5 July 2024

Is Labour ready to get Britain building again?


The results are in and Labour have won a landslide majority. The Conservatives lost 234 seats and their vote share shrank by 19.9%, a historically bad result for the party. The British public have decided to punish the Conservative Party because it feels like nothing works anymore. At the heart of the Conservative defeat is a decade-plus of sluggish economic growth.

Obviously events like the pandemic and Russia’s unprovoked invasion of Ukraine didn’t help, but the key problem was that Britain was unprepared for these shocks. This is in large part because the Conservative Party failed to make it easy to build the infrastructure and homes Britain needs.

Energy bills spiked after Putin’s invasion, but this was not inevitable. Had the Conservatives built the domestic sources of clean energy and grid connections the country needs, Britain would not have been so painfully exposed to international gas markets. French billpayers were protected by their fleet of nuclear reactors and energy bills that were already 50% cheaper than those in Britain. Instead of building, the Conservatives effectively banned onshore wind in England. Offshore wind takes 13 years to see through to completion despite construction only taking two. Britain has failed to get a nuclear power station built in 29 years and the one we are building is the most expensive in the world and has been bogged down by 30,000-page environmental impact assessments and lawfare.

Even before mortgage rates rocketed last year, Brits were spending more per head on housing than any other major European country for older, colder, and smaller homes. By failing to build enough homes for decades, it is harder than ever for young people to get on the housing ladder.

New railways, trams and roads already cost up to 10 times more in Britain than in other European countries. Instead of tackling these sky-high infrastructure costs, Rishi Sunak threw his hands up and cancelled HS2 to Manchester, while failing to start the replacement ‘Network North’ projects. 

While Labour have won a landslide majority, they’ve done it on just 33.7% of the vote. If they want to avoid the Tories’ fate, then they’ll need to get Britain growing again. The biggest lever Labour have to do this is planning reform.

The positive news is that they have a mandate for it. Labour made backing the builders not the blockers one of their key campaign pledges. Building clean and secure energy by 2030 is one of their five main missions, and planning reform to build 1.5 million homes features as a core plank of their plan for economic growth. 

Margaret Thatcher distinguished between two types of policies: popular policies and policies that produce popular results. Planning reform, and the economic growth and improved living standards it brings, is an example of the latter. It will take a lot of political capital to get the required yet contentious changes through, but should Labour succeed, they will see the benefits of a reformed planning system in cheaper and more secure energy, lower rents, and better-connected towns and cities in the longer term. Any delay to enacting their plans risks pushing these benefits beyond the next election.

On housing, Labour’s plan to build on the ‘grey belt’ is exciting. There’s enough land within walking distance from existing transport links in London to build 350,000 homes, which current greenbelt designation blocks. This alone could provide a quarter of Labour’s planned homes over the course of the next Parliament. Their plans to bring back housing targets should also be welcomed, especially if they keep the Conservative policy of urban uplifts, which raises the targets in the country’s 20 largest urban areas by 35%.

However, the big gap for Labour is a lack of urban densification policies, which allow more people to live in our most productive cities. When thinking about where to build new towns, Labour should focus on building urban extensions to areas where house prices are the highest compared to income and new towns nearby, rather than far from where people would like to live. They should also look abroad to the successful policies of Jacinda Ardern, the former Labour PM of New Zealand. Her government gave automatic planning permission for any project up to six storeys high near transport links in New Zealand’s largest cities. A similar policy in Auckland caused rents to be a third lower than they otherwise would have been, which would be a £6,000 saving for the average couple in London.

Labour’s plans to bring onshore wind back into the Nationally Significant Infrastructure project regime is long overdue and their ambition to update National Policy Statements adding more Critical National Priority tools will cut down on delays for new clean energy projects. But if they want to go further they should scrap unnecessary trenching laws that drive up the cost of solar planning applications and create clean energy zones where projects are exempt from long environmental statements, which can reach tens of thousands of pages. They should also replace habitat regulation assessments, which have failed to stop Britain’s nature depletion, with simpler environmental outcome reports to help funnel investment from clean energy developers into restoring habitats.

They will also need to make sure that their laudable push for a net zero grid by 2030 doesn’t leave new nuclear power by the wayside. Cheaper, clean, abundant nuclear power will be vital if the UK wants to run the data centres necessary to become an AI superpower.

As for building the key transport links necessary to connect people with well-paying jobs, Labour have been more muted, instead focusing on their plans to re-nationalise the railways. If Labour want easy wins in this area, they could make it easier for their metro mayors to approve new tram projects and give local authorities more devolved funding over building new infrastructure.

Ultimately the success of the new Labour government will come down to whether they can arrest the decline in living standards and get Britain growing again. If they follow through with their plans on reforming the planning system, and adopt some of the ideas in Britain Remade’s plan, ‘Back to What We’re Good At’, at the next election they’ll be able to reap the rewards of getting Britain building.

Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.

CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.

Ben Hopkinson is Policy Researcher at Britain Remade.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.