"These problems are obvious to many British politicians. Leaders in the Conservative and Labour Parties often comment on expensive energy and scarce housing. But their goals haven’t been translated into priorities and policies that lead to growth."
I can't find this mentioned anywhere in the article, but the current imbalance of supply and demand and the resulting high prices is quite beneficial for parts of the real estate lobby which don't focus on building houses but on maximizing value from existing properties.
Approximately one in five Members of UK Parliament are landlords or have investments in the property market.
So while the article is advocating for the removal of "barriers that stop the private sector from doing what it already wants to do", it seems to be blissfully unaware of the powerful forces outside and likely WITHIN the political parties that rather prefer to maintain this imbalance...
Here in Australia, there are 227 sitting Members of Parliament, of those: one in three federal politicians (71) own two properties; one in three (77) own three or more properties, and about one in three (67) own one property. Eleven federal politicians don't own a home, at least not in their name, and of those only one is known to be a renter.
I don't know why we call it Parliament House, it should be call the House of Lords.
The last government intentionally banned the cheapest source of energy, onshore wind, from being built in England, by making it so that a single complaint could stop a project.
I cannot believe this article talks about planning constraints and energy prices and doesn't mention that.
Fascinatng that `brexit` isn't mentioned once in that article. Making trading harder with your closest neighbour can't be a great move for the economy.
Yes that’s really funny.
Im not sure how you can write an article like this and never even mention it once.
Brexit was the most stupid thing a country ever did to itself, and the full effects are just starting to come to the surface now.
I dont think the UK will ever fully recover from it.
Brexit is a symptom, not the cause. The people who were most screwed by Britain's prior mistakes voted for it in a vain attempt at fixing the problem by throwing misguided nostalgia at it.
It's not great, sure, but it's only something like a long-run 2% drag. 2% is a lot, don't get me wrong! But the loss from planning is pretty high double digits, well over 10% in the US, to say nothing about the gains from liberalizing migration
Making trading slightly harder with 27 non-English speaking countries in a stagnating political experiment (roughly 30-50th percentile of worldwide GDP growth rates)
Making trading easier with 168 other countries, many of them English-speaking nations, and who comprise the largest and most dynamic economies on Earth.
“To do so, it need simply remove the barriers that stop the private sector from doing what it already wants to do.”
Which is fine if resources were infinite or distribution was equal, but neither are true and the private sector will not safe guard the public sphere of the environment.
In any case, plain as day, the big problem with the UK economy was and is the 2008 financial crisis that chopped 5% of GDP off the economy. Since then every government has been faced with either doing what would be needed to make things right, or doing what is needed to get reelected. They have all picked the second option apart from Boris Johnson's administration through to Truss, who picked electoral destruction through magical thinking (on Northern Ireland and then by raising spending without raising tax to pay for it, precipitating first a crisis of politics and second a crisis of finance).
> Which is fine if resources were infinite or distribution was equal, but neither are true and the private sector will not safe guard the public sphere of the environment.
On top of that there is a part of the private sector which currently benefits tremendously from the imbalance of supply and demand.
Approximately one in five Members of UK Parliament are landlords or have investments in the property market.
So a part of the private sector is ALREADY "doing what it wants to do", and surely supports the political direction in its favor.
My own [local government] is so stupid its own massive 7-figure park project got blocked by [local government] planning halfway through. For about a year instead of a park we’ve had two massive holes surrounded by fences. Too many taxes, too much nimbyism. This one really is that simple.
This happens everywhere in enterprise and government because policies and processes are designed to avoid mistakes or embarassment at any cost (because those risks are internalised by the bureacracy and therefore "real") but do not account for the cost of not being able to get anything done, because those are externalised and everyone involved in the various committees and review processes gets paid regardless.
I wish there were better ways to align incentives here.
When I was working for various local govs there was a usual remark being made. You cannot fire shitty employees. There are great ones, but some are just getting the pay check and make things worse and there is no way to fire them. It is just not practical.
I am not saying those are the main problem but it contributes to the lack of efficiency.
We have a broken mentality. In the US, they're temporarily embarrassed millionaires. Here, we're temporarily embarrassed landlords. The only ambition that's socially acceptable is a mortgage.
This article is severely tilted nonsense with a weird ideological bent.
The author sneers against regulatory rules to limit suburban sprawl but really none of that has anything to do with a housing shortage.
It is entirely possible to denser and taller buildings, having both compact communities, green space, farms and forest and also addressing housing needs. UK hinders its economy by declining to do so (as do so many other places with housing shortages).
The UK needs to do both. It needs to allow denser development, but that isn't enough. It is also possible to expand the green belt without causing suburban sprawl.
Nastily anti-state bias that’ll get a heap of upvotes here no doubt. What the uk actually needs is less private companies leeching off the masses and more investment in state support.
I want to see more discussion from the perspective that the economy and government is not just a process, an institution, but a contest, an arena.
Outcomes which are presented as a failure, are not merely a failure, but like a punch in a boxing match that misses its mark, occurs in a wider context, and against deliberate opposition. A failed project might be a failure for most, but for opponents it may be a victory, or even just collateral damage in a wider fight.
Well after about 15 years of governance, the conservatives were voted out of power. Unfortunately the problems in the energy and housing sectors are structural and mostly located in the local government, and I am unsure whether this government has the political clout or even the will to deal with them considering the immense entrenched interests involved.
Exactly. I think there's an entire political party that capitalizes on suffering, offering to jump in and rescue the poor victims. Like racketeering: create the problem and sell you the solution "if you just vote for us, we'll fix the devastating problems caused by $BADGUYS". but an absence of problems means you lose your voter base.
The greatest housebuilding period was in the inter-war years, mostly driven by private development. This collapsed after the war with the creation of the post-war planning system that tightly rationed land.
I have some friends over there and they (or their employers) are cutting back on their business expenditures, staffing and overall outlook. The new payroll taxes (unemployment insurance?) are going to bite both employers and employees alike.
Taxes are too high, there's too much red tape for businesses and successive governments have failed to invest in anything outside of the "south" (e.g. Greater London). I was (half) joking with them that the "north" would be far better off if it seceded and joined Scotland!
There are too many glaring holes in this article for it to be taken seriously. It's simply not a complete argument if you discuss the UK's current economy and don't mention
1) Brexit
2) Green energy policies
"More than a decade ago, Germany began to phase out nuclear power while failing to ramp up other energy production. The result has been catastrophic for citizens and for the ruling government. In the first half of 2024, Germans paid the highest electricity prices in the European Union."
That completely ignores that Germany made itself dependent on cheap Russian gas which is not delivered anymore. It's not like nuclear was ever very cheap.
Already-built nuclear is cheap to keep running. Constructing new nuclear is what's expensive. Phasing out nuclear means that you already paid the big cost, but don't want to get the benefits
This is a conservative (note small c) bit of agi-prop. "Things were better in the old days" before politicians stuffed up. Sows discontent with no discussion of future action. The comments here are far more interesting and important. Bloody MSM!!
I thought that the article would be investigating how Thatcher's policies caused disastrous results. Her right-to-buy policy led to councils not having an incentive to build housing and encouraged landlords to buy up housing and thus contributed to the over-priced housing we see today
Fun fact: there's a popular pub question to ask tories - "name one successful Thatcher policy" which on the face of it doesn't have an answer. However her "Enterprise Allowance Scheme" was ironically a big success
You can see two upticks in debt: first was the steady rise after the 2008 crisis (which austerity clearly failed to stem) and the second around 2020 which may be pure Covid or may be also due to a bit of Brexit.
When the UK government talks about "growth", it really means "growth in tax revenues". This means they want you and me to spend more because transactions are the drivers of revenue.
Inflation is generally painful for the public but very useful for a government up to its ears in debt because debt payments do not rise with inflation but revenues do.
And public services are highly toxic to an economy which requires 4-5% growth just to meet its debt payments. Why provide services for free when you can collect VAT receipts for basic essentials like clean water, energy, and medication? Why spend millions on regulatory oversight when the inevitable health issues downstream will result in more private spending and GDP growth?
"...energy use per unit of GDP is the lowest in the G7"
The article characterises that fact as "energy starvation". Wouldn't "efficiency" be a better analysis? Low energy use per GDP or per capita is surely a thoroughly good thing.
>Per capita electricity generation in the U.K. is now roughly one-third that of the United States, and energy use per unit of GDP is the lowest in the G7. By these measures, at least, Britain may be the most energy-starved nation in the developed world.
Yikes. Housing is the big issue that gets everyone’s attention, but this is huge. Cheap energy drives economic growth at all levels. It’s incredible that the various British governments have let it get to this level. Maybe it’s time to import a few Chinese or Soviet technocrats?
Nobody wants to see any electricity infrastructure being built. The British media is so inward looking and personality driven nobody will dare to connect "no infrastructure" with "high prices".
I think those are intentionally misleading numbers. The UK is a finance power house, not a manufacturing one, so of course it derives a larger share of GDP from less energy.
Italy has a higher % of GDP from manufacturing but way more expensive energy.
[+] [-] mitchbob|1 year ago|reply
[+] [-] rickdeckard|1 year ago|reply
I can't find this mentioned anywhere in the article, but the current imbalance of supply and demand and the resulting high prices is quite beneficial for parts of the real estate lobby which don't focus on building houses but on maximizing value from existing properties.
Approximately one in five Members of UK Parliament are landlords or have investments in the property market.
So while the article is advocating for the removal of "barriers that stop the private sector from doing what it already wants to do", it seems to be blissfully unaware of the powerful forces outside and likely WITHIN the political parties that rather prefer to maintain this imbalance...
[+] [-] TheSpiceIsLife|1 year ago|reply
I don't know why we call it Parliament House, it should be call the House of Lords.
https://www.abc.net.au/news/2024-10-16/how-many-properties-d...
[+] [-] ZeroGravitas|1 year ago|reply
I cannot believe this article talks about planning constraints and energy prices and doesn't mention that.
[+] [-] patrickdavey|1 year ago|reply
[+] [-] tacker2000|1 year ago|reply
Brexit was the most stupid thing a country ever did to itself, and the full effects are just starting to come to the surface now. I dont think the UK will ever fully recover from it.
[+] [-] kmeisthax|1 year ago|reply
[+] [-] JackYoustra|1 year ago|reply
[+] [-] gadders|1 year ago|reply
[+] [-] dboreham|1 year ago|reply
[+] [-] cbeach|1 year ago|reply
Making trading slightly harder with 27 non-English speaking countries in a stagnating political experiment (roughly 30-50th percentile of worldwide GDP growth rates)
Making trading easier with 168 other countries, many of them English-speaking nations, and who comprise the largest and most dynamic economies on Earth.
[+] [-] sgt101|1 year ago|reply
Which is fine if resources were infinite or distribution was equal, but neither are true and the private sector will not safe guard the public sphere of the environment.
In any case, plain as day, the big problem with the UK economy was and is the 2008 financial crisis that chopped 5% of GDP off the economy. Since then every government has been faced with either doing what would be needed to make things right, or doing what is needed to get reelected. They have all picked the second option apart from Boris Johnson's administration through to Truss, who picked electoral destruction through magical thinking (on Northern Ireland and then by raising spending without raising tax to pay for it, precipitating first a crisis of politics and second a crisis of finance).
[+] [-] rickdeckard|1 year ago|reply
On top of that there is a part of the private sector which currently benefits tremendously from the imbalance of supply and demand.
Approximately one in five Members of UK Parliament are landlords or have investments in the property market.
So a part of the private sector is ALREADY "doing what it wants to do", and surely supports the political direction in its favor.
[+] [-] TheSpiceIsLife|1 year ago|reply
In what sense are homes for people to live in not the public sphere of the environment?
What do you expect people to do? Go back to freezing in the dark?
[+] [-] piker|1 year ago|reply
[+] [-] xyzzy123|1 year ago|reply
I wish there were better ways to align incentives here.
[+] [-] oatmeal_croc|1 year ago|reply
[+] [-] sublimefire|1 year ago|reply
I am not saying those are the main problem but it contributes to the lack of efficiency.
[+] [-] bell-cot|1 year ago|reply
"This island is made mainly of coal and surrounded by fish. Only an organizing genius could produce a shortage of coal and fish at the same time."
- Aneurin Bevan, British Labour politician, in a speech at Blackpool, 24 May 1945
[+] [-] WalterBright|1 year ago|reply
If the Soviet Union took over the Sahara, nothing would happen for a few years, and then there would be a shortage of sand.
[+] [-] pelagicAustral|1 year ago|reply
[+] [-] potato3732842|1 year ago|reply
That doesn't mean it's not an existential problem. You can have a growth forever before the cancer gets bad enough to notice.
[+] [-] devnullbrain|1 year ago|reply
[+] [-] Tiktaalik|1 year ago|reply
The author sneers against regulatory rules to limit suburban sprawl but really none of that has anything to do with a housing shortage.
It is entirely possible to denser and taller buildings, having both compact communities, green space, farms and forest and also addressing housing needs. UK hinders its economy by declining to do so (as do so many other places with housing shortages).
[+] [-] automatic6131|1 year ago|reply
Yes, but you're not allowed those either.
[+] [-] ascorbic|1 year ago|reply
[+] [-] dmje|1 year ago|reply
[+] [-] monkeycantype|1 year ago|reply
[+] [-] Sabinus|1 year ago|reply
[+] [-] throwawayffffas|1 year ago|reply
[+] [-] gosub100|1 year ago|reply
[+] [-] rahimnathwani|1 year ago|reply
[+] [-] Rovanion|1 year ago|reply
[+] [-] data_marsupial|1 year ago|reply
[+] [-] quantum_panda|1 year ago|reply
[+] [-] tester89|1 year ago|reply
[+] [-] lsllc|1 year ago|reply
Taxes are too high, there's too much red tape for businesses and successive governments have failed to invest in anything outside of the "south" (e.g. Greater London). I was (half) joking with them that the "north" would be far better off if it seceded and joined Scotland!
[+] [-] walthamstow|1 year ago|reply
Taxes-too-high is a common refrain but income tax + national insurance takes 26% of my 95th-percentile income. Is that so bad?
[+] [-] laurencerowe|1 year ago|reply
Increases to employers' National Insurance contributions. It's the equivalent to Social Security in the US. Mostly goes to pensions.
[+] [-] secondcoming|1 year ago|reply
[+] [-] piqufoh|1 year ago|reply
[+] [-] guardian5x|1 year ago|reply
That completely ignores that Germany made itself dependent on cheap Russian gas which is not delivered anymore. It's not like nuclear was ever very cheap.
[+] [-] timerol|1 year ago|reply
[+] [-] Peteragain|1 year ago|reply
[+] [-] ndsipa_pomu|1 year ago|reply
https://www.ft.com/content/8d5f2952-3c17-11e8-bcc8-cebcb81f1... https://www.insidehousing.co.uk/insight/the-housing-act-from...
Fun fact: there's a popular pub question to ask tories - "name one successful Thatcher policy" which on the face of it doesn't have an answer. However her "Enterprise Allowance Scheme" was ironically a big success
https://www.theguardian.com/culture/2023/jul/26/thatcher-ent...
[+] [-] pjbster|1 year ago|reply
https://www.ons.gov.uk/economy/governmentpublicsectorandtaxe...
You can see two upticks in debt: first was the steady rise after the 2008 crisis (which austerity clearly failed to stem) and the second around 2020 which may be pure Covid or may be also due to a bit of Brexit.
When the UK government talks about "growth", it really means "growth in tax revenues". This means they want you and me to spend more because transactions are the drivers of revenue.
Inflation is generally painful for the public but very useful for a government up to its ears in debt because debt payments do not rise with inflation but revenues do.
And public services are highly toxic to an economy which requires 4-5% growth just to meet its debt payments. Why provide services for free when you can collect VAT receipts for basic essentials like clean water, energy, and medication? Why spend millions on regulatory oversight when the inevitable health issues downstream will result in more private spending and GDP growth?
[+] [-] urban_winter|1 year ago|reply
The article characterises that fact as "energy starvation". Wouldn't "efficiency" be a better analysis? Low energy use per GDP or per capita is surely a thoroughly good thing.
[+] [-] owenversteeg|1 year ago|reply
Yikes. Housing is the big issue that gets everyone’s attention, but this is huge. Cheap energy drives economic growth at all levels. It’s incredible that the various British governments have let it get to this level. Maybe it’s time to import a few Chinese or Soviet technocrats?
[+] [-] pjc50|1 year ago|reply
[+] [-] riffraff|1 year ago|reply
Italy has a higher % of GDP from manufacturing but way more expensive energy.