The whale is wounded. The sharks smell blood and start to circle. The chancellor, Rishi Sunak, is in the lead. The rest thrash about, still disoriented by Covid. That is, except for Michael Gove. Last September, in an unguarded moment, Boris Johnson handed Gove the opportunity of a lifetime: to chart a path out of the ideological chaos of lockdown towards a 21st-century Tory dawn, and, with it, a claim to the succession.
Gove has been asked in effect to recast non-metropolitan Britain. He must revive local democracy and reverse the centralist planning regime of his predecessor, Robert Jenrick – the regime that so enraged Chesham’s Tories in the June byelection. Gove must sort out the intellectual vacuum that is Conservative housing policy, with its casual pledge of 300,000 new homes. He must also reveal what Johnson really meant by “levelling-up” the north. He has even been told to rescue the union with Scotland in his spare time. If he can pull all this off, Gove will be a hard man to beat.
At the heart of Jenrick’s planning fiasco lay a confusion over housing. A true Tory would leave houses to the marketplace and concentrate on homelessness among poor people. The trouble began with Margaret Thatcher “weaponising” housing subsidy as a middle-class vote-winner, with property developers piling in as her party’s leading financial backers, pressing at every turn for planning decontrol. Jenrick was putty in their hands.
This reached its nadir with this year’s algorithmic targets for new development. This defined housing “need” as demand represented by price. New estates were imposed on every town and village, wherever prices were rising fastest: a developer’s dream. First-time-buyer subsidies merely pushed up prices – overwhelmingly in London and the south-east. Buckinghamshire and Hertfordshire began to go the way of Middlesex. Johnson even found himself protesting over new estates in his own constituency. As of today, about 400,000 houses granted permissions remain unbuilt, their builders fearing too many houses might damage profits.
Appearing last month before a Commons committee, Gove signalled a radical change of gear. He ordered a “complete rethink” of Jenrick’s planning reforms. He promised that communities would be re-empowered to “take back control” of their future development. He wanted to see brownfield sites developed and opposed carbon-guzzling “concrete and steel” materials. He was also sceptical of housing policy as being only about new-build. The supply of properties to the market is overwhelming existing buildings.
Britain has some of the most inefficient and underoccupied houses in Europe, largely through longstanding undertaxing of living space. A luxury London flat may pay barely a tenth of the tax on one in New York City. This combined with high stamp duty is a tax against downsizing, and has led the Resolution Foundation to argue that fiscal policy should hold the key to housing policy. Half a million homes lie empty as “savings”. About 600,000 houses could be nudged back on to the market “without the need to lift a single brick”. London’s half-vacant luxury towers and Georgian terraces make a mockery of housing targets. Whether Gove has the clout to take on the Treasury’s aversion to fiscal reform remains to be seen but is a real test of his seriousness.
Gove seems determined to reset the balance between Whitehall and local communities on the future of land use. His advisers are tending towards urban densification and renewal rather than clear-and-build. The champion of more traditionally planned towns, Nicholas Boys Smith of the thinktank Create Streets, has been appointed head of Gove’s new Office for Place. This is intended to promote a popular, perhaps more aesthetic, kind of planning, in contrast with Whitehall’s powerful and developer-led Homes UK agency.
Meanwhile, Britain’s local government is in turmoil. Public services have been devastated by 11 years of austerity halving their budgets. The much-publicised cuts in care homes are the tip of an iceberg that includes police, youth services, older people and childcare, local transport, arts and museums. When confronted with this reality, “levelling up” by splurging on infrastructure is meaningless.
The real threat to the north has long been the magnetism of the south, rather than a lack of public investment. I recently attended a meeting of business leaders in Manchester at which the overwhelming cry had nothing to do with infrastructure or HS2. It was: “Why can’t the south stop stealing our best young people?”
A truly radical levelling-up agenda would ban new greenfield housing in the south, pleasing Tory voters and making house-buying there even more expensive. Southern flight should be discouraged by waiving student loans for all graduates who work in the north. Every penny of cultural and skills investment should go north for a decade. Move the Royal Opera to Manchester and the National Theatre to Leeds. Dump the House of Lords in York. Drive HS2 north from Birmingham, not south from it. Put London’s Crossrail into mothballs. The reality is that levelling up the north can only work with levelling down the south.
The answer to northern decline lies in the re-empowerment of its cities, which long ago revived those of industrial Germany and France. A relentless hollowing out of local democracy has been the defining feature of the Cameron-May-Johnson years. Gove has been given a truly radical opportunity. But his motto should not be “take back control”; it should be “give back control”. Will he do it?