Liz Truss – 2018 Speech at Spectator Housing Summit

Liz Truss

Below is the text of the speech made by Liz Truss, the Chief Secretary to the Treasury, to the Spectator Housing Summit on 17 May 2018.

For me, it’s personal.

As Virginia Woolf said: A woman must have money and a room of her own.

What she was talking about was having the power to shape her own life.

So, as a 21-year-old graduate from Leeds, I followed that advice.

I headed for the bright lights, big city for my first job as an accountant.

We want the next generation to have the chance to better themselves, to be able to move where there are the best jobs and the best opportunities.

Young people are at the forefront of a huge shake up of the economy.

They are the freest generation ever: the Uber-riding, Deliveroo-eating freedom fighters.

They’re not just hungry for pizza, they’re hungry for success.

They have the desire to shape their own future.

But at the moment they’re spending too much time as frustrated flat hunters.

According to the CPS, the cost of living and housing are the most important issues.

Renters face high housing costs, with nearly half of income going on rents in London on average.

The average London house price is 12 times higher than the average London wage – when you can only get a mortgage at four or five times your salary.
To paraphrase Norman Tebbit, the new generation want to get on their bikes, hit the road, and find the best jobs in the best cities.

But even though this generation are keen cyclists, they’re not getting in the saddle.

Because it’s no use getting on your bike to find a job, if you end up with nowhere to lock it up.

It doesn’t matter where you want to go – Norwich, York or London, if you want to go there and get the best job, you should be able to.

I want everyone to be able to move house to get a better job, so they can get on in life.

And accepting the status quo is bitterly unfair.

We also need to make sure that the record number of new businesses we have in the UK get access to the best talent.

For the sake of society, we need to make sure our villages are viable – that they have the houses, schools and shops to thrive.

And for the sake of our economy, we need to let our most successful, towns and cities expand.

In Medieval times, Norwich was the second-largest city in England, agriculture’s answer to Silicon Valley.

Then, during the industrial revolution, the country marched to the beat of the North, and workers flocked upcountry.

It was not so much a gold-rush as a cold-rush.

The point is that when towns have their moment, people move to the places where the wages are highest. That’s resulted in Britain’s economy growing faster.

Today, London is as productive as Germany, while cities like Oxford, Cambridge and York are bursting with potential.

These are towns calling out to workers everywhere, desperate for more hands to the pump.

But according to the Resolution Foundation, the share of working age people moving for jobs has gone down by 25 per cent since 2001, with the most significant decline among young graduates.

What’s more, the typical person would have been £2000 better off getting on their bike.

So we need to need to let these towns off the leash, because we all stand to benefit, in our wages and in our quality of life.

A recent study in America by Hsieh and Moretti showed that freeing up housing regulations in New York, San Jose and San Francisco to median levels could increase the US’s GDP by 3.7 per cent, which would mean an extra $3,500 in wages for all workers.

But the most productive cities are being held back by zoning requirements.

And it’s much the same story in the UK – restrictions on building are holding cities up.

Analysis shows that opening up planning is one of the fastest things we could do to boost our country’s productivity.

This is why reform is so urgent.

It’s restrictions that are causing problems, but there are some out there who say that the solution is more restrictions, more control, more state interference.

This is the opposite of what we need.

Others are calling for a £10,000 bung to 25-year-olds – which they’ll all end up paying back in higher taxes.

I think it’s a myth that young people want free things. The fact is they want free-dom – to work and live where they choose, and that will take radical action.

Because all of these are attempts to cure symptoms.

None aim to tackle the underlying issue, which is supply.

The answer is not top-down meddling, but encouraging disruption.

We need to open up more land to build on.That means challenging the vested interests.

We need to challenge the NIMBYs, comfortable in their big houses in suburbia.

The fact is that flats and houses need to be built where they are needed.

We all want somewhere for our children to live – not least because that means they don’t have to live with us until they are 30!

We need to make better use of the land that we have.

We are introducing minimum densities for housing development in city centres, and have extended freedoms to convert certain types of property into housing.

We also need to encourage more creative tools that give more power and freedom to the individual.

We modernised outdated estate agent legislation in 2013, making it easier for excellent websites such as Zoopla to provide the information that renters and house buyers need when deciding where they want to move – including whether their garden is south facing.

Meanwhile Airbnb and Spareroom have helped people find – like Harry Potter and his friends – a room of requirement.

We need to liberate business planning in high-growth, free enterprise areas.

I would like to see more of the development model used to build Canary Wharf – A Canary North!

And we also need to look at those councils around the country who are not delivering.

Last November, we singled out 15 other councils that are holding back people who want to develop land and create new opportunities, and the government has started intervening in 3 of these cases.

I’m pleased to say, though, that this government allowed local people to make their own neighbourhood plans, so that they can do what’s best for their villages.

That’s why our reforms, put forward by Sajid Javid, and taken forward by James Brokenshire, are so important.

We’ve removed stamp duty for first-time buyers purchasing a house under £300,000 – that’s 4 out of 5 cases. This will save people £1,700 on average, and help over a million first time buyers getting onto the housing ladder over the next five years

And we’re streamlining the Byzantine planning system, to make it easier for the small firms to compete, to disrupt the market and, through fierce competition, build the houses and offices and factories that will make Britain successful.

In the 1930s, before planning system was introduced, there were ~265k houses built by the private sector a year – which goes to show we can do this!

We’re cutting through bureaucracy and, since overhaul of planning act in 2012, we’ve gone from 200k to 350k planning permissions per year.

And last year, there were 217,000 net additional new homes in Britain, which shows massive progress.

We are also making plans for the future, including the corridor between the bright lights of Oxford and Cambridge – we have concluded a deal targeting 100,000 new homes by 2031.

This goes alongside our investment in infrastructure – a 40-year-high – which will connect all these new homes with the modern roads and railways people need to get around.

Britain should be an opportunity nation where you can get on your bike and find a job where you want.

This is what I mean by freedom of movement.

It’s part and parcel of a free enterprise economy, which is what drives growth and prosperity.

Our job in government is to help achieve that.

With better and more affordable housing, we can improve social mobility, address wealth inequality, and make sure our country’s opportunities are open to everyone – big or small, north or south, man or woman.