How realistic is Labour’s plan to reform the planning system?
Labour has promised to move fast and break things to get Britain building again, but will their plan actually work, asks Sam Griffiths
Were elections a more humane sport, then this one would have been called off by referee stoppage weeks ago. Alas, the Conservative punishment beating only concluded on Thursday, and now the new Labour government is talking up its plans to move fast and break things to resuscitate Britain’s economic growth. Target number one is the planning system, with new Chancellor Rachel Reeves yesterday promising to “get Britain building again” with a raft of reforms. So what can Labour achieve quickly, and what are the political risks that might cause the new Starmer government to lose its nerve?
Front and centre for Labour is the restoration of mandatory housebuilding targets for local councils. The abolition of these targets has led to a marked decrease in planning permissions and slowed the progress of local plans, so this is a quick and easy win for Labour. Proposals to give more strategic planning powers and freedoms to combined authority mayors, in return for requirements to plan for housing growth in their areas, are sensible too.
So far, so encouraging. Yet their manifesto can’t help but indulge in some populist tropes about “international investors” and “speculative housebuilding”. This country would be in a happier place if only we had more of those knocking around.
Starmer also wants to hire 300 new planning officers, which is a drop in the ocean to what the industry says is needed. But, in Labour’s defence, planning bureaucrats are unlikely to come out top on the sympathy list of public servants in need of cash. Some developers might also murmur that money can’t be the only problem, considering they often cough up enormous fees through planning performance agreements (PPAs) to self-finance their applications and still receive a poor service. A better solution to reduce council workloads would be to slash the size of planning applications back to the “single thick folder of documents” that used to suffice. Nowadays, applications can consist of hundreds of pages of make-work, examining everything from obscure species to health impacts. How often are these read by anyone apart from the consultants paid to write them?
Another headline-grabbing pledge announced by new levelling up secretary Angela Rayner is to build “a generation” of new towns. Such ideas are welcome but should not be the priority – turbocharging growth will come from building new homes in and around the places people most desperately want to live, which are our most productive cities such as London, Oxford and Cambridge. Dropping new towns in places with little to attract people and employers won’t have the same effect.
The bad news for Labour is that even if their pledges above are met, housebuilders simply do not have capacity to deliver the promised 300,000 homes a year right off the bat, with workforce and skills shortages serious supply constraints in the short term. However, in the longer term, markets have an extraordinary power to innovate and expand supply – that is if a government gives them the right signals.
The opportunity is there, for this new Labour government with a large majority, to radically reshape our failed planning system. This should include devolving business rates, building on green belt land around train stations and eventually moving towards a less-conditional zoning system. If Texas and Auckland can do it, we can too. This country built its way out of housing crises twice in the 20th century, and there is no reason we can’t do so again.
Sceptics rightly point out that Labour’s new backbenchers in suburban seats could prove a thorn in Starmer’s side as they come under pressure from NIMBY voters and political opponents on their left and right. However, the more visionary Labour MPs should see this moment as an opportunity to transform the landscape of British politics, like Right to Buy once did. Many Tory MPs opposed planning reform in 2021 partly through a fear it would lead to a deluge of left-leaning liberal professionals moving into their leafy constituencies. Labour should be ruthless and accelerate this process through a massive expansion of housebuilding, and make the ‘Blue Wall’ in the south of England even harder to rebuild.
The problem with these sorts of economic reforms is it can take time to see the benefits, so governments often shy away, thinking they will have to do all the hard work and the fruits will only be borne once they are out of office. And time is something Labour may feel they don’t have much of, hence the urgency to move quickly in their first few weeks. This urgency comes from the knowledge that if they fail to deliver on housing and growth, in five years’ time the unforgiving British electorate will be itching to dish out another beating.
Sam Griffiths is senior account manager at London Communications Agency