Keir Starmer is apparently drawing up plans for a second planning bill to follow his Government’s flagship legislation, currently stuck in the Lords. That’s a welcome recognition that the current strategy isn’t working. The latest figures on planning applications show that Labour will fall a staggering 480,000 properties short of its promise to build 1.5 million homes by the end of this Parliament. Such swift and total failure on a major policy promise is nothing short of a disaster. It is clear that getting Britain building requires much more radical policies.
Yet the truth is, nothing will improve until the Prime Minister acknowledges that for all his claims to be a pro-building Yimby, he only has himself to blame for his failures on housing. Again and again, he and his party have been their own worst enemies when it comes to fighting the blockers.
Consider the scale of the problem. Britain has a backlog of 4.3 million homes compared to the European average. As a result, the average home in England now costs nine full years of average income, rising to fourteen in London. Meanwhile, some ten million people spend more than 40% of their income just for the roof over their heads – half again above Europe’s average.
It is now widely accepted throughout Westminster that the housing crisis is a manufactured injustice; an injustice manufactured by restrictive planning policies which effectively make housebuilding almost impossible. In the period after the 1990 Town and Country Planning Act introduced discretionary planning rules, housebuilding figures fell over a third.
This legislation was so devastating because it effectively gave local councils an absolute veto over most construction, whereas previously they at least had to compensate for blocked development. Myopic councillors, concerned only with the short-term disruption of new construction, then blithely reject proposals, often despite an overwhelming economic case in favour. Polling of planning committee members reflects this mentality: a quarter openly claim to oppose any new development in their area whatsoever.
In light of this, the key proposal in Labour’s new Planning and Infrastructure Bill is a new National Scheme of Delegation, allowing certain planning applications to bypass councils and be directly approved by apolitical planning officers. This is fantastic in principle, except the Government has now severely curtailed its own policy: restricting automatic delegation to minor developments of under ten dwellings. Initially, the Government indicated that proposals promised in a ‘Local Plan’ would be automatically delegated for approval, but it seems now to have retreated even on this limited promise. Starmer created a minor commotion when he promised the reintroduction of mandatory housing targets in Local Plans, but if these plans aren’t enforced then they aren’t worth the paper they’re written on.
This phenomenon – of Labour hinting at a significant policy shift before suddenly kowtowing to opposition – is a recurring theme. In the same planning bill, the Government proposed a system which would allow developers to pay into a nature fund (via an Environmental Delivery Plan, or EDP), rather than engage in absurd and often exorbitant local mitigation measures as required under the status quo. Put simply, rather than being forced by Natural England to spend £100 million on a bat-protection shed, developers could put a smaller sum into a nature fund and support the environment more cost-effectively elsewhere. Yet even this moderate improvement was too much for Labour to push through, and they have now imposed a litany of onerous requirements on EDPs to satisfy the environmental lobby in the House of Lords.
Wider Failures on Planning
Beyond just backtracking on their own headline planning legislation, Labour is finding other ways of undermining its housebuilding goals. For example, the Government has quite inexplicably decided that now is the time to consolidate and raise Landfill Tax. New proposals would see quarries be taxed for ‘landfill’ when they use inert materials to refill quarried land – something they are mandated to do under environmental regulations. Therefore, all quarries will be subjected to a new tax of £126.15 per tonne of material they refill and, by extension, for each tonne they have extracted. This policy is estimated to add extra costs of £25,000 to the price of every new home in Britain; yet the Government appears stubbornly ignorant of the fact that more expensive materials make homes more expensive too.
It is also worth touching on the last piece of Labour’s plan to get Britain building: extensive devolution of planning powers to local government in their new Devolution Bill. For example, the Government is giving mayors the power to ‘call-in’ strategic projects for a direct decision, as part of widening mayors’ strategic development powers. While this seems promising, in London these powers have been used by Sadiq Khan not just to approve development, but to performatively block major projects out-of-hand. Similarly, Labour is extending powers to create new Mayoral Development Corporations, powers which in London have failed to get homes built but succeeded in wasting money. There is no reason to think that extending these powers to Manchester and other mayoralties will be any different.
Overall, Starmer’s myriad failures on his own housing pledges have two causes. The first is a total lack of the radicalism to substantially change the system, compounded by an abject lack of courage to persevere when a proposal meets the slightest opposition. The second, and more fundamental cause, is that Starmer’s approach to housing remains mired in the madness of central planning. This article has only skimmed the surface of the Kafkaesque, bureaucratic nightmare that is Britain’s planning system: thousand-page-long local housing plans, endless committees needing to approve the most basic economic activity, more rules and ‘powers’ than anyone could ever remember.
The solution to the housing crisis is simple: simplify planning rules and create a rules-based zoning system so local councils can’t block reasonable development. Starmer lacks the courage to do it.
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