Race for Downing Street: Labour's pledges to reform the planning system

Labour is talking up its plans to move fast and break things once in power to resuscitate Britain’s economic growth. Bloomberg reports that target number one is the planning system to ‘get Britain building again’. So what can Labour achieve quickly, and what are the political risks that might cause a Starmer government to lose its nerve?

Front and centre in the Labour manifesto is restoring the mandatory housebuilding targets for local councils. The abolition of these targets led to a marked decrease in planning permissions and slowed the progress of local plans, so this is an 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 the 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 no-one apart from the consultants paid to write them?

Another headline-grabbing Labour pledge 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 300,000 homes a year right off the bat. Workforce and skills shortages are 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 a new Labour government with a large majority, to radically reshape our failed planning system. This could 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 20^th 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. 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 after the election.  

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 after 4 July. This 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.