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To call the housing crisis a quagmire would be an understatement. Strangely it is one of the few bipartisan issues in modern Britain: every party accepts that we must solve it, but no one can agree on how. The fundamental issue being that every proposed solution appears to have a crippling drawback.

One fairly simple solution is for the government to build more high rises within London. However, to do so on a scale necessary to address the housing crisis would undermine the lessons learned from Grenfell. Following the tragedy, it came to light that when the housing blocks were first built in the 1960s the clear majority of those surveyed stated that they wanted houses not apartment blocks. Polls taken by YouGov following the disaster meanwhile showed that this has not changed. Yet London has very finite space meaning the building of houses to fix the crisis is not practical either.

Perhaps the solution then is to expand London and other urban areas. To pave the Greenbelt and build the houses we need there. However, the ecological impact would be a disaster, not to mention that the Greenbelt is irreplaceable once gone.

Perhaps the best solution has nothing to do with housing at all. This may sound nonsensical, perhaps even oxymoronic, but as Sun Zu wrote in the Art of War: “fight your enemy what they are not”. If no conventional solutions can be thought of then it is time to think outside of the box. The issue must be resolved at its core: supply and demand.
Most proposed solutions seek to address the issue of supply by, one way or another, increasing it. Perhaps the best path is not only for the government to construct more houses where they can, but also address the issue of demand. One of the subtler, yet fundamental, causes of the crisis is the over dominance of London within the British economy. In this regard the city acts like a black hole, sucking in investment, talent and opportunities at the expense of the rest of the country. The houses in London are unaffordable due to the extraordinarily high demands skyrocketing prices while cheaper houses in other areas go unsold as those who can afford them live elsewhere due to their being limited jobs because of the poor state of local economies. To demonstrate this inequality in wealth ONS statistics from 2016 showed the GDP per capita of London at £43,629 while Wales for example sat at only £18,002.

This reflects the same wealth divide that Benjamin Disraeli recognised two centuries ago. Fixing this divide is a fundamental principle behind one-nation conservatism and is the key to solving the housing crisis. Wealthy elites, both native and foreign, can afford to buy up huge swathes of London. Wages cannot hope to rise in conjuncture to make housing affordable. But so long as London remains the economic hegemon of the UK other areas cannot hope to provide incomes large enough to get the average worker on the housing ladder.
The North of England, for example, has remained impoverished for decades. This is mainly due to the collapse of British manufacturing in the 70s and 80s which was not adequately replaced by a new industry. Currently there is little to make these areas competitive, especially when compared to areas such as London where higher levels of wealth create a much larger potential for profits for any business, big or small. This means thousands of cheap houses go unused as workers search elsewhere.

Yet, if these areas had more incentives for business, i.e. Lower corporation tax, lower income taxes, government subsidies etc. large corporations would have far more of an incentive to invest. Once larger companies move out to areas such as the North of England entrepreneurship on the smaller scale would also increase. Large corporations provide a solid economic bedrock which in turn enables the establishment of small and medium businesses.

These businesses, regardless of size, would not only have lower taxes on their profits, but would find a ready supply of affordable labour – unemployment in the North East for example is at 6.0% according to the ONS. Lower tax rates and incentives could work wonders on the Welsh steel industry or agriculture in the South West.

Ultimately this process would create a positive feedback loop: lower corporation tax would encourage large manufacturers to move to these areas, which in turn will create high paid jobs whose income is in turn invested into the local economy allowing small business to thrive and creating more jobs.

The income from these jobs would enable millions to enter the housing in formerly undesirable areas. With the economy no longer being so lopsided towards London the strain on the southern housing market’s will be reduced. This alongside other solutions such as rent to buy schemes, subsidies for first time buyers, regulations on Airbnb style renting and restrictions on wealthy foreign buyers buying up new houses in mass will create a robust and comprehensive solution.

Ultimately, the government can build more tower blocks, they can pave the Greenbelt, they can cap rent prices, but what will this really have solved? Foreign oligarchs and the wealthy elite will still possess significantly more purchasing power than the average worker and thus will price them out of the market if left to their own devices. London will still be an economic black hole, pulling more and more people in, thus exacerbating the problem. No matter what is done these solutions on their own will leave the country firmly at square one again. Housing is a modern colossus that Britain must overcome. With a problem this complex the solution must be all encompassing. Creating Disraeli’s one-nation may not be easy, but the right course of action seldom is. In the end solving the housing crisis will be a marathon, not a sprint. The question is does the government want to fix this issue for the time being or solve it once and for all?

Max Glynn was runner-up in the 2018 Tamworth Prize with this essay. The views expressed in this article are those of the author, not necessarily those of Bright Blue.