Think Tank Challenges Labour's Rural Housing Focus, Urges Urban Development
Resolution Foundation criticizes Labour's plan to build 1.5m homes in rural areas, suggesting focus on cities like Manchester and Birmingham for economic growth. Report analyzes growth targets and recommends policy changes.
The Resolution Foundation, a prominent British think tank, has challenged Angela Rayner's strategy to construct 1.5 million additional homes in towns and villages, advocating instead for urban-centric development to stimulate economic growth.
In a report analyzing Labour's growth plans, the foundation argues that building in expensive rural areas with limited job opportunities would not significantly contribute to the government's growth objectives. The study, overseen by former Conservative minister Lord Willetts and economist Rupert Harrison, suggests that cities like Manchester and Birmingham should be prioritized for new housing developments.
Lord Willetts criticized the government's current housing targets as "perverse," stating:
"The issue is the criterion the Government is using is the gap between property prices and average incomes in the area. This has the effect that it makes Cornwall and Norfolk, for example, high priorities for more housing. But it means London and some other cities where house prices might be high but also incomes are relatively high don't get such high priority."
The report highlights that Labour's goal of making Britain the fastest-growing economy in the G7 would require accelerating growth from the current 1% to at least 1.5%. However, the analysis suggests that current plans for housing and infrastructure would only achieve about half of the necessary growth.
To boost economic growth, the foundation recommends focusing on urban centers and surrounding towns, particularly Birmingham and Manchester. Lord Willetts emphasized the importance of building near city centers to concentrate workers and consumers in close proximity.
The report also suggests that closer alignment with EU regulations could potentially add 0.6% to GDP by 2035, providing a modest but meaningful boost to annual growth.
In response, a government spokesperson defended their plans, stating that all areas of the country must contribute to meeting housing needs in towns, cities, and villages, particularly in areas facing the greatest affordability pressures.
As the debate over housing policy continues, it remains to be seen how the government will balance the need for economic growth with the challenges of providing affordable housing across the UK.
