Lord Flight is a former Shadow Chief Secretary to the Treasury.
The great majority of British citizens form their political views from their own experiences; issues such as whether or not to invest in a new North Sea development, or how serious is the environmental danger, leave most individuals simply focusing on higher fuel prices.
I thought it might be useful, therefore, to focus on what issues are currently commanding the attention of citizens at large and what might be done to address them.
Over the last five years, six thousand high street shops have closed, and one in seven such premises are vacant. The high street is dying.
Online shopping is taking more and more business from traditional stores. The reason why online shopping has increased so much faster in Britain than in the rest of Europe is, surely, because our taxation systems operate such that brick-and-mortar shops are taxed on their sales significantly more than offshore outlets. (Amazon’s main UK division benefited from £7.7m of tax credits on just its infrastructure investment.)
More fundamental still is unfair business rates. Retailers pay business rates calculated on the store fronts they use, under a formula which translates into a rateable value determined by a government multiplier.
Over the past twenty-five years government has shifted the burden of local taxes from houses to businesses, with some shops finding their “rates” increasing 20 to 30 per cent in one move. A survey of high street shop owners found that that 85 per cent said they viewed “rates” as critical to their survival.
Politically, Boris Johnson promised to reform the rates system, but never got round to it. Rather, the Conservative Government has made it easier for developers, who do not vote, to buy up retail premises and replace them with new houses.
France has twice as many independent high street retailers as Britain: surely the net taxation on retail sales whether by High Street or online should be similar? I believe British citizens are aware of the unfairness of the rates regime and would strongly support measures to help sustain High Street shops.
When I was a boy, the UK had one of the most attractive housing regimes, enabling citizens to buy/own their own homes. The rough and ready mortgage multiple of three times pay operated well. The Thatcher Government, and Margaret Thatcher herself, made home ownerships a major plank of Conservative policy.
But now our housing market is in a mess where newcomers cannot afford current prices, especially in the South East and Greater London. Young married couples have had to revert to living with their parents.
The Grenfell tragedy affected not only the previous residents of Grenfell Tower, but also, a huge number of households throughout the country whom having purchased their new homes, have discovered subsequently that flats have the same building materials. This has left the owners unable to sell their property.
They are still, however, having to pay the mortgage interest, and many have suffered with various medical conditions due to severe stress. They are unable to afford to rectify their building problems; mortgage lending companies will not help; nor the original builders nor, indeed, the Government.
Everyone claims it is not their responsibility. Individuals who live in taller blocks get compensation, but not those living in shorter ones.
Who is to blame? It might be easier to ask who isn’t.
First, the suppliers of the building materials – not only cladding which proved to be flammable, but RAAC too. This lightweight form of concrete panel, used in many schools and hospitals, has been found be to be porous; it fills with water and becomes unstable.
Next, the builders and developers who should not have used materials unless there was proof that they had been tested, were safe and had a guarantee.
Third, mortgage companies, who make prospective customers fill out many forms to make sure that they are paid.
They presumably employ solicitors who do due diligence on the lender’s behalf. But many people do not use a solicitor when purchasing the most expensive thing they will ever own.
I understand that a Solicitor taken on by the purchaser should do due diligence on a property prior to purchase, so presumably if one of the buildings does turn out to have used RAAC or inflammable cladding, then the solicitor should be liable.
Then there’s councils. Property companies have made huge profits from building and every building that goes up has to go before a planning committee, where the great plea from councils is for property companies to build affordable housing. This rarely happens and often the developer prefers to give money towards future affordable housing.
But council officers also have a huge workload and are not experts in building supplies. Indeed building materials are not the responsibility of the local authority. The Government determines the rules of building control, what is and what is not acceptable. It is for the local authority officers merely to enforce these rules.
These are some of the issues which politicians need to address as part of any effective programme to tackle our housing problems.