Tuesday 21 December 2010

It's chaos out there ...

No, not the snow, but the government's approach to localism which one Conservative MP has described as deliberately chaotic (you can listen here - 7.14). There is a serious point here with which many urban economists would sympathise. Because people are different, with different preferences over public good provision and taxation it can be good to have different policies implemented in different places. This holds even if all places are otherwise identical. Add to the mix the fact that places may be different (say rural or urban), and there are many reasons why policy should vary.

The problem, of course, is that the British appear to be allergic to "postcode lotteries" - where outcomes differ across areas - and the hysterical reaction to Nick Boles' comments suggest that nothing much is changing there.

Monday 13 December 2010

Localism and House Building

The localism bill has confirmed more power to local people to overrule planning decisions.

Back in August, I reflected on the fact that honest and direct debate about housing would convince most existing local residents that they should oppose new homes. The BBC has a nice example of how this might play out in practice.

High Speed 2 - no more consensus

In October this year, I wrote: "The case for spending £33bn on high speed rail is greatly exaggerated; the case is even less convincing in light of government spending cuts; yet all the main political parties are for it. Go figure ..."

One main political party is no longer so convinced by the project it appears. Better late than never, I suppose.

Wednesday 1 December 2010

Building regulations

The coalition government has announced that it is scrapping new proposals that would have further tightened building regulations. I don't claim to be an expert on building regulations (they are complex - which is part of the problem CLG are trying to address) but I am fairly confident this is a sensible move.

Tight building regulations for new homes impose a regulatory tax which reduces the number of new homes built (although land prices and planning remain a more important barrier). These regulations are imposed so that new build should be of a better quality than existing stock (with respect to safety, living environment, carbon footprint etc). So, the flow of new housing stock is better quality as a result of building regulations. But the effect on the overall quality of UK housing depends on the flow relative to the stock. Unfortunately, in the UK we build very few new houses so the effect of these tight regulations is almost completely diluted by the state of the existing stock. The coalition government's move should help with the flow rate and providing that the increase in new build is sufficient to offset the marginal decrease in standards will improve the total impact of the regulations on new build. But none of this will have a very large impact - that requires action on the much bigger existing stock.