When the rich start to complain, one may be sure that the poor are already suffering. The rich, particularly in London, are starting to complain about their children. It is not that they are growing up to be feckless layabouts who will not settle down to a real job of work. It is rather that they are serious young people, who have been to university, and are looking for a job that will have some social utility and provide them with a comfortable salary on which to bring up their own children.

They want what their parents achieved in their generation. And they are finding it tough. Life for the young graduate in his or her mid-twenties is much harder for the present generation than it was for the generations of the 1980s, or the 1960s. It is a mistake to be young in new Labour Britain; it has become much more difficult to get started in life, to find the first professional job or the first house.

As a result there is a new fashion in which the middle-class young leave home to go to university at about 19 and then return home at the age of 24, because they cannot afford to live anywhere else. During their absence at university they will have accumulated a considerable debt.

Jobs are difficult. Not everyone can go into the City and earn the bonuses of corporate finance. There are not enough openings, nor does everyone have the appropriate talents. With the expansion of universities, employers have an embarrassment of choice among graduates with respectable degrees — a 2:1 or better — from universities that employers will have heard of — not necessarily Oxford, Cambridge or Imperial College, but Exeter, Bath, Bristol, Nottingham, Warwick or St Andrews.

Starter jobs are hard enough to find even for those who are well qualified — the search can be a nightmare for those with low qualifications and no network of friends who have already found a niche. Training salaries are not as generous as they once were; many people have to go through a period of internships or work experience, and may think themselves lucky to get even unpaid work.

The first job is hard to get, but for many graduates housing is the worst problem. The Halifax has published statistics showing that in 70 per cent of towns in Britain key public sector workers have been priced out of the housing market. The rise in house prices means that 97 per cent of towns are now too expensive for firefighters; 99 per cent are too expensive for nurses. If you want to be a teacher, and also want to buy a house, you have the choice of Clydebank or Merthyr Tydfil. You certainly cannot expect to live anywhere in the South East of England, such as those haunts of plutocracy, Weybridge or Gerrards Cross.

It is the “20-20s” that are ruled out; they are the graduates in their twenties who are earning something over £20,000 a year. The average pay of a teacher is, apparently, £26,400 a year. Many graduates, even in better paid professions, will earn less than that in their early jobs. A suburban semidetached house in Gerrards Cross, which may have cost about £1,250 when it was first sold in the 1930s, would now cost between £500,000 and £1 million.

The Government has to take the responsibility, just as it must take responsibility for the pensions disaster. In 1947 the Labour Government introduced the postwar Town and Country Planning Act.

Since 1997 there have been several reports showing that Britain is building too few houses. The Government has had ten years to reform the planning system to bring the housing market into balance. The housing boom has made housing unaffordable for more and more people.

Demand of all sorts has grown. There are more households, more people are living on their own and there are more immigrants, with more to come. Without any improvement in housing conditions — which is badly needed — many more houses will have to be built. They are not going to be built under existing plans. The current shortfall is at least 100,000 houses a year, and even that would take ten years or more to bring housing supply into balance with demand.

Apart from being complex, inefficient and bureaucratic, the planning system gives far too much power to existing homeowners, “nimbys”, to prevent new building in their area. The “40-40s” — those who are 40-years-old and earn more than £40,000 a year — have an interest in maintaining a high level of house prices. The localised system of detailed planning control puts them in a strong position to protect that interest.

If one asked a competent graduate of a business school to design a business plan for a national cartel to raise house prices to the maximum, it would have four elements, all of which exist in our present system. It would license housebuilding, so that no one could build a new house without a licence, or even rebuild an old house or a redundant barn. It would encourage developers to maintain large land banks in order to benefit from rising prices. It would leak out new permissions only after long periods of delay. It would combine this with an unlimited flow of mortgage credit and relatively low rates of interest.

If you restrict supply below the market clearing level and increase funding, you will inevitably create a bubble and you will lock people out of the market. That is what has been done; those are the consequences that have followed.

Of course, this is an economic distortion that will eventually have to be unwound, though cartels can last for a long time. It also causes great social evils. The poor suffer the most. The housing shortage is bad for health, for education and for crime.

Semi-homelessness, living in hostels or bedsits, is a poor basis for getting a job or winning promotion. In 1951 the Conservatives promised to build 300,000 houses a year — nearly twice the present level. That promise swept the country and brought the Conservatives back to power for 13 years. It was the young who voted them in. That could happen again.

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