There has been a significant row in Parliament in recent days about the Government’s proposed planning reforms. These significant changes would scrap the local planning permission system which has existed since 1947 and replace it with American-style ‘zones’. Under these plans areas would be zoned as either ‘growth, renewal or protected’. I oppose these plans.
If they proceed, in ‘Growth’ areas outline planning permission will be automatically granted. Planning officers will then decide the detail. In Renewal areas, there would be a statutory presumption in favour of development. Development that meets pre-specified criteria would again receive automatic consent. In Protected areas, the current planning process would continue to exist in broadly the same way.
You can see this is a considerable change to the status quo and effectively removes any local input or oversight of planning decisions. The big developers have long sought something of this kind. This issue played a significant role in the Government’s recent shock defeat in the Chesham and Amersham by-election.
No-one could ever accuse me of failing to support housebuilding. I have done so even when it is unpopular because I recognise the scale of the housing crisis. Home ownership in the under-25s has fallen from a third to a tenth in just two decades. No country in the world has seen house prices rise like they have done in the UK. If UK house prices had risen just by the same inflation as everything else since 1995, the average UK home would cost around £105,000 (it’s currently £256,000). If we want our children to have anywhere near decent places to live then we have to take action and working class people should be able to own their own homes. But the problem is not the planning system.
9 out of 10 planning applications are already granted. And if local authorities don’t plan to hit the new homes target given to them by the Govt, they effectively lose control anyway as decisions will get overturned on appeal. Plus lots of planning permissions are granted but are then left for years before development actually begins.
The two major reasons why we have a housing crisis are as follows: 1) the big developers and; 2) land. On the first, house building in the UK is dominated by the big developers – Persimmon, Taylor Wimpey, Barratt etc. They are a classic oligopoly. High prices should theoretically bring more providers into a market, increasing supply and bringing down prices. This just doesn’t happen in UK housing. Land is so restricted that the big developers can buy up all the best sites, and they then have no incentive to increase supply and bring down prices. This is also why new build quality has become so poor. It wasn’t always like this: in the 1930s most housing was built by small, local building companies. After the war the public sector also played a big role, until the Thatcher Government.
This is all made worse by the second problem – land. After 1947 if land increased in value as a result of planning permission being granted on it, that value stayed in the public sector to provide public services for those new houses. After all, nothing has been created or produced there. The value is entirely created by the granting of planning. Land had to be sold based on it’s ‘existing use’, and a charge captured any ‘planning uplift’ for the local authority. But this was steadily dismantled by legal challenges in the 1950s, and finished off when the Tories passed the Land Compensation Act 1961. If you look around the constituency, you can see that a great deal of housing that we depend on today was built between 1947 and 1961 under the Town and Country Planning Act which introduced this system (it’s no coincidence that after the change in 1961, tower blocks began to be built in large numbers in the UK). We should learn from the past. One thing the Council is trying to do with the proposed Garden Village is to more fairly share the increase in land value between local landowners and the provision of local services, but this is only possible because the Government have provided over £10m upfront. If you want to know more about this, this blog from Shelter is a good summary: https://blog.shelter.org.uk/…/land-reform-the-key-to…/
The Government’s reforms mention nothing in terms of providing infrastructure alongside homes. There is also nothing on net zero, ‘levelling-up’ or creating good employment from building homes. I think they have got this wrong. I would note, simply as a matter of fact, that the big developers and landowners are and always have been one of the major donors to the Conservative Party. Labour actually legislated to correct the land value problem in both 1967 and 1976, but each time the Tories reversed it. Yet capturing the uplift in land value is the standard way of financing development in many countries around the world.
Sometimes people claim that the UK is overdeveloped, but this isn’t true. Just 2% of land in England has buildings on it, including domestic and commercial uses (Source: National Ecosystem Assessment). We just have a very poor system and the Government has made the wrong call in proposing to scrap local input and democratic oversight of planning. That’s why I voted against it.