Rishi Sunak’s extraordinary gambit to make the cancellation of a new railway line between Birmingham and Manchester the centrepiece of his party conference speech last week gifted Keir Starmer the key theme of his Labour conference speech this week: building, not blocking. This looks set to become a central part of the long election campaign and, should it happen next year, the Starmer government.
Starmer’s “big build” is particularly focused on new towns and energy infrastructure, but it will have to extend to transport and other utilities given the demands of new housing, population expansion and decades of infrastructure underinvestment.
It is not just because of the housing shortage that Starmer majored on housing and new towns. He is in search of bold policy for national renewal which doesn’t impact on public spending in a direct and immediately calculable way.
Fearful of Tory attacks on higher taxation, Labour’s quest is for initiatives that can plausibly be claimed as private sector or self-funded. Major housing development is in this category, if you claim that associated infrastructure and social housing costs will be borne not just by developers but also now by landowners too. Labour’s planned new compulsory purchase order (CPO) powers will ensure that for new towns and major housing projects on greenfield sites, landowners are forced to sell cheaply to local development authorities. By these CPO powers the state could in effect recoup a subsidy from landowners and developers.
This is reverting to the CPO policy under the generation of new towns built after the Second World War, up to the development of Milton Keynes after 1967. Since then, landowners have been able to claim a much larger share of the uplift in land values, thanks to legal decisions and human rights legislation. Whether the reversion to the postwar position can be legally crafted in a way that delivers significant “development gain” for the state in the creation of new towns and suburbs will be a major test for the next Labour government. If it fails, or only partially succeeds, the government could be liable for huge infrastructure costs. But that is all in the future.
It was a big mistake of Sunak’s to allow Starmer to occupy this territory. It is starkly obvious that there is a chronic housing shortage in southern England, and around some northern cities, which needs to be addressed. It wasn’t just the HS2 axe which put Sunak in the category of “blocker” not “builder”: his abandonment of national housing targets after his campaign for the Tory leadership last summer gave Starmer his opening to say he would reinstate them and force local authorities to accept new housing where needed.
Significantly, Sunak’s housing secretary, Michael Gove, had started to move on this agenda by stealth. His announcement in July of a “new quarter” for Cambridge was far more than it seemed. It amounts to new housing for up to 300,000 people to be built adjacent to Cambridge by 2040, nearly trebling the city’s population. But this got little national attention and has now been buried under the fallout from the cancellation of the northern parts of HS2.
Let’s hope the next government acts with greater decisiveness and alacrity over new towns than the present government acted on HS2. Under my original scheme for HS2 in 2010, the whole 330-mile scheme would have been completed or under construction by now. Instead, we have seen repeated delays, indecision and cost additions. Then the ludicrous decision to halt construction north of Birmingham, which will have to be reversed before long.
Half-built houses will be as useless as a half-built railway.
