In Rachel Reeves’ first speech as Chancellor, Labour set out plans to rebuild Britain in its bid to make every part of the nation better off.

Christopher Worrall is a housing columnist for LFF. He is on the Executive Committee of the Labour Housing Group, Co-Host of the Priced Out Podcast, and Chair of the Local Government and Housing Member Policy Group of the Fabian Society. 

The housing and planning lever has firmly been pulled less than a week into a new Labour government with major housing and infrastructure announcements the central pillar to kickstart economic growth. The planning revolution proposals have been backed by a recent report from the Tony Blair Institute, highlighting the potential substantial economic gains from unlocking housing reform. Labour YIMBY (Yes in my Back Yard) was also launched, the event dubbed Boozing In Our Back Yard by Politico, in Westminster where speakers praised the announcements to get Britain building again. Yet supply sceptics outside YIMBY circles have responded with criticism, citing ideological reasons as to why they believe they won’t work. Many of which, have been rebutted by supporters of the changes.

In Rachel Reeves’ first speech as Chancellor, Labour set out plans to rebuild Britain in its bid to make every part of the nation better off. Reeves decried how the economy had been held back “by decisions deferred and decisions ducked”. Condemning the previous administration that had put political self-interest ahead of the national interest.

For a first speech from a Chancellor, this was what YIMBYs across the divide had been waiting for. Restoration of housing targets, now made mandatory, consultation on a growth-focused approach to the planning system through changes to the National Planning Policy Framework (NPPF), as well as the announcement of a new taskforce that will be created to accelerate stalled housing sites, naming projects totaling over 14,000 homes. Support for local authorities was also announced with 300 new planning officer jobs across the country. New powers for direct intervention in the planning system for ministers. Universal coverage of local plans. Reviews of green belt boundaries. Priotising brownfield and grey belt land for development to meet housing targets.

All of which, set out to increase the delivery of affordable homes, including more for social rent. Infrastructure and energy featured heavily, with decisions on infrastructure projects prioritized that have sat unresolved for too long. In addition to updating National Policy Statements and intentions for critical infrastructure, with the ban on on-shore wind lifted and consultation announced to bring it back into the Nationally Significant Infrastructure Projects (NSIPs) regime.

The Tony Blair Institute’s recent report, The Economic Case for Reimagining the State, demonstrated the shift towards in depth analysis of Britain’s economic woes from the days its housing research was headed up by supply-sceptic Ian Mulheirn. Housing reform featured heavily, acknowledging how planning restrictions have led to major housing shortages, in particular in Britain’s most productive cities. Stifling labour mobility and weakening agglomeration effects, in turn holding back growth. It cited how labour shortages in the housebuilding industry may hold back some of the desired impacts of planning reform, while suggesting the economy could be boosted by 3 to 4 per cent of GDP over the course of a decade. 

Co-Chair’s Marc Harris and Shreya Nanda led speeches at the launch of Labour YIMBY, highlighting the need for the reforms and speaking to a bursting room in Walker’s of Whitehall. Sponsors College Green Group and the LPDF had speeches made by Hanad Darwish and Labour YIMBY Executive Committee Member, Eve McQuillan.

Newly appointed MP for Burnley, Oliver Ryan made a keynote speech after introduction by the first YIMBY in parliament, Andrew Western. Brent Cabinet Member for Regeneration and Planning Shama Tatler, who recently ran in Chingford and Wood Green, rallied the YIMBY movement through calls to get more involved in local politics and the planning system, emboldening future politicians to the cause. MP for Milton Keynes North, Chris Curtis, also attended in support of the group, citing housing as a key issue for his constituents. Co-founder Kane Emerson from YIMBY Alliance spoke, while Siddo Dwyer, author of the Learning from Lower Hutt City contribution in the Homes for London report, had his calls for a more representative consultation process echoed by myself to the packed room.

Notwithstanding the successful launch, some controversial opinion was made on The News Agent Podcast by i paper journalist Vicky Spratt, who claimed increased supply wont’ make homes cheaper. The claim was promptly community noted on X, stating that the consensus shows increasing the supply of homes decreases prices, citing research from Professor Christian Hilber and Dr Wouter Vermeulen on the impacts supply constraints have on house prices in England.

Yet this didn’t deter Spratt from claiming this as not a “fringe view”. A claim denounced as “absolutely a fringe view amongst actual experts”, by leading US YIMBY commentator Jordan Grimes. Spratt had cited Toby Lloyd’s feature on an Institute for Government podcast, where the same supply-sceptic argument was made. Lloyd, rumored alongside his former Shelter colleague Rose Grayston to be an incoming advisor to the Labour government, has previously gone on record stating that “liberalising planning rules on its own will never build enough homes to lower the price significantly”.

Previous blog posts of Lloyd’s also claimed “no matter how high house prices rise the market does not respond with more supply”.  It cited a FTI Consulting report from 2012, which had the caveat “the report does not consider the supply implications of specific planning policy regimes”. Nevertheless, it begs the question whether an incoming Labour government, which has pledged to risk short-term political pain and unpopularity to fix Britain’s stuttering economic growth, should be advised by those who do not believe in its endeavour.

Encouragingly, recent empirical evidence from New Zealand has shown that planning reforms does in fact lead to a “substantial impact on housing construction”. Stu Donovan explained how in the eight years since Auckland enacted its own planning reforms, 90 per cent of the 112,000 new consents turned into new housing. The article addressed supply-sceptics in New Zealand, which had found politicians of all stripes condemning a reports recommendations that were argued along the same lines as Spratt and Lloyd. Interestingly, the outcomes from the New Zealand planning reforms found that rents for two and three bed room dwellings in Auckland declined by 20 to 30 per cent in real terms. With no less than two other studies confirming the causal effects of the reforms increasing housing supply.

Meanwhile in Austin – Texas, rents were down 7 per cent. It comes after Austin officials loosened restrictions in a bid to ease home prices and rents by allowing more supply. The results show through less restrictive land use regulations the market responds more promptly to house price rises with more supply. The same can be found in Minneapolis, Minnesota. The city found itself at the top of the YIMBY pantheon for being the first city in the United States to enact such meaningful planning reforms to improve supply. The reforms resulted in a demonstrable increase in supply, with rents subsequently falling since approving the Minneapolis 2040 plan in December 2018. Much to look forward to in the UK if Reeves and Rayner achieve their goal of universal coverage of local plans.

All this paints a positive picture for the recent announcements. Bolstering the good news is the potential for Nick Boles to join the ranks, having been mooted to be brought in as Labour’s ‘Planning Tsar’. Interestingly coming off the back of barely two years since announcing his support for Labour back in 2022, having been a Senior Advisor to Berkeley Group. Boles was previously Parliamentary Under-Secretary of State for Planning between September 2012 and July 2014, where he has gone on record stating that “we have historically, for a number of decades, been bringing forward too little land for development” and that “the planning system is at the very heart of the very long term problem”. While in the role he pledged to cut the “abuse” of planning conditions in permissions to speed up housebuilding. He has, however, clashed with Liz Truss previously over allowing the state to compulsorily buy land for a price that excludes the potential for future planning consent. This being when the idea was proposed by Labour back in 2018.

Matthew Spry of Lichfield’s recently wrote in The Times how Labour has fired the starting gun on the race for planning reform to build 1.5 million homes this parliament. He said how the measures reflected the “reality that ministers can achieve an awful lot through statements of policy and how they invest their time and effort, without new legislation”. Spry noted that the current Labour government is pursuing a “50 per cent increase in the rate of housebuilding from that achieved by the Conservatives”. In the article, Spry cited analysis by the CMA, which indicates to build 1.5 million new homes will require permissions for at least 1.8 million. The equivalent of 375,000 consents per annum over 5 years.

Last year consents were issued for 233,000, while nearly 40 per cent of local planning authorities did not have enough deliverable land to meet their five-year targets. It comes alongside the fact that by next year up to only 25 per cent of areas will have a local plan that is up-to-date. A requirement that is crucial to enabling the allocation of land for development in a given area. Spry acknowledged that the policy ambivalence of recent years has made decisions less predictable, while deterring investment in new projects. Something, in my opinion, the Labour government has sought to grasp from the get go in its bid for economic prosperity.  

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