Planning reforms are good news – but there is more Labour could do

Rumours are running amok about which taxes Labour might hike in the Budget and what impact those policies might have on growth.

But it is worth remembering that Labour’s flagship growth policy has already been announced.

At the end of July, the government put forward a long list of changes to the National Planning Policy Framework (NPPF), the document that sets out the government’s guidance for planning decisions.

Getting planning reform right – and delivering the 1.5m homes Labour has promised – could bring a huge boost to the UK economy, albeit not soon enough to prevent Starmer and Reeves from having to make “difficult decisions” in the Budget.

So what should we make of Labour’s planning reforms?

Zach Simons, an influential planning barrister at Landmark Chambers, was impressed. “These proposed changes are serious. They’re thorough. They’re deeply considered,” he wrote in a blog post.

Two in particular – the re-imposition of housing targets and reform of the green belt – have attracted a lot of attention. Both will likely be the subject of a lot of discussion when the consultation responses come in later in September.

Let’s take each in turn.

The government confirmed that it would re-introduce mandatory housing targets, ditched by the Conservatives back in 2022 under pressure from their backbenchers.

Under the new proposals, all local authorities will be required to increase housing supply by 0.8 per cent, with tweaks made according to affordability issues.

These tweaks should help concentrate the construction of new homes in areas with the worst affordability issues.

However, many have argued that the algorithm puts too many houses in areas which do not have such acute affordability issues. For example, housing targets across the northeast will be double what they were under the previous method. In London, by contrast, the housing target was cut by a fifth to 80,000.

It’s worth pointing out that even this reduced target is more than double London’s current rate of new home construction, so it’s still ambitious. But it does seem odd that the housebuilding targets are most ambitious in areas with the least affordability issues.

It suggests that the weighting between the stock of new homes and affordability issues could be tweaked.

The second most prominent set of proposals concerns land in the green belt, which has effectively been sacrosanct since its introduction back in the 1950s.

To help meet the re-introduced housing targets, councils will have to identify ‘grey belt’ land. This effectively means previously developed plots of land, like car parks and wasteland, are included within the green belt.

Housing developments on these plots of land will automatically have a strong presumption in favour of development.

On its own, this category of land won’t make a huge difference – after all, only about one per cent of the green belt has previously been developed – but the document includes signs of a more fundamental rethink of the green belt.

If authorities are still missing their housing targets, even after all available grey belt land has been developed, then the consultation raises the possibility that authorities could be forced into redefining the green belt.

“This could be… the beginning of the drawbridge being lowered again across many of the least affordable places in England,” Simons said.

Whether it will be is another question. The government has introduced a series of ‘golden rules’ for building on land released from the green belt, including the requirement that 50 per cent of new homes be affordable homes.

Robert Colville, director of the Centre for Policy Studies (CPS), said this looks like it could be “extremely tough to achieve”, and will result in fewer new houses being built.

Paul Cheshire, emeritus professor of economic geography at the LSE, went further. “In reality, almost no additional building on green belt land will occur, however ‘grey’ the land may be,” he said.

There’s no doubt that the government has taken a strongly pro-growth approach to the planning regime – much more so than previous governments. But there’s definitely scope to go further. It will be interesting to see how Labour’s proposals change in response to the consultation responses.