Last week, I wrote about how Labour’s plan for new towns – supposedly Sir Keir Starmer’s big-bang solution to the housing crisis – is unlikely to produce even a single one. There were several factors that went into why, but broadly it could be boiled down to two points.
First, the proposals adopt an everything-bagel approach which is becoming increasingly common in progressive politics. It isn’t enough to build lots of new homes. No, a new town must also: look nice, be affordable (i.e. price-controlled), free (paid for by the private sector), and boost biodiversity too!
It should be obvious to CapX readers why ‘we’re going to build a host of extra costs into the building process, fix the prices, and then have the private sector build it’ won’t work. But that is, broadly, Labour’s plan.
Second, there is a remarkable – and fatal – lack of coercion. Labour aren’t going to ‘decide’ where new towns will go, as the headlines might lead you to think. They are going to set up a quango (of course) and invite applications from councils for the privilege of having their planning powers taken away and given to a development corporation.
In short, it’s a heap of process and busywork that doesn’t engage at all with the fundamental problem of incentives and veto opportunities at the heart of the housing crisis.
But it has been put to me that I wasn’t entirely fair. Starmer and comrades are not putting all their eggs in the new-towns basket, after all. There is also their proposal for overhauling the so-called ‘grey belt’ – those sections of designated green belt land which are, in reality, ugly as sin and in dire need of development. Per the BBC:
Labour Leader Sir Keir Starmer said his party was committed to a ‘brownfield-first’ approach but would loosen planning laws and create a new class of ‘grey belt’ land for low-quality green belt areas. This new category will include ‘poor-quality scrubland, mothballed on the outskirts of town’ like a disused petrol station in Tottenham currently designated as green belt, Labour said.
This seems good, right? The fact that large parts of the green belt fall far short of the bucolic vistas that dance before the eyes of voters is nothing new. Moreover, the development potential of such land is huge: my ConservativeHome colleague Harry Phibbs has dug into the numbers and suggests there could be 54,000 acres of ‘grey belt’ – enough for over a million homes.
Yet just as with the new towns proposal, the devil is in the detail – and while we don’t have all the detail yet, we have enough to make out a familiar set of cloven hoofs peeking out from under them: an everything-bagel approach that demands the impossible, and a remarkable lack of coercion. Let’s take them in order.
Labour say that their plan is to ‘prioritise’ brownfield and grey belt developments. But their proposals cannot but incentivise developers to do the opposite. As stated, the policy actually places a heavier burden on them than a normal development: any proposal has to exceed the usual minimum biodiversity net gain (BNG) requirement, and comprise at least fifty per cent ‘affordable’ housing – that is, housing that trades at least 20 per cent below the market rate for the area.
(There is at least nothing in Labour’s ‘golden rules’ about the houses being attractive this time, which is probably a good thing. Good design is an expense, hopefully justified by higher prices; there is no easier nor cheaper way for developers to skew housing ‘affordable’ than building it ugly.)
Add to that the requirements for additional infrastructure and for plans to include ‘improvements to existing green spaces’ and meet ‘high environmental standards’, and it isn’t obvious why any developer would pick such a site unless they had no other choice.
This is especially because developing brownfield and derelict sites is often more expensive than building on virgin land. A government that was serious about getting such areas redeveloped would be creating special exemptions from the crushing weight of regulation that plagues housebuilding – not adding to it.
Such a policy would not only provide a general incentive, but it might also create a niche for smaller developers (of which the UK has relatively few, due to our arbitrary planning system) who might be more interested in taking forward small developments on grey belt sites rather than relying on big projects.
It may be that Labour sets these other requirements low enough to make grey belt developments viable; the cautious welcome given the idea by the sector suggests it hopes this is so. But given the way MPs broke the back of HS2 with thousands of straws, the precedent isn’t promising.
Remember too that the relevant comparison isn’t merely whether grey belt land is theoretically easier to develop than green belt land. We have few developers, a parts-and-manpower bottleneck and shortage prices: developers do not develop all their prospective projects at once (thus the conspiracy theory about ‘land-banking’). The question is whether a developer with several potential projects to choose from would choose a grey belt development over another option.
Yet the policy will probably founder before it even reaches that hurdle, because just as with new towns, Labour seems to be hoping that a bit of new policy architecture will be enough to get councils to do what they already have the power to do, but do not want to do.
Starmer’s go-to example of the sort of thing he’s trying to stop – the blocked redevelopment of a disused petrol station in Tottenham – is entirely down to a decision by Haringey’s planning committee. If they’d wanted to develop it, they were and are free to do so. They don’t.
The Labour leader’s proposal to break this deadlock is… creating a special category of land that is especially onerous (compared to other options) to build on.
But how will Starmer create it? He doesn’t say, but in the absence of some very novel legislation I’m told the most likely option is that the grey belt will be incorporated into the National Planning Policy Framework, and thus local authorities will be forced to designate grey belt areas and incorporate them into their local plans.
All that is yet more process (any changes to the NPPF will likely need to be consulted on and take at least a year to bring in) for uncertain returns. Despite the best efforts of the outgoing government, many councils have stubbornly refused to even draw up local plans. Even if they do, councillors and planning officers will still have huge scope to block concrete proposals on a case-by-case basis.
Starmer could go some way towards breaking this logjam by reimposing central targets (foolishly abandoned by the Tories) and being energetic about sending in the commissioners when councils refuse to draw up their own plans. This might see local authorities start designating grey belt, if only to avoid granting permissions in other areas – although that simply steers the policy back onto the shoals of Labour’s everything-bagel planning requirements.
Ultimately, the problem is that Labour is the wrong party to tackle the scourge of urban nimbyism. While there are plenty of true-blue Tory shires in need of new housing, the heart of the housing crisis is in London and our other major cities – and the principal culprits are Labour councils. That’s why it was so unpardonably stupid for the Conservatives to let a handful of MPs in doomed suburban marginals dissuade them from radical action on urban planning reform.
Perhaps all this will deliver some houses, which is better than no houses. But for all the bold talk about taking on the planning system – and how totally in Labour’s interest it would be to brute-force as much new housing as it can in the country’s commuter belts – it looks as though the party of regulation simply cannot or will not accept that this crisis is beyond the power of a few new rules or an extra quango to solve.
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