David Curry

Just what is the problem Kate Barker is trying to solve? It might sound a gratuitous question, but the deeper I got into her report the more I asked it. Is it about how we tackle the problems posed by the volatility in the house price market in the UK (2.4% average annual rise of 30 years and 2.7% over the past 20)? This was the mandate originally given by chancellor Gordon Brown in the context of the debate about the single currency. Although Barker does put numbers on the additional housebuilding programme to hit the European average of 1.1%, the single currency gets but one passing remark in the entire document.

Is it about how to meet the housing needs stemming from new household formation? But this, in turn, poses two vital questions. The first is the reliability of the census figures on which the projections of household formation are based. Barker cites a figure of 179,000 new households being formed annually between 2002 and 2011 in England.

The second is what sort of households are being formed. We need to know how many, for example, are likely to be elderly people who are not economically active; how many are expected to be single-parent families; how many may be constituted of key workers. We also need to know where they are, not least to be able to respond to Barker's own demand for much more regional differentiation in market management and for closer integration between housebuilding programmes and the provision of the services the new households will demand.

These may not be easy questions to answer, but they illustrate the need to recognise the dependence of the Barker report on economic modelling and some heroic assumptions about economic behaviour. The Campaign for the Protection of Rural England may have a vested interest in questioning the assumptions of housing need but equally Shelter, whose research Barker draws on heavily in her calculations of demand, also has a vested interest in campaigning for more homes.

Given the long timescale for fulfilling the communities plan, there is time to deconstruct the Barker arithmetic. But the government has been faced with a rather more urgent dilemma in addressing the report's recommendations on tax and planning. The central Barker recommendation is to promote the bringing forward of land for development and the speeding up of the planning process. She wants to see a planning architecture with regional planning overlords and targets set for affordability. But the key recommendation is the introduction of an uplift tax on land value, variable regionally, and the scaling back of section 106 agreements to the provision of social and affordable housing.

The government should review the suggestions for new planning structures with some scepticism. Local people in the four growth areas under the communities plan are indignant at the imposition of planning supremos over local structures, which they (rightly) regard as a mechanism to override local wishes. Even in regions outside the four growth areas, the most frequent complaint is about the dictatorial and unrepresentative nature of regional planning bodies. A major democratic deficit is accumulating in planning, and the government needs to beware.

Barker says that the uplift tax cannot fly unless there is a broad political consensus behind it. Brown has already kicked a decision well beyond the expected date of the next election. If that election produces a Tory victory, or the prospect one at the subsequent election, the idea of a consensus on an uplift tax seems pretty remote because the forecast that it would risk keeping land off the market would become self-fulfilling.

Barker specifically linked her recommendation with the abandonment by the government of the proposed tariff for planning permissions (as an alternative to section 106). This is incorporated in a bill near its final stages in parliament. I doubt if the government will drop the tariff provisions (however hard it is to extricate from the government details of how they will work in practice), so we could end up with serious confusion about where the planning system as a whole is going. That would be the worst of all worlds, given that business in general wants certainty and stability even if the price is a less than perfect system.

Barker's report is hard going. It is part economic treatise and part political tract. It raises more questions than it answers, of methodology, statistics and policy. It poses some seriously difficult dilemmas for government.

Don't hold the front page: we are already in a general election campaign.