale price of all the new construction, there would be proper funding to pay for enhanced services and infrastructure for the local communities receiving the development – place-making infrastructure – and proper funding for truly affordable housing in the social sector. Government would not have to pay a penny. All this could be funded from land value uplift.

The only catch is a political one. The policy would allow building on Green Belt land – so long as that land had no environmental or amenity value – within 800 metres of commuter stations. There is a remarkable quantity of such land. A worked example for five city-regions – Birmingham, Bristol, London, Manchester and Newcastle – reveals 47,000 hectares of buildable land. Reserving 10% for new publicly accessible green space and wild life habitat still provides enough land to accommodate two million additional homes – 15 years of building at recent rates. If the new development levy were set at 20%, it would produce £100 billion of revenue over time to pay for the place-building infrastructure and new social housing. But people could find new, more affordable and low carbon homes closer to where the jobs are.

_________________

About the Authors

Paul Cheshire is Emeritus Professor of Economic Geography and Associate at the Centre for Economic Performance, LSE.

 

 

Christian Hilber is Professor of Economic Geography and Associate at the Centre for Economic Performance, LSE.

 

 

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science. Featured image credit: Pixabay/Public Domain.

The NHS and Johnson’s manifesto: conservative with commitments

Tony Hockley argues that the Conservative Party manifesto pledges for health and social care offer a sensible approach to NHS funding.

One of the most telling ad-lib comments by the Prime Minister at the Conservative manifesto launch was his claim that NHS spending increases would be done: ‘in a sensible way’. For all the heat in current politics, the Conservatives have produced a shockingly sensible manifesto. The attacks around ‘trust’ have clearly hit home with the party, and they have very evidently learnt from Labour’s attack on their 2017 proposals for social care funding that they cannot face that huge challenge alone.

Just hours before the Conservative launch, the Labour Party added a new £58bn commitment on pensions, on top of their £83bn manifesto spending plans. The scene was set for an incredible tax-and-spend battle between the two parties and an extraordinary leap of faith behind the growth of the British state. The ‘sensible’ approach declared by the Conservatives came as something of a surprise just as people prepare to post their votes. This surprise was reflected in the questions at the launch. There was a general theme in the questioning of ‘Are you sure about this? Do you realise the scale of the gap between your promises and Corbyn’s?’.

Yet a sensible, ‘steady as you go’ approach is exactly what the NHS has always needed, but always been denied. Since 1982, Nick Bosanquet has been making the case to policymakers that growth of around 2% a year is needed to keep pace with demographic and technical change. Much more than this and inefficiency, inflation, and waste creep into the system. Inflationary costs from boom years (particularly on the NHS pension and new infrastructure) are carried well into the years of bust. Much less and the pressures for a sudden crisis investment become inevitable. The ‘weaponisation’ of the NHS at almost every election since 1950 has kept the NHS on this costly boom-bust cycle. Protecting this national treatment service from public sector cuts since 2008 has meant that sickness has been supported and health neglected. Even before this, Britain’s health system already ranked close to the bottom of the Commonwealth Fund’s global league table for achieving ‘health care outcomes’.

A steady approach to long-term NHS funding should create the first real opportunity to tackle some of the major determinants of health in a sustained way: disposable incomes, education, housing, the environment, and social services. Stabilising NHS spending growth, and maintaining it at levels that are normal for other European health systems may actually offer the first chance to tackle systematically the determinants since the NHS was created.  These three charts from analysis by the Office for Budget Responsibility show the unique British problem in health funding:

Figure 1: Growth in public health spending per capita (1995-2009)

Figure 2: Growth of real health spending and GDP per capita (2000-2015)

What then of the specific commitments that are in the Conservative 2019 manifesto? Some of them are certainly worthy, but certainly not headline news for an election; improvements to hospital discharge systems for people with learning disabilities and autism is one example, and the extension of the Cancer Drugs Fund to cover treatments for auto-immune disease and paediatric rare disease is another.

The policy that probably most typifies the difference between the main parties is on car parking at NHS hospitals. NHS providers have a long history of trying to find ways to extract money from patients, and policymakers have long had to limit these once they are over-exploited. Once it was payphones and televisions, now it is car parking. As with many giveaways, however, a free-for-all policy hits hard capacity constraints. Many hospital car parks are already full, despite high charges. This problem gets worse, and the need to invest capital into car parks more demanding, when parking is free. As with dental checks, the Conservatives have chosen to target help on those most in need, rather than hit the capacity constraints and infrastructure costs of a new, universal commitment.

Thankfully, the Conservatives have learnt from their 2017 election problems on social care and avoided launching a ‘big idea’ on funding. Far better to try once again to work towards a cross-party solution, whilst continuing to reverse cuts to the current system. For social care cross-party agreement is the only way any reform would be likely to survive the subsequent election. A mutually acceptable solution must be found. This will be one that neither massively extends the role of the state nor massively subsidises inheritance, and which improves both the quality and quantity of social care. In the current political environment, it may be that this is best done by a small group of the ‘brightest and best’ from the various parties rather than through a formal inter-party committee. In the end, the solution will be 50% political and 50% technocratic.

Much has been made of the commitments on capital investment into hospitals, and the headline promises much debated: how many new hospitals? But the policies of most significance are those designed to tackle the workforce crisis. The abject managerial neglect of nursing in the NHS goes back more than a decade, as seen in the inquiries into the Mid-Staffordshire scandal. The demoralisation and comparatively poor treatment of the nursing workforce will be hard to repair: the fix being found to protect doctors from the impact of tax law on their large pensions cannot help in this regard. The manifesto provides some specific measures – the restoration of the bursary for students nurses, for example, and an NHS Visa to support global recruitment (again), and a vague commitment to ‘more supportive hospital management’. Over the next few years, the achievement of these changes will probably matter more for the quality of NHS care than anything else.

The promises are certainly conservative. At the start of this election the NHS establishment demanded an end to treatment of the health service as a political football. Ironically, Boris Johnson appears to have followed this advice, only to be kicked for not producing rabbits out of hats. Such is the stuff of British health policy.

________________

About the Author

Tony Hockley is Director of the Policy Analysis Centre, and a Visiting Senior Fellow in the Department of Social Policy at the LSE, where he teaches Behavioural Public Policy. He is also a former Special Adviser in the Department of Health.

 

 

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science. Featured image credit: Pixabay/Public Domain.

The changing appraisals of party leaders and policy competence amongst their supporters, Leavers, and Remainers

With a few weeks of campaigning under their belts, and the manifestos released, we might expect to see shifts in appraisals of party leaders and policy positions. But is such movement just a result of voters bringing their assessments into line with their party support as election day looms? In his third blog of the campaign, Joe Greenwood considers this by looking at shifts in appraisals amongst party supporters and the two Brexit camps.

Polling following last week’s ITV general election debate showed an unsurprising result: despite being asked to put aside their party preferences, 2017 Conservative voters rated Boris Johnson’s performance more positively, whereas 2017 Labour voters rated Jeremy Corbyn’s performance to have been better. This may be a good example of motivated reasoning, in which people bring their evaluation of one thing into line with their evaluation of a related thing. So, the logic goes, voters prefer a party and this shapes their appraisal of its leader and policy positions. Indeed, this tendency even extends to Humphrey, the 10 Downing Street cat. Conservative voters approve of him more strongly if he is described as Margaret Thatcher’s cat, and less so if he is described as Tony Blair’s cat, with the tendency reversed amongst Labour voters.

There is another possible explanation for this tendency: party support and assessment of policy positions may both be influenced by ideological disposition. As the most prominent representative of the party closest to their ideological views, and a key voice promoting policies that they agree with, we expect voters to like the relevant party leader as well. However, this leads us with a conundrum; do elections force voters to pick a party (often one they have voted for before) and then adjust their views of its policies and leader, or do they allow leaders to pitch policies to the electorate and convince them to support parties? This may be a particularly meaningful question for Jo Swinson, who has seen the Liberal Democrats’ strong polling numbers begin to decline, at the same time as her personal ratings have moved downwards. Is this voters deciding that, when push comes to shove, they cannot support the Liberal Democrats and then bringing their appraisal of the party’s leader into line? Or is it voters being unimpressed by the leader and policy platform, and shifting their vote?

To shed some light on this, we can compare change in the assessments of party leaders from when the general election was called to the weekend of 16-17 November. Specifically, we should focus on the change amongst supporters of each party, whom we expect to be most favourable towards their preferred party’s leader. We can also compare changes in assessments of the best party in relation to Brexit, the NHS, and the economy. Given that Brexit identity is stronger than party identity, we should also look at changes amongst Leavers and Remainers, which are also more stable groups than party supporters. These results are all based on Deltapoll’s numbers to ensure a consistent methodology, and because they ask the relevant questions in each of their polls. It is worth noting that Deltapoll’s figures show the Conservatives, Labour, and the Liberal Democrats remaining largely static (i.e. within the 3% margin of error) during this period, though these small changes in support still affect the make-up of the sub-groups of party supporters who we look at below.

Net appraisal of a leader’s performance is calculated by deducting the percentage who think they are doing badly from the percentage who think they are doing well. Looking at the top left panel of the above figure, we can see the change in net appraisals of the leaders’ performances since the election was called.

As expected, Boris Johnson started with a very positive appraisal of his performance amongst those intending to vote Conservative and amongst Leavers. Those groups’ assessments of his performance have declined (changes of -11% and -10% respectively), though they remain firmly in positive territory (+64% and +39% respectively). Remainers started the campaign with a negative appraisal of his performance, and have adjusted it down further (by -12% to -52%). Most worrying for Johnson is the fall in ratings amongst those planning to vote Conservative, whom we would expect to maintain their positive appraisals.

The appraisals of Jeremy Corbyn amongst those intending to vote Labour is positive and started in positive territory (+6% to +48%) but improvement in ratings amongst Leavers (+5%) and Remainers (+7%) still leave him in negative territory amongst those groups (-66% and -12% respectively).

Appraisals of Jo Swinson’s performance has declined amongst those intending to vote for the Liberal Democrats (-10% to +41%) and Remainers (-20% to -1%). Again, the decline in appraisals amongst her party supporters is most worrying for Swinson, whilst the latter figure is also concerning and could indicate two things. It suggests that Remainers who support other parties (or are contemplating it) have adjusted their appraisal, or that her performance really is not appealing to a key target group.

We now turn to three key policy areas: Brexit, the NHS, and the economy. When asked whether a Conservative or Labour government would be better for the first of those, there is no meaningful change in those who choose the Conservatives. This is probably because it was already high amongst supporters of the party and Leavers, and low amongst Remainers, indicating previous realignments over the issue. Labour does appear to have picked up support amongst those intending to vote for the party (+9% to +77%), either from existing supporters reappraising their position or from those who have switched to the party, indicating that their Brexit line is cutting through with some voters.

Because we are dealing with sub-groups of voters rather than the full sample, the changes in views of which party would be better for the NHS are largely within the margin of error so we are not confident that they have changed meaningfully. There is one exception: notably more (+10% to +85%) of those intending to vote Labour now say that the party would be better than the Conservatives for the NHS.

Finally, on the economy, the only change outside the margin of error is the growing percentage of Labour supporters who think it would be the best party in this area (+11% to +79%). Again, this could be those who have switched to Labour bringing a positive view or existing supporters adjusting their view. Crucially, it should be pointed out that appraisals of the Conservatives by those intending to vote for them remain stronger in all three areas (+93% for Brexit, +90% for the NHS, and +91% for the economy) than the equivalent figures for Labour amongst their supporters.

The overarching picture here looks positive for Labour as appraisals of Jeremy Corbyn have improved amongst party supporters and Remainers, whilst Boris Johnson’s ratings are down across the board. However, they started from very different positions, so Boris Johnson is still seen more positively amongst his party supporters and Leavers and, despite having a stronger rating than his rival, Jeremy Corbyn still has a negative rating amongst Remainers. Indeed, there is now a distinct lack of enthusiasm for any of the leaders considered here amongst that group. This is concerning for Jo Swinson, who has seen her rating amongst Remainers and her own party supporters fall markedly.

In terms of policy, Labour supporters are now more positive about the party’s ability to deal with Brexit, the NHS, and the economy. This is all certainly indicative of a gradual shift back towards Labour as the party’s campaign cuts through or voters with reservations (including, perhaps, many Remainers) stump for the party and adjust their appraisals accordingly. Discerning individual-level shifts in these appraisals will have to wait until after the election, when the British Election Study will release their excellent data. That will help to reveal how much voters are bringing their views of leaders and policies into line with the imperative that they choose a party to vote for.

__________________

About the Author

Joe Greenwood is a LSE Fellow in the LSE Department of Government, where he teaches on GV101 (Introduction to Political Science). He previously worked at YouGov and, before that, completed his PhD at the University of Essex. His research focuses on political participation, privilege, and perceptions in the British context. He tweets @niceonecombo.

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science.

Powered by WordPress | Designed by: index backlink | Thanks to insanity workout, car insurance and cyber security