Since last October, when Keir Starmer declared that he was a ‘Yimby’ – a ‘yes in my back yard’ – Labour has tried to position itself as the pro-housing party. We are now finally getting a glimpse of what this might look like in practice.
Deputy leader Angela Rayner has promised a revitalisation of the postwar ‘New Towns’ programme, which, in the quarter-century from 1946 to 1970, delivered hundreds of thousands of new homes.
New Towns are not a panacea
This certainly signals the right ambitions, and if done in the right way, New Towns could indeed make a major contribution to solving Britain’s housing crisis. But they are not a panacea, and the devil is in the detail: there is a risk of overburdening the proposal by expecting it to fulfil too many policy objectives at once. But more on this in a minute.
The original New Towns were an indirect response to Britain’s interwar building boom. In the 1930s, the British housing stock used to grow by close to 3 per cent per annum. Some see this as the golden age of British housing, not just because of the sheer scale of construction, and the positive impact on housing affordability, but also because 1930s housing tended to be of a reasonably high quality.
But this success carried the seed of its own destruction. It mostly took the form of outward expansion of the UK’s larger towns and cities: much of outer London, for example, was built during that period – and not everybody liked it. It created a backlash. As Samuel Watling shows, the 1930s saw the rise of organised Nimbyism, which is still with us today.
The early Nimbys won major victories in the postwar years, namely in the form of the Town And Country Planning Act 1947, a much more restrictive system of land-use planning than the one it replaced, and the designation of greenbelts in the 1950s.
With further urban expansion severely curtailed, New Towns became a vehicle to accommodate the spillover demand. In the new system, London could no longer grow very much, but the likes of Stevenage, Crawley and Harlow still could.
At first sight, New Towns appear to be a clever way around the Nimby problem. Propose to build a few houses on the edge of a town, and the Nimby lobby will scream bloody murder – but build them far away in nobody’s back yard, and nobody will complain.
However, Britain’s postwar experience suggests that New Towns do not become major self-contained economic centres in their own right. They become commuter towns of existing cities and conurbations.
There is nothing wrong with that. But commuter towns need to be close enough – and well-connected – to wherever it is that people commute to. You cannot build them in the middle of nowhere.
Yet if you build them as de facto extensions of existing towns, like a borough that just happens to be a bit removed from the rest, you run into the old Nimby problem again. That is one reason why the New Town programme went dormant after 1970.
Apart from these general difficulties with New Towns, there are additional ones specific to Angela Rayner’s version of them. Rayner wants to impose a ‘gold standard target’ of 40 per cent ‘affordable’ (i.e. below-market rate) housing on New Town developers, on top of developer contributions to large-scale upfront investment in infrastructure and local amenities. If combined with earlier Labour proposals for stringent environmental standards for new buildings, this would risk making New Towns unviable. New Towns would be risky long-term investment projects at the best of times. If you want them to take off, the last thing you want to do is pile additional costs and risks onto them.
If New Towns helped to ease Britain’s housing shortage, that would already be enough make them a major success. They do not also have to solve all of the country’s social and environmental problems at the same time. They do not need to be a cure-all.
Rayner’s pro-housing ambitions are very welcome indeed, and a more focussed version of her New Towns plan, devoid of unrealistic expectations, could be a force for good. But if she makes the perfect the enemy of the good, she will end up getting neither.
Dr Kristian Niemietz is the Editorial Director of the Institute of Economic Affairs (IEA). He is the author of the report “Home Win: What if Britain Solved its Housing Crisis?”
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