Boris Johnson’s Thatcherite Housing Ideas Won’t Go Very Far

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In the words of Noel Coward’s chirpy song of doom, “there are bad times just around the corner” for Boris Johnson.

The prime minister ends the week as walking wounded, having narrowly survived a no-confidence vote on his Conservative party leadership on Monday. If such a test was long in the cards, the ferocity of the uprising has taken even a leader known for his boosterism by surprise.

The opinion polls and 41% of his MPs may be against him, but Johnson is usually at his most resourceful when his back is against the wall. Can he stop the rot?

First, the prime minister must find a clearer strategy for survival. On the evidence so far, he has no plan other than personal defiance, a play for time and scattershot policy proposals.

The background for this political mortal combat is grim. An OECD report published this week predicts that the UK will experience the lowest growth of the G7 countries next year (at 0%), driven by double-digit inflation. Household incomes, which have hitherto propped up the stuttering economy, will fall sharply in real terms.

That’s hardly favorable ground on which to fight a general election two years hence, and Johnson will be grateful to survive that long. His former Brexit minister David Frost, now the darling of the party’s nervy right wing, warns that the prime minister will be out by October unless he delivers “a 10-year Conservative plan” for changing Britain.

In the short term, two by-elections in Tory-held seats at the end of June are predicted to result in victory for Labor in the north and perhaps for the newly resurgent Liberal Democrats in the southwest. The House of Commons Privileges Committee will also decide whether Johnson misled Parliament over the Partygate scandal — a resigning matter, even if Johnson isn’t the resigning type.

In a wide-ranging speech in Blackpool on Thursday, the prime minister set out to prove that his government still has a purpose. Yet it begged many of the same old questions.

Johnson’s former chief adviser Dominic Cummings once compared him to “a shopping trolley smashing from one side of the aisle to the other.” Despite his large House of Commons majority, rebellious factions in his party were already vetoing contentious legislation. After an unconvincing victory on Monday, dare the prime minister to follow any bold course that might tip more MPs against him?

A natural big spender, Johnson is being urged by his party’s powerful right wing to fund tax cuts from state expenditure cuts. They demand “red meat” and the juicer the better — recent tax rises must be reversed and VAT on fuel bills slashed. At Blackpool, Johnson paid ritual obeisance to this wing by accepting that the tax burden was too high. But he stood by his fiscally orthodox chancellor who wants to postpone income tax cuts until next year. Watch for the next wobble.

The centerpiece of his speech, however, was a proposal to revive “The Right to Buy,” an iconic policy associated with Margaret Thatcher that allowed millions of tenants in social housing to buy their homes at a discount. In the 1980s, that drove a wedge between aspirational working-class voters and the Labor party, their former political home. The electoral logic of home-ownership remains the same: 57% of those who own their homes outright and 43% of those with mortgages voted for the Tories in 2019, while large percentages of social renters and private tenants plumped for Labor.

But much has changed since the great homeownership push by Maggie. From a high point in 1991, owner-occupation has fallen, especially among the young. Among those aged 35 to 44, the figure stood at 78% some 30 years ago. Today, it’s at 56%. For those under 34, it is much less than half. The cost of a deposit also keeps rising — during the pandemic it typically rose to 110% of the average annual wage.

In his Blackpool speech, Johnson proposed that millions of households will be given the right to buy the property they rent from housing associations, as they currently can with council houses. The housing benefit those with lower incomes receive from the state might also go toward the purchase of their property.

However, this idea was trialed before by an earlier Conservative administration and abandoned as too cumbersome and expensive. How will the current government compensate for private housing associations for property sold to tenants? Money is already tight and Johnson has also pledged to replace properties sold with new housing stock.

In theory, the economic logic is compelling. A new report from the Center for Policy Studies think tank estimates that only 2.3 pence is spent by the state in incentivizing home-ownership for every pound that subsidizes renting. Long-term savings to the Treasury are set at £140,000 ($172,480) for every house sold. Yet over the medium-term it would cost £3 billion to fund the program, and the government is offering £500 million at best.

The key policy is also risky. Having first-time buyers put down a smaller deposit has also been tried before. Last time around, it helped stoke house price inflation and lost insurers billions when the bubble burst. The Treasury is wary of taking on the responsibility of insuring against defaulters.

The simpler solution is to build more houses and continue to relax planning rules, as Johnson promised in a key plan of his party manifesto. Yet here too, he is torn.

After furious opposition from many of his MPs and the by-election loss of a southern seat to the Liberal Democrats last year, Johnson abandoned his plans for a bonfire of the planning regulations that restrict building in desirable (Tory) neighborhoods. In his Blackpool speech, he even backed away from the government’s existing target to build 300,000 homes a year.

Meanwhile, the prime minister boasts that he is going all-out for growth, while he’s pledged to refise the Northern Ireland protocol he himself negotiated with the European Union. Does he appease his Brexit Right by tearing up his deal and risking a trade war with Brussels that will hit the economy? Or will he count on his pro-European MPs and the House of Lords to vote down the legislation and save him from himself?

The achievements he has under his belt all derive from his executive authority — forcing Brexit through, appointing Kate Bingham to deliver the fastest pandemic vaccine program in Europe, and throwing his weight behind arming Ukraine from the outset. Unless he can revitalize his appeal as commander-in-chief of his party, Johnson will be facing a political firing squad.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Martin Ivens is the editor of the Times Literary Supplement. Previously, he was editor of the Sunday Times of London and its chief political commentator.

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