Liz Truss and Kwasi Kwarteng took what they believed were good decisions. Their massive energy price subsidy would protect people from the cost of living crisis. They thought that cutting taxes would boost growth and prosperity for everyone. It is easy for people to sneer at the latter after the event. But the plain fact is that no-one has discovered a sure fire plan to deliver economic growth. If they had, running the economy would be easy.

As we now know, the markets took fright at the further proposed increases in government debt. Interest rates on the debt soared and the pound collapsed. The Truss government was wrecked. This had always been a risk, ever since in 2019 the government piled up massive amounts of public debt with the furlough scheme. At some point as government debt rises, confidence really drops and interest rates really do double, or even more. But this point is inherently unknowable in advance. It bears little connection with the objective facts.

For example, interest rates were in the 6-8% range in several Mediterranean Eurozone countries in the mid-2010s. But the amount of government debt relative to the size of the economy in, say, Spain, was lower than it is now in the UK. Even now, the UK’s debt position is much better than that, say, of Italy. But it was the UK which the markets attacked and not Italy.

Many commentators on the Left maintain that all this was obvious in advance, that the Truss-Kwarteng policy was bound to end in rapid and ignominious failure. But we might reasonably ask, if this is the case, why these same commentators are not now enormously rich, having used their insight to short UK government bonds.

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All this was anticipated by Keynes, a much more subtle economist than many of his followers grasp. In his magnum opus, the General Theory of Employment, he championed the idea that extra government spending could help keep an economy out of recession. But he qualified this with two key points. When government deficits rise as a result of increased spending, Keynes wrote that: “The method of financing the policy may have the effect of increasing the rate of interest and so retarding investment in other areas.” He went on to suggest that the psychological effect on “confidence” might also depress private sector spending. The psychology, he asserted, was often “confused”, by which he meant it could move in ways entirely contrary to what a rational assessment of the evidence would suggest.

The second example is much less grand, but all the more telling. Intentions and outcomes can differ even on a small scale. To great fanfare, in 2018 Nicola Sturgeon announced a policy of a minimum price on a unit of alcohol. Scotland has a serious alcohol problem, and this seemed a good idea. The policy was praised by the World Health Organisation. Yet the hard-core older drinkers who were the real targets of the policy seemed to have continued drinking. They paid for it by cutting back the amounts their families spent on food and heating — even before the cost of living became the issue which it is now.

Young people in particular do seem to have cut back on high alcohol drinks. They switched to cheap street drugs instead. These are often unreliable and dangerous products, and the drug-related death rate in Scotland is now four times higher than in England. Sturgeon and the SNP intended to do good with their policy, but the outcome seems to have worsened the situation.

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Why Truss's gamble failed

By Aris Roussinos

If detailed planning really worked, the Soviet Union would have been a great success and not a catastrophic failure. Of course, both governments and firms have to set a vision, a view of where they want to be. But they must never fall into the trap of thinking that the plan is reality. Most of the time, outcomes are different to the intent in the plan. The main risk is that focusing too much on the plan might lead a government or firm to reduce its flexibility, its capacity to respond to surprises, both good and bad. In the old Soviet Union, everything was planned with great precision. No individual enterprise was allowed to fail. But, eventually, the whole system collapsed in catastrophic failure. In the West, individual firms fail all the time, but the system as a whole delivers the goods.

There are worrying signs that, as a result of the furlough scheme, the same Soviet-type mentality is starting to pervade Britain. If a company is in difficulty, some scheme should be contacted so that it is kept alive by taxpayers’ money. The industrial structure should be pickled in aspic. The intention of any such policy would be to do good. The risk is that it simply leads to an economy populated by zombie, low productivity firms.

Sometimes outcomes can be much better than expected. A classic example is Windows. The first releases basically tanked. Microsoft announced that development would stop after the release of version 3.0. In the meantime, they had partnered to develop OS/2 with IBM, the “operating system of the future”. Windows 3.0 sold millions of copies in the first few months and the rest is history.

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By Matthew Crawford

Coca-Cola spent vast amounts of research testing how people would feel about New Coke, which they launched in the mid-Eighties. The plan said it would be a great success. But it met with a disastrous reception in the real world. Coca-Cola abandoned the product within a few weeks despite the huge sums spent on it. Their actions show the value of flexibility and willingness to discard plans in the face of new evidence. The UK government’s reaction to the emergence of Covid in early 2020 shows the danger of inflexibility. The early data from China suggested that the death rate might be of the order of 3-4%. So it was reasonable to have an initial lockdown to try and assess the situation.

But it rapidly became clear that the death rate was in fact much lower. More importantly, at least 95% of all deaths were in two groups which were small compared to the size of the overall population: the over 85s and those with chronic conditions such as heart disease caused by obesity. For the bulk of the population, there was little serious risk to health. Despite this new information emerging quickly, the government seemed to double down on its plan of lockdown and its message of fear.

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Covid was liberalism's endgame

By Matthew Crawford

The complexity of the world does not mean that nothing can be done, that outcomes are random. But it does mean that governments and firms must be flexible. A further implication is that, as far as possible, decisions should be devolved. The closer to a problem you are, the more likely there is to be local, tacit knowledge which is hard to capture in formal documentation and rules.

In fact, successful institutions evolve organically, indicating that excessive government intervention may be both unnecessary and counterproductive. Consider Greater Manchester. The Mayor and the GM combined authority have relatively few legal powers. These in general still reside with the ten individual boroughs. But the combined authority has evolved “convening powers”. This is soft, informal power. A complex system of interconnected organisations and committees has developed and is continuing to develop. And it seems to work. A genuine, connected city-region is coming into being.

The economy and society are essentially more like a biological system than a complicated machine. No matter how complex, a machine can be programmed and controlled. The economy evolves, often in unpredictable ways. Policy-makers, including the new Prime Minister, need to shed the tick-box mentality and recognise this fundamental feature of reality.

Many of the streets have Scottish names; many of the houses are graced with distinctive male or female keystones above the front door, rumoured to be based on Archie and his wife. The estate is at least a 15-minute walk from the nearest train station and is mostly an established family neighbourhood. I have lived here for three years and have fallen hard for its charms.

While Archibald Corbett’s legacy is widely known and celebrated with affection locally, it’s unlikely that his politics would go down well with many of his estate’s residents today: he was an unapologetic capitalist (Lewisham has been Labour for as long as anyone can remember) and he disapproved thoroughly of drinking (summer nights around here are full of the sound of late-night partying; K-pop, Jamaican dance-hall, Eastern European folk, take your pick). And as someone who believed in decent housing for working-class people — by which he meant one family per house, a garden, proximity to a station and park — it’s likely he would have been appalled by what’s been going on lately in his streets.

Because at the moment, as a result of Tory housing policy, the modest houses of the Corbett estate are being bought up by property developers, their interiors ripped out, and in their place, units designed for individual occupation inserted into them. The units can be as small as 6.52 metres squared — smaller than a prison cell. By adding a hastily constructed loft, a narrow terraced house of approximately 60 square metres can be transformed into a “HMO” — a house of multiple occupancy comprising up to six separate “units”. These HMOs represent different things to different people: for the owners, they are sources of profit; for the neighbours, they can often be sources of nuisance or even danger. And for the vulnerable people who live in them, they can be a living nightmare.

As residents became aware of an increase of HMOs in the area, an acquaintance of mine organised a meeting last month with the Lewisham East MP, Janet Daby, to address the issue: he expected it would be attended by him and a few other people who were directly affected. In the event, the church hall was standing room only, with at least 150 people in attendance. The officials were clearly expecting this as we were met not only by Janet Daby, but two local councillors, three council staff including Lewisham’s Director of Planning, and three Metropolitan Police Officers.

Residents spoke of a sense of hopelessness as developers bought up houses next to them and undertook building work without any regard for its impact on them, ignoring party wall agreements. One woman from another ward but within the borough reported being told by a council officer to not go into her back garden because the irresponsible building work rendered it too dangerous. For her there was nothing that could be done, because the work was being conducted around the back of the house and was, as such, private and none of the council’s business. A councillor described the companies that make hay amid the lax regulatory environment as “cartels”.

The council staff and the politicians were not defensive, as I expected them to be. It was far more depressing: they seemed utterly defeated. The Director of Planning asked people not to sell their houses to these developers; one might reasonably ask, if you have a badly run HMO next door to you, who other than a developer is going to buy it? Another councillor suggested direct action and looked to the three Met police officers in attendance, one of whom had already described local HMOs as “not fit for human habitation”. They shrugged, perhaps in assent. The “cartel” comment councillor — with a flair for drama or perhaps an appropriate sense of what was at stake — spoke of law and order breaking down. Another woman questioned the absence of the state, why she was paying her taxes, and whether anyone cared about what was going on in the community?

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Activists aren't what they used to be

By Niamh Mulvey

What is going on here is something called “exempt accommodation”: housing that is exempt from the usual limit a local authority can pay in housing benefit for the provision of accommodation to vulnerable people. The additional money is intended to cover the cost of caring for the residents of such accommodation; people who are vulnerable for a whole host of reasons. Ashley Horsey of Commonweal, a charity that has researched exempt accommodation extensively, explained to me that there are two types: one sort is for people with long-term challenges such as mobility or an intellectual disability. This kind tends to be well run.

The other type of exempt accommodation (“non-commissioned”) is intended as a stop-gap for people who temporarily need assistance during a transitional stage in their lives. This includes people emerging from prison, people recovering from drug and alcohol addiction, women escaping domestic violence, care-leavers and people who have been sleeping rough. It’s not uncommon for people from all of these categories — and others — to live alongside one another, sharing a hallway, a kitchen and an entrance. According to Crisis, 150,000 people across the UK are being housed in exempt accommodation, a 62% increase since 2016.

​​This type of accommodation (non-commissioned exempt) has created a situation that turns vulnerable people into units of profit to be mined by developers — the “cartels” the local councillor spoke of. Providers can charge up to £960 per month for the provision of accommodation for people in this category. By examining adverts for rental accommodation locally, one can clearly see this: a “studio” going for £960 per month in a borough where a double room in a more traditional house-share with a responsible landlord yields only around £500-£700 per month. At the meeting in Lewisham, one such landlord — and brave soul, given the atmosphere — spoke up in some bewilderment: why aren’t the Government regulating us, he asked.

The additional money paid to these providers is supposed to be used to provide assistance to residents, to ensure they have the help they need to move on with their lives. What has actually happened is that many providers absolutely fail to provide this “help” — it is neither defined, measured nor monitored — and simply cream off the money that is supposed to assist people, as profit. In a detailed report into the issue Commonweal describe an “accountability deficit” that has arisen here: there is no obligation on providers to ensure that their residents are looked after — despite the premium that is paid for the accommodation. The results can be grim — “sex for rent” situations, drug users living alongside those trying to stay clean and endless anti-social behaviour issues for neighbours.

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How to save fiction

By Niamh Mulvey

Imagine for a moment that you are a woman escaping a violent situation in your home. You get away, and you get housed. You turn up at your new address and find a six-square-metre room is now your home. The kitchen you use is shared by five others, some of whom have histories of violence, some of whom are using drugs. The kitchen has no window; you have nowhere to dry your clothes. You are supposed to stay here temporarily, but you can’t afford private rents, and there is no social housing available.

What do you do? What can you do? It’s too noisy to sleep at night. Your landlord is making up to £12,000 per year off of you; he doesn’t want you to leave and there is nowhere for you to go. Some women in situations like this have children living with them — and because of the lack of oversight, it is unclear how many children are currently living in such circumstances.

The “accountability deficit” — lax oversight, little to no building regulation and helpless local councils — has created a gold rush in neighbourhoods like Lewisham: places where housing is still cheap, relatively, and where local homeowners are of modest incomes and can’t easily afford solicitors to defend their rights. A local homeowner here in Catford dug into the ownership of the HMO next door to him and found the property was flipped four times in quick succession between companies owned by the same person. The tactics used by many of these companies are straightforward: they purchase houses, in cash, easily outbidding ordinary buyers. They then proceed with building work as quickly as possible and ignore legal requirements that require consent from neighbours.

If neighbours object, they have trouble finding out to whom they can object — these companies maintain a practice of keeping former buyers’ names on the land register or they flip houses (four to five times in one day) to obscure ownership. These companies take a calculated risk, knowing that most regular homeowners will not have the time or the resources to wade through the legality of the situation. The game is stacked utterly in favour of the developers; the only instrument the council has is weak and ineffectual.

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This instrument — an Article Four Direction — can be used to prevent further HMO development in a neighbourhood, but only after complaints have been made. It cannot be applied retrospectively, meaning there is no disincentive for developers to continue to act with impunity. Article Four was applied in wards to the south of the Corbett estate and this is why development has suddenly descended upon these streets; the problem was not solved, it simply moved. The first many people knew of it was the sudden, poignant sight of six small fridges turning up for delivery at the recently-sold, small three-bedroom house next door.

This, of course, points to another issue: habitation by what amounts to six separate households creates a dangerous strain on services and facilities. I hear of a HMO in another neighbourhood that had its gas and electricity switched off due to fire safety concerns.

Nobody is being incentivised to fix this situation. Not local government, not the taxpayer, not vulnerable citizens, and not central government, which is effectively paying private corporations a premium to house people in dangerous conditions. But when the guiding ideology of our era lacks a moral dimension, or a sense of responsibility towards a community then this is where we end up. It’s hard not to think of Grenfell and the callousness of companies such as Kingspan, where staff have admitted to prioritising profits over standards. And I’m struck by the clinical nature of the language we now use around housing: units, delivery, services, clients. Who thinks about their homes in that way? Who are we forcing to think about their homes in that way?

A lack of housing security, a lack of a home — not knowing where or if you’re going to sleep at night or if the place you have is safe, is a reality for thousands of people across this country. The current solution: pay developers to make it go away; pay them whatever they want. The utter disregard for the dignity of the individuals involved or the neighbourhoods they live in, is grim and very telling. As a resident told me: the developers don’t live in Catford. They live in Knightsbridge or Dubai, or everywhere and nowhere.

These are our elites: they don’t put the names of their cherished homeland on the streets they create, they hide behind shell companies and when they look at vulnerable people and ordinary neighbourhoods, they see pound signs and profit.

It seemed reassuring. I know this because I messaged something like “It seems like they might know what they’re doing!”  in a science-nerdy chat group that I’m part of. But my optimism was not echoed. “It seems like they’ve just killed all our grannies,” responded someone.

I recall this to make two points. Firstly, I can’t claim any sort of foresight. I didn’t see then, though perhaps I should have done, that the early response of the British government to Covid was disastrous and wrongheaded. Instead, I was falsely reassured by the confidence of the scientific advisers, Whitty and Vallance. 

But secondly, other people did see it. The failings were predicted. And not just by my friend: a large number of smart, numerate generalists outperformed public health experts repeatedly in predicting the course of the pandemic in those early months.

On Monday night, two House of Commons select committees released the findings of their report into England’s Covid response. The headlines yesterday were stark: the “worst public health failure ever”, “big mistakes”, “damning”. 

The individual mistakes — failure to protect care homes; failure to move quickly enough on lockdowns; failure to build testing infrastructure and more — are certainly worthy of criticism. But having read the report, I want to talk about what strikes me as the overarching theme: being too bloody clever by half.

Let’s return to early March 2020, when I was falsely reassured by the Whitty/Vallance/Johnson press conference. The “flatten the curve” strategy that the three men introduced involved slowly introducing public health measures one by one. The idea was to carefully control the R value – the number of people that each infected person would, on average, give the disease to. The idea was to keep it at just above one, so that the disease would slowly spread through the population rather than either burning through it or dwindling down.

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By Tom Chivers

In paragraph 87 of the report, the committee writes: “It is striking, looking back, that it was accepted that the level of Covid-19 infection in the UK could be controlled by turning on particular non-pharmaceutical interventions at particular times.” 

“Striking” is certainly one word for it. This was a novel disease. We knew almost nothing about its behaviour. On March 6 2020, I went to a gig at Alexandra Palace. Looking back now, it should not have been allowed to go ahead — but because the consensus at the time was that the disease was spread by fomites, by touching surfaces, the only advice was to keep washing our hands. In fact, it is spread largely through the air. 

So we had a completely wrong idea how the virus behaved, but we nevertheless had a confident plan to control it very precisely by now banning large gatherings, then closing schools, then encouraging working from home. We were trying to thread a needle blindfolded.

This sort of overconfidence in highly uncertain science crops up over and over again. As well as flattening the curve, the phased introduction of distancing measures had another purpose: it was not believed that the public would accept long-term restrictions on their freedom. “There is a risk,” Whitty told the public in one of the early press conferences, “that if we go too early, people will understandably get fatigued and it will be difficult to sustain this over time.” 

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Have we seen the end of Covid?

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This was also the official Sage position: “Sage agreed that a balance needs to be struck between interventions that theoretically have significant impacts and interventions which the public can feasibly and safely adopt in sufficient numbers over long periods.”

It’s not clear what this claim was based on. Other behavioural scientists questioned it, with 200 of them signing an open letter to the Government asking for the evidence. But what evidence were they hoping to receive? What comparable situation have we ever faced? A few small-scale experiments about people obeying instructions under laboratory conditions probably can’t tell us anything at all about what people would be willing to do in order to save hundreds of thousands of their fellow citizens, very possibly including their own elderly relatives. Nonetheless, we based highly counterintuitive policy decisions — not imposing strict lockdowns even as the disease was spreading and killing, despite seeing it being successful elsewhere — on this apparently unevidenced belief.

And let’s be clear: the coming hundreds of thousands of deaths were very much known about. The report rightly says that we over-relied on a plan for pandemic flu. That was a huge mistake, and it led us to strange things like moving to “delay” the virus rather than “contain” it, and stopping community testing. 

That meant that we had no idea how widespread the virus was. “The UK was reduced to understanding the spread of Covid-19 by waiting for people to be so sick that they needed to be admitted to hospital,” says the report. “For a country with a world-class expertise in data analysis, to face the biggest health crisis in a hundred years with virtually no data to analyse was an almost unimaginable setback.”

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Did anyone predict coronavirus?

By Tom Chivers

So, yes, sticking to the flu plan was a disaster. But if you read the flu plan, it wouldn’t have worked any better for flu. The disaster that arrived was completely foreseen, yet it confidently said we couldn’t do anything about it, so we shouldn’t try. It said that planners should “aim to cope with a population mortality rate of up to 210,000–315,000 additional deaths” within 15 weeks of a virus arriving, and should “plan for a situation in which up to 2.5% of those with symptoms die”. 

The lowest number there, 210,000 over 15 weeks, works out at 2,000 deaths a day. At the peak of the second wave, the seven-day rolling average of deaths briefly – for nine days, in fact — broke 1,200 a day. 

That period was horrifying, but the pandemic flu plan was to “cope” with at least 2,000 deaths a day for 15 weeks. That appears to have been based on the idea that we, the British public, were so profoundly wedded to liberty that we would rather let the equivalent of the entire population of Norwich die in three months than have the nightclubs closed. 

More than that, in fact, it was important to keep them open so that people didn’t get depressed: “Large public gatherings or crowded events where people may be in close proximity are an important indicator of ‘normality’ and may help maintain public morale during a pandemic.” The possibility that people might not want to attend large public gatherings if it might kill them or their family, or might value the lives of their elderly relatives highly enough to stay home for a few weeks rather than watch them die in their thousands, was not considered..

Over and over again, the British response was one of unwarranted confidence in highly uncertain outcomes. We were, of course, dealing with a largely unprecedented situation. But that meant that the evidence was necessarily weak. 

So statements such as “There is very limited evidence that restrictions on mass gatherings will have any significant effect on influenza virus transmission” (from the pandemic flu plan) were on the one hand true, but also basically meaningless. There’s very limited evidence either way. 

But the common sense attitude would be that being in a large group of people probably helps the virus to spread. And given that the alternative, which the plan explicitly endorses, is at least 210,000 people dying in 15 weeks, it seems incredible that the approach was “well, there’s no evidence that it works, so we might as well not try”.

There are other areas where this overconfident, clever-clever approach backfired. For instance, Matt Hancock told the committee that in the early months, they were advised that “testing people asymptomatically might lead to false negatives” so you shouldn’t do it. Of course, it would also lead to lots of true positives. But the fear of a hypothetical second-order effect — like Jenny Harries’s claim last March that wearing masks could increase the risk of infection, because it would make people more confident — overshadowed the very obvious and real risk of disease. It’s like the plan was based around not wanting to be obvious, but always being clever and counterintuitive.

And the reliance on the pandemic flu “flatten the curve” plan meant that there was no modelling of the impacts of a lockdown. Dominic Cummings told the committee: “You are going to have to lock down, but there is no lockdown plan. It doesn’t exist. Sage haven’t modelled it.”

Often, simply plotting an exponential curve on a graph might have done better than the more complex forecasts the Government used. Vallance told a press conference that we were “four weeks” behind Italy, when simply looking at the number of deaths showed that we were 14 days behind. And when other countries locked down, with some success, we didn’t learn from their example, because we had a plan, and we were confident in it.

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And, of course, border closures. Naively, you’d think that stopping people coming into the country would reduce the likelihood of the disease coming here. But overconfident modelling told scientific advisers that it wouldn’t, so they trusted that, rather than thinking “OK, but if the model is wrong then we’ve completely messed up.”

This isn’t to place all of the blame on Whitty, Vallance and Sage — or to exonerate the politicians. There was plenty of cowardice and dithering on the part of the Government, not least (as the report shows) when they ignored scientific advice to impose a short “circuit breaker” lockdown in autumn 2020, presumably because they feared being unpopular. 

But the valuable lesson, I think, is not “we should have done X” or “we should have done Y” specifically, but that we should be less confident in our ability to predict highly complex situations. And more than that: we should look at the possible results of being wrong in our attempts to predict those highly complex outcomes. If you’re 60% sure that lockdowns won’t work, then that implies there’s a 40% chance they will, and that implies that you think there’s a 40% chance of saving hundreds of thousands of lives. Instead, it seems like the whole way through, the thinking was “it probably won’t work so let’s not try”.

I didn’t foresee any of this. I should have: it was all there in the pandemic flu plan. Others, smarter and more conscientious than me, did, or at least foresaw that disaster was a realistic probability. But the takeaway should be not “in the next pandemic, we need to protect care homes” — although we should — but “in the next pandemic, we should stop trying to be so damn clever”.

Yes, it’s nakedly opportunistic, but it should worry Conservative MPs. After C & A, there are very few seats in the leafy South that can be viewed as absolutely safe. Generation Rent wasn’t voting Tory anyway, and now they’ve been joined by older, home-owning opponents of new development.

Of course, there’s always an excuse for opposing a particular housing development while claiming to support new housing in general. For ‘progressive’ nimbies, a favourite excuse is that not enough of the new homes are affordable — which tends to be the way of things in short supply.

Still, the rankness of Labour and Lib Dem hypocrisy doesn’t matter. The Tories are in power and therefore they’ll cop the blame. Indeed, it’s about to get a whole worse for them because there’s a housing and planning bill due in the Autumn.

We’ve already had a taste of just how controversial this is going to be. The key proposals were floated in a white paper last year, which became the subject of a Commons debate last October. One-by-one, MPs lined up to attack the government position — and, ominously, almost all of them were Tories.  

The Isle of Wight MP, Bob Seely led the charge, but he was joined by more than 30 colleagues including Jeremy Hunt, Damian Green, Chris Grayling, Karen Bradley and the former Prime Minister, Theresa May. Shocked by the scale of the unrest, the Government dropped the most controversial proposal — a literally brainless scheme to allocate housing targets by algorithm.

However, the centre piece of forthcoming bill is still very much in place. The idea is to gut the existing planning system and replace it with American-style “zoning”. Local authorities would be forced to divide up their communities between three types of zone: “protected”, “renewal” and “growth”. In the growth zones, outline planning permission would be granted automatically to qualifying developments and the rights of local people to object drastically curtailed. 

It’s pure political poison. Every “growth zone” in the country would be seen as a building site in waiting — and every one of them surrounded by angry, disenfranchised residents. So all the ingredients are in place for a major backbench rebellion: dozens of anxious MPs; a choice of high profile potential leaders — including Theresa May and Jeremy Hunt; an opportunistic opposition; a pitifully weak Secretary of State (Robert Jenrick); and, worst of all, a truly terrible set of policies that deserve to be torn to shreds anyway. 

William Hague has argued that planning reform could be Boris Johnson’s Poll Tax. It’s a lot worse than that. The Poll Tax was an unforced error. And once Margaret Thatcher was out of the way, it was easy to reverse ferret. On planning reform, however, Boris Johnson is in a much tighter spot. 

The need for better, more affordable housing is pressing. Excluded from the property-owning democracy, an entire generation has turned against the Tories. Boris could scrap the planning reforms — and leave the generational Götterdämmerung to the next Conservative leader. However, he can’t duck the urgent task of reviving the post-Covid economy. If there’s no recovery in house building, they’ll be no recovery at all. Building back better isn’t just a figure of speech.

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That, however, brings us back to the nimbies. Now that they’ve got the Blue Wall in their sights, what’s to stop them dismantling it brick by brick? 

The Government’s solution is beauty. Ministers believe they can win people over to development if the architecture is pleasing to the eye. However, the politicians are forgetting something, which is that people can look out of their windows. They can see what is being built in their neighbourhoods and most of it is far from beautiful. 

This screenshot — which comes via the indispensable and aptly-named Shit Planning Twitter account. It shows the hapless Jenrick standing in front of a new estate in Mansfield. It is soul-destroyingly bland. Boring box-like houses are surrounded by an ocean of tarmac. If this is “affordable housing”, then that’s no excuse. Beauty should be a right, not a luxury. 

The Building Better, Building Beautiful Commission does wonderful work, but it’s not translating to the ground. By-and-large developers are not “creating streets”, they are sticking up blocks inspired by the screw you school of architecture. Still, let’s not be naive. We could build Rivendell and half the nimbies still wouldn’t be satisfied. So perhaps the Tories should defy them instead. With a majority of 80, they could afford to lose some seats down South, especially if there are more to be gained up North. 

But the trouble is, the reforms would do nothing to make housing any more affordable. The only way that houses get cheaper is if supply rises relative to demand. It therefore matters who controls the supply and demand.

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On the supply side, it’s not just the planners, but the big developers. After all, they’re the ones who sell new houses into housing market. Unfortunately, they’ve got no reason to increase supply to the point at which house prices stabilise or fall — and so, obviously, they won’t. As for demand, that isn’t just controlled by aspiring home owners, but also by property speculators — which these days don’t just include the amateur buy-to-let market but major private equity firms. These people also have no interest in letting house prices fall. 

So, bugger the nimbies. They may have a big influence on the politics, but they don’t control the economics. Planning reform, therefore, is largely irrelevant. A very different plan of action is required.

Firstly, the law should be used to exclude speculators from the housing market. We plan the location of new housing for environmental reasons and we should plan the ownership of new housing for social reasons. Most new houses should be reserved for first-time buyers and movers.

Free marketers might complain that this is distributism not capitalism. But so what? For a conservative, spreading home ownership should come before the purity of the market place.

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On the supply side, government needs to break the big developers’ stranglehold on the land supply. It can do this by purchasing and preparing sites itself. A time-limited right to fully develop and sell-on plots could then be auctioned-off. Builders would thus be able to obtain the sites they need for houses they actually intend to build, but they’d have no need — nor the perverse incentive — to hold on to more land than that. 

This still leaves the political problem. Lose enough seats and your policies won’t matter because you won’t be in government. The answer is to concentrate new housing in as few, very carefully selected, locations as possible.

There’s no reason why mini-cities like Cambridge and Oxford shouldn’t become bigger cities. At the moment they’re surrounded by absurdly restrictive green belts. Stopping sprawl is a good thing, but these university towns are the size of a single London borough. Using the gentle density model of the Georgian square or the Edwardian mansion block, we can have expansion without sprawl. And what about Canterbury? It’s ridiculous that Kent, with a population of 1.5 million people, doesn’t have a single proper city. Elsewhere in Europe, a building like Canterbury Cathedral would take pride of place in a major regional centre.

Also let’s not forget that these are open-minded, Remain-voting, university towns. I’m sure that a progressive community that supports liberal immigration policies could have no objection to providing homes for a growing population. But if, for some strange reason, they do, then central government should insist. It is said that you can’t please all of the people all of the time. But if you seriously displease just a select few of them, then you’ll probably get away with it. 

Back in the 1950s and 60s, the Midlands was booming. Leicester at the time had so many jobs that employers waited at the gates of other factories to poach workers, and even chased up potential recruits who forgot to come to interviews. In the decade to 1964, service businesses around Birmingham grew faster than any other part of the country; in 1961, West Midlands households earned more on average than any other British region, including London and the South East.

But all this was ended by London-based planners, who virtually banned new factories, offices and housing south of Manchester in a failed attempt to rebalance the economy. In 1960, the Government even refused Fox’s Glacier Mints permission for a new factory in Leicester to replace its existing building facing demolition for a ring road. That began the story of Fox’s decline in the city, culminating in its recent controversial decision to leave Leicester forever, and illustrates the profound damage caused to the Midlands and the British economy as a whole.

The Midlands boom was nothing new: ancient pottery shows a manufacturing hub since the Bronze Age, and throughout the Middle Ages it could compete with the south in terms of wealth: in the 14th century, the West Midlands were among the richest places in Europe. William the Conqueror’s favourite, William Peverel, doubled the size of Nottingham soon after the Conquest, and much later Daniel Defoe was to call it one of the most beautiful towns in England.

The area was central to the Industrial Revolution, among its heroes of innovation being Abraham Darby, who smelted iron using Black Country coke rather than charcoal, and James Watt and Matthew Boulton, who began to commercially develop steam engines. But this growth and prosperity would continue into the 20th century, as other industrialised areas of Britain fell into relative decline.

From 1911 to 1954 the West Midlands grew real output per person faster than any other region, to reach the highest outside the South East. Leicester, which dates back to an Iron Age settlement predating the Roman invasion, was by the 1930s the second most prosperous city in Europe; it later had Britain’s first local radio station.

Meanwhile Coventry, which was already a substantial settlement before the Norman Conquest, with a monastery founded by Leofric, Earl of Mercia — although his wife is better remembered for an altogether different reason — was the fifth wealthiest town in England by the reign of Henry VIII, beaten only by Bristol, Newcastle, Norwich and London. Again by the mid-20th century it was booming, with the fastest population growth of any British city both between the wars and from 1950 to 1965. In the 1930s  it was such a magnet of prosperity that two-fifths of its residents were from other parts of the country. In 1953, unemployment fell to 0.8%; a 1959 Times article called it a “powerhouse of technical progress” and “an Eldorado for its workers”.

Birmingham, seen by guidebooks as “the cradle of England’s industrial greatness”, grew from 8,000 people in 1700 to over a million in 1931 — overtaking Manchester in 1861 and Liverpool in 1881. Strongly Liberal and run by Joseph Chamberlain, in 1890 it was described by Harper’s as “the Best-Governed City in the World”. The 1911 Greater Birmingham Act made Birmingham three times the area of Glasgow and twice that of Manchester, Liverpool or Belfast.

The city was famous, above all, for its industry. From the 1600s to the 1800s, enterprising locals dug 35 miles of canals — more than Venice — to carry Birmingham’s huge trade, these barges first powered by England’s uniquely strong shire horses and then by England’s coal deposits.

Between the wars, Birmingham’s products included a coining press for Tibet’s mint, rolling stock for electrified suburban lines of Buenos Aires, and pipelines for oil through Iraq. From 1923 to 1937, its formal working population grew nearly twice as fast as the country as a whole. Historian Lord Briggs wrote that “Birmingham was more adaptable […] and succeeded in retaining its industrial supremacy” even though its initial advantages — coal, iron ore, and limestone — were lost.

The city became a global powerhouse, with the terminus for the world’s first two long-distance railway lines — the Grand Junction railway to the North and Robert Stephenson’s London and Birmingham Railway. It saw the invention of compact cavity magnetrons for radar, and the first design of a practical nuclear weapon. It remained Britain’s most prosperous city after London as late as the 1970s.

Suggested reading

How Birmingham changed the world

By Paul Lay

But national government saw the success of the Midlands as damaging other regions. The Distribution of Industry Act 1945 sought to stop industrial growth in the “Congested Areas” — the Midlands, East Anglia and the South East — and to push industry to declining “Development Areas” in the North and West. Entrepreneurs had to get an “Industrial Development Certificate” (IDC) before building a new factory.

The 1956 West Midlands Plan even set Birmingham a 1960 target population far lower than its actual 1951 population — so people would have to leave, and industry shrink. The controls made it difficult to regenerate businesses or add new ones, and the economy became less diverse, focused on the motor industry. That left it vulnerable to the recession of the 1980s, which badly affected the Midlands.

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How Birmingham gave birth to heavy metal

By Paul Lay

The Certificates failed even to work as the planners intended. Of the projects refused, a study found that only 18% instead went ahead in an area approved by the government, and many of those were in the South East. Half of the refused projects were just reduced in size to escape IDC control; 31% of refusals led to closure, reorganisation or abandonment. So IDCs prevented or destroyed several jobs for every job successfully moved.

Those requirements blocked most post-war growth in Midlands factories. But for 20 years, there was no limit on service businesses, and so Midlands entrepreneurs turned to those; despite the planning madness, the Midlands flourished.

From 1953 to 1964, service sector employment around Birmingham boomed, with major British and international banks, professional and scientific services, finance and insurance, adding three million square feet of office space. In the decade from 1951, Birmingham created more jobs than any city except London, with unemployment generally below 1%.

But then in 1964, the Government declared Birmingham’s growth “threatening”, and banned further office development for almost two decades. To add insult to injury to the region, its cities suffered among the worst architectual destruction of that decade, with much of old Victorian Birmingham torn down and medieval Coventry destroyed.

What would have happened without these disastrous policies? The size of a country’s cities normally follows a rule called ‘“Zipf’s law”, by which the second largest city is half the size of the largest, but Britain is an exception. By one estimate, Birmingham should have twice as many people, and Nottingham a third more. Those shortfalls, perhaps also due to years of transport neglect, are staggering.

Suggested reading

Why the North East of England is different

By Dan Jackson

The deliberate strangulation of the booming industries of the Midlands and other high-wage places by London planners was partly why, in the late 1960s and 70s, we became the “sick man of Europe” as average earnings dropped behind our continental friends and rivals. Adjusted for purchasing power, British spending per head was overtaken by West Germany, France and Italy, and ever since we have been playing catch-up. We have now again overtaken Italy and France, but Germany is still about 17% higher. Germany had no equivalent to IDCs; France and Italy’s were much more flexible.

Blaming bad planning for low growth is no pie in the sky. One of Britain’s most respected economic historians, Nicholas Crafts, says we could raise average annual growth by two percentage points for an entire decade by fixing our planning system: if we had done that earlier, today’s GDP would be more than one-fifth higher. That would mean plentiful jobs with higher wages. We would have more money for education and healthcare.

To grow and overtake Germany again, we need to unleash the Midlands and other regions — giving them more power to grow, with world-class transport. The injustice cannot be undone, but we can free Mercia to regain its former glory.

But for that to continue, the rest of us must grant the young a place to make their own and a stake in the future. Fail to do that and the threads that connect the past to the present will fray and snap.

In that respect, our society is wearing thin. Indeed, across the West, we see social relations unravelling fast. Furthermore, the sense of belonging and purpose we so desperately need to rediscover is often at its most ragged among the most highly educated part of the population.

Suggested reading

Why the rich are revolting

By Ed West

What’s gone wrong? Ed West cites Peter Turchin’s concept of “elite overproduction”:

“…the socially dangerous situation where too many people are chasing too few elite places in society, creating ‘a large class of disgruntled elite-wannabes, often well-educated and highly capable… denied access to elite positions’.

“So while around half of 18-year-olds are going onto college, only a far smaller number of jobs actually require a degree. Many of those graduates, under the impression they were joining the higher tier in society, will not even reach managerial level and will be left disappointed and hugely indebted.”

Also for UnHerd, Mary Harrington looks at the decline of family formation among the millennial generation:

“A recent Pew report showed 30% of millennials living with a spouse and child, a fall of 10% on Generation X and a whopping 40% drop on the 1968 generation. That’s America, but ONS datashows the age of first child climbing relentlessly in Britain too — while the birth rate is falling in all cohorts save the over-40s.”

Both Ed and Mary also mention housing — as well they might, because it is here that we see the most tangible evidence of the deteriorating position of the Millennial left-behinds. So-called “Generation Rent” — i.e. the Millennials who can’t get on the housing ladder despite their degrees and knowledge economy jobs is now approaching middle-age and thus the point at which they’ll have enough years of work left to qualify for and pay off a mortgage. Remember that next year is when the oldest millennials (born 1981) hit their forties.

Look ahead another two or three decades and they’ll be retiring — a growing proportion of them never having become homeowners. A lot of them, still paying out a massive chunk of their monthly salaries to landlords, won’t have much in the way private pensions or savings either — so how are they going to pay the rent when they retire?

In Abraham Maslow‘s famous Hierarchy of Needs a secure and safe place to live is foundational to the higher needs i.e. “love”, “esteem” and “self-actualisation”. Of course, you can find these things without being a property owner, but having a home that you can truly call your own really does help.

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What Antifa and the alt-Right have in common

By Mary Harrington

If we undermine the stability of the basics then everything else that people reach for — relationships, purpose and meaning — will also be destabilised.

Economically, socially and culturally, our future depends on solving the housing crisis.

*

That task has become all the more urgent — and immensely more difficult — because of the Covid-recession.

On Friday we got the latest GDP figures and, as expected, they’re nothing short of cataclysmic. Output shrunk by 20.4% in April alone and is 25.1% lower than it was before the pandemic. One of the worst affected sectors is construction, which is down 43.6% compared to January.

Of course, a lot of that loss of output is artificial — the result of lockdown restrictions. As these are eased we’ll see a bounce back in activity. The record decreases will be followed by record increases. But unfortunately the latter are highly unlikely to be as big as the former, which is what we’d need for a true V-shaped recovery.

A must-read new report from the Centre for Policy Studies by Alex Morton warns of a W-shaped recovery in housebuilding. The crash that’s happening now will be followed by a partial rebound as developers finish the projects they’d started on before lockdown. However, once that pipeline is exhausted, there will, in the absence of government intervention, be a second crash. Morton explains why:

“Life is hard for housebuilders in falling markets, since they are stuck with the costs of the land they have already paid for. This limits their scope to cut prices – if buyers are waiting for prices to fall, builders simply stop building rather than operating at a loss.”

Assuming that property prices stay depressed by the effects and after-effects of the Covid recession, developers will sit on their land rather than sell it at a loss (or an inadequate profit).

The report explains why the big developers are able to go into suspended animation. Firstly, they have major cash reserves. Secondly, their creditors are patient — the banks know that the money they’ve lent is effectively secured against the developers’ land holdings, so rather than foreclose it makes sense to wait until land prices go back up again. And, thirdly, only about 20% of the people working onsite are employed directly. A minimal level of activity can keep those occupied (supplemented this time round by the furlough scheme) while the outsourced workers fend for themselves as best they can. Many of the latter are migrant workers — a large number of which will return to their countries of origin when work dries up (and, presumably, all the more so in the midst of the pandemic).

When the property market begins to show  signs of life, house builders will cautiously expand their, output again — but not so fast as to stall the recovery in prices. And thus the recovery in house building — the final upstroke of the “W” — will most likely be long and shallow. In the last recession, after the banking crisis, it took half a decade to get back to the level of construction before the crash.

Suggested reading

Test article

By Peter Franklin

If the same thing happens now, then that means years of drag on growth, employment and the supply of new homes needed to alleviate the housing crisis. It will also most likely mean another period of market concentration in which the big developers become even more dominant — because smaller, independent firms don’t have the resources to hold on through the slump.

*

What can government do to prevent this? Alex Morton’s proposal is what he calls a “Help to Build” scheme — that is a system of grants paid directly to builders for each new home built. The scheme would time limited and conditional upon maintaining a steady supply of new homes.

As an idea it’s more relevant than what the government appears to be working on. According to a story in the Financial Times, Downing Street is resorting to that old stand-by — reform of the planning system. If the proposals end up improving the quality of new development then that’s great, but the idea that planning restrictions are holding back the quantity of new development is one of the biggest and most persistent myths in public policy.

The number of permissions granted for new homes runs way ahead of the number of homes actually built. According to Morton, the most recent figures (pre-Covid) show that the level of the latter (homes built) is only about 60% of the level of the former (homes permitted). Meanwhile the Local Government Association points out that, over the last decade, more than a million homes have been granted planning permission that haven’t been built yet. So forget the standard narrative about nimbys, they are not the obstacle here.

What then does determine the number of houses being built? It’s pretty clear when you look at the figures. Over the last 40 years or so, there’s been an incredibly close relationship between new homes built and the total number of transactions in the housing market. Morton puts the ratio at one new build for every 8.5 to 12 transactions. Or to put it another way roughly 10% of all houses sold are new houses (the rest are second-hand). In fact, if you were to plot new build against transactions on a graph with the latter divided by ten, then the two lines would be almost on top of each other, rising and falling in almost perfect synchrony.

Why would that be? Well, it’s because the big developers — who dominate the industry — won’t sell houses (and thus the land they’re built on) until they make a profit on the land that they originally purchased. The more demand there is in the housing market (itself a function of the amount of finance available), the more houses can be built and sold without that supply overwhelming demand and pushing down prices. In a recession, when finance dries up and buyers are cautious, demand collapses and the big developers ration supply accordingly.

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Given how this system works, the only way for government to accelerate the recovery of house building is to subsidise it — either by ‘compensating’ the builders directly or by artificially boosting the supply of finance to purchasers through measures like the Help to Buy scheme (in which taxpayers’ money is lent out to fund deposits).

Help to Build is an improvement on Help to Buy, but it still amounts to life support for a fundamentally flawed system. With the house building oligarchy on its knees, now is the time to change the system, not subsidise it.

*

And make no mistake it can be changed. The ratio of one new build home for every ten sales in the housing market is not an immutable law of physics. It may have held true for decades, but only because this is a period in which the big commercial developers have built the great majority of new housing and have a stranglehold on the supply of building land.

Before the mid-1970s that was not the case. Local authorities and housing associations were still obtaining land and building houses on a massive scale. This doesn’t mean that the private sector was squeezed out — indeed, since the war, the commercial builders have never built more houses then they did in the 1960s. Furthermore, despite all the council housing, this was a period of rising home ownership — and, no wonder, houses were actually affordable, allowing the baby boom generation to get onto the housing ladder when they were still in their 20s and 30s. Most strikingly, that ten-to-one ratio between transactions and new build was more like five-to-one.

It’s worth noting that all this happened in the decades after the much-maligned 1947 Town and County panning Act came into force. So we should stop blaming the planning system, or the green belt, or all other convenient scapegoats . What caused the housing crisis — i.e. the last four decades of chronic house price inflation — was the shift in power over the land supply.

This must be taken out of the grip of the big developers — with publicly-owned ‘community land banks’ taking control instead. What these bodies would do is buy land, grant planning permission upon it and put in place the basic infrastructure. Commercial developers, housing associations, councils, social enterprises and self-builders would bid for the right to build on the serviced plots — and to sell and/or rent out the completed properties. At no point would the house builders own the land themselves. Therefore they could neither profit nor lose from its eventual sale. Instead, the end-purchaser would buy the plot from the community land bank and would pay the builder for the building in much the same way that one pays a builder for an extension.

House builders would cease to be land speculators, and would instead compete solely on the basis of the price and quality of what they build. They would have no incentive, or ability, to ration land supply to the market.

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Could coronavirus topple skyscrapers?

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Of course, the publicly-owned land banks that I’d like to see managing the land supply instead are ultimately underwritten by the state. If they mess up — buying land for more than they can sell it — would taxpayers end-up bearing the loss? No, they wouldn’t — not if the land were purchased at close to its market value as farm land and not its value as building land (the latter being a multiple of the former). Legislation must be passed to abolish the morally indefensible “hope value” principle — which entitles land owners to the capital gain that is created by the granting of planning permission for development. This uplift in value is not created by the land owner and therefore should belong to the country, be used for the common good and protect taxpayers against the ups and downs of the property market.

At first, the reformed land supply system would be used to boost social housing, as part of the Government’s emergency economic stimulus. But, in time, the system would be expanded to provide as much land as was needed to meet demand for new owner-occupied homes.

*

OK, assuming this all works and a lot more land gets released into the property market, wouldn’t it put downward pressure on house prices? Absolutely it would, and quite rightly so. After all, we don’t just have a housing crisis because we’re not building enough houses, but also because houses are too expensive. In almost every other sector of the economy — from food to consumer electronics — we welcome lower prices. To be able to produce more for less is what economic growth is all about. It is what makes us richer. Driving out cost, improving quality and expanding output is what the market does best — when it’s not captured by vested interests.

The idea that a basic need like housing should be an exception — that we should positively welcome inflation — is absurd. Indeed, worse than that, it is a fundamental injustice by which an entire generation is being systematically ripped-off.

If charity begins at home, then fairness begins with housing. A land allocation system based on the monopolisation and manipulation of supply cannot be allowed to stand.

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The inequality that fuels our dangerous times

By Peter Franklin

Organised by the magazine Building Design, it has (in my aesthetic judgement) produced a worthy shortlist and a worthy winner every year since its inception in 2006.

But there’s a big problem with the prize — not its subjectivity, but the fact that the winning buildings still exist. Indeed, buildings like them are still being built. Name-and-shame is not working.

There’s an argument to be made that things are getting worse. We’ve swapped the horrendous, but interesting, brutalism of the post-war period for the offensively bland spreadsheet architecture of the 21st century. In an age in which Jane Jacobs has won the intellectual battle against Robert Moses, we really ought to know better. Yet we continue to fill up our towns and cities with inhumane, alienating architecture.

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The hideous spread of 'spreadsheet architecture'

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It’s environmentally destructive too. For instance, around Victoria Street in London you see buildings that went up within living memory now being demolished and replaced. Though that’s no great loss to our heritage, it can’t be sustainable to throw-up these great piles of concrete, glass and steel only to tear them down again a few decades later. Is it not too much to ask our architects to design buildings that won’t just enhance our lives, but also outlive us?

It might seem paradoxical, but to end the cycle of destruction, we need to accelerate it. Every year, there should be a public vote to choose the worst new building in the land. The winner wouldn’t get a cup, but a wrecking ball. Yes, that’s right, it would be physically demolished — immediately and without compensation. Indeed, the owner would be required to foot the bill for the building’s de-construction (though they would have the option of suing the architect and the planning authority).

This would concentrate minds wonderfully. Instead of competing among themselves to épater les bourgeois, starchitects would need to design with due regard to the common good. Meanwhile, developers whose sole objective is to squeeze as much profitable square footage into any site they can get their hands on, would have to contend with the possibility of financial (as well as literal) ruin. The planners would come under immense pressure to do a better job too. At the cost of sacrificing one new building, development across the land would be greatly improved.

There’d be a minimum threshold of votes required to trigger a compulsory demolition, so by achieving a broad consensus behind new development — not least by properly involving local people in a positive planning and design process — it’s possible that no new building would have to come down.

But can the people be trusted? By placing the wrecking ball in their hands, would we imperil innovative projects that shock a lot of people at the time that they’re built, but come to be loved? Here I don’t mean the concrete monstrosities that sophistication-signallers like to rave over on Twitter, but genuine wonders like the Eiffel Tower.

We could, perhaps, complement the vote-to-demolish with a vote-to-save, but beyond that I am inclined to trust the people. Indeed, radical democratisation would do more good than harm, freeing architecture from the stifling conformity imposed by elite taste-makers and those who pay for their work.

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How communities lost their soul

By Nicholas Boys Smith

If there is a flaw in my modest proposal it’s that the focus would be on the tallest, flashiest new buildings — and therefore London. The problem isn’t that these aren’t crap, but that less prominent crappiness in other parts of the country might get overlooked. The prize therefore should be regionalised, with categories for a different scales and types of development. After all, we don’t just need well-designed, sustainable landmarks but also beautiful houses, shops and other everyday buildings.

Some of you might think that I’m ignoring the real objection to my idea — which is that the state can’t go round demolishing newly-built, structurally-sound private property. But it can and sometimes does. You could build a brilliantly-designed dwelling in an area that desperately needs more homes, but if you do so without planning permission, it’ll be knocked down. That’s the law.

Admittedly, my idea concerns buildings that have got planning permission. But that’s precisely the point: the planning system as it stands is failing. Over-and-over again it stops the development we do need while allowing development that makes places worse. Despite recent reforms, the system remains opaque, important decisions are made behind closed doors and the whole process advantages the rich and powerful over ordinary people.

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How beauty shapes our fates

By Phillip Blond

Unlike bad art or bad literature, bad architecture is something that whole communities are forced to live with. Our existing laws clearly doesn’t provide them with the protection they need, so we must redress the balance. I’d prefer it if we could move to a fully democratic, consensus-based planning system, but that won’t happen unless the developers, and the financiers behind them, are incentivised to make it work.

My proposal provides the incentive. I’ll admit it does so in a brutal, uncompromising manner, but fans of modernism should surely approve of that. 

That’s the lesson I took from Tanya Gold’s bracingly unsentimental portrait of Cornwall for UnHerd. It is, she says, a “lovely but hard” place – the two qualities existing side-by-side, but experienced in differing proportions depending on whether you’re there for a holiday or to make a living.

Further reading

Why the Cornish must accept the tourists

By Tanya Gold

But what happens when the tourists don’t leave, but move in? Answer: house prices go up, even while local wages remain low. Property markets in some Cornish communities have been utterly distorted. According to The Economist, “at the last count, a quarter of the dwellings in St Ives were second homes or holiday lets”.

Gold says that fatalism is in the Cornish character. But if that’s true, then the people of St Ives are going against type:

“Locals worry that the town is becoming a playground for rich Londoners… So in May 2016 locals decided to do something about it, voting in a referendum to introduce a ‘principal-residence policy’, which stops newly built houses in the town from being used as second homes. The thinking went that by stopping holidaymakers from snapping up new-builds, housing would become more affordable to people who live in St Ives all year round.”

Three years on, has the policy worked? Yes, is the short answer:

“…official statistics suggest that excluding second-home buyers from the new-build market has removed a big source of demand. The price of new homes in the town is 13% below what it might have been if the previous growth rate had continued.”

We’re also told that “other Cornish towns have introduced their own versions of the policy”. However, there is a complication – the level of house building in St Ives has, apparently, “slumped”. The Economist describes this as an “unwelcome side effect”, suggesting that the outcome was both harmful and unintended.

Here’s an alternative interpretation: in some situations, deliberately slowing down the pace of development may be just what’s needed.

Obviously, this runs counter to the conventional wisdom – which rests on two fundamental assumptions: firstly, that the only way to solve the housing crisis is to build more houses; and, secondly, that property prices are a function of supply. Look more closely, however, and we can see that the first assumption is wrong and the second incomplete.

The housing crisis is first and foremost a crisis of affordability. The basic problem is that homes are too expensive, not that there too few of them. The basic solution, therefore, is to make them cheaper – or at least hold prices steady so that wages and savings can catch up.

Ah, but wouldn’t building more houses increase supply and therefore bring down prices? Not necessarily. Prices are a function of both supply and demand. If demand runs ahead of supply, then it doesn’t matter how much you build – prices will still go up. Because supply is physical (requiring bricks and mortar, workers and equipment) and demand is financial (requiring only the electronic transfer funds from one bank account to another) the latter always has the potential to outstrip the former. Never forget: money flows faster than concrete.

Further reading

Sun, sea, sand – and shooting up

By James Bloodworth

That’s why you see property markets overheating even during construction booms – or, rather, especially during construction booms. That’s because supply has a tendency to generate its own demand. In the context of housing, a building boom is its own best advert. It provides visible evidence of a thriving economy – and thus attracts further investor interest, which bankrolls more construction and so on and so forth.

It’s a process best served by the most noticeable kinds of development. Visibility may come from the architectural form of the buildings (the flashier the better) or the concentration of activity in certain hotspots or the already established prestige of certain locations. A measure of controversy also helps – there being no such thing as bad publicity.

Demand can be further enhanced by selling a development as a generic investment product – and not necessarily as a primary residence requiring a full time commitment by the purchaser. Hence the attraction to investors (and thus developers) of holiday homes, time shares, buy-to-let flats and so on.

When some or all of these factors align in a particular place it can be impossible to satisfy demand. Prices therefore keep rising – attracting even more speculative attention and making life ever more expensive for local people.

In these circumstances, it is entirely rational for the community to do what St Ives did and use the law to selectively curb demand – in this case by freezing out the second homers. By disrupting the circular relationship between development and speculation, prices have a chance to subside back to affordable levels.

The Economist, being a liberal publication, plainly doesn’t approve. And, to be fair, place-specific restrictions on second home ownership, buy-to-let landlords and other unwanted categories of demand do represent a barrier to the free movement of people and capital.

However, the right to free movement is not absolute. All liberals would uphold the right of individuals to restrict access to their own private property; and most liberals, apart from the ultras, believe that nations (or groups of nations like the EU) should be able to control their own borders.

And if such rights are justifiably exercised at the level of the individual and the nation, then why shouldn’t they also apply at the intermediate level – that of the community?

Further reading

Control mass immigration? Europe can’t even control mass tourism

By Peter Franklin

In British politics, the green belt is regarded with equal trepidation. Only last week, Tory leadership rivals, Boris Johnson and Jeremy Hunt, agreed that building more homes should not mean building on the restricted development zones that surround London and other UK cities.

Those hoping that a change of Prime Minister might bring change were disappointed. For instance, James Forsyth of The Spectator made his feelings known:

“Boris Johnson and Jeremy Hunt on the green belt is so depressing. If Britain ceases to be a property owning democracy, the centre right will not win elections.”

Frustration is mounting. After 13 years in which New Labour created the housing crisis, the Tories have spent the last nine years not solving it. In all that time, the green belt has remained sacrosanct – despite rising house prices and falling levels of home ownership.

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Slaying dragons: the stifling British green belt

By Ian Birrell

However, on the pro-development side, I fear that the green belt has become an inverted taboo, something that must be violated in order to prove one’s commitment to the worthy cause of homes for all. Indeed, the most fanatical of the anti-nimbys positively embrace the concept of sprawl.

Yet according to Ellie Anzilotti for Fast Company, public demand is shifting away from the suburbs. Instead of assuming an unchanging American dream, researchers from George Washington University and Smart Growth America took a look at where Americans are choosing to live now:

“…sprawling communities of single-family homes that require a car to navigate are not what’s drawing people anymore. What’s popular now are places where people can live in mixed-use, multifamily housing—maybe an apartment building above a coffee shop—and walk, bike, or take transit to get around.”

Their report, Foot Traffic Ahead: Ranking Walkable Urbanism in America’s Largest Metros, identifies 761 densely built, but liveable, communities in urban centres across America. Collectively, they only cover less than 1% of America’s 30 biggest metro areas, but in terms of new development they are all important:

“While sprawling, suburban districts have added no new development and in some cases, lost occupancy since 2010, nearly all new office and multifamily housing construction has clustered in these 761 areas.”

Similar trends are visible in Britain too – with the fashion for city centre living no longer limited to London. But it isn’t just a fad. The knowledge economy puts a premium on connection and therefore proximity. The plum jobs are bunched up together in the superstar cities. Moreover, there’s a growing reaction, especially among the young, against car-centric lifestyles – not only on environmental grounds, but also because of the cost and hassle of ownership.

By definition, space in city centres is constrained; and, as demonstrated by the Mayor of London’s rejection of planning permission for the Tulip tower, there are limits to vertical development. So does that mean we’ll have to default to sprawl whether we like it or not? Will the bright young things have no choice but to become the Margo and Jerry Leadbetters of the 21st century?

Further reading

The false promise of the vertical city

By Peter Franklin

I don’t think so, because though city-loving hipsters tend to grow up, start families and even buy houses and cars, they’re not going to conform exactly to the lifestyles of their parents and grandparents. They will want to maintain access to the economic and cultural opportunities to which they’ve become accustomed – as well as new priorities like good schools.

Fortunately, there is a third model for providing more homes. As Anzilotti writes “density and walkability do not have to be limited to the urban core”. The future is one of ‘polycentric development’ – i.e. not just one focal point right in the middle of the metropolis, but other hubs further out – “connected to both the urban core and each other by sustainable transit.”

What does this mean for planning policy? For a start it doesn’t mean replacing the green belt with carte blanche for piecemeal, build-what-you-will development. That would just add up to sprawl.

Further reading

Ten vested interests the Tories failed to tackle

By Peter Franklin

Achieving polycentric development will require direction – and, indeed, intervention – on the part of government to ensure density, good design and the provision of supporting infrastructure.

It also means biting whole chunks out of the green belt – but only where it prevents necessary development in strategic locations. If we’re truly serious about providing enough new homes without sprawl then we need to do things like build sustainable urban extensions to cities like Oxford or garden villages around rural railway stations – just the sort of smart development that our taboo-laden planning system currently makes impossible.

We urgently need an honest, open debate about how, where and when to make this happen.

With the normal business of government paused and the attention of the nation’s press undivided, the Conservative leadership contest might have been an opportunity to have that debate. In the process the candidates might have sent a message of hope to the younger voters without which the Party is finished.

But Messrs Johnson and Hunt obviously didn’t want to go for that.

Should modernist architects be involved in the rebuilding of Notre Dame? Yes, absolutely they should… they’d make fantastic gargoyles. After all, no one does ugly better.

If you walk through a city – almost any city – and fix your eyes on the nastiest building in your field of vision, it’s almost certainly in the modernist style. The most beautiful building, on the other hand, probably isn’t – more likely it’s some gutsy survivor from an early age.

Further reading

The violation of Salisbury, my ancient, gentle home

By Tom Holland

A word of warning, though: if you wish to maintain your cultural respectability, it is absolutely essential that you don’t say any of this out loud. If you must make a point about the deficiencies of the contemporary urban environment, then make sure that you blame the planners or motorists or just about anyone but the architects. After all, you wouldn’t want to end up like Sir Roger Scruton, would you?

The code of silence of the haute bourgeoisie has served the professions well, and the architects most of all. It’s why our politicians are so reluctant to talk about beauty – and why, when they occasionally do, they quickly lose their nerve. What the worship of ugliness can’t do, however, is make beautiful buildings disappear or stop the rest of us from gathering in their awesome presence. When our untutored eyes behold the greatness of Notre Dame and then flick to, say, the Pompidou Centre, the combined might of the cultural establishment cannot stop us from drawing the obvious conclusion.

Any other profession would be embarrassed to be overshadowed by the accomplishments of their forebears. Imagine if medical treatments had been more effective a hundred years ago? Today’s doctors would be mortified. Or what if the computers and mobile phones of the previous decade were considered to be faster and more fashionable than today’s gadgets? The alpha-geeks would blow a fuse.

Today’s architects, however, have to endure the general public’s enduring love – indeed, reverence – for buildings built centuries and sometimes millennia before the modern age. And it’s not as if this appreciation of old architecture is limited to its historical value. People will pay tens of thousands of pounds extra to live in a Victorian or Georgian house as opposed to contemporary dwelling. If Le Corbusier was right and a house really is just “a machine for living in”, then it seems that the architects of old built better machines than their 21st-century counterparts.

*

That’s not to deny the very real advances in construction technology. Thanks to modern materials and computer assisted design, we can throw up buildings to unprecedented heights, with remarkable speed and in just about any shape that can be imagined – from the top-heavy mass of London’s Walkie Talkie to the pencil-thin towers now exalting the rich above Manhattan.

We can build just about anything we want and we’ve got much more money to do it with than in any other era of human history. Therefore this should be a golden age for modern architecture – but it’s not. Indeed, many within the profession believe that architects are being squeezed out of the design and development process (for instance, see here, here and here).

Ironically, they’ve become victims of the technology that made modernism possible in the first place. With the right software a developer can rustle up a workable, structurally sound blueprint for a major project without the need for an architect. The building or buildings may be supremely bland, but for a volume builder that’s a plus – by standardising the ‘design’ every aspect of the development, from finance to the planning process to the supply of building materials, can be streamlined and costs cut to the bone.

The result is a variation on the modernist style that I’ve seen described as ‘spreadsheet architecture’. I’m not sure who came up with the label, but it’s an apt one. For a start, the monotonous grid-like form of the buildings do look as if they’ve been designed on a spreadsheet application like Excel. The rows and columns might be resized or offset, but there’s not much else to break-up the monotony.

Further reading

The false promise of the vertical city

By Peter Franklin

You may have discerned I’m not the biggest fan of 20th-century architecture. Yet the other day I found myself staring at a piece of 1960’s brutalism with something like nostalgia. It was a hideous building, undistinguished even by modernist standards; but the squat concrete edifice still had a presence, bearing the mark of an intelligent, if misguided, designer. Spreadsheet architecture, on the other hand, looks exactly what you’d expect a computer to produce. Just type in a few parameters and off it goes: a plan for the maximum amount of rentable floor space with a minimum of thought for anything else you might want a building to be. Spreadsheet architecture clearly cares only about the bottom line – and if that can be done without paying an architect, so much the better.

*

The core architectural modernist principle is “form follows function” – a phrase coined by Louis Sullivan, the so-called ‘father of the skyscraper’. When form does follow function as opposed to precedent, architects are free to break with tradition in the pursuit of other priorities.

Though presented as rational and progressive, this approach is in fact divisive and self-centred. Precedent and tradition are things shared across a community, but function is not. There is a literal and metaphorical difference in perspective between those on the inside of the building looking out and those on the outside looking towards it. The insiders are those least affected by the impact that the building has on everyone else. Functionalism – and its implicit disregard for beauty, balance and harmony – discounts the outsiders’ perspective.

Further reading

Ruskin's modern message

By Melanie McDonagh

Spreadsheet architecture is the ultimate expression of this mindset – and perfectly suited to the speculative development of our cities. As the primary function of all such development is to make money, its form must follow suit. It conforms to the needs of its most powerful users, i.e. investors who may never actually see the building with their own eyes. The radical uniformity of the design is just what a globalised property market demands – a fungible asset that is basically the same wherever one builds it.

*

We’ve been conditioned not to resist or to imagine anything better: the architect knows best, we’re told; aesthetic judgements of the general public count for nothing. However, with the rise of spreadsheet architecture the issue has become disintermediated. The licensed taste-makers have been pushed aside and the clash of interests between the developer and the host community made plain for all to see. It’s time for the community to take back control. Local people must be equipped and empowered to set out a positive vision for the growth and development of their neighbourhoods – as opposed to exercising limited powers to block the worst proposals.

It can be done. The power of the developers can be systematically resisted. It already has been done with respect to conservation of culturally significant buildings and neighbourhoods. We’ve declared whole swathes of our cities off limits to the cold, commercial logic of the developers. Through the listed building system and conservation areas, we’ve decided that in many locations the old is more valuable than the new no matter how profitable it might be to redevelop it. Our ancestors would be amazed, because with a few exceptions – sacred buildings, monuments and the like – they happily tore down their old buildings confident that the new ones would be better. That we have lost this faith in the modern age is the most damning indictment of its architecture there could be.

Further reading

Why we must suppress technological progress

By Peter Franklin

But having defied the dragon of modernism to protect the best of the past, we need to do the same to achieve the best possible future. If developers aren’t allowed to wreck our historic neighbourhoods, then why should their short-term, selfish interests prevail in those locations where a city has the chance to reinvent itself? The opportunity for placemaking, to create streets, to bequeath the best of us to generations we’ll never meet, is simply too precious to waste on spreadsheet architecture.

On Wednesday, I wrote about the French government’s long infatuation with Minitel – a demonstrably inferior rival to the internet. But that sort of folie du grandeur is hardly unknown on the other side of the English Channel. Time and again, Her Majesty’s Government has misallocated the country’s wealth on a monumental scale.

Suggested reading

The French 'internet' – when state innovation goes wrong

By Peter Franklin

It has had ample opportunity to do so, because the modern state always has been, and always will be, the country’s biggest investor. When it spends between a third and a half of UK GDP every year, it could hardly be otherwise. Of course, most of this is current spending on things like public sector pay, pensions and benefits. But there’s also a huge capital spend of nearly £80 billion every year.

On top of that, there’s the influence of government decision-making on private sector investment. On matters like planning, transport and energy, government policy has shaped, and continues to shape, the development of entire industries and regional economies.

Before we give the entrepreneurial state an even bigger role, we need to examine its past performance as an investor – which, by any fair standard, is distinctly chequered.

What follows is a top ten of terrible investment decisions made by British governments since the Second World War:

1. Heathrow Airport

London is a global city it needs a world class airport – ideally a hub airport.

So where do you put it? How about right up against the city itself, surrounded be residential suburbs, hemmed in by reservoirs and within the orbit of the main ring road – thereby maximising the number of people whose lives are blighted by noise and air pollution, while minimising the space for expansion? Yep, that’ll do!

How on earth did the British government first make (in 1946), and then keep reinforcing, such a shortsighted decision? Well, there was an military airfield that needed a purpose immediately after the war[1. Jason Ford, ‘January 1946: The origins of Heathrow Airport’, The Engineer, 18 January 2018] – and it wasn’t as if air travel was ever going to find a mass market, was it?

It later dawned upon the geniuses of Whitehall that perhaps a mistake had been made – and that maybe, just maybe, a coastal location on the Thames estuary might be a better option. But government finds it hard to correct mistakes; and, expertly guided by those with a vested interest in the status quo, it follows the path of least resistance as surely as a pilot follows the path of a runway.

2. The Beeching Cuts

Few people doubt that post-war Britain had to prune the dense Victorian tangle of its railway network.

However, when Dr Richard Beeching was asked to propose a programme of rationalisation, his tool of choice wasn’t a pair of secateurs, but an axe.[2. Christian Wolmar, ‘Beeching guilty as charged but should not have been alone in the dock’, Christian Wolmar blog, 17 March 2013]

The biggest villain, however, was Ernest Marples – the government minister who commissioned the Beeching report. Marples also just happened to be the founder of a motorway construction company. No conflict of interest there!

The decimation of the network was bitterly opposed at the time (the Beeching report was published in 1963) and bitterly regretted in later decades[3. Jonathan Glancey, ‘It looks like Dr Beeching was too hasty after all’, Telegraph, 22 March 2013] – when demand for rail travel began to rise again. Though some lines and stations have been reopened, in many cases it’s no longer an option because tracks have been ripped up and land sold off for development.

To give just one example: the Oxted line used to connect London, via its Uckfield branch, down to Lewes and Brighton. It could have been upgraded to supplement the now heavily used Brighton mainline. Unfortunately the line from Uckfield to Lewes fell victim to Beeching’s axe and the old route is now blocked by development. An immensely valuable corridor from London to the south coast was lost to Beeching’s myopia and Marples’ dodgy machinations.

3. Concorde

Ah, Concorde – you were the future once!

The supersonic plane is reckoned to be the most beautiful passenger aircraft that ever flew. Unfortunately, it was also one of the most expensive.

The enterprise began in the 1960s as a joint venture between the British and French governments. There were great hopes of sales all around the world. However, British Airways and Air France (both state-owned at the time) were the only airlines to purchase and operate the aircraft. Escalating development and manufacturing costs led other airlines to back out at supersonic speed. In the end, only twenty were ever built, including the prototypes.

The first flight was in 1969, but commercial services didn’t start until 1977. One had to be seriously rich to afford a ticket – but there were takers because, at twice the speed of sound, Concorde could cross the Atlantic in a mere three hours. Sadly, its speed was also a weakness – the sonic boom phenomenon meant that supersonic flight was banned over inhabited areas, limiting services to trans-oceanic routes.

Suggested reading

Can Britain build an innovation economy?

By Vicky Pryce

Concorde wasn’t the biggest white elephant to get airborne. A more worthy candidate for that honour is the Tupolev Tu-144, developed by the Soviet Union at around the same time as Concorde (and so similar in looks that it was nicknamed the ‘Concordski’). However, it greatly exceeded its western cousin in the scale of its economic and technological failure. Crashes brought an end to commercial flights shortly after they started.[4. ‘Concordski: How the Soviet Union lost the supersonic race, BBC, 1 June 2016]

Tragically, it was a crash – Air France Flight 4590 – that brought about the end for Concorde too.[5. The disaster, in which all aboard were killed, together with four people on the ground, is believed to have been caused by debris from another aircraft]

4. AGR nuclear power stations

Tony Benn, that great champion of socialist state planning, was, as ‘Minister of Technology’, instrumental in saving Concorde from cancellation in late 60s.[6. Tony Benn, ‘Concorde special – the politician – Tony Benn’, Flight Global, 21 October 2003] Fittingly, he also played a pivotal role in another ill-fated venture – the Advanced Gas-cooled Reactor or AGR.[7. Geoffrey Owen, ‘Book review: ‘The Fall and Rise of Nuclear Power in Britain’’, Financial Times, 7 March 2016] The supposedly superior design was meant be a sure-fire winner for British industry. In practice, the AGRs were plagued by construction delays and operational problems. Many of the problems continue to this day and we still have the decommissioning costs to look forward to – which were, of course, significantly underestimated.

With an unerring failure to learn from past mistakes, the current UK Government is now committed to Hinkley Point C – the fabulously expensive[8. Holly Watt, ‘Hinkley Point: the ‘dreadful deal’ behind the world’s most expensive power plant’, Guardian, 21 December 2017] new nuclear power station due to be built next to Hinkley Point B, the first of the AGRs. HPC is of a different and more recent design – but one that already has a track record of construction delays and cost overruns. Undaunted, the Government has signed us up to the project – only this time we’ll be blowing billions to the benefit of French-owned industries instead of British ones. Brilliant!

5. The overbuild of coal-fired power stations

Another triumph for state planning and investment in the energy sector was the massive overbuild of dirty coal-fired power stations in the 1960s and 1970s.[9. Dieter Helm, Credible energy policy: Meeting the challenges of security of supply and climate change, Policy Exchange, 2008, chapter 2]

Suggested reading

China's entrepreneurial state has lessons for the West

By Michael Burleigh

The state-owned Central Electricity Generating Board (CEGB) had assumed that demand for electricity would increase in line with economic growth. In fact, thanks to energy efficiency and the off-shoring of manufacturing capacity to the Far East, energy demand has increasingly decoupled from growth.[10. Euan Mearns, ‘UK electricity demand, GDP and energy policy’, Energy Matters, 16 October 2013, figure 1]

The legacy of the CEGB’s strategic error has been one of pollution plus a UK energy sector focused on ‘sweating assets’ not the development of greener, cleaner energy technologies fit for the 21st century.

6. The strangling of Birmingham

Britain’s great industrial cities literally made the modern world. Their decline in the 20th century was due to many factors, but one of the most important was the centralisation of political power in London.

In the post-war period, Whitehall decreed that the growth of Birmingham, which was booming at the time, had to be curtailed – in order to reallocate growth to cities further north.[11. Henry Overman, ‘Booming Birmingham and the Need for Rebalancing’, Spatial Economics Research Centre blog, 28 May 2013]

The central planners would discover that this is not how growth works. The long-term impact of their meddling hobbled Birmingham’s economy[12. ‘How to kill a city’, The Economist, 31 May 2013] while doing nothing to help the North. Instead, by an amazing coincidence, investment and enterprise became concentrated where the politics and the power was – i.e. London.

7. The fall of Euston

The strangling of Birmingham was greatly assisted by town planners and architects. The city’s fine Victorian architecture was marred by, or demolished to make way for, ring roads, tower blocks and other concretopian horrors.

For instance, the city’s Birmingham New Street station – a wonder of the industrial revolution – was knocked-down and replaced in the mid-60s by one of the most hated buildings in the country. At the other end of the line to London, the classical wonder that was Euston station met the same fate: demolished to make way for a modernist successor.

But while Birmingham plumbed the depths of brutalism, the new Euston didn’t even achieve that dubious distinction. It is an architectural non-statement – a low-slung slice of lifelessness. Not before time, it’s now set to be replaced – as Birmingham New Street already has been.

The plans for the new new Euston include a reconstruction of the Euston Arch – a famous landmark that was destroyed, quite unnecessarily, as part of 1960s redevelopment.

It tells you a lot about the mentality of the time that British Rail – the state-owned company that destroyed the Arch – refused to say what had become of its remains. Fortunately, these were rediscovered in the 1990s by Dan Cruikshank.[13. Daniel Wright, ‘Lost beauty #9: Hardwick’s Hall (the old Euston station, London, UK)’, The Beauty of Transport, 10 June 2015] 

If the old stones can’t be be incorporated into the reconstructed arch, they should instead be fashioned into a monument to the spirit of post-war architecture and central planning. An extended middle finger, perhaps?

8. Insanity begins at home

Arguably, the best location to assess the acumen of government bodies is in their headquarters. After all, if they can’t run their own homes properly, why should we trust them with anything else?

Happily, there’s a long tradition of buildings that symbolise what we’ve come to expect from the organs of the state that reside within them.

Suggested reading

Only an entrepreneurial state can defend our nation

By Allan Mallinson

For instance, there’s the Home Office – whose cleaners turned out to be illegal immigrants. Or the Department of Energy and Climate Change, whose HQ was so energy inefficient that they had to turn off the air-con to cut back on its carbon footprint. Or Alexander Fleming House, once home to the Department of Health and Social Security – when it was notorious for Sick Building Syndrome. Outstanding stuff.

My favourite example, however, was an edifice known as Marsham Towers (a.k.a. ‘the three ugly sisters’). Completed in 1971, the complex consisted of three slab-like towers of twenty storeys each. They only interconnected at ground level, which wasn’t a big issue when the plan was to accommodate three separate government departments. However, the layout became a serious problem when the ministries were merged into one. How’s that for joined-up government?

And the name of the new super-ministry whose HQ wasn’t just dysfunctional, but also the most notorious eyesore in London? Why, the Department of the Environment, of course.

Just over thirty years after it opened, the building was knocked-down – a testament to the sustainability of purpose-designed state architecture.

9. Gordon’s gold

At about the same time that Marsham Towers was being reduced to rubble, the Government was completing the disposal of another asset – the country’s gold reserves. Gordon Brown, then Chancellor of the Exchequer, believed that gold was a ‘lazy asset’,[14. Robert Peston, ‘Gold and Gordon Brown’, BBC, 4 March 2008] because it just sat in a vault offering no guaranteed return. So, between 1999 and 2002, he sold off 395 tons of gold at an average price of $275 per ounce.[15. Paul Farrow, ‘Gold: Does Gordon Brown’s regret selling half of Britains’ gold reserves 10 years ago?’, Telegraph, 8 May 2009] By 2007, gold was trading at $600 per ounce. The price peaked at over $1,800 in 2011. Even today, it trades at something like $1,200.[16. https://tradingeconomics.com/commodity/gold] Buy low, sell high, is basic idea when it comes to trading, but Brown had sold at the very bottom the market – a decision that cost the country billions.

Brown had forgotten that the purpose of gold is not to provide a predictable return, but a hedge against instability in the foundations of economic policy. As one of the key architects of those foundations – including the regulatory framework for the world’s most important financial centre (the City of London) – Brown was in no position to make an objective decision as to their soundness.

When the financial crisis burst almost every asset bubble except gold, Brown’s arrogance was fully exposed. It is not so much his failings as a commodity trader that condemns him, but his fundamental misunderstanding of risk.

Are these really the sort of people we want running an entrepreneurial state?

***

So there you go – my top ten statist fiascos. Of course, I do realise that I’ve only provided nine of them – but I’ve already exceeded my word count and blown through several deadlines. Things didn’t quite turn out as planned.

Of course, they never do. So perhaps we should think twice before entrusting major investment decisions to people who aren’t qualified to make them and who’ll never be held accountable for the consequences.

The desire line is a natural form of crowd-sourced design and probably where the planners should have put the path in the first place.

Another example is something called a ‘Sneckdown’ – which is explained in a great post for the 99% Invisible site:

“Urban planners can learn a lot simply by observing where cars actually drive (or don’t) after a fresh snowfall. Author and activist Jon Geeting has been photographing ‘sneckdowns’ (a portmanteau of ‘snowy’ and ‘neckdowns’ or: curb extensions) in Philadelphia for years, highlighting areas that could be converted from vehicular to pedestrian use. Remarkably, his documentation has done far more than just create general interest — it has actually helped to reshape intersections.”

The sneckdown is the area of road which remains snowy because there are no cars driving over it. To put it another way, the area where traffic crushes the snow out of existence is the desire line – the portion of the road that drivers actually use.

In Philadelphia, campaigners were able to use the sneckdown photographs as evidence that pedestrian areas could be extended without impeding the flow of traffic – an act of urban reclamation with many benefits:

“Shortening pedestrian crossing time… Calming vehicle traffic around intersections… Reducing asphalt surfaces and increasing plant surfaces to improve the absorption of rainwater by the soil, minimizing runoff and floods.”

This is all rather wonderful, even ingenious, but does it have any wider relevance?

Yes, because it serves as a parable for the age of big data.

It won’t be long before we have a continuous stream of live information about our everyday interactions with the built environment and, indeed one another. Month by month, year by year, we’re adding to the automated array of cameras, microphones and other types of sensor that record what happens in the world about us – and our behaviour within it.

Recommended reading

Kiss your privacy goodbye – CCTV is just the beginning

By Peter Franklin

With these technologies in place it isn’t necessary to wait for a snowfall to work out the desire lines followed by pedestrians and drivers – it’ll all be there in a detailed log of our every movement.

However, as well as ensuring that this big data is anonymised, it needs to be made publicly available. While the paths we make in the snow are there for all to see and photograph, the electronic traces we leave behind could be hidden away for the exclusive use of state agencies or private corporations. If the big data that they collect is about us and the public spaces we share, then it is essential that we’re able to challenge and verify the conclusions that they draw from it.

In the not too distant future big data, plus the AI systems used to analyse it, will enable us to monitor and modify the public sphere in real time. To a growing extent it is already happening.

The strength of our civil society – indeed our basic liberties – will depend on keeping ordinary citizens in the loop.

In the current era of ultra low interest rates and quantitative easing, there is some loosening of the old strictures. However, really radical ideas – such as helicopter money – have yet to break into the political mainstream. Governments don’t want to make their boundary-pushing too blatant – lest they they undermine public confidence in the currency.

There might, however, be another way for cash-strapped governments to replenish their treasuries. There’d be no monetary malarkey involved, and no need for extra borrowing or taxation. All that governments would need to do is make the most of a resource that is ultimately under their control: land.

We usually associate the wealth of a city with its buildings, but the most valuable and enduring resource is what those buildings are built on. Just how valuable, is the subject of an article by Richard Florida for CityLab:

“The total value of America’s urban land is astounding, adding up to more than $25 trillion as of 2010—that’s roughly more than double the nation’s total economic output or GDP in 2006, according to a recent study by economists at the University of Illinois and the University of Michigan…

“That breaks out to an average of $511,000 per acre, or $100,000 for the typical residential lot of roughly a fifth-acre (or $2,000 for a typical parking spot). Over the course of the study period, the total value of urban land peaked at more than $28 trillion—2.2 times more than the U.S. GDP in 2006, before the economic crash—but then fell to $18 trillion, or 1.3 times GDP, in 2009.”

The geographical distribution of this land wealth is highly uneven:

“New York… has the highest average price per acre, at more than $5 million. Next in line are three metros—San Francisco, Honolulu, and Jersey City across from Manhattan—where land is valued at $3.3 million per acre. Los Angeles is fifth, at $2.7 million per acre, with Orange County and San Jose following closely at $2.6 million and $2.3 million per acre, respectively. Average land values exceed $1 million per acre in a dozen additional metros, including Miami, Seattle, Oakland, Washington, D.C., and San Diego.”

Other big cities don’t do nearly so well. Boston comes in at $600,000 an acre and Houston less than half of that.  Bottom of the the pile are “Rust Belt metros such as Buffalo ($162,000) and Pittsburgh ($156,000)”.

Unsurprisingly, the most valuable land is in the city centres – a cool $123 million per acre in New York and in the $20-30 million range for Chicago, Washington and San Francisco.

Richard Florida sees a story of inequality in these figures:

“Economic inequality is bad, but spatial inequality is even worse. An acre of central land in New York City is worth approximately 72 times more than an acre of central Atlanta or Pittsburgh, and almost 1,400 times more than the same in many small Rust Belt and Sunbelt metros.”

On the other hand, there is a huge money-making opportunity to be had here – and not just for the Donald Trumps of this world. In countries lucky enough to have a ‘superstar city’ like New York or London, governments need to get entrepreneurial. Unless it’s being used for an important environmental or cultural purpose, publicly owned land in these areas should be systematically exploited for the public good.

For instance, in London there are low density housing estates scattered across the city’s inner suburbs. This is some of the most valuable land in the world and yet its potential is being wasted. Redeveloped at a density appropriate to its location it could generate enough income to greatly improve the lives of the people already living there, with plenty left over for the public purse. Furthermore, the extra population would generate ongoing revenue through local and national taxes, not to mention the wider boost to economic growth.

And let’s not forget the brownfield and greenfield sites within commuting distance of high productivity cities. This land could be worth hundreds of thousands or even millions of dollars per acre. Obviously, planning permission is the all important issue – but that too is in the gift of government.

The state is in a position to buy land and massively multiply its value overnight simply by issuing a piece of paper. The demand for land isn’t inexhaustible of course. And there would come a point at which the state-as-developer freed up enough land to lower property prices.

But this would be a good thing, indeed a miraculous thing – a license to print money while suppressing inflation.