London, Housing and Planning – 1. The Conservatives

Attack as a Defensive Strategy

That the Tories deliberately chose to go on the front foot on housing and planning is fascinating. Both are highly divisive subjects within their own party’s ranks. On one side, planning reform and top-down housing targets were dumped after a major backlash from backbenchers such as Theresa Villiers. On the other, a block of Tory MPs are pushing hard for building vast numbers of new homes as part of a wider economic growth strategy – what Liz Truss’s supporters saw as ‘supply side’ reforms. The ultimate NIMBY v YIMBY clash.

One way to manage this internal conflict would be for the party to keep a low profile – do and say as little as possible, particularly on the run up to an election. But polling and focus groups will be telling Tory HQ how housing is a growing priority for voters, so can’t just be ignored.  But it gets more complicated. Voter concerns on housing vary enormously depending on geography and demographics. For some, it’s about home ownership – the expense of buying homes or rises in mortgage payments. For others, surging rents are the issue, or the poor quality of homes. Then there’s a group where the fear is of most development – your classic NIMBYs.

Ever Increasing Circles

And, here in London and the fringes beyond, what is a headache for the Tories becomes a migraine. Take Inner London. Rising housing costs are driving demographic change. Home ownership is a distant prospect for many and renting privately is a growing struggle. Younger voters are being radicalised – in part by housing pressures – contributing to the leftward shift in inner London’s politics. This is evidenced by the Tories losing flagship Wandsworth and Westminster councils, having only four[1] Tory MPs left in inner London and a sole blue run council (Kensington & Chelsea). 

Then there’s Outer London – classic suburbs territory – where in recent years housing has become a political flashpoint. As Greater London’s shortage of housing has worsened, the search for new space to build homes has rippled outwards. This has brought conflict between settled suburban communities on one side and councils, developers and the Mayor wanting to build more homes on the other. While this is still the most Tory part of London, even here it is under increasing pressure. It is home to 17 of their 21 London MPs, nine[2] of whom have majorities under 8,500. On current polling, these nine look decidedly vulnerable.

And finally, the fringe beyond the M25. Given last year’s local elections, the Conservatives can no longer take this vast swathe of blue for granted. What Tony Travers has dubbed the ‘Londonisation’ of the commuter belt has seen the Lib Dems, Labour and even the Greens make strides. Many Tory seats are potentially marginal.

Taking the wider south east as a whole, the Tories must balance being pro-growth without upsetting the delicate political fortunes of a crucial belt of constituencies around the edges of London where opposition to new development is greatest.  

Cakeism and Deflection

Their response is two-fold political strategy to see the Tory party through the next General Election – cakeism and deflection. Cakeism is saying to the electorate the Tories will build a million new homes, just not in those areas where it causes the party political pain. The deflection is through the use of handy foils and bogeymen.

We saw last week how Sunak and Gove vowed to protect the green belt, using soothing language about the gentility of the suburbs and accusing bogeyman Keir Starmer (who has expressed openness to building homes on the green belt) of wanting to concrete over the whole lot.

Handy foil comes in the form of the Labour Mayor of London. The Mayor isn’t building enough homes, say the Tories, and that’s a drag on not just London but the whole country. If Khan were building enough homes, there wouldn’t be a crisis – it wouldn’t cost so much to buy or rent. And if he built more in the right parts of London, developers wouldn’t be nibbling away at the green belt or shoving up towers in the suburbs. The Tories are going to ‘step in’ and sort this, making the Labour Mayor build more homes, and make sure they’re built in the ‘right places’.

Interpreting Sunak and Gove’s Interventions

The recent Sunak/Gove intervention was dressed up as an announcement, but if anything it was rather thin on new stuff or, for that matter, anything likely to make a major difference to house building (at least not any time soon - my slightly cynical take is in italics below).

• A billion pounds for estate regeneration – however, it’s not new money (but part of the existing Affordable Homes Fund allocation) and the GLA has previously called on the Government to give them this power.

• A Docklands 2.0 in Thamesmead, Beckton and Charlton Riverside – much of this is in the pipeline already but held up by the need to build the DLR Extension (a decision to fund this lies with the Treasury). The 65,000 homes Gove/Sunak lighted upon didn’t include any timescales, but amounts to only slightly more than a year’s target in the current London Plan.

• Amend the London Plan to have a higher housing target – having a higher target doesn’t, on its own, lead to more homes being built. Besides, changing the London Plan is a bureaucratic and slow process for reasons of process required by law.

• More homes in central London – central being the key word here. Central being away from key Tory marginals in the suburbs.

The Centre Taking the Strain

Interestingly, the London Plan comes in for special attention. As a reminder, the Mayor produces a London Plan that seeks to accommodate the city’s housing need within the Greater London boundaries. This is a struggle, and (mostly Tory) local authorities beyond the M25 are always anxious the city will export its housing problems. Moreover, people cannot be forced to live in particular places.

That being said, the current plan uses a complex methodology to set a target for 523,000 new homes over ten years, allocated by local authority – with 55% of these homes in outer London boroughs. Large brownfield sites alone aren’t enough to build all these homes – all corners of the city have a contribution to make. Of course, outer London covers 484 square miles compared to inner London’s 123, meaning inner London is already planned to take three times as many new homes per square mile as outer London.

What the Government effectively said last week is this: ditch the housing targets in the current plan, adopt a much higher target (probably a nice round eye-catching figure), central and east London must carry a bigger burden for building these homes, with the suburbs relieved of the pressure to build. Tower Hamlets, Islington and Hackney are already the most densely-populated council areas in the country.  The policy at its simplest is: ‘build many more homes where there are already most and fewest where there are currently least’.

This a long way from the decades after 1945 when London’s housing need was planned across the wider south east, to a London Plan that squeezes housing need within and across the 32 boroughs, to a new position where the Government is now saying Greater London’s new homes should go in inner London.

It’s All About the General Election

Unsurprisingly, Sunak and Gove’s highly political attacks on the Mayor elicited a strong reaction from both Sadiq, and his Deputy Mayor for Housing. But perhaps most telling, the wider housing package unveiled last week received a lukewarm response from housebuilders – at the same time as it was revealed Gove hasn’t met any house builders or representatives of the trade in the first quarter of this year.

I’m not sure this will bother the Conservatives. This is a purely political strategy to shore up the suburbs and the commuter belt. A better barometer of success are the views of outer London Tory MPs. Theresa Villiers, Tory MP for Chipping Barnet (majority 1,212) welcomed the announcement as a “good way to deliver a high volume of new housing without resorting to building on the green belt or forcing tower blocks on low rise suburban areas”.

The Race for City Hall is Secondary

But what about the other major election next May, the race for City Hall? On the face of it, there is an apparent alignment between mayoral candidate Susan Hall and Rishi Sunak’s positions across housing, transport and environmental policies. Perhaps No 10 see the race for mayor as a dummy run before the General Election.

That being said, what was unveiled last week feels very focused on the General Election, and defending marginal parliamentary constituencies around the fringes of the city. While it might mobilise votes in outer London, winning City Hall also needs votes in the centre of the city.

From what we’ve seen so far, that looks more of a challenge for the Conservatives. The party’s growing pro-car, anti-LTN, anti-ULEZ stance – plus Hall’s long-standing positions on Brexit, Trump and Boris Johnson – aren’t likely to land well among much of London’s particular demographic. On top of this, the Conservatives are now saying to these parts of London they’ll have to take more of the city’s new homes on behalf of preserving the suburbs. As a package, this might be a hard one to sell on the doorstep.

I might be proved wrong. Perhaps it will resonate with voters, or more of a yet to be unveiled policy offer could be popular in inner London. But recent electoral history – and what we know of the demographics and habits of those in the centre of the city – suggest otherwise. Either way, either by design or by accident, the Tories seem to be adopting a ‘suburbs first’ approach to coming elections, that risks sacrificing the race for City Hall and those remaining Tory politicians in inner London.

Positioning Over Policy

That being said, it is not plain sailing for Khan and Labour. Starmer has opened up the prospect of building on the green belt, but Khan is opposed. Shadow Chancellor Rachel Reeves has hinted there won’t be more money for building affordable homes, but Khan has long called for an increase in funding. Shadow Housing Secretary Lisa Nandy has rejected calls for rent controls and fiscal devolution, both of which City Hall has sought more powers over. This is before we get to the divergence of views on ULEZ which the campaign in Uxbridge exposed. I will turn my gaze to Labour’s equivalent conundrums in a future piece in the coming weeks.

What we do know, however, is that a lot of what we’ve seen and heard this past ten days is less about policy substance and more about political positioning. And that interaction between political party priorities at a national and a London-wide level are complicated and often misaligned. So, with what feels like the firing of the starting pistol on the election campaign, expect more attempts at quelling internal party disputes and a lot more political performance.

Nick Bowes is Managing Director, Insight

[1] These are Kensington (Maj: 150), Cities of London & Westminster (Maj: 3,953), Chelsea & Fulham (Maj: 11,241) and Wimbledon (Maj: 625).

[2] The 9 are: Carshalton & Wallington (629), Chingford & Woodford Green (1,062), Chipping Barnet (1,212), Finchley & Golders Green (6,562), Harrow East (8,170), Hendon (4,230), Sutton & Cheam (8,350), Uxbridge & South Ruislip (7,210 – now 465 post by-election) and Wimbledon (628).