Brian Rushton Two birds with one stone

Brian Rushton,

One down, three million to go

BRITAIN’S measly productivity growth gives politicians sleepless nights. Since 2007 output per hour has hardly budged, while in America it has jumped by 9%. Unless productivity picks up, wages cannot grow: small wonder that Sajid Javid, the business secretary, calls it “the economic challenge of our age”. Standard remedies to boost productivity include investing in education, health care and technology. But Britain’s government thinks that by tackling another big problem—the bubbly housing market—it will make productivity soar. Is it right?

Britain is crying out for new homes. The country needs to add about 250,000 per year to satisfy demand; in 2014 it built probably 150,000. As part of a 15-point “productivity plan”, on July 10th George Osborne, the chancellor, announced big changes to planning regulations, in a bid to stimulate housebuilding. A much-hyped “zonal” system will grant automatic planning permission on suitable brownfield sites, a policy borrowed from American cities. Londoners will be able to add extra storeys onto their houses up to the height of adjoining...Continue reading

via Brian Rushton, Two birds with one stone