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The Budget must be bold measures sensitively implemented

The Government is currently in an ongoing state of turmoil, and has been since the June Election. Hopes are being pinned on the Budget next week. As the final measures are nailed down, the Government needs what might be termed ‘bold measures – sensitively implemented’. The Chancellor may be wary of pushing too far, given the forced climb down over increasing national insurance for the self-employed. But this is to misread the signs. This was a fairly small measure (costing around £500 million a year, compared for example to a £500 increase in income tax threshold that costs nearly £1.5 billion a year), but one that touched on various raw nerves. The current drift of the Government means that a ‘do-nothing’ budget is not a sensible option. The Chancellor needs to deliver bold measures, but also show he can read the politics and mood of the party and country.

Action is needed on diesel cars

As other posters on this website have noted, there is a clear need for action on diesel cars. I have written previously on this site that the Conservatives need to champion the motor car (for example, continuing the fuel duty freeze), while trying to eliminate its downsides. These downsides include air pollution. In many large urban areas, you can almost taste the particulates, particularly on the underground, or by large roads in city centres. With an estimated 40,000 early deaths a year due to air quality, and with outdoor air quality more of a risk than indoor air quality, this is a major public health issue. While the public health lobby can certainly be accused of being overly prone to scare tactics, (put that occasional bacon sandwich down!), even if this figure is a substantial over-estimate, it is an unacceptably large number. Action is clearly necessary.

But action has to be intelligently thought through. The anti-growth approach of some green campaigners must be resisted. Air quality is actually improving on average in the UK. But it is not in many urban areas (and there is some evidence that in some places it is deteriorating). See this report for details. Measures must be targeted.

The Chancellor should therefore focus on how we can deal with what is really an urban issue. He should put a major new tax on new diesel cars, enough to fundamentally change the incentives for those buying a car – running into the thousands not the hundreds of pounds. He should also increase VED for new diesel, and make this apply to every year (at present almost all cars default to a flat £140 after the first year). The Treasury could consider if new diesel VED could be varied by place of residence so that London and other cities had a higher rate.

Some of this will help pay for a continuation of the wider fuel duty freeze, which Robert Halfon has long (and rightly championed), and moves to support electric and hybrid vehicles, to show we are not anti-motorist in general. The Government should also consider using some of the money raised for a targeted and one-off scrappage scheme for older diesel vehicles owned by those living in large cities, where air pollution is at its worst. The Chancellor must resist the temptation to whack existing diesel drivers with increases in VED or fuel duty. Many people were told that they should purchase diesel, so to now attack them would be both unfair and politically foolish.

Building our homes up

On housing, I have already argued that the Budget needs bold measures, including tackling councils which perennially fail to meet housing need. I won’t repeat myself but also commend Nick Boles’ excellent housing chapter in A Square Deal. But I want to focus on the concept of building up by extending permitted development rights as an example of what a bold idea sensitively implemented could look like. They say few ideas are wholly new, and when I worked in Number 10 we tried to push this idea through the system. It was not successful – a rather watered-down consultation emerged, followed by a few lines in the White Paper. The hope had been to implement this in terraced streetscapes in London, and then move on to suburban properties once the principles and issues were established. But now time is more pressing it is likely that this will have to be done at greater speed.

Building up requires sensitive implementation. It touches on rights to light, privacy, design and nuisance. For example, if you want a funky extension then you should go through planning permission, and the rules should clearly set out the design styles acceptable. Some modernist architects will argue this is anti-innovation, but if people start slamming concrete boxes in the suburbs this will get quite toxic quite quickly. Few people really object to a mansard roof. We however also need to recognise to really drive an increase in floorspace, this idea must apply in conservation areas. For example, Islington, where demand is high for new space, 50 per cent of the borough is covered by conservation areas. Much of the remaining 50 per cent is likely to be more difficult to extend upward – council estates and commercial spaces. This is true in most similar areas. In addition, there will be building regulations which will have to be flexible (e.g. the approved documents on stairs) if this is to work.

Some (though not all) officials were also too obsessed in the past with the idea that if an extension is not a new property, it is not worth proceeding with. This is nonsense. Turning a two-bed into a three bed or three bed into a four bed allows people to stay in a flat or home, or if renting, to accommodate an extra person. It is floorspace, not units, that matters. We will also need rules around how long it is acceptable to have major works on any building in place. If we get all this right, we will create a large group of grateful owners with minimal tension, a better streetscape and affordable homes. If we get it wrong, we could end up with lots of pain for minimal gain and an uglier country. This is the tightrope we must get right.

A Budget with domestic reform and political antennae

The 2017 Manifesto and fallout showed a disastrous set of political antennae. May however needs to move on and find a domestic agenda to rally the party around – because without it the Government risks disintegrating over the coming months. We can only hope the Budget next Wednesday sets out some bold measures that are politically feasible and carefully thought through.

49 comments for: Alex Morton: Building homes up, taxing new diesel – how the Chancellor should act next week

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