Blog 23rd October 2017

Blog 23rd October 2017

In this week’s blog, I refer to: Catalonia, Ireland, the European Union, Sajid Javid and Housing Business Planning in an Uncertain Environment.

The crisis that has arisen in Catalonia following the referendum on independence is causing widespread concern. It is also part of a pattern that can be seen in many parts of the world where territories are seeking independence from the country of which they are now a part.

The Spanish constitution states that the current boundaries of Spain must be maintained. Therefore, there is no constitutional way in which Catalan nationalists can seek independence for Catalonia and, so they are ‘forced’ to take ‘illegal’ steps such as holding an ‘unconstitutional’ referendum.

If the current map of Europe is compared with a map from previous periods in history, it will be seen that it is the nature of geo-political boundaries to change. Kingdoms and empires rise and fall; countries merge and countries break-up. One hundred years ago, thirteen of the 28 current member states of the European Union did not exist as independent states; and most of the other fifteen (including the United Kingdom) had different boundaries to their current ones. It would be a safe prediction to say that over the next hundred years; there will be further changes to national boundaries.

Europe 2017

Europe 1914

A study of history also shows that when geo-political boundaries change this is often accompanied by violence. Two examples follow: The Austrian Empire resisted attempts by nationalists to achieve independence for various territories in the Empire; Serb nationalists assassinated Arch Duke Franz Ferdinand; the First World War resulted, and the Austrian Empire was dissolved anyway. The British Empire resisted Irish independence despite overwhelming evidence that this was the wish of the majority of the Irish; this resulted in conflict that culminated in the Easter rising in 1916; the partition in 1923; the ‘troubles’ and a legacy of division that survives to the present day.

I think the challenge for international statesmen is not to prevent such changes from taking place; but to devise ways in which such changes can be managed in a peaceful and constructive manner.

In the specific case of Catalonia this would probably require some flexibility from the Spanish government and some mediation from the European Union. Unfortunately, neither seem forthcoming at present.

Sajid Javid, the Secretary of State for Communities & Local Government gave an interesting interview to Andrew Marr on the BBC on 22nd October. In it, he signalled a significant shift in government macro-economic policy by suggesting that a distinction should be drawn between borrowing to fund the revenue deficit and borrowing to fund investment. He said that:

“We are looking at new investments and there will be announcements, I’m sure, in the Budget covering housing… But what I want to do is make sure that we are using everything we have available to deal with this housing crisis, and where that means we can, for example, sensibly borrow more to invest in the infrastructure that leads to more housing and take advantage of some of the record low interest rates we have, I think we should absolutely consider that.”

He also conceded that England needs to build between 275,000 and 300,000 homes a year, despite the government’s current target being 1.5million homes over seven years.

And, Lord Gary Porter (Conservative) Leader of South Holland District Council and Chair of the Local Government Association told reporters that he is hopeful that the government will raise the local authority housing ‘borrowing cap’ as part of the November budget.

All this appears to be good news for housing although nothing specific has been announced and many in the sector will remain sceptical until specific proposals are made in the budget.

Our next seminar is on: ‘Housing Business Planning in an Uncertain Environment’. For more information or to make a booking, please click HERE