Opinium have a new poll in the Observer today (I think it’s the only poll in the Sunday papers, at least, it seems to be the only voting intention poll). Headline voting intentions are CON 41%, LAB 37%, LDEM 8%, UKIP 6%. Fieldwork was Thursday and Friday and the full tables are here. The four point lead echoes the YouGov poll that came out on Thursday, which had toplines of CON 41%, LAB 37%, LDEM 9%, UKIP 4% (tabs.

As well as their usual trackers, the Opinium poll also had some questions on the Brexit deal and what comes next. Asked how likely they think it is that there will be a “satisfactory” deal by March 2019, 26% think it is likely, 50% think it is unlikely. Satisfactory is, of course, in the eye of the beholder – some people presumably think there will be deal, but that it will be an “unsatisfactory” one, as the next question asked what people think is the most likely outcome – 30% expect us to leave with a deal next March, 33% to leave without a deal, 16% that we will not leave in March 2019.

The poll also asked what should happen next if there is no deal, or Parliament does not approve a deal. In the event of no deal at all, 14% think there should be a general election, 23% a new referendum, 13% an extension in order to continue negotiations, and 32% that Britain should just leave without a deal. In the event that a deal is struck, but Parliament rejects it, 12% think there should be a general election, 10% a deal vs no deal referendum, 20% a deal vs remain referendum, 14% that the government should return to negotiations, 25% that Britain should just leave without a deal.


1,211 Responses to “Opinium/Observer – CON 41, LAB 37, LDEM 8”

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  1. @ JJ – Thanks. Indeed, I can’t see how we’d get anywhere near 45 LAB MPs to back anything close to Chequers.

    CON Arch Leave appear to be finally willing to use extreme tactics to call time on the Mayb0t sh!t show. Voting down the Finance Bill (budget) is very extreme but they seem to think May is just going to kick the Brexit can out to Dec EU Council meeting, then over Xmas recess and then probably out to 21Jan and even then its not clear what would happen.

    Given the numbers CON Arch Leave don’t even have to vote against their own party they can just abstain and leave May+Hammond up sh!t creek without a paddle.

    If Hammond attempts in any way delay the “end of austerity” and make it specific on a “good” Brexit deal then I wouldn’t rule out going the more direct route of leadership challenge.

    It is worth stressing that this is about getting May to “pivot” to Lancaster House Plan B, honour manifesto etc. The likes of Soubs, etc might rebel against that but the numbers on her side are much lower and they’ve always “blinked” in the past.

    @ CARFREW – OK, fine, from now on I’ll just post my own stuff. The “paranoia” of Remain is absurd, but then a lot of Leave – especially CON Arch Leave MPs getting somewhat paranoid as well – a lot of it going around ;)

    @ SCOTS – So time to scrap the Barnett Formula then? In which case I quite agree, it’s 40years old and certainly no longer fit for purpose. It’s ridiculous that we have a shared currency but one nation is running a 7.9% budget deficit with no central policy that forces then to get that down below 3%.

    Let’s get Brexit over with and come back to that.

    As I’ve long said, Scotland is economic and political baggage for both main parties. The Italian budget issue will hopefully raise awareness of Scotland’s 7.9% budget deficit and all the “freebies” the Scots get at the English taxpayers expense!

    (PS I think the EC are right to intervene in Italian budget. My issue is that the EC seem to adopt a very subjective approach concerning “who” and “when” specific rules apply – starting with letting Italy and Greece into the Euro to begin with!)

  2. Planning (Scotland) Bill further amended to give “public authorities the legal means to purchase land at existing use value, so that the uplift in land value from planning permission for development of the land is captured for the public good.”

  3. @SOMERJOHN

    Smuggling has always been rife along the UK/RoI land border in NI. Two separate countries, two separate tax and duty levels.

    I spent a total of nearly seven years there during the Troubles, most of it on the border (not that you could tell where it was – of the hundreds of crossing points only around a dozen or so were manned). You mention washing powder. During my time it was fag lighters, LPG, fuel oil and for a time Coca-Cola,

    But by far and away the biggest cross-border scam was ‘carouseling’ – continually moving lorry loads of grain and pigs back and to across the border abusing the disparity on EU subsidieson each side. Nothing could stop it because the officials supposedly controlling it at ground level on both sides were corrupt and ignored the checks put in place to make sure it couldn’t happen – such as pouring blue dye on the grain (made no difference, it was just moved back and too and re-weighed for the subsidy), cutting the serial number tattoos off the pigs, moving them back the other side and getting them re-tattoed (in fact for a time they paid farmers one side a subsidy to kill the pigs and on the other a subsidy not to). We were soldiers so it wasn’t our concern, the RUC and Garda weren’t bothered and the relevant monitoring authorities were corrupt.

  4. @Bantams

    I also live in Drecklyland, and you are quite right about the threat from Airbnb to mainstream guest houses and hotels. It is quite simply unfair competition, as there is no regulation, and, as you suggest, probably precious little tax. And certainly no VAT.

    I cannot think that a ban is the answer, and again would be hard to enforce, but some sort of regulation, and probably a few prosecutions for tax fraud would concentrate minds.

    Second homes are less of a problem, except in a very few localities where specific policies have been introduced, probably reasonably. St. Ives in Cornwall is the best known example. Second home ownership in these villages and small towns can reach 40%, which cannot be desirable.

    There is data out there, but it is very confusing, about the level of second home ownership. But I couldn’t go along with Alec’s proposed ban.

    Second home owners often make a significant economic contribution to the relevant community, and frequently move there in later life.

    I don’t own one, by the way.

  5. Some comment earlier today about the ‘anger, aggression and incivility’ in political discourse. Today we are getting news of pipe bombs being sent to the Clintons, Obama, George Soros, CNN and the Democratic Governor of New York.

    No clues yet as to the people or person responsible, but all the targets have become a common political target for right wing campaigners. As the US seems to plumb new depths on an almost daily basis in the level of vitriol and hatred in their political and cultural discourse, it’s difficult to avoid thinking that this has a right wing political agenda stamped all over it.

    If you keep telling your voters that these people are unpatriotic criminals, somethings going to give. I just hope this turns out to be a lone lunatic rather than a fully fledged terror group out to target ‘liberals’, whatever that means.

  6. @Garj

    “, but he has some points about how heavily the dead hand of the state weighs upon the delivery of housing. My take has always been that a better conceived, de-risked planning process could speed up housebuilding”

    ——

    Ah yes, blaming the state for the ills of the market. Removing state influence and regulation is not some magical panacea that magically univents capitalism.

    Under capitalism the goal is to hoover up as much capital as you can. And if that means gaming the system, land banking, buying up rivals, and getting government systems to favour you, so be it.

    We deregulated banks, look what happened. Hand energy over to the private sector, prices rocket and they use the money to buy up rivals and suppliers so they can put up prices even more.

    The reason the state got involved in building housing in the first place was because couldn’t rely on the private sector.

    Not that the state is automatically wondrous either. But removing the state and leaving it to the market isn’t a panacea and may well not even remove the state that much.

    Because the big players like to have the state assisting them. So they’ll use their increased power to ensure there’s plenty enough state to keep their grip on the market.

    Basically we need a combination of the left and right, Old Labour plus Thatcher.

    We need the state to build more homes, with a rent to buy scheme for tenants.
    If the state want to employ the private sector to build the homes, fine, but don’t leave whether the homes get built all up to the private Sector.

    It’s as bad an idea as was leaving education all up to the private sector.

  7. Cross Border Organised Crime Threat Assessment 2016

    I think this is the most recent report.

    https://www.octf.gov.uk/OCTF/media/OCTF/images/publications/Cross%20Border%20Organised%20Crime%20Assessment/Threat-Assessment-Report_Layout-1.pdf?ext=.pdf

    “There has been a substantial increase in the number of foreign national OCGs known to be involved in organised crime across Northern Ireland. These groups have origins in, and links to, South East Asia, Africa, Portugal, Spain, Italy, Russia, Lithuania, Albania, Romania and other countries within eastern Europe. These groups bring new methodologies and can be more challenging to investigate, due to issues such as language barriers. These groups often commit offences in both jurisdictions. Recent successes against a number of these OCGs tends to support intelligence that these groups are involved in a wide range of organised criminal offences including, the importation, cultivation and distribution of drugs, human trafficking, labour and sexual exploitation, fraud, cybercrime, money laundering and organised theft. “

  8. @Millie

    Interesting link. So do you have a counter to Finch’s critique, which consists of these key points, pointing out the problems with leaving it more to the market?

    “Patrik fails to mention, in the course of an essay of several thousand words, the historical role of the public sector in supplying housing for those not earning enough to hoist themselves onto the housing ladder. A thumping gap in his argument is why, when the public sector was actively engaged in building homes, we did not have the sort of crisis of supply he now rightly complains about.

    Funnily enough, and here is the second thumping gap in the thesis, we had a very similar planning system, and for a respectable period had minimum sizes in the form of Parker Morris space standards, when supply and demand were in broad balance. Far from ‘socialist’ policies resulting in a shortage of housing, what they did was create a civilised context in which private housebuilders could not engage in a race to the bottom over design and construction quality: to an extent they had to match public standards. It was the world of 1978.

    When that cut-price national treasure Michael Heseltine scrapped both local authority housing and Parker Morris standards, he created the conditions which according to Schumacher should have triggered a perfect market response to a new world in which the poor could not expect to be housed in the same way, or to the same extent. (Except where, via subsidised purchase, they reduced the available public stock.)

    When Heseltine scrapped local authority housing and Parker Morris standards, he created the conditions which according to Schumacher should have triggered a perfect market response.

    Heseltine’s policies prompted big housebuilders to cut sizes and standards, focus on land speculation rather than quality of construction, and consistently opposed measures designed to improve quality, including energy and fire regulations – an attitude which persists. They were honest enough not to claim that they could house poor people decently – but then, why should they have?

    So the third thumping gap is the absence of suggestion as to why or how the private sector will provide for the relatively poor. There is scant mention in Patrik’s essay of the following: children, families, communities. He seems to think that the world consists entirely of ‘young professionals’, mentioned more than once, who spend most of their time away from their home, which can therefore be kennel-sized.

    Schumacher seems to think that the world consists entirely of ‘young professionals’ … for which read: ‘the sort of people my practice employs’

    A final thumping gap in the Schumacher proposition concerns inward migration to London since the 1980s – not discussed. Reading this hymn to the joys of capitalism, with its silly and insulting suggestion that the poor should live in the housing equivalents of Subway, McDonald’s and EasyJet, you wonder why

    Patrik fails to analyse a huge reason for the housing crisis in London: the addition of more than two million people over the past 30 years, increasing the city’s population by a third to its current record levels, with plenty more predicted to come. And they are not simply those ‘young professionals’, for which read: ‘the sort of people my practice employs’.“

  9. @Millie
    @Garj

    I should add, land banking and speculating on assets is also normal capitalism at work.

    Again, we see similar with the banks. We deregulated, and did this open up a wonderful world of extra lending for business? Nope, the banks put money into assets instead, including housing.

    Because it’s easier. Why take the risk and hassle of investing in business when you can speculate on the back of a constrained supply?

    Not that all this money going into housing actually like means loads of extra housing getting built. Nope, it just inflates the prices.

    We have reduced state involvement and as you would expect, we get less housing. The idea that reducing what state involvement remains will suddenly turn that around is going to take some establishing!

    With housing, the current interests of government and capital align. It’s in both their interests to constrain supply. There are votes AND profits in it.

  10. @Carfrew – with you on housing.

    As with so many other things, the last few decades have witnessed the private sector either trousering public funds and/or screwing up public service provision, only the then claim it wos the state wot done it!

    Here’s another sorry tale of housing woe about how global finance allied to deregulation and a lack of enforcement of what remains ends up blighting peoples lives – https://www.theguardian.com/business/2018/oct/24/freezing-uk-tower-block-was-cash-cow-for-foreign-investors

  11. Valerie
    Thanks for saying that you read my posts. I always read yours twice, because you are thoughtful enough to post them twice :-)

  12. @Carfrew

    I wouldn’t argue with any of that!

    I wouldn’t come close to adopting Schumacher’s solutions.

    But Finch does not address a lot of what Schumacher says, which I think is true. Namely, that the state is seeking too much to micro-manage the activities of the private sector, with complex, unwarranted, expensive and Londoncentric interference.

    For example, private developers of all sizes are probably the best judges when it comes to deciding the type of accommodation that is required: they build retirement flats to meet perceived demand, and when that subsides they switch to terraced houses. The market, in my experience responds quite well in this respect. They tend to build what people want.

    By contrast, my Neighbourhood Plan has just laid down the precise proportions of 1, 2 and 3 bedroomed accommodation to be built over the next 10 years. Incredibly, this has been decided without justification or evidence by a group of half a dozen local people, all professionally unqualified. And all self-appointed, because no other volunteers came forward.

    A nearby town has abandoned their NP because they couldn’t get anyone to volunteer to write it.

    Anyone who has ever been involved in the delivery of a Local Plan will know that the evidence base that supports it is chronically poor. My District Local Plan commenced in 2007 with an assumption of 3% annual growth for the next 26 years. When it went to the Inspector in 2016 that was still the assumption, and he accepted that number. I rest my case.

    On the subject of bizarre economic predictions, the peak of optimism must be represented by Great South West who are predicting 4% annual growth for the next 18 years for our region. Unbelievably, all 17 local authorities involved have rubber stamped this estimate of future growth. No wonder Whitehall and every serious commentator laughs at us.

    I’d settle for a mix of Old Labour and Thatcher ( with qualifications… )

  13. @Trevor Warne

    “@ CARFREW – OK, fine, from now on I’ll just post my own stuff. The “paranoia” of Remain is absurd, but then a lot of Leave – especially CON Arch Leave MPs getting somewhat paranoid as well – a lot of it going around ;)”

    ——

    Yes well, i didn’t say you shouldn’t do it. One wonders why you can’t have separate accounts, but then if you’re all gathered round the machine chipping in ideas rapid fire, for one of the Trevors to type in clipped fashion to try and catch it all, that might explain a few things!

    Dunno if Remainers are paranoid, and I don’t blame them if they are. I don’t blame leavers if they’re paranoid either. Everyone should be paranoid, especially with so many Trevors knocking about!

  14. @Alec

    “If you keep telling your voters that these people are unpatriotic criminals, somethings going to give. I just hope this turns out to be a lone lunatic rather than a fully fledged terror group out to target ‘liberals’, whatever that means.

    My sentiments and fears too. Most of the far Right in the US have lined up behind Trump thus far, hence his equivocation about the Charlottesville disturbances, and it will be interesting to see how Trump reacts should the culprit(s) behind these attempted killings turn out to be an individual, or a group, who swear some sort of allegiance to him. Trump will desperately be hoping he can pass it off as the actions of a lone wolf lunatic, rather like some attempted to do with the Jo Cox murder, even though her killer, Thomas Mair, had clear links with far Right groups like Britain First and subscribed to their ideology. If these attempted assassinations in the US today are indicative of a wider far Right conspiracy, then he’s going to be in some difficulty.

    Good grief, these are worrying times and I’m haunted by John McDonnell’s worries about how a second referendum on Brexit may uncork an appalling backlash from nationalist and far right groups in this country. The fact that he felt the need to express this fear may well be an early sign that our leading politicians are starting to realise and sense some of the dark forces now stalking our democracy. We may not be as immune as we once thought and when you see the increasing toxicity and divisiveness in the Brexit debate, I fear McDonnell is right to be worried.

    Of course, fear of a violent backlash should be the very last reason to justify not doing something that you believe is right, but I sort of get the point McDonnell is making. Events in the US today, two weeks before the mid term elections in that country, should worry us all.

  15. @Carfrew
    @Alec

    https://www.theguardian.com/business/2018/oct/24/freezing-uk-tower-block-was-cash-cow-for-foreign-investors
    Share this:

    I think we would agree that this is not how to do it.

  16. @Alec

    Sorry – just read your post, which crossed with mine. The wonder is that there were any prosecutions.

    You are actually agreeing with me: it is wrong that the government is intervening constantly in the market and passing large amounts of public money to the big developers. As I think Carfrew is suggesting, it was, in some respects ‘better in the old days’ with a lightly regulated private sector and some decent council housing.

    Planning now is a deadly combination of paternalism, Londoncentric ‘we know best’ meddling and micro-management, and chronic bureaucracy. Plus a lot of amateur architects making design decisions.

    I would like to see a return to individually designed houses, simplified planning applications and demand led development.

    And good quality council housing.

  17. It is being reported that Russia has lodged a formal objection at the WTO to the EU and UK proposal on TRQs. If so, the hoped for relatively quick and simple use of the rectification procedure to settle the TRQs May not be possible.

    https://mlexmarketinsight.com/insights-center/editors-picks/brexit/europe/russia-blocks-uks-post-brexit-tariff-proposal-at-wto

  18. @crossbat11

    We know from the security services that far right terrorism is a significant and growing concern for them. Far right extremism is becoming normalised as UKIP morphs into an alt right movement ( hosting Tommy Robinson in the House of Lords yesterday). Even posters on here thought it a matter of amusement that far right extremists attacked a left wing bookshop in London.

  19. @MILLIE

    “I wouldn’t argue with any of that!

    I wouldn’t come close to adopting Schumacher’s solutions.
    But Finch does not address a lot of what Schumacher says, which I think is true. Namely, that the state is seeking too much to micro-manage the activities of the private sector, with complex, unwarranted, expensive and Londoncentric interference.”

    ——

    Well, I think Finch accepts that currently, there’s an issue with the way the state is involved, and he says Hezza is one of the cuplrits.

    And I went so far as to say that I don’t think it’s entirely an accident. It may have started as an accident, but the lack of rush to fix it might have something to do with their being votes in constraining supply and upping housing.

    Once we abandoned policies to ensure wages grew as the economy grew, we went back to the pre-war situation of increasingly insecure employment and stagnating wages. This not being ideal electorally, house prices wound up stoked instead to compensate.

    So I don’t doubt you and Garj are right there are issues in planning etc., and it’s sobering to read your knowledgeable explanations! My point is rather that even if we fix regulation, there are still those typical pressures for capital to try and up profits by constraining supply, and only building the houses they make the most money on rather than the ones we absolutely need.

    As Finch points out, we did actually have a system that built a lot more housing, affordably, and once we left things more to the private sector, we got less housing, and more expensively. As you would expect.

    The private sector works much better when selling stuff that isn’t essential. If they try and up prices on hifi, people will just buy something else instead. But with essentials, like accommodation, they will try and corner the market then constrain supply and up prices.

    If you look at pharma, they may decide not to invest in a cure, because treating continued symptoms is more profitable. So yes, there are issues with the State, but sadly, it’s the same with Capital. It’s not an either/or.

    And as I pointed out, paradoxically if you hand more over to the private sector and give them more clout, they are in a better position to pressure or buy off government to advantage them even more via regulation etc.

  20. @Hireton

    Thanks for the TRQ link.

    I was particularly struck by the last sentence:

    Australia, New Zealand, Brazil and many other countries have been critical about the methodology, timing and the basis of the proposal and are seeking to increase the quotas, to compensate them for any loss of market access caused by Brexit.

    There seems to be an expectation amongst brexiteers that all will be fine and dandy when negotiating with countries like the three mentioned, as opposed to the dastardly Europeans. I think there’s a rude awakening in prospect (none ruder than when negotiating with Trump’s USA).

  21. @Alec

    Yes, a sobering article.

    “The offshoring of the private rented sector is just another layer of absurdity,” he said. “From a relatively stable housing system where the government provided homes for people that couldn’t access them through the market … we’ve now gone to an unregulated system where rents are much higher because UK property has become such an attractive asset to international investors.”

    Beswick added: “A lot of those rents are finding their way into offshore accounts with, presumably, a higher level of tax avoided on taxpayers’ money.”

    Mill View, he said, proved that the involvement of international investors in the UK property market – and the problems it had caused – were not confined to London.

    “The worst thing about it is that while the money is being ploughed in, it is not in any way productive. Investors’ money is not being used to build more affordable homes, it is just being used to buy existing assets. It just increases the competition for homes and increases the cost of homes, with the people of the UK ending up with more expensive houses and no increase in the supply of houses.”

    That’s the amazing thing. All this money goes into housing, but we don’t get much more housing. Billions of QE gets pumped in, billions from overseas investors, all the housing benefit increases, and banks preferring property to investing in business, and still we wind up with the shortage.

  22. CARFREW, ALEC

    The state bears an enormous responsibility for the situation as it stands today. The planning system is just about the largest government interference in any free market that we have, employing thousands of bureaucrats to micromanage every building project; it is the reason why land banking makes sense, why we have a housing shortage, why the housebuilding industry is dominated by a handful of big players. The sheer complexity, risk, and expense of navigating planning permission is why the lion’s share of the profit accrues to gaining permission to build rather than actually building. The only reason we needed such high levels of council housebuilding in the first place was because introducing planning restrictions strangled off the supply of houses completely. The post-war era wasn’t when we had the highest building levels, it was pre-war and almost entirely private:

    https://www.theguardian.com/housing-network/2013/apr/19/1930s-house-building-economic-recovery

    That doesn’t mean that you need to do away with planning, but to try to limit it to the level of interference which is actually needed, and refocus it on actually delivering homes. Reforming planning gain in particular could get planners away from trying to negotiate S106 agreements, which is a hugely wasteful business. A more predictable system would result in fewer appeals (certainly fewer successful ones). Steps have already been made on use classes but they could go a lot further.

    I’d also like to see planners spending their time in a much more proactive fashion, using the funds they have available to actually plan, to identify and acquire sites and sell them on for development. The more land that can be made available then the more of the final property price that can be available for actually building, and that can be captured for the taxman without endangering the viability of the project. It would also make it easier for small builders and individuals to get into the market. Take a look at France, where they have far fewer restrictions on building land and complete more self-builds every year than we do houses of any kind, or Japan where they reformed their system and turned a massive property spike into longstanding price stability. Liberalisation doesn’t have to mean a laissez-faire free for all, it means seeing where the planning system has failed through being overly restrictive (which it absolutely has) and acting to correct it.

  23. @Millie

    “As I think Carfrew is suggesting, it was, in some respects ‘better in the old days’ with a lightly regulated private sector and some decent council housing.”

    ——

    I wouldn’t argue that was ideal though. Mortgages were constrained, not much rent-to-buy, some of the housing left something to be desired, among other things.

    (But to be fair, the government was relatively new to such provision and there had been a rush to rebuild after the war with constrained finances).

  24. CARFREW

    To add to that last one following on from your posts, certain developers wouldn’t be able to corner the market if the state didn’t give them the tools to do so. That’s why I’d like to see planning less concentrated on the bureaucratic management of development, and more concerned with maintaining a sufficient supply of land and homes.

    MILLIE

    Couldn’t agree more, local and neighbourhood plans are riddled with figures plucked out of the air and enormously specific demands and allocations that have little reason for being there other than the whim of an officer or councillor.

    Can’t agree about the need for more council housing, at least not until the provisions on allocation in the 1977 Housing Act have been repealed. We have some of the highest levels of social housing in the OECD, and the only country in Europe to let a higher proportion of its housing stock on the basis of need is Slovenia. There’s nothing wrong with state (and not-for-profit) ownership of housing, but it should be let freely so as to raise standards and lower prices in the open market.

  25. @Carfrew

    I agree that there has to be public sector building, and housing need will not be met entirely by the private sector, I also think there needs to be proper regulation of private development, and prosecution where standards are below acceptable.

    I also think we should have broadly plan-based development, and I don’t have much of a problem with the NPPF.

    But the planning system is far too complex, expensive and micro-managed.

    I’m not sure about land-banking – I doubt that this happens much. As Garj will confirm, this is usually a result of the extraordinary cost of making planning applications, and especially the time it takes. It can often involve many years.

  26. @Hireton

    “Even posters on here thought it a matter of amusement that far right extremists attacked a left wing bookshop in London.”

    Yes, I remember that and a post of mine was mocked for saluting the rather eclectic group of individuals who turned out to express solidarity with the bookshop and its owners shortly after the attack. We suddenly got into dwindling Left wing gatherings on Italian beaches and how the new Italian Deputy PM, Matteo Salvini’s popularity and good deeds were rendering them increasingly irrelevant. Jolly good too, apparently.

    One of those great UKPR leaps of logic. From a group of genial and benign left wing eccentrics in Bloomsbury to the glories of a right wing populist leader in Italy. In one fell swoop!

    :-)

  27. @Garj – “The only reason we needed such high levels of council housebuilding in the first place was because introducing planning restrictions strangled off the supply of houses completely. The post-war era wasn’t when we had the highest building levels, it was pre-war and almost entirely private…”

    The facts really don’t support your case. Yes, there was a private sector boom in the mid 1930’s caused by prolonged low interest rates, but much of this followed state led investment in the railways and roads. Without this (and lets not forget – these things were very carefully planned by bureaucrats in offices) there wouldn’t have been the sites in demand for those homes.

    It’s also true that social housing was also important back then – 100,000 homes per year in the mid thirties. From 1919 there were large scale council led housing programs, subsidised by government, and later in the 1930’s there were mass slum clearance initiatives. By 1932 the 27,000 home Becontree estate in Dagenham had become the largest public sector housing development in the world.

    Your notion that the golden age of the private sector housing development was entirely due to free markets being able to operate is largely false. There was huge government involvement in all aspects of delivering houses pre 1939, including identifying where they could go, investing in the infrastructure, developing minimum standards, subsidizing first councils and then private developers, and behind all of this a significant and prolonged public sector provision program.

  28. @Oldnat – missed your post on the planning gain proposals in Scotland. Long time coming!

    One of the beauties of devolution is that it allows different approaches to be taken in different polities. If Scotland does indeed go down this route, it will be fascinating firstly to see if it works, and if does, to then see see how people in England begin to explain why affordable homes in Scotland are so much more affordable than in England.

    Can’t wait!

  29. Alec

    “If Scotland does indeed go down this route”

    It would be unusual for amendments agreed in Committee to be overturned on the final vote, but nothing is certain in politics!

    We have an intriguing situation with the bypass proposals for our town. One of the landowners along the route has planted many trees on it, replacing rough grazing. Presumably that is to increase the land value prior to purchase.

    The new Planning Bill won’t cover that scenario, which is restricted to housing need, but there is a much wider problem in all polities where public investment results in unearned private gain.

  30. As there’s some discussion about housebuilding and its ramifications, has anyone got any inside knowledge on the following point?

    I have noticed that very few new developments include any shops, schools or pubs. My understanding is that developments over a certain size have to include some of these. I have observed several large developments where this requirement has been avoided by parcelling the land up into plots just smaller than the size when the requirement kicks in, and developing in stages, perhaps over several years. I guess that there is therefore less profit in building schools, shops etc, or perhaps the building regs are stricter?

  31. Pete B

    Clearly planning is often not very well planned!

    https://www.bbc.co.uk/news/science-environment-45956792

    Whether the situation is as bad in Scotland, I don’t know – but would hesitate to be optimistic!

  32. @Garj

    Yes, there are conditions when markets work well, and conditions when it’s not so good.

    I have agreed that planning plays an important part in this, and yes the Japan example cropped up when I talked about Japanese deflation with the Trevors.

    My point is that it isn’t necessarily a panacea. There have been still other drivers towards landbanking, what with all the QE, immigration, foreign money flooding in all of which serve to put an upward prsssure on prices which companies might want to leverage.

    So you can relax planning, but still not be out of the woods. It may be that these other drivers are waning, but that doesn’t mean there won’t be new ones. (Help to buy may have stoked prices a bit, etc.)

  33. @Millie

    I think we’re broadly in agreement. But it’d be surprising if land banking didn’t happen, because it is economically rational in current circumstances, just as it may be more economically rational to build pricier properties rather than social housing. (Or to invent treatments rather than cures etc.)

    If prices are going up, which makes you more money? Building cheap social housing immediately, letting someone else pocket the subsequent increase in value? Or holding onto it, pocketing the house price inflation yourself, and then building a pricier home on it and selling it to some rich foreign national who might leave it empty?

  34. @Garj

    “We have some of the highest levels of social housing in the OECD”

    ——

    We also have some quite high house prices too, so we need the affordable housing.

  35. ALEC

    True, ‘almost entirely’ is an exaggeration; councils were responsible for about a quarter of the homes built in the 1930s. They only got up to more than 100000 a couple of times though, averaging more like 70000. This was also a time when they were engaged in slum clearance, so a lot of these were replacement rather than entirely new homes, not that that wasn’t a laudable aim.

    You may note from my previous posts, anyway, that I am very much in favour of the state identifying sites suitable for building, constructing infrastructure, imposing minimum standards, ensuring a supply of cheap land, and even building homes itself. I would rather that they took all of those proactive measures, and more, than persist with the reactive micromanagement which they currently impose on private development.

    PETE B

    Most large developments in an urban setting will have shops and pubs (or at least bars) aplenty, and profit from them, it’s the suburban greenfield ones that tend to lack such amenities. Schools, however, are a pure loss-making exercise. It’s one of the overcomplicated flaws of the current system that, rather than using a straightforward tax (such as a CIL) to fund schools, councils have a tendency to try to impose school building on developers through complex negotiated S106 agreements, then have to expend further time and energy on trying to uphold them, while the developers spend their time and energy (and money) trying to wriggle out of and water down their obligations.

  36. @Garj

    We have to have significant social housing, because the occupiers cannot meet the market’s commercial requirement, and they have to be housed.

    However, I would agree that a freed up planning system would reduce housing delivery costs, thus diminishing the need for social housing.

    And simpler, cheaper planning would also improve the prospects for smaller builders, thus reducing prices through increased competition.

  37. Land Banking

    (From the House of Lords Briefing in January this year)

    http://researchbriefings.files.parliament.uk/documents/LLN-2018-0001/LLN-2018-0001.pdf

    According to Tom Archer and Ian Cole, the structure of the UK housing industry is such that UK housebuilders, in strict business terms, are land speculators first and housing developers second. They suggest that it is the volatility in land prices and indeed house prices which represents the greatest risks to housebuilding sector—ultimately determining profits and losses of any development. Archer and Cole note:

    [T]o protect against volatility and secure sales at predicted prices, housebuilders use land banks to control the flow of new housing into local markets, and to strengthen their negotiating position with landowners. Land banks help the larger housebuilders ‘spread risks, lower financing costs, [and] improve negotiating positions with land-owners’.65

    The House of Lords Economic Affairs Committee’s report noted that the practice of land banking was a common criticism of large housebuilders. It provided data from three of the largest housebuilders that showed each held up to five years’ supply of land, with planning permission, as shown in Table 1.

    The report also cited figures from the Local Government Association, published in February 2015, that indicated there were 475,000 homes in England that had been given planning permission but had yet to be built.66

    Tom Archer and Ian Cole suggest this practice is driven by a desire to maximise profit.67 Through analysis of nine of the ten largest housebuilders’ annual reports (one company is not publicly listed), they found:

    – Between 2010 and 2015, the biggest five house builders saw their Profit Before Tax (PBT) rise by 473 percent, and the biggest nine firms saw an increase of 489 percent in their PBT.68

    – This group of firms had collectively achieved over £372 million in end of year profits by 2010, and this had risen sharply to over £2 billion by 2015. This represents a near 500 percent increase in end of year profits between 2010 and 2015, after taxation and other impairments have been taken into account.69

    – In this period housing completions rose by 48 percent, while housebuilding revenue increased by 103 percent.70

    – The rate of growth in profit is ten times the rate of increase in completions.71

    – In 2015, the biggest five house builders returned 43 percent of their yearly profits to shareholders, an amount totalling £936 million.72

    According to the authors, the focus on profit “acts as a major disincentive to increase output significantly in times of both falling house prices and rising house prices” because:

    – when prices are rising, an increase in output might lead to oversupply which will affect end sale prices; and
    – selling at below projected levels in times of declining prices would directly jeopardise the predicted margin.73

  38. Land Banking pt2

    Now, it also says in the report, that…

    “There are strong financial incentives not to sit on land with permission as once acquired, the planning permission often has an expiry date after which the firm would need to reapply […] firms are incentivised to get building because only through building will we get a return. The housebuilding model does not sit well with land hoarding.”

    …but the number of homes with planning permission yet to be built is really quite significant, and apparently it’s not the end of it.

    From the Graun…

    “But Shelter points out that this is only half the story, given it doesn’t take into account land subject to “option agreements”. These are exclusivity deals between landowner and developer that give the latter a legally binding “option” to buy the land within a certain timeframe or if a certain event occurs, such as planning permission being achieved.

    They can tie up land for a long time, cutting others out from the market who might be prepared to build on it sooner. Details are murky because such deals don’t have to be registered publicly, but the housebuilders’ “strategic land banks” show there are an additional 480,000 plots in this state of limbo.

    The housebuilders have been quick to dispute these findings, arguing that their business model relies on having a healthy pipeline of plots to develop, and none of the sites with permission were actually sitting idle. The beginnings of something resembling foundations had been dug, at least.

    Barratt said it has “virtually no sites that have an implementable planning consent that are not in production”. Berkeley said it is building on all sites that have an “implementable planning consent”. The delay, it added, is in “getting conditions cleared for development, particularly on major regeneration sites, and the capacity within local planning authorities to work alongside us”. Taylor Wimpey also pinpointed the “slow and complex” planning process.

    It is true that local authorities have had their planning departments ruthlessly slashed, but the delays have less to do with red tape than the commercial desire to keep house prices high. Getting planning permission isn’t the issue: England consistently grants twice as many permissions as homes that are started. Housebuilders build slowly not because of bureaucracy, nor because of the Herculean effort of cementing bricks into place, but because if they built too many homes at once and flooded the market, prices would plummet.

    As Jeffreys puts it, land banking is a symptom, not a cause, of our dysfunctional housing market. “Developers have to buy land upfront at a very high price,” he says. “Then they have to get a return for their shareholders, so of course they are only going to build at a speed that keeps prices high.”

    The fact that land values are so high in the first place is due in part to an entire industry of land promoters and “strategic land companies”. They enable landowners to make big gains upfront based on the projected profits of a speculative development, without having to shoulder any of the cost or risk of actually building that development.

    “We increase the value of your land at our cost and risk,” trumpets the website of the Strategic Land Group. “If we don’t succeed, it doesn’t cost you anything. By working together, it means that we both have the same aim from the start: to maximise the value of your land.”

    By the time a willing builder finally gets their hands on the land, several transactions later, they’ve had to pay so much for it that the only viable option is an enclave of executive homes or luxury flats. The same vicious cycle makes it impossible for smaller housebuilders or community groups to ever dream of getting access to land.

    A 2012 study for the Greater London Authority, by consultants Molior, found that 45% of sites in London with planning permission for new homes were owned by a company which did not build homes. The list includes “developers who do not build”, along with owner-occupiers, historic landowners, government, sovereign wealth funds, hedge funds, universities, churches – anyone looking to use land for short-term trading, tax sheltering purposes or simply as a long-term investment.

  39. And the planning system is implicated again, but not necessarily in the way you might think.

    https://www.theguardian.com/cities/2017/jan/31/britain-land-housing-crisis-developers-not-building-land-banking

    Those with the longest-term views are now buying up land beyond the green belt, on the grounds it will be a tradable asset in 50 years’ time. Others buy green belt land then intentionally make it so undesirable that the local authority is more likely to grant planning permission. But ultimately there’s no incentive to actually build anything.

    “Developers can make much bigger profits by simply selling plots than building houses on them,” says Chris Brown, chief executive of Igloo Regeneration, adding that the whole land value issue is a symptom of how our approach to development and granting permissions has changed.

    “When the planning system began in 1947, we said the value of a planning permission should go to the public good,” he explains. “The ‘uplift’ from a field to a housing development was owned by the public. Now we’ve completely changed the model, whereby we almost grant planning permissions for free and the developer takes all the profit. Yes, they must make Section 106 payments and pay Community Infrastructure Levy, but we don’t try and capture as much of that land value uplift as we could.”

    A big part of the problem is that developers continue to pay way over the odds for land, knowing that they will most likely be able to negotiate the planning obligations away.

    “The planning system needs to be much more robust, so that the policies are actually reflected in the value of the land,” says Toby Lloyd, head of development at Shelter. “If a local plan says a particular site should have 40% affordable housing and a primary school on it, then that’s what it should get. If the landowner doesn’t play ball then local authorities should be able to use powers of compulsory purchase to make it happen.”

    Shelter has joined calls from many local authorities for developers to pay council tax on unbuilt sites with permission, while others advocate more fundamental reform, including the introduction of a land value tax.

    “The volume housebuilders are an easy target, and they do have a lot to answer for,” says Jefferys. “But it’s time we tackled the root causes and rethought the way we build homes. This model of speculative development won’t do it on its own.”

    (All Bold type is my emphasis)

  40. Carfrew

    That’s a helluva lot of my emphasis Did you forget the HTML closure?

    The SGP amendment to the Scottish Planning Bill, may help to mitigate the problem here, and I understand that ELab are considering something similar there.

    It’s not an insoluble problem, though governments may decide not to even try to solve it.

  41. Millie,
    “For example, private developers of all sizes are probably the best judges when it comes to deciding the type of accommodation that is required:”

    Well no Millie, they will build what sells. That doesnt mean it is what is required, it means what people are capable of buying. And given the market is distorted by shortages, that means tiny tiny cheap.

    Instead of buildng 100 tiny flats, we should be building 100 up market large houses. That way everyone moves up into better housing. If you build the tiny flats, it means we all move down to smaller homes. The final price will be the same either way, because it is constrained by what purchasers can afford, not by any real value of the homes.

    “I’m not sure about land-banking – I doubt that this happens much”

    Near me an old mansion was up for redevelopment. Got plans on condition it was converted into flats. Got planning zones changed to allow development on the grounds, to subsidise the conversion into flats. Then left it with no development at all untill they could argue it was unsafe and needed to be demolished. It didnt, I walked round it, and the demolition men said it was rock solid.

    During the several years it stood empty, it was re-sold several times at escalating prices.

  42. Interesting discussion for me. Have sat for several years on a planning committee in suburban, coming to be urban outer London.
    In contrast to the Graun article, most developments are ‘car free’ with a few (usually redundant) disabled spaces and some car club bays.
    I’ve never come across S106 agreements for schools. Whilst we have invested some of ‘our own’ money in school expansion, new schools, for practical purposes, are required to be Free Schools, funded by the DfE.
    The profit is in studio/1BR flats but the housing need is for 3BR and above, so there is a constant battle in planning which the developer generally wins.
    Traditionally we have a strong commercial/office estate here but of course residential is worth way more than office so a bonanza was set off with regulations to allow existing offices to be converted to residential with no S106, no CIL, no planning permission, nada. Resulting in anything from large office blocks on main roads with no amenities being converted into large blocks of flats (local authority has to find somewhere to put schools, deal with any resulting congestion, empty the bins, provide social services; NHS has to accommodate a bunch of new patients without a penny to do so). We also have units in the middle of 1930s industrial estates being turned into a couple of flats so we have printing works, tyre depot, two flats, metal bashing works, two flats, food processing works all in a little terrace. Nice.
    In my ward we have something like 3000 flats and 200 houses with existing planning permission and probably at least as much in the short term planning pipeline. Whether much of this will be built, given Brexit in some shape or another, is another matter but we are under pressure to build still more.
    Developers plead desperate poverty but the planning system allows them to bring home 20% net profit (they often achieve more) and the playing field is tilted decisively in their favour.
    I agree the planning system is deeply flawed but in its absence I believe our area, traditionally composed of Victorian terraces and inter-war semis, would have developments of 20 storeys or more (some are, even under the present regime) and truly horrendous congestion and amenity.

  43. @Carfrew

    I am no fan of big developers. And I would cancel Help to Buy, which distorts the market, and appears to be largely helping the well off. It also contributes hugely to big developer profits.

    But they are not significantly land banking. I have seen a lot of the commentary on this issue, and I accept their explanation. A five year supply of sites would be good practice if you have a skilled workforce that you wish to retain. And there is a world of difference between sites with permission and sites with all their pre-commencement conditions met. It can take years to meet the huge number of conditions that are often ( unnecessarily? ) applied.

    The big six builders have a lot to answer for, but I think the land banking charge is not one of them.

    Without making this post too lengthy, the process is often delayed because original applications are not for what the developer actually wants to build. They are designed to secure the principle of consent. So further applications, and the use of the appeal system, follow as the developer challenges the myriad of detail that surrounds a permission.

    You can argue as to who is to blame for this, but Garj and I are saying that the extraordinary complexity of the system is the key driver of these delays.

    Land banking – it happens, but not on anything like the scale that some suggest. IMHO, of course.

    It is perfectly true that a lot of the land with planning permission is held by non-developers/investors. These are often opportunists/specialists who have shepherded the site through the planning process. Builders don’t actually want to do this job, and prefer to buy sites with consent. This eliminates uncertainty: they often say: ‘we are builders, not planning consultants’.

    Such is the complexity of the system, that the process is now largely undertaken by specialist planning ‘middle men’ and risk takers.

    Hence the trend towards options: so much time and money is involved in making an application, that the option system is inevitable. The landowner cannot afford the cost and risk of the application, so an ‘enabler’ is required. The planners normally prefer this, as they are dealing with a knowledgeable professional rather than an inexperienced farmer. It is telling that options used to be typically for six months, but are now often for two to five years.

  44. @Garj (and @Millie, @Oldnat, @Carfrew and at others)

    I’ve not followed the housing discussion in detail, but it started from a point of various apparent disagreements, and seems now to be heading towards a general recognition of broad areas of agreement, with the main disputes seeming to be around areas of emphasis, rather than deep principle. That’s good.

    I think @Carfrew’s recent posts do rather undercut the idea that land banking isn’t an issue, although we could still perhaps agree that it becomes an issue only because of the planning system in operation, which is perhaps where @Garj comes in on this?

    I can also accept @Garj and @Millie making the point that S106 agreements represent complex micro management and stultify building projects, while also pushing house building towards big companies, rather than allowing a more healthy ecosystem of smaller local firms in on the act.

    In terms of the debate about inter war house building, after the depression we did had a booming private sector, based on state investment in infrastructure, ultra low interest rates and accompanied by compulsory purchase and a hefty council led building program as well. Much of the issue today is how we combine that private sector building with the necessary infrastructure development. Without the state spending, we wouldn’t have had a private sector boom in the 1930s. How would the new home owners have traveled to and from their houses, and where would their children have gone to school? This is what @garj forgets.

    To me, the way forward seems quite clear. Return to the 1947 legislation regarding land purchase costs, as Scotland is about to do. Ideally in my view, the system should be based on something like compulsory purchase, with LA’s selling on the land, keeping sufficient planning uplift only to cover costs of necessary infrastructure and no more. No private sector speculative gain.

    Lots would then be sold off for house building, with provisos that houses actually get built and the plots can’t be sold on – only returned to the LA if the buyer cannot/will not build. These sales can be structured to ensure plenty of small lots for a handful of houses to entice local builders back into the picture. Part of the land can be gifted to Community Land Trusts to ensure a stock of permanent and properly affordable houses get build.

    With the profits made on the land sales, councils build the roads, school, surgeries etc, and we abandon completely. S106s. House builders just get on and build houses.

    Alongside this, we take a range of measures on the demand side, like banning foreign ownership and discincentivising second home ownership until everyone has a first home, etc. I’d also like to see zero VAT on projects bringing redundant property back into permanent occupation. Try to minimize the number of homes we actually need to build.

    Where I will disagree with others is that this is simply the fault of the planning system. I also don’t believe we can use the private sector in the 1930’s as a viable model for 2018. Since then, the UK population has expanded by 50%, and the available land area has expanded by 0%. We desperately need planning, and we desperately need to reign in free enterprise, because the combination of a defective planning system and rampant capitalism is killing people.

  45. @OLDNAT

    Carfrew
    “That’s a helluva lot of my emphasis Did you forget the HTML closure?”

    ——

    Well, because I was adding it to quotes and wasn’t on a machine with my macros, yes it went wrong. (On the other hand, it’s possible there wasn’t enough emphasis…)

  46. Hopefully, a brief corollary to my comments on land banking.

    It is suggested that many sites with planning permission are deliberately left untouched as investments. This undoubtedly happens, but not, in my view, on a large scale.

    I think I can ‘prove’ this: such sites would have their permission technically implemented, so as to ‘cement’ the permission indefinitely. This eliminates the risk of losing the consent, and the cost of re-applying.

    Implementation is usually a very inexpensive exercise. So the permission on a two acre site might be implemented by modest access works costing as little as ten or twenty thousand pounds: peanuts in the context.

    If there was large scale land banking by big developers we would see great numbers of such sites. But, driving around the UK, I see comparatively few.

    When a development is started by a big developer, it is usually finished. I think this is better evidence than any Shelter report.

    @Alec

    I agree with your analysis, but not with your solution. Perhaps I am a red-necked capitalist after all…

  47. @Alec

    “although we could still perhaps agree that it becomes an issue only because of the planning system in operation, which is perhaps where @Garj comes in on this?”

    ——

    I think Garj highlights that there are situations where planning probably is the dominant issue, e.g. Japan.

    However, it’s important to note that even if planning were benign, there can be OTHER things besides planning driving up prices and hence incentivising sitting on land while it accrues value, e.g. QE, immigration, foreign money etc.

    And we can’t ignore Danny’s point, that in such circumstances where supply is constrained, and because housing is an essential, people are forced to accept what they are given, when they do finally get around to building some housing, developers can sell them shoeboxes for lots of money.

    This is where the state building houses comes in: by increasing supply it forces developers to offer more for the money.

  48. @Millie

    “But they are not significantly land banking. I have seen a lot of the commentary on this issue, and I accept their explanation. A five year supply of sites would be good practice if you have a skilled workforce that you wish to retain. And there is a world of difference between sites with permission and sites with all their pre-commencement conditions met. It can take years to meet the huge number of conditions that are often ( unnecessarily? ) applied.

    The big six builders have a lot to answer for, but I think the land banking charge is not one of them.”

    ——

    Well, you’re not really engaging with the data. The fact is, banking is happening. That’s the point of the data. Around half a million instances. Some of it is obscured by these option arrangements which give around ANOTHER half a million.

    (Then there’s what you might call the “property banking”, which according to Alec adds another million).

    The data also shows there are twice as many planning applications granted as built on. So there is lots of land banking going on.

    The question is whether there is a good excuse. And when you look at the scale of the profits, and how much land is banked by companies who aren’t even developers etc., the excuses wear pretty thin.

    And ultimately, there is no denying that the ramping up of house prices will likely force land banking. Because otherwise you sacrifice a lot of profit. And companies have a duty to shareholders to try and maximise profits, because Capitalism.

    There is not enough pressure to STOP land banking, now that there are mechanisms to avoid having to cede the land if they don’t quickly build.

  49. ALEC

    I do wish you’s stop saying that I ‘forget’ the importance of the public sector. It’s an invasive and controlling bureaucratic state that I have a distaste for, but that doesn’t mean that I want to get rid of government altogether, or reduce public spending. What you’re saying is what I’d like the public sector to be doing more of – building roads, schools, infrastructure, focusing on the stuff that it’s good at and that only it can really do. The picture you outline of the state putting its efforts into acquiring land and parcelling it up into sites is exactly what I’d like to see.

    GUYMONDE

    Developers plead desperate poverty but the planning system allows them to bring home 20% net profit

    Firstly, 20% is not much on a project that takes three years minimum to complete (often a lot longer) and requires substantial investment (often about half of the costs) upfront, and which bears considerable risk and uncertainty. Secondly, is there another (successful) industry where the state tries to rig an allowable profit margin and take everything above it. If we want more houses built then we need to accept that developers should be able to make a decent profit and not be pilloried for doing so. Just imagine where we’d be if all of the money invested in buy-to-let over the last 20 years had gone into building homes instead.

    The profit is in studio/1BR flats but the housing need is for 3BR and above

    How do you determine that though? If the market is placing a higher price per square foot on 1BR flats then that’s a concrete demonstration of greater need.

    On the office to residential matter, this is a clear example to me of where the planning system could be streamlined and reorganised. I’d like to see space standards, bin stores, daylighting levels etc all migrated over to building control. That way conversions and alterations can be made to accord to standards without the need to involve planning, so the principle of change of use can be easily established with the detail left to a later design stage.

    As to whether there should be any planning gain captured, that’s a tricky one. So long as the existing use value plus the development cost comes to significantly less than the finished residential value then there will be an incentive to convert, but if you add substantial developer contributions to that then you’d kill off the viability of most projects. To my mind there never should have been such a restrictive system as to allow a gulf to open up between commercial and residential values in the first place, and given time easy change of use will close that gap. Until then the lack of developer contributions on those projects is essentially the penalty that councils pay for having been overcontrolling about building use.

  50. @Carfrew

    I’m afraid the data/evidence surrounding land banking is not very reliable. What are the criteria for Shelter’s claims?

    Half a million permissions is not a lot, when we are building 200,000 units per annum.

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