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If ever there was a good day to lose an MEP, today must be difficult to beat.

The former Lib Dem member for somewhere up north will be inside page stuff tomorrow compared with bent-as-a-nine-bob-note Labour donation scandals, yet again.  It utterly beggars belief that anyone would imagine that donations made via someone else were right and proper.  Mind you there always were stories about a certain landlord in Oxford forcing his tenans each to give Labour small amounts on his behalf so he would not go above he notification level each year.  So maybe it's endemic.

...or why we must not base all our assumptions about housing and how to solve our needs on Gordon Brown, Yvette Cooper and Kate Barker's diktat that "we must simply build more to supply the demand".

In last weekend's Sunday Times, Simon Jenkins in Housing crisis? What crisis? The most puffed up panic in the land hits many nails on the head:

"There is no housing crisis. There is just a housing market. There is no housing “need”, unless you are sleeping in the street. There is just housing demand and housing supply. There is also housing panic, housing lobbyists and housing stark raving madness, the last much in evidence last week.

"The news that the government wants all children to learn economics is fine but ministers should go to the head of the queue.

Most especially, he floats the idea of Land Value Tax:

Need in an open economy is demand and demand is a function of price and supply. This demand for 40,000 unavailable and affordable homes a year could vanish with a change in interest rates or a tax on underoccupancy or encouragement to students to live at home. All might be sensible policies but none is mentioned.

Get that? A "tax on underoccupancy" - that's Land Value Tax. It encourages people to consider whether remaining at their current location after their need for all the particular unique benefits of that location have gone is justified. Do you still need to be in that school catchment area once your kids have grown up? Do you really need to be within walking distance of of the rail station for your 50 minute commute to Marylebone once you've retired? All of these, things over which you have no say or influence as merely the owner of a prime location benefitting from a good school or nearby rail station feed into the land value of your property. If that land value were taxed, instead of your income for example, you might decide voluntarily that paying a relatively high tax compared with your new needs and financial circumstances for holding onto something you no longer absolutely need while others clearly do is not worth it and you can move to a lower tax area - where you'd be freer to spend your newly increased income on luxuries and "nice to haves".

And let's not underestimate the extent of underoccupancy in the UK. I actually found Jenkins' article Googling for a report from 2006 mentioned in another housing article, this time in the Observer, this weekend that claimed that:

36.4 Percentage of English houses that are under-occupied , according to a 2006 local government survey.

2.5 Percentage of English houses that are overcrowded , according to the same survey.

I would quibble with a couple of things in Jenkins' article though. First...

The assumption that every adult citizen has a “right to a decent home” that they can “afford”, courtesy of the government, must be the last hangover of postwar socialism and a brainless basis for policy.

Well, he might be right that we should not expect housing "courtesy of the government" but there must be an absolute right to somewhere to "lay your hat", derived merely from the fact that we only have this one planet on which to be born, live, work and die. And since location is a quasi monopoly, there is a role for the community as a whole, call it government if you will - though I'd prefer to take the politics out of it by making it automatic - to intervene in that natural monopoly. Else eventually, when someone else owns everything (as they already in fact do) those without ownership of land have no means of self-ownership - the ability to keep what you toil for, because the land owner can charge you what he likes for access to somewhere to base yourself in order to earn your crust. Even John Locke agreed with that.

And secondly...

Owner-occupation in the United Kingdom is now 70% of housing tenure, against 42% in Germany and roughly half in most comparable countries. The private rented sector, the most fluid and efficient form of housing, is ridiculed and persecuted with red tape, comprising a mere 12% of the market, against 23% in France and 53% in Germany.

The first part of this is trotted out with monotonous regularity - that Britain is somehow unique in high rates of home ownership. But actually we're about slap bang in the middle, sharing 69% with the US, and while France and Germany are low (but catching up, in Germany at least, partly because of government allowing a lot of flexibility in the way municipalities plan and develop increased housing) Ireland (at 77% off its peak of 80%+ a few years ago), Spain (85%), Greece (83%), Hungary (a whopping 92%), Italy (70%), Norway (77%) and so on are all ahead of us in ownership... Sweden is an interesting one, where there is only 42% home "ownership" but 40% of urban homes are in a type of mutual tenure much as some of us here want to develop in Community Land Trusts. But it's not actually terribly relevant - housing should be a cost of living, and a fairly predictable cost of living at that - not an alternative living...

...which is where my criticism of the second part of that comes in - that private rentals are efficient. This is not necessarily the case - private landlords, just like owner occupiers, are mini monopolies at the location of their "investment" so the majority of their rental income comes straight from the land values that they have done nothing to contribute to - and are, as in Oxford, actually seen as having a negative impact on. Land Value Tax would also mean that they had to consider the quality of their property, the "improvements" on the land value, because that's what their income would be based on after the tax for the location value was taken into account. Yes, private rental provides liquidity in the market but it's reaping what it does not sow.

But there are other snippets of wholesome goodness in Jenkins' article pointing towards a thoroughgoing change in the way we understand housing and policy to make best use of the land we already have:

Even so, if we can tear our eyes away from crazy headlines about London prices, the rate of house price inflation has not wildly outstripped other forms of saving. Only in the past two years (of cyclical boom) have houses caught up with the 10-times rise in equities since 1980. Terrorising the British people out of lending to the productive economy into oversupplying themselves with living space has been the stupidest thing this government has done. Then to claim a “housing shortage” is absurd.

Nor is there anything exceptional or “critical” about present housing costs. Political attention focuses on first-time buyers. For them the key figure is not the purchase price of a house, which they will probably sell long before they have paid for it, but the cost of finance. Lower interest rates have led to this plummeting. Median housing payments for first-time buyers were 16% of income in 1975, 18.4% in 1980, a savage 27% in 1990, 14% in 2000 and 16.8% last year. That is why banks will lend five times income today as against three in the 1980s.

The "Eddie George" effect - low interest rates kept us borrowing more and more against land so that we didn't go into recession in the mid-late nineties. Who pays? We all do - in artificially inflated house prices and now in higher interest rates to try to stem the flow before it becomes too inflationary - the price-earnings ratio of buying a house has been artificially ramped up because the dividend cover was so high, but now comes the crunch, and both must inevitably fall.

The housebuilders’ lobby argues that prices are high because of a shortage of developable land. There is no shortage of land any more than there is of houses. The prime minister might care to join me on a tour of Portsmouth or the Thames Gateway, of the west Midlands from Solihull to Wolverhampton, of Derbyshire and South Yorkshire from Chesterfield to Barnsley, of the Merseyside M62 corridor, of Wearside and Tyneside.

A sound planning policy would encourage all new developments towards city and town centres, expecially in the Midlands and north, for the simple reason that this uses roads, sewers, schools and shops more efficiently, discourages car use and promotes community. Urban Britain is woefully underdeveloped but this is reversible. In a matter of five years, the population of inner Liverpool has risen fivefold simply by good planning of private sector activity. It could rise another fivefold.

Exactly - we just need to encourage that land to be developed up to its optimal market use - presently housing in most places - by levying Land Value Tax so that owners again are forced to look at whether they are making the best use of their asset given the tax due on it. And establish a corporate taxation policy that encourages business to locate to underused areas - for housing is no good without work and economic activity. But again - that points to replacing Corporation Tax with Land Value Tax.

If such effort, backed by land clearance grants, were repeated across Britain, Brown’s new homes would emerge overnight.

Don't give them grants though - why do you now argue for subsidy? Just make it financially attractive to redevelop land based on the tax payable on it!

But the message is clear - we need, no must, look beyond Barker, beyond the crude supply and demand calculations and the very crude "finger in air" centralised/regional planning. Yes, we can build our way out of a crisis, for a while, but it will return one day, in another round of blighted areas (now called "Housing Pathfinder" areas) and another round of pressure points of unaffordability. The answer to all of Simon's points is, unequivocally, Land Value Tax. Until we have that, we will never, literally, have a level playing field.

Technorati Tags: affordable housing, housing, land value tax, Simon Jenkins

It's environment week at Oxford Brookes University. On Wednesday evening I took an evening off from campaigning to attend a lecture/discussion led by Bill Dunster, architect of BedZED, Professor (and Lib Dem City Councillor here in Oxford) Sue Roaf, and others entitled "Designs on the Planet".

It was a debate about how we're all facing an energy crisis in the not too distant future and how we need to build our homes, workplaces and communities to survive only on the energy we can generate ourselves as a nation from sustainable resources - something around 10% of the copious energy we fritter away today.

The media is in a frenzy about politicians "going green" by example, or not, with Ming Campbell selling, or not, his Jaguar, Dave Cameron choosing a hybrid Lexus and forcing his environment spokesperson to get rid of the Porsche, how well your local council does on recycling and so on. We have a hose pipe ban about to be extended to teeth cleaning it seems. Soon we will be advised to drink our pee to save water no doubt.

I've said it before, but it bears saying again, if the "mainstream", and especially those who used to be quite eco-sceptical, have seen the (energy efficient) light and are now promoting action to deal with or adapt to climate change, then perhaps the first battle of the "War on Weather" is being won, but the changes that are being suggested vary wildly. The "are you doing your part" sort of message of the politicians - flogging the gas guzzlers and switching off the TV - is, according to Dunster, Roaf and others fiddling while Rome burns.

And their prognosis is, I think it is a fair word to use, cataclysmic, unless we embrace huge changes. Huge, costly (in financial terms) changes.

All of them are missing the point. They are all dealing only in symptoms and adjusting to the effects of something that we can in fact change very little. For many, the damage is already done. We may be able to slow it down. The most benign interpretations may even suggest that we can do things now that will cause changes for the better, in time. But let's face it, the planet is a vast system - talk about how long it takes to turn a supertanker around and multiply it by hundreds, maybe thousands of years.

Yes, as one well known notso-eco-organisation says "every little helps", but it's not addressing the root of the problem. Everyone feels a bit better for doing their bit, I'm sure. But we are fighting a losing battle.

However, there is one system that forces us into the sort of habits that we generally now seem to accept have helped cause the problems on the horizon. A system created by human ingenuity rather than an immutable law of nature. A system that has changed and adapted, often out of all recognition, from time to time as human needs have changed. A system that, unlike gaia, the great mother-ship, whatever you want to call our one and only home planet, can be changed "merely" with an act of political will.

IT'S THE ECONOMY STUPID

I say "merely" because of course there are huge vested interests involved. The 0.25% of the world's population that own more than the other 99.75% put together will of course find a way to survive any impending crisis. It will not be the financial elite that will disappear under the water as it rises over Battery Park or Belgravia but the poor, just as it was with those worst affected by the Boxing Day Tsunami sixteen months ago.

And the not so poor. Just those who, despite years of hard work, saving to buy their dream home, cannot afford simply to up sticks and move to higher ground. In fact, most of us. The same most of us who have begun to recognise that the way we treat the environment has to change. The vast majority. Crucially too, in case you don't think this applies to you, it's the same most of us who are now worried about whether we will be able to retire on a decent pension any time soon, because the reasons are the same.

But this is not an envy-trip. I don't begrudge people who have played the system successfully what they have gained (so long as they have played fair) - it is the system that now needs changing. The rules of the game, as Tony Blair said about another war he's losing.

What we have to ask ourselves now is whether we can afford not to do whatever it takes, to change whatever we can actually change, in the faint hope of changing the prognosis for the planet but in the better hope of being able to survive the changes that may already be inevitable. And the things that are ripe for changing are the man made systems and rules that say, in particular "we, the vast majority, can't afford to..."

So stop fiddling, and take the initiative. The mass movement that's building of concern for our planet and our future, from all shades of the political spectrum can achieve it. Do we want to fry merely for want of looking at other economic models that promise "sustainable abundance"? For fear of upsetting an economic "orthodoxy" that has pushed us into this position. It has served us well, arguably. But it is now, more than anything else, a hinderance and not a help. At least for about 99.75% of us.

"Why should we be beggars with the ballot in our hands?"

Nearly a month ago, when Chief Constable Peter Fahy of Cheshire went on his rant about upping the alcohol age limit I wrote the following piece but ended up not posting it. Now that thanks to Tim Martin of Wetherspoons (somewhat ironically as I would hold his company to be part of the problem - cashing in on the drinking shed culture and pricing out many estate pubs) an alternative argument similar to mine below has been posited, and picked up by Liberal England and Niles, I thought maybe it was worth reviving. It was a theme I mentioned actually in my candidate vetting interview as one potential way in which local authorities might be able to influence this "binge drinking" issue:

There's all this chatter about alcohol fuelled crime and anti-social behaviour going on. Most sensible folk seem to agree that raising the drinking age is no answer (I would in fact abolish any minimum age completely of course). But I wanted to take a different tack that has niggled away at me for a while. Kind of on the "Bowling Alone" theme of declining social capital. I believe a lot of this trouble is because of the demise of the local pub.

more from san joan's evening
Originally uploaded by J_G_R

Everyone now seems to get together (usually on the same night of course) and gather at drinking sheds in town and city centers. Long ago, when people weren't so mobile late at night and so on, they would go to their local pub. Many of our housing estates even had one built as part of the original planning for the estate, at least as important as a church or a medical centre or a Co-op.

But in there you would not just have the Club 18-30 hell bent on a little youthful havoc. You'd have people of all ages and all social groups on an estate. And it was probably the only one within walking distance so if you were barred it was a real pain to go anywhere else. If you got a little obnoxious or worse on the booze your family and neighbours would get to hear about it pretty quick through someone else who was at the pub when you kicked off. You would have to apologize, and perhaps even beg, or at least eat a bit of humble pie, to get back in. Be a little shamed by the incident.

Now, nobody who knows you sees you out in these anonymous booze barns in the centre of town. One is much like another so if you embarrass yourself at one you can go to half a dozen others for the same bus journey. Reprimands are all down to the police, assisted perhaps by bouncers. And all have to stay within strict boundaries - your cousin is not going to take you out the side door and box your ears (not that I'd advocate such violence as a cure!) until you stop acting like an idiot and can go back in and apologize. You might even feel proud to be on "Police, Camera, Action" rather than ashamed to be acting the idiot in front of your family and neighbours.

I doubt we can roll back the years that have made some city streets (like George Street here in Oxford) end to end gin palaces. Who knows though, maybe climate change, fuel costs, environmental concerns, might one day make us go back to the real local pub and have to face up to our families when we act the alcohol fuelled arsehole.

Since the Vatican last week tried to redefine the "Seven Deadly Sins" and the events of the last few days in the financial markets I thought I would share a nice quote by a chap called Josiah Stamp, a liberal economist, tax policy expert, director of he Bank of England for a while, chairman of the LMS Railway company, and at the time reputed to be the second wealthiest man in Britain:

"Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money."