Homes: Existing Communities

Lord Wolfson of Aspley Guise Excerpts

Thursday 12th December 2024 Grand Committee

Asked by

[Lord Wolfson of Aspley Guise]

To ask His Majesty’s Government what steps they are taking to increase the supply and improve the quality of the homes people want, in the places they want to live, whilst ensuring that development does not adversely affect existing communities.

[Lord Wolfson of Aspley Guise (Con)]

My Lords, I start by saying how much I appreciate the opportunity of debating this subject in Grand Committee today. I pay tribute to the collective wisdom of the House; I know many Members have spoken before on this subject. I has taken me a year to get to this point, so I am very excited to be here at last.

One statistic tells us everything we need to know about the debilitating effect of our planning system: in the south-east of England, one acre of agricultural land without planning permission is worth around £15,000. That same land with planning permission is worth a minimum of £1.5 million. At a time of anaemic growth in our economy, the Government literally have the ability to create billions of pounds’ worth of value at the stroke of a pen. Of course, the effects of our planning system are not just economic. The UK’s housing market is socially divisive and deeply regressive and transfers wealth from young to old, poor to rich, north to south.

The sky-high cost of building land has one other perverse effect: it means that money that should be invested in quality, design, space and parkland is instead spent on acquiring land and getting planning permission. It should therefore be no surprise to us that new buildings are unattractive, always overpriced and, most importantly, unpopular. There is a vicious circle. We have created an anti-building system that makes building unpopular, so the Prime Minister’s ambitious and courageous efforts to build new homes should be applauded, as should the Deputy Prime Minister’s determination to release a fraction of London’s green belt, an area that is more than twice the size of London, for the homes that London desperately needs. I am encouraged by their enthusiasm, but I worry that these initiatives will have little or no impact. They certainly will not deliver high-quality homes in the places people want to live at a price they can afford.

It is instructive that in his recent article in the Times the PM exhorts,

“Whitehall, housebuilders, councils and everyone else to stretch ourselves to the max to meet the scale of the challenge we face”.

We have to ask ourselves why are all these disparate groups —bureaucrats, developers, Whitehall and communities —so obstructive? No other market in the UK requires the Prime Minister to urge all the actors involved to do better. The Prime Minister does not need to cajole the food, clothing, electronics or furniture markets into delivering better quality. I was encouraged by the Statement by the Housing Minister today. It was a positive step, but does it not strike noble Lords as strange that the Government are planning to spend £3 billion to help private housebuilders build houses at a time when the system is locking up so much value in unnecessarily expensive land? It is like the person who is wounding you offering you free plasters at the same time.

We seem to forget that the rules against which the Prime Minister believes we should all be stretching ourselves to the max are rules of our own making. We are being urged to fight a system of our own creation. There is a very simple and powerful reason why, since its introduction in 1947, planning has consistently produced fewer, smaller, denser, uglier, less desirable homes than we want. Every reform has begun with the implicit assumption that development needs to be planned by government. We have created a system that controls the supply of land and dictates where we live, what type of houses we live in and where we work and shop. However, government, at every level, national or local, simply does not have the requisite knowledge, incentives or resources to do that effectively. No guiding mind ever could.

That planned economies do not work seems to be a lesson the world never tires of learning. We plod through the standard list of excuses for failure: blame the plan, blame the planners, the developers and the blockers, blame everybody you can. The problem is not the people involved but the system that they have to operate within. Those excuses are symptoms of a deeper truth: planned economies do not deliver, and the UK’s housing market is no exception.

To use a building analogy, our system of building control is built on the wrong foundations, so changing the wallpaper and putting in a new kitchen will not suffice. The 1947 Act needs to be demolished and rebuilt on better principles, ones that achieve the aims which we all, ultimately, want planning to achieve: to have better quality, more spacious and functional homes in the places we want to live, surrounded by the land that we enjoy living in. I suggest that we need to start with an entirely different presumption: a system that starts by presuming that all land is developable but, crucially, subjects building to strict principle-based rules and regulations that protect the legitimate interests of existing communities and the natural environment. At one stroke, such a system would release millions of acres of land for development, dramatically reducing its cost while increasing the numbers of houses built and their quality, along with reducing costs to consumers.

Some people might assume that such a reform—the abolition of top-down planning—would be a free for all. Unsurprisingly, and perhaps fairly, such a suggestion conjures up images of a dystopian race to the bottom, with a nation covered in concrete. But there is a middle ground between top-down planning and a free for all: the same type of system that regulates virtually every other successful economic activity in the world, from food to cars, computing to clothing and chemicals to crops. It is having carefully regulated free markets, with systems that permit growth but prevent the sort of development that undermines the value of existing homes.

A new system of pro-economic, pro-quality building control will take time to formulate. Noble Lords will be delighted to know that I do not have the time to go into the detail of what that system would look like, but let me start with three principles that should be at the heart of any new regulatory system we might consider.

First, and most importantly, there is the “love thy neighbour” principle. This simply insists that development does nothing to materially devalue neighbouring homes and businesses—a principle that goes right to the heart of what people fear most about new development, and one that would incentivise the building of high-quality homes that look nice and therefore do not devalue the property around them. Not only do they not do so, but good developments actually enhance the value of incumbent properties.

Secondly, there is the “carry your weight” principle. This would require all new development quite simply to leave the infrastructure that it finds—roads, drainage, rail networks and more—in the state in which it was found or better.

Finally, there is the recognition that a great deal of land in the country is of communal value. It has special value to communities, so local councils should have the ability to designate that land as having outstanding community value, and that land would have the sorts of restrictions that we currently apply to all land. However, we would not need those restrictions because there would be so much other good land around that there would be no need to destroy areas of natural beauty. That is another great problem of the scarcity that we create in this country: it encourages the building of homes in places where people least want them.

One might justly think that these three principles are already embodied in our planning system, but that would miss the point. The system I am proposing is fundamentally different: it starts at the other end of the telescope. Rather than government seeking to force, cajole and plan the development of good building, it would instead focus on preventing bad building and leave the vast resource we have at our disposal as a nation—the creative energy, intelligence, initiative, capital and innovation of the nation—to deliver the great buildings that we desire.

Before 1947, such a free market system existed in broad terms; it delivered the architecture, streets, cities and towns that we love and cherish today. Let us have the courage to start afresh, release the vast store of wealth tied up in land that we currently squander, put more trust in each other, love the future as much as we love the past and return this nation to another age of great building of which we can be proud.