John Rentoul: Affordable housing is Brown's mantra. But he's wrong if he thinks he can make it happen

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The Independent Online

Tony Benn was right about one thing and one thing only during his long and destructive career: that ishoos are more important than pershonalities. Gordon Brown's fate over the coming year will be decided not by the quirks of his character that were hailed last summer as great qualities and are now held against him, but by his policies.

What is the most important issue? Housing. Now, you may not think that housing is the most important issue for the Government, but Brown does, and that is part of his problem. At his last news conference before Christmas, he listed the "long-term challenges" from which he was not going to be diverted: "Building a stronger economy, 3 million new homes, the Climate Change Bill, education from three to 18, which is the new policy of the Government, rebuilding and renewing parts of the health service."

Three million new homes was the first item in the list after the economy. Of course, every time Brown sets out his lists, the laundry comes in a different order. In his New Year message, he wrote of "important legislation making long-term changes in energy, climate change, health, pensions, planning, housing, education and transport".

A few paragraphs later, he presented a different, overlapping list. "So we will not shirk but see through changes and reforms in the vital areas for our future secure energy, pensions, transport, welfare, education, health and national security." Housing had mysteriously disappeared.

I was reminded of the vivid description of how Brown wrote his speeches in a book on his first year as Chancellor of the Exchequer by Hugh Pym and Nick Kochan. He would pound the keyboard, all in capitals, reading out lines to a group of advisers, then split the screen in three to compare versions of a passage and choose which was best. His New Year message read as if he had written several versions and kept them all, one after another. But I am digressing into pershonality rather than ishoos.

My point is that, in all the lists he has read out I mean, speeches he has delivered since becoming the unopposed candidate to lead the Labour Party seven months ago, "affordable housing" has been the one theme that stands out. It has often been at the top of the list as when Brown launched his leadership campaign at the Imagination Gallery on Tottenham Court Road on 11 May. And it stands out because it was not something that Tony Blair bothered with much.

Yet there are good reasons why politicians should be wary of promising affordable housing. It sounds like the sort of thing to which no reasonable person could be opposed. When I wrote recently, as an aside, that I did not agree with affordable housing, a sub-editor asked whether I had left something out by mistake. Well, I suppose I had, because it is not the kind of statement you can make without some explanation.

Everyone seems to think house prices are too high, if not for themselves, at least for their children. And everyone seems to think that the Government should do something about it.

Take Kim Jones, who is a fashion designer. I know this because he was a subject of the five-minute interview in The Independent last week. He was asked, "I am not a politician but", which is not a question but we know what it means. He completed the sentence: "I would like to make house prices cheaper. My friends always moan about how expensive London is."

At this point the synapses should start to light up. "Make house prices cheaper" is a phrase that should trigger a few neural connections. How could someone who actually is a politician "make house prices cheaper"?

Even under Blair, the Government tried all sorts of small schemes to buck the market: key workers, shared equity, help for first-time buyers. None of it made much difference, and Brown knows it, because he knows more about economics than Blair (and Kim Jones). He knows that the price of housing is determined by supply and demand. Hence his determination to build more houses three million more by 2020.

Yet he really ought to know that he is promising something cheaper houses that he cannot deliver. Surely he is aware that the economics of public policy goes beyond mere supply and demand? He knows that, in many markets, increasing supply leads to increased demand. We all know now, for instance, that if we build more roads, more traffic will be created to fill them. Surely we should also know, therefore, that building a third runway at Heathrow will not, except in the shortest of terms, ease congestion. If it makes it easier to fly, more people will do it.

And it is similar with houses. We know, from the huge success of the British economy over the past 10 years, how it has sucked in a million workers, many from central Europe. Often they live in crowded private rented housing, but they add to the overall demand for housing, and if more houses were supplied, more of them could afford to live and work here.

What is surprising is that David Cameron goes along with the half-baked economics of the state trying to dictate how many houses should be built. Writing in The Independent on Sunday in March 2006, he said: "The failure to provide an adequate number of new homes in Britain has contributed to the affordability problem." Just to make sure we noticed that the Conservative party had changed, he described the planning laws as "bananas", referring to the acronym BANANA: that we should "Build Absolutely Nothing Anywhere Near Anyone".

It is clever word play, but it is useless politics. There are times and places where the Government should be trying to prevent people building houses, such as on the green belt. The green belt principle is a good one, which should be extended, not curtailed.

The fact that houses are expensive reflects all kinds of factors, including low interest rates that make mortgages more affordable, and the fact that everyone wants to live in London. Trying to make prices go down is almost bound to hit a law of unintended consequences somewhere. "Predict and provide" ought to be as discredited in housing as it is in road-building.

So we should take Tony Benn's advice and refuse to judge Brown on the character question. That he is indecisive, secretive and abrasive is not in itself a disqualification for high office as he proved as the most successful Chancellor in modern history. If Brown chose the right priority after years of dithering; if he were secretive about clever plans to make Britain a better place; if he were abrasive in pursuit of worthwhile goals then his personality would be a strength rather than a weakness. But his policies are wrong. The only reason he is not in even worse trouble is that, on housing, which he has identified as the most important issue, Cameron's policy is wrong too.

j.rentoul@independent.co.uk

John Rentoul is chief political commentator for The Independent on Sunday

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