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George Osborne has won over the IMF to austerity. Now can he win over Eric Pickles to planning reform?

6 June 2014

6 June 2014

Fresh from celebrating the Tories’ victory in Newark, George Osborne is continuing a very joyful day by celebrating the International Monetary Fund admitting that it got it wrong on austerity. Christine Lagarde today conceded that ‘we underestimated the growth of the UK economy in our growth forecast a year ago’. The report the IMF published today contains its usual mix of things that all parties can celebrate: plenty of compliments for the Government such as ‘the economy has rebounded strongly and growth is becoming more balanced’, along with criticisms that Labour finds useful for its press releases.

Osborne has very little to worry about immediately from the main criticism, which unsurprisingly relates to the Help to Buy scheme. The concluding statement says:

‘Help to buy is enabling creditworthy lower-income households to purchase homes, especially outside London and the Southeast. The program has also played a role in unlocking mortgage credit for lower-income borrowers from other sources. If these flows increase significantly, the FPC and the Treasury may wish to consider whether HtB should be modified or even remains necessary for the full three years of the policy.’

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There’s an ‘if’ in that recommendation which means Osborne can dodge the criticisms reasonably well, until after the 2015 election at least. And he hopes that the Help to Buy scheme will help that victory by suggesting to voters that the Tories are on the side of hardworking people and so on. The polling certainly backs that up: in July 2013, 75 per cent of voters had heard of this policy. But in a later point in the IMF report, a challenge pops up:

‘New initiatives to spur house building are welcome, but political consensus for further reform is needed. The government has introduced major changes to the planning system to create incentives for local councils to increase available land for housing development, and there are some signs of recovery in housing construction. Nonetheless, key inefficiencies remain. These include: unnecessary constraints on key brownfield and greenfield developments; tax policies that discourage the most economically-efficient use of property and undeveloped rental markets with relatively short lease terms.’

The challenge for Osborne when it comes to finding political consensus for reform comes not from the other parties, but from within his own, where key figures such as Eric Pickles are desperately nervous of any further reforms to planning. How to secure political consent from colleagues will be a key challenge for any Tory chancellor after 2015.

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Show comments
  • global city

    There should be an inquiry now into what may have happened had we taken each of these pieces of advice down the years. stop the ‘cuts’ join the Euro, remain in the EMU, do not opt out of anything!

    Best to regain our independence, make our own mistakes and move along. at least that way you get the chance to rectify.

    One for the Lefties. Just imagine, if the Poll Tax had been and EU directive we would still have it today, no matter bad the consequences or unjust the levvy…. no matter how many arseholes rioted down Trafalgar Sq.

    That’s what loss of sovereignty means.

  • Bonkim

    Higher density and multi-storey development on brownfield sites are sufficient to meet housing needs – no need to build on green-field sites. Developers are allowed too much latitude by planners. Developers are adept at building land-banks and waiting for their investment to grow. Councils should limit the life of planning permissions so developers are forced to build and not bank permitted developments.

  • JonBW

    So basically, we have to sacrifice both our countryside and local democracy to achieve growth… and not even sustainable growth.

    Oh, and given the record of the IMF, any policy they advocate is likely to be proved catastrophic anyway.

  • southerner

    “How to secure political consent from colleagues will be a key challenge for any Tory chancellor after 2015.”

    There won’t be one.

    • telemachus

      The charismatic one will begin to inject some fairness into the economy

      • global city

        Good one! I knew you had a joke in you.

  • HookesLaw

    The big headline would have been if the IMF had not admitted they had got it wrong. The facts speak for themselves. Its also significant that they point up the take up for help to buy in the regions.

    • the viceroy’s gin

      It’s amusing that you socialists are so attentive to the statist pantomime. I get a chuckle at that.

  • goatmince

    “George Osborne has won over the IMF to austerity.”
    That is so brilliant I am speechless – excellent, Isabel. No one will ever top that – no way, no even Charles — curious how this was not spotted by anyone, or perhaps it was and it shut them up. Or, which is perhaps more likely, they are still sulking due to their emphatic recent victory in the locals.

    • the viceroy’s gin

      …does your barking tree sockpuppet ever bark at you, lad?

  • Nick BW

    Osbourne is the problem for the Conservatives. I have been a loyal Conservative supporter, with exceptions for Jonh Major and Edward Heath, both plonkers and now I vote Ukip. We want our autonomy back.

    • Hello

      You mean you’re a “loyal Conservative” who didn’t vote Conservative when you didn’t agree with them? Brutus was a loyal friend of Caesar’s.

    • HookesLaw

      In other words you are responsible for13 years of Blair and Brown and the giving away of half our rebate. Thanks. I’m surprised you’re willing to show your face in public.

      • southerner

        Yup entirely Mr BW’s fault. Nothing to do with a left wing Tory party that not even their own traditional supporters would vote for.

        • Hello

          Actually, I think it’s the opposite that’s true. I think the Tories came perilously close to alienating their core support by pursuing these “traditional” voters.

          They’ll always be a conservative majority in Britain, but obsessives can never be conservatives. And no one wants a government of politicians that claim helplessness against Europe, immigration or change.

          • HookesLaw

            Obsessives can never be conservatives. Nicely put.

            • southerner

              Nor can socialist loons like you.

              • HookesLaw

                Look you have just shown how thick you are already, no need to press the point.

                • southerner

                  Embarrassing. You don’t have an ounce of self-awareness you socialists.

        • HookesLaw

          Of course it’s his fault and people like him. And if he has his way he will do it again and gift us a europhile labour govt led by a crypto Marxist. On top of which despite his silly comment, Osborne has steered a fair course as chancellor despite a disastrous inheritance and the storms in the eurozone.

          • global city

            Why has Cameron refused to meet with Juncker?

  • Hello

    “How to secure political consent from colleagues will be a key challenge for any Tory chancellor after 2015”

    Unless you move Pickles to the Treasury and Osborne to Local Government, that is. Maybe Osborne is after Pickles’ job?

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