Red Brick

By Monimbo
Red Brick reported earlier in the week on the letter sent by Jack Dromey to the UK Statistics Authority, criticising Grant Shapps’ use of housing statistics.  The minister’s response, which accuses Dromey of indulging in an ‘incomprehensible rant’, suggests that Mr Shapps might not have been deterred by the shadow minister’s warning. His rather cavalier approach to figures is revealed again in his reply.

You may not be the type of person who studies tables of figures, few of us are, but I would ask you to have a look at the tables on new housebuilding published today by the government quango the Homes and Communities Agency.
They show housing starts – ie when a builder takes charge of a site and cuts the first sod – and completions (ie handed over for occupation) – under various headings over the past few years.  I am asking you to look at the tables so you can see all the figures and make your own assessment of the veracity of various claims about them.

The Communities and Local Government department used to pride itself in its rigorous approach to ‘evidence based policy making’.  Now it has become the seat of ‘policy based evidence making’, at least on the Ministerial corridor.
The latest examples have been Eric Pickles’ latest pronouncements on the ‘troubled families’ programme and Grant Shapps’ increasingly distant relationship with accurate statistics.

The housing market in this country is dysfunctional and it is the responsibility of Government to intervene to ensure that market mechanisms work as well as they can do to achieve society’s goals.   Two recent examples from very different parts of the country illustrate the problems that free markets can create and the difficulty in getting intervention right.

You won’t see much about it in most of the Tory press, but rarely has the visit of an American economist changed the terms of political debate as much as that of the Nobel Prize for Economics winner Paul Krugman last week (in the UK to promote his new book, ‘End This Depression Now!’).
His appearance on Newsnight, when he exposed the economic stupidity and political crassness of two Tory opponents, has become the talk of the town and a mild antidote to Jubilee fever.

In 1952 the winning goal in the FA Cup Final was scored by a Chilean, George Robledo.  Newcastle United beat Arsenal 1-0.
There’s a bit of a fuss on this weekend.  But 60 years ago, when Queen Liz II was ascending the throne, not only did Newcastle win the cup but my family was busy moving into a new council house in Newcastle.   It was a ‘Bevan House’, built to the standards demanded by Aneurin Bevan when he was Minister of Health (and Housing) in the Attlee Government.  Space and amenity standards were excellent and the estate was a great place to grow up.  (For those that know the city, it was near the Kenton Bar – which has just been demolished – on the fringes of Cowgate.)  The average council rent in 1952 was 18s per week – equivalent to around £25 today.

On more occasions than I can count, we have advocated on Red Brick (for example here and here and here) that the most effective way of boosting growth in the economy is to get some money, public or private, into housing construction.
We have also commented on the extraordinary process of quantitative easing (QE) and how hundreds of billions of pounds have been flushed into the economy without any clear idea of where the money will end up and what benefit it would bring in terms of lending in the productive economy.

After a few days away from blogging on the North Cornwall coast (not, I hasten to add, to follow the Olympic torch) I had some catching up to do with my reading.  So I was struck by the confluence of four different bits of information from the last week.
First, our esteemed Housing Minister Grant Shapps said something that I agreed with!  He pointed out that, with 245,000 additional households being formed each year, we will continue to build well below the number of homes that are needed.  He should of course have gone on to say that his policies mean that the number of starts is falling and he is making things much worse.

Two hours last night in front of the telly, and there couldn’t have been a bigger contrast between the two programmes I watched.
I have praised Nick Knowles’ ‘SOS DIY The Big Build’ before, but last night’s story was as stunning as any.