Wednesday, September 05, 2007

Wendy in da house

Labour’s new Scottish leader, Wendy Alexander, has been out and about “listening and learning”. What’s she learned? Well, she was reportedly “taken aback” by the strength of feeling across Scotland about the lack of affordable housing. "The huge issue", she said.

But why it took a nation-wide tour for Wendy, an economist, to discover that there is a housing crisis? Her party was in government only four months ago. The former First Minister, Jack McConnell, has a second home on Arran, where the crisis is so severe the island faces losing its indigenous population - priced out by holiday home owners like, well, Mr McConnell.

The Nationalists are just as bad as Labour. Last week the SNP housing minister, Stewart Maxwell, unveiled the new government’s bold solution to the housing crisis: another “consultation” with “stakeholders”. In other words, doing nothing at all.

I’m always astonished at the extent to which politicians seem unable to grasp that housing really is the biggest issue in politics right now. You only need to look at the property pages. The vast majority of people under 35 are unable to afford a rabbit hutch now that prices are up to ten times average earnings. The average age of a first time buyer is now 37, according to the Scottish government’s own figures.

But housing isn’t just about property. If you want to understand why the Scottish population is declining, and talented people are leaving, this is where you have to start. Even professionals can’t afford houses on the salaries they earn here, so they are taking their skills south or abroad. Those who stay are having to put off starting a family because they don’t want to raise children in a one-bedroom flat.

Housing is also the key to understanding the why policies on transport, the environment, global warming don’t work. People are using their cars more because they have to commute further and further to escape inflated house prices. The average commuting distance has risen by a mile and a half in ten years. Our houses are also so inefficient that they expend the equivalent output of Hunterston power station to heat the sky.

And housing now also threatens the stability of the economy. As the American sub-prime mortgage crisis has reminded us, prices can go down as well as up. And when they do, there is chaos and a “repricing of risk” - a euphemism for boardroom panic and governments throwing billions at bankrupt finance companies. In Britain, with house prices having tripled in ten years, we are sitting on a time-bomb.

Yet there is no need for this. Building houses is one of the few things that governments can actually do - as even the Tories showed in the 1950s. The housing shortage is an entirely artificial one in Scotland because, unlike the south of England, Scotland has an abundance of land - we have one third of the land mass of the Britain with less than a tenth of the population. To have a housing crisis here is really, really difficult. Yet the rate of new house building in Scotland is only one third that of England.

So, why do politicians seem unable to act? Could it have anything to do with the fact that most of them are multiple homeowners themselves? Could it be the mindset of senior civil servants, who are invariably middle-aged owner-occupiers? All of us who've ridden the long boom have been corrupted in one way or another by seeing our houses ‘earn’ more than we do year on year. But a time must come when we put aside l selfishness and start to build our way out of this crisis. Here’s a chance for Wendy to show how clever she really is.

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