Nicholas Boys Smith: High-rise living means crime, stress, delinquency – and social breakdown. Instead, we must Create Streets

Nicholas Boys Smith is the director of Create Streets a new organisation which has been set up encourage and facilitate the replacement of multi-storey housing with real houses with gardens in real streets rather than multi-storey housing with communal space. Their report, Create Streets, is published in conjunction with Policy Exchange today.

The vast majority of tower blocks and multi-storey housing estates are the product not of the market, but of state control and the planning system. We should instead be allowing developers to create streets. Streets, houses and low-rise flats are more popular, provably better for the people who live in them (especially if they are social tenants or families), a great long term return for the landowner and, critically, achieve the same density as the post-war estates they could replace.

For twenty years, very few multi-storey estates were built in Britain. Between 1979 and 1998, only six buildings above 35 metres were built. Why? Because the government-mandated post-war experiment in high-rise living was a disaster. Summoned into existence by the 1956 Housing Subsidy Act (which offered higher public subsidies the higher the building), the 4,500 tower blocks built by 1979 quickly descended into a frightening dystopia. Communities resisted moving. The new multi-storey housing become ‘hard-to-let’. Families and households refused to move in. The Thamesmead Estate, completed in 1968, was 40 percent full by 1974. 55 per cent were refusing to move into the Broadwater Farm Estate within five years of completion. And Ernö Goldfinger’s iconic Trellick Tower (known locally as the ‘Tower of Terror’ due to the risk of rape) was ‘hard-to-let’ within months. In 1971 A Clockwork Orange used tower blocks to symbolise a savage future with the film’s teenage protagonist (and ‘ultra-violence’ practitioner) living in ‘Municipal Flatblock 18A.’

Nicholas Boys Smith: The Coalition must hold its nerve as it reforms an unfair Housing Benefit system which disincentivises work, traps millions in the welfare system and malignly distorts the housing market

Nicholas Boys Smith is the author of Reforming Welfare and a former advisor on welfare policy. In this piece he argues that Housing Benefit is not just unfair, but a disaster for its recipients, the housing market and the British economy. However, it is good at coping with “polygamous arrangements”...

Now it gets nasty. Removing Child Benefit from the better-off led to a vicious little backlash from the Tory press. But that was mild. Ultimately it is hard to get too successfully indignant about robbing a poor Peter to pay a better-off Paul. Housing Benefit is different. Its recipients are legitimately indigent. Limiting payments has already led to shameful inferences of genocide. There is worse to come. Reforming Welfare was always going to be a dirty war. And the Universal Benefit will create losers in their hundreds of thousands (at least). As some of these implications are analysed and understood, the real fighting will begin.

Iain Duncan Smith’s father was a Battle of Britain pilot. And photos of the young guardsman IDS have something of the G.A. Henty hero about them. He’ll need some pluck. In the years ahead he is going to vie with George Osborne to be the Tory most Left-wingers most love to hate.

Defenders of the status quo have to be vicious. Their argument rests on emotion, not reason. For when you strip away the veneer of managerial and New Labourish gobbledegook they need to be able to present Housing Benefit, Council Tax Benefit, Tax Credits, Jobseekers’ Allowance and the whole complex muddle of the Welfare State as a necessary act of charity. Those who would take it away are therefore not just wrong but evil – on a par, as Polly Toynbee’s outrageous article in The Guardian implied, with Himmler and the gas chambers of Auschwitz.

Meanwhile back in Britain in 2010 the facts are rather different and the case for reforming Housing Benefit rests quite comfortably upon them. And it is about far more than inequity. A few years ago Housing Benefit and Council Tax Benefits were 23 per cent of total non-pension welfare expenditure. They are the largest part of the system. When I wrote a book on the benefits system four years ago I described Housing Benefit as “little discussed, rarely argued over in Parliament, not understood or even known by most members of the public... barely mentioned by the policy experts.” That at least has changed.  Until now nothing else has. For Housing Benefit is an almost uniquely bad benefit: disincentivising work, trapping millions in the welfare system, malignly distorting the housing market and unfair to those who do work in almost equal measure. No other benefit achieves quite this quadruple whammy of awfulness.

A Government Worth Having... Needs To Increase Economic Growth

We asked a few friends of ConservativeHome to offer 100 word thoughts on how George Osborne might prepare to lift Britain's economy.  Our contributors didn't all keep to the word limit but their responses cover a wide range of economic policy angles.

Nicholas Boys-Smith, Consultant Director of Reform: "George Osborne is the most successful Conservative Shadow Chancellor since Geoffrey Howe. He has turned the debate on an iconic right of centre policy (inheritance tax), stymied plans for a 2007 election, prised open important new debates on tax complexity and green taxation and even managed to win the favours of the Prime Minister’s erstwhile mistress, Miss Prudence. Now it gets really hard. He has five key challenges;

1. Radically simplifying the tax system so that Britain is once again internationally attractive – merging National Insurance and aligning the accounting and tax systems would be a start;
2. Devising green taxes which can be implemented without increasing tax or complicating the system all over again – no easy task in the current climate;
3. Making sure that the Treasury can support the wealth of ideas now emerging to channel private funds and voluntary energy into mending our starkly broken society and benefits system (this means taking on debt and risk – again not easy);
4. Judging how many ideas to reveal in advance of the election (he needs substance) and how many to keep in reserve (he needs surprises and not all ideas will necessarily be election-winners); and
5. Perhaps hardest of all, devising the 200 day plan which will effect most of his programme – politics being the art of the possible and electoral honeymoons being short..."

Michael Fallon MP: "We will probably inherit public finances in their worst state since 1975.  The public are ready for honesty: they know that, like any household, government has to cut its costs and its borrowing. We can protect frontline public services but will have to be much tougher elsewhere: too many shadow ministers seem to assume that the current department budget is theirs to spend.  We also need to make in-work benefits more effective: tax credits are fine in principle but poorly administered and go too far up the income scale."

Mark Field MP, CentreRight contributor: "The Party needs to make a strong case for reduction of personal taxation paid by the lowest earners. I believe that far more attention now needs to be directed on the lowest paid in our communities. At the moment you barely have to earn £105 per week in order to start paying income tax.  Rather than institutionalising the complexities of tax credits, I should like the Conservative Party promote a system whereby no one earning less than £200 per week pays any income tax at all. Similarly by raising slightly the thresholds of those paying tax at the higher rate, the better-off in our society would not benefit from this long overdue extension of the zero rating."

Oliver Marc Hartwich, Chief Economist of Policy Exchange: ""How could an incoming Conservative government increase economic growth? On the one hand, of course, increasing economic growth should not be too difficult. If the experts are correct, there will hardly be any economic growth, maybe even a recession at the time of the next election.  On the other hand, and more seriously, these tough economic conditions require an adequate policy response. It is easy to say that Britain's structural deficit will leave little room for manoeuvre. True as this may be, the party should still find the courage to do the things that will make economic growth more likely in the long run: shrink the proportion of GDP that the state is consuming, keep taxes low, lower barriers to market entry by reducing regulatory burdens.  Conservative economic policy has always been best when it was economically liberal."

Andrew Lilico, Managing Director of Europe Economics and CentreRight contributor: "For an incoming Conservative government to increase long-term growth, I would recommend (a) the introduction of a robust price-level (average inflation) target; (b) enhanced use of market mechanisms in public services.  A price-level target would increase certainty over the long-term inflation rate, leading to more investment and less loss in inflation-proofing contracts, and hence to more growth.  Productivity growth in public services is very low, and so this very large portion of the economy contributes little to overall economic growth.  The use of more market mechanisms (especially on the demand side) would lead to higher productivity growth and more innovation, adding materially to the overall growth of the economy."

In the next part of this series, which will be published in a few days, we'll turn to foreign policy.

Nicholas Boys Smith: Now it is time to really link welfare to work

Nicholas Boys Smith was an advisor on welfare policy to the then Secretary of State for Social Security, Peter Lilley, before working at McKinsey & Co. He now runs his own strategy consultancy and was secretary to the Tax Reform Commission.  Today he publishes Reforming Welfare with the think tank Reform (Times) and unpacks some of the paper's key messages below.

Poverty has been in the news again. And about time too.

In 1997 one of the mantras of New Labour was their resolution to embrace welfare reform. Their intentions and their language were welcome; to link rights with responsibilities (a “hand up” not a “hand out”), to control spending, to increase incentives to work and to reduce means-testing.

Ten years on, perhaps it is time to ask how they have done. The answer is none too well. They have failed in their core aim. Over 80 per cent of the system remains entirely rights-based.  Less than 19 per cent of expenditure places any real demands on its recipients. But that is not all. The British welfare system is actually worse than most other state-delivered monopolistic welfare systems:

• The  system is too expensive. In 2001, the UK spent over £70 billion, 7 per cent of GDP. This was above both the continental European and the OECD averages (both of which are 6.8 per cent of GDP).
• The system is too complicated and becoming more so. In 2005-06, there were at least 51 separate benefits with a myriad of different qualifying criteria, timetables, tapers and tests. Of these 26 are nugatory – accounting for less than 1 per cent of total expenditure.
• The system fails in its own terms. Despite paying more than average to redistribute income, the degree of relative poverty is closer to US than German levels. This seems poor value for money whatever one’s political perspective.
• The New Deal costs more and achieves less than similar schemes. Unemployment was actually falling more quickly before it was introduced. And almost of the scheme has remained entirely state-run.
• The system continues to trap millions of recipients on benefits due to sharp withdrawal rates. According to the OECD Britain actually has the very worst poverty trap. A one earner couple with 2 children (dare I say it – an old fashioned family !) moving from part time to full time work at the minimum wage only receive 10p out of every additional pound that they earn. The OECD average is over five times that.  The IFS has also shown that 12 per cent of all British working adults face marginal tax and benefit rates of over 50 per cent. 

Unsurprisingly, new figures show that as a result of all this, 71 per cent of working-age benefit recipients receive benefits for over a year.  Trapping people in benefit year after year is not compassionate. It is cruel.

Nicholas Boys Smith: True Blue - How Fair Conservatism Can Win The Next Election

Nicholas Boys Smith is a former parliamentary candidate and has served as a front bench adviser in Government and in Opposition. This is an excerpt from ‘True Blue: How Fair Conservatism can win the next election’, published by Demos on Monday.  Details of the events launch can be read here.

I have spent part of this autumn travelling around Britain. It has made me angry. From Kensington in Liverpool to Merthyr Tydfil in the Welsh Valleys, one point has been painfully and consistently apparent to me. Britain is more divided and less equal now than it has been for nearly a century.

Why is this? It is certainly not because we have been badly governed for most of the last 25 years. Quite the reverse. Almost everyone now accepts that the heady days of the union-vanquishing, privatising, free-marketeering Margaret Thatcher governments effected a British renaissance.

Rather, the 1980s Conservative Ministries did not do enough. They liberated the market but they did not give enough Britons the tools to compete.  They freed the banks and the builders, but they did not liberate the people from a cloying, maliciously-coddling welfare system.  They did not set the people free from a glut of enterprise-stifling local councils and poor public services. They did not take on the dangerous politically correct mantras that marriage and a ‘proper education’ were mere Victorian vestiges. Above all, they did not liberate the poor from outrageously high levels of personal taxation.

Part of Britain was ‘Thatcherised.’ It is now rich and becoming richer. Part of Britain was not. It is not rich and not getting richer.

Most of Britain knows their fellow citizens are living in poverty. 55 percent believe there is “real poverty” in Britain. Voters care, too. 59 percent are proud of the welfare state. There is, rightly, much scepticism about how the current welfare system works. All the same 59 percent oppose simple benefit cuts for the very good reason that they will “damage too many peoples’ lives”.

The desire to help the less well off may not always top the polls of how people say they are going to vote but it often does top the polls of how people actually do vote. In 130 Labour Tory marginals after the 2005 election, more voters (15 percent) listed “pensions/social security/the minimum wage/poverty in Britain” as the most important issue in deciding how they had voted than any other. This is a staggeringly important fact. Conservatism has to respond to it if it wants to reclaim the centre ground of British politics.

Most people think (unfairly) that the Thatcher governments created more absolute poverty and revelled in it. We don’t respond. We just can’t talk about poverty in terms that could. This isn’t because recent Tory front benches have not worried about unfairness. They have. The problem is that too many other Conservatives have denied the existed of “real poverty” in the UK.

There seems little point in talking about the use of the voluntary sector or parent choice to solve the problem when our language and consistency of purpose has not demonstrated that we give a damn.

But we need to give a damn if we are going to connect with the majority of the British. 58 percent of voters think we do not care about ordinary people. 67 percent think we are out of touch. And 53 percent of voters still think that Labour “cares about the problems that ordinary people have to deal with.” Whatever errors they make, half of all voters still give Labour the motivational benefit of the doubt.

We need to engage, and be seen to engage, with the problems of everyone, above all the poorest, if we are to wrestle the centre right (let along the centre ground) of British politics back.  This will need passion and obsession – not a technocratic discussion of choice and freedom. We need to mean it and we need to show it. We can’t talk about means if we have not proved that we care about ends. Our end, our aim, must be fairness.

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