Realist, not conformist analysis of the latest financial, business and political news

Because Sadiq Khan Is An Economic Illiterate

Sadiq Khan’s new housing proposal for London includes this passage:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Why rent control?[/perfectpullquote]

Because Sadiq Khan is, as my colleagues at the Adam Smith Institute have already pointed out, an “economic illiterate”.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]For the reasons set out earlier in this paper, the Mayor believes that rent control has a key role
to play in improving the affordability of housing in the capital, as part of a package that
includes increasing the supply of social housing and rethinking welfare reform. He is therefore
calling on the Government to give him the powers to develop and implement a system of rent
control for London.[/perfectpullquote]

It has never worked, anywhere, other than to reduce the quantity and quality of rental housing available. But, sadly, this becomes clear some years after implementation. Meaning that Khan will gain the plaudits for capping rents, not gain the brickbats for having capped quantity and quality.

No one said that Khan doesn’t understand politics, it’s only economics where we insist he’s intellectually bereft.

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Andrew Carey
Andrew Carey
4 years ago

Here’s a thought experiment ( won’t happen of course ): Suppose you could devolve planning powers completely to Local Authorities and Regional Assemblies ( so no NPPF, no centralisation of flood insurance guarantees, no central register of listed buildings, nothing centralised at all, LAs can permit what they like in areas under their fief, SSSIs and similar excepted ). At the same time we devolved the power to control rents if the LA so desired.
Would you support that devolution of power?

4 years ago

Guido has a post of a paper making just the points you make- and signed by Sadiq Khan. He is not ignorant of economics, he just doesn’t care.

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