Labour’s growth ambitions demand more radicalism on planning

At the heart of Labour’s economic strategy is a puzzle. All hope of repairing Britain’s crumbling public services is pinned on faster growth. To get it, Sir Keir Starmer, the Labour leader, says he is prepared to “bulldoze through” opposition to homes and infrastructure, largely by reforming a planning system that has become a brake on the economy. Yet for all the vigorous language, Labour’s policies are rather timid.

The diagnosis, at least, is spot on. In Britain it has simply become too hard to build. By preventing building where it is needed, argued Rachel Reeves, the shadow chancellor of the exchequer, in a recent lecture, the planning system has pushed prices ever higher and held back Britain’s most productive cities. She described planning as “the single greatest obstacle” to economic success.

Labour’s conversion to YIMBYism (“Yes in my back yard”) is comparatively recent. In 2020 the Conservative government under Boris Johnson tried to introduce a more permissive zoning system for housebuilding—an idea Labour blasted at the time as a “developer’s charter”. After Tory MPs and voters rebelled, the plan ended in a miserable retreat. Since then Michael Gove, the outgoing housing secretary, has further weakened pressure on local councils to allow housebuilding. In 2023 the number of planning applications in Britain fell to 360,000, the lowest in almost three decades. The number of houses completed in England was down by 11% to around 158,000, far below the level needed to make up for decades of undersupply.

Labour says it would aim for 1.5m new homes over the next five-year parliament if it were to win the upcoming election. It has one big advantage: its voters are not NIMBYs. But its policies are a mixture of the sensible, the vague and the misguided.

First, the sensible proposals. The Labour Party would bring back targets and force local authorities to adopt plans that identify developable land—reversing Mr Gove’s changes. Any council that failed to comply would have development foisted upon them. Labour would also recruit more planning officers; it has separate plans to speed up infrastructure development by making it harder for local groups to veto national projects. All this would improve the way the current system works.

Next, the vagueness. Labour promises to review the green belt, a series of 16 rings around English cities designed to stop urban sprawl. This is the part that could be transformative, says Paul Cheshire of the London School of Economics. According to the Centre for Cities, a think-tank, if you worked on less than 2% of the green belt surrounding Britain’s five biggest cities it would be possible to build 2m homes within half a mile of railway stations. Labour could decide to allow such targeted building. But the party has yet to say much about its review, which could get bogged down or focus only on more modest changes like releasing brownfield sites.

Least promisingly Sir Keir has a plan for a “next generation of new towns”, reprising a favourite of post-war Labour governments. Although some later new towns, like Milton Keynes, have been relatively successful, it would make more sense to focus on making cities bigger and denser than on creating entirely new towns. More practically, it is doubtful that Labour would be able to get any built quickly. A similar plan under the last Labour government fell flat, in part because councils would not agree to them.

What is missing in all this is much of a sense of radicalism. Ms Reeves says cities are being held back, yet there is no talk of removing the height restrictions that prevent even gentle densification. More fundamentally, previous failed attempts to boost housebuilding suggest that Labour will find it difficult to sustain higher levels of construction without overhauling Britain’s discretionary planning system. As long as that system remains in place, councils will be able to veto projects or create uncertainty around plans, however sensible. Many other countries—including much of Europe—take a more rules-based approach, whereby proposals are automatically approved so long as they conform to a locally agreed design code.

Such a change would be controversial. YIMBYs are a strong caucus in the parliamentary Labour Party; their ranks will undoubtedly swell after the election on July 4th. But some in Labour are still drawn to a romantic notion of planning as a way of perfecting urban environments. Sir Keir and his shadow housing minister, Matthew Pennycook, speak the language of incrementalists who think they can achieve their aims by tweaking the existing system. The problem, says Ant Breach of the Centre for Cities, is that planning reform has taken on a “load-bearing” role in Labour’s growth-focused plan for government. If the party fails to be bold, there is a risk it won’t take the strain. ■

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