Lost in the headlines yesterday about climate change, Brexit, Russian spies, and various accidents and tragedies was a deeply depressing and profoundly important story. The Institute for Fiscal Studies out out a report saying that only 60 percent of young adults in England can afford to buy the cheapest homes in their area, even if they have a decent deposit. In London the proportion was much smaller. In 1996, in the Capital and elsewhere, the figure was 90 percent.
The IFS looked at what was affordable for young adults aged 25 to 34, willing to take out a mortgage for four-and-a-half times their income and with a 10 percent deposit. It noted that average house prices have risen by 173 percent in England since 1997, whilst real incomes for this group have gone up by only 19 percent. The result is that over the past 20 years home ownership in this age group has gone down from 55 percent to 35 percent. In short, young adults, often young families, are being completely priced out of home ownership, with all the consequences that brings. It is a huge societal change.
This is not new news, although it has rarely been pointed out so starkly. Even politicians are aware that housing is a huge issue for the electorate – witness the promises made by Sadiq Khan when he ran for Mayor, Labour’s repeated pledges and, most recently, Theresa May agreeing to let councils borrow more to build social housing. But these fine words have yet to make a real difference. Like so many big issues they remain stuck on the ‘to do’ list.
That list is growing longer and longer – and longer. Beyond setting a long range target for decarbonisation and the adoption of electric vehicles, do we have a comprehensive policy for addressing climate change? What about dealing with our social care crisis in the context of an ageing population and severe shortages of competent and willing staff? How about pivoting our defence strategy to respond to the age of asymmetric warfare and cyber as a weapon? And what about our issues with productivity, our failure to invest properly in infrastructure, education and lifelong training, all the while with the AI juggernaut bearing down upon us?
The truth is, all of these are on the backburner because we are paralysed, unable to think, let alone to act, and all because of Brexit. How many political decisions have been put off over the past two-and-a-half years whilst we go through this period of navel-gazing and introspection? And what about businesses – how often have we heard about investment choices being put off until we know what a deal looks like? The result is that in reality nothing much has happened at all. By the time this exotic spresm is done we will have wasted 3, 4, 5 or more years and have done nothing to what really matters.
Paralysis because of Brexit is bad enough. But it is just the latest reason to kick the can down the road. The truth is we have been stuck for a decade. When the banking system fell over so, apparently, did the ability of politicians to be bold and to lead, to develop a philosophy, confront the big issues, and do something about them. David Cameron briefly looked like he might have some good ideas, but he was hobbled by coalition government and in the end by his lack of courage in the face of the Brexit headbangers. Today there is no-one sensible putting forward any genuinely big ideas. It says a lot for the paucity of thinking elsewhere that the Marxist ravings of the cabal running the Labour Party are setting the agenda these days.
So the question is this: can our political classes put aside the gradualist, managerialist, instincts they have learned over the past decade, and rediscover the joys of thinking big thoughts, setting the agenda and leading the country towards it? In ten more years will we look back on this lost decade as a weird aberration rather than the new normal? We have to hope so, because the alternative is unpalatable, leaving us all unprepared and anxious about the future and unsatisfied and angry about the present. Time for our politicians to stop jockeying for position and angsting about the minor details of Brexit, and start instead to dream impossible things.