Planning and Infrastructure Bill

Viscount Hanworth Excerpts

2nd reading
Wednesday 25th June 2025 Lords Chamber

[Viscount Hanworth (Lab)]

My Lords, the Planning and Infrastructure Bill marks a turning point. An intention has been declared by the Government to pursue a major reconstruction of the UK economy. This intention is conveyed by the Bill.

Many years ago, a Labour Government were faced with a similar task of post-war reconstruction. An austere and purposive Government, under the unassuming leadership of Clement Attlee, faced a task of which the difficulties were widely acknowledged. The Government were supported by an able Civil Service. Its skills had been honed by the wartime exigencies. The Ministry of Supply, which had overseen the procurement of wartime matériel, was replete with technicians and staff who had managed a complex supply chain. The ministry oversaw some leading post-war technological projects, including those of the newly established nuclear industry. It also oversaw the nationalisation of the iron and steel industry.

Equal competence was demonstrated by the Ministry of Transport, which oversaw the nationalisation of the rail network, albeit that little credit was given on this account. Thereafter, the Civil Service was rapidly de-skilled. Its traditional amateurism was reasserted by means of its selection board. By the mid-1960s, critics were complaining of the lack of scientific, commercial and manufacturing skills in the Civil Service.

Current circumstances are very different from those of the early post-war years. The Department for Energy Security and Net Zero, which is charged with overseeing our energy policy, has a dearth of technical expertise. One might expect the department to be dominated by scientists and engineers, but there are few of these. Those in charge of the nuclear policy are graduates with degrees in archaeology, history and the social sciences. Although they can be credited with supporting a nuclear renaissance, there is little understanding of the technological imperatives.

In pursuit of net-zero emissions, it will be necessary for small nuclear plants to become close-up and personal to industrial applications and to clusters of population. Reactors are required that embody fourth-generation nuclear technologies that possess inherent safety. Instead, we are developing pressurised water reactors, both on a massive scale and as small modular reactors. Both pose stringent safety requirements, which must keep them at a distance from the consumers of heat and electricity. We have allowed projects that have been pursuing fourth-generation nuclear technologies in the UK to close or to expatriate themselves to more welcoming countries. A ministry staffed by technical enthusiasts would never have allowed this to happen.

The dearth of commercial experience in the Civil Service is as striking as its technological limitations. This deficiency has been gruesomely illustrated by the experience of the HS2 rail project. It seems that successive Governments who were willing to support the project were content to issue vague outline plans and to rely on the contractors to determine the detailed specifications. Governments were inclined to make changes to the plans without regard to the costs of the resulting disorganisation. The HS2 project has been affected by a planning system that is beset by local objections and demands for judicial review. This has severely impeded its progress. The Planning and Infrastructure Bill proposes to reform a sclerotic system.

There is a tendency to envy nations that have a more forceful regime that can override local objections. If we are not prepared to act likewise, then we must resolve to adequately compensate the affected parties. However, in pursuing the construction of new towns, if that is what we intend, we must make provision for the compulsory purchase of land in a way that will allow its enhanced value to accrue largely to the public authorities or to the development corporations. Otherwise, it will accrue to lucky but undeserving landowners.

I will make one final comparison between the past and present. After the war, the nation was fully aware of the parlous state of the economy and the physical environment. Nowadays, the electorate are less aware of the hazards we face. Our leaders should have alerted them to the realities sooner. The consequence is that we will be blamed for each emerging problem. We will be blamed for the failures in the provision of healthcare and social care, for the bankruptcies of local authorities, universities and institutions of higher education, and for much else besides.

We have been willing to listen to the nostrums of pollsters, spin doctors and political strategists, who were responsible for convincing our leadership that it was dangerous, at an election time, to admit that taxes needed to be raised to finance the reconstruction. That was surely a misreading of popular opinion that made no allowance for the possibilities of political persuasion. The consequence is that we have lost time before embarking on the project, and we have lost some credibility.

High Streets (Built Environment Committee Report)

Viscount Hanworth Excerpts

Tuesday 13th May 2025 Grand Committee

[Viscount Hanworth (Lab)]

My Lords, I too served on the committee while this report was being compiled. I also commend our chairman and our secretariat.

The report testifies to the decline of Britain’s high streets. They have been suffering from the current economic troubles of the nation, which tend to be described as a cost of living crisis, but there are other enduring factors that have contributed to their decline. Among the recent difficulties affecting high streets have been the impact of the Covid pandemic and the rising proportion of online shopping. A less immediate problem has been the development of large shopping centres that have attracted customers away from high streets. This phenomenon has been seen in neighbouring countries, such as France, where large so-called hypermarkets have been built in out-of-town locations. It seems that the detriment of such developments has now been recognised in the UK and that measures are being taken to restrain them.

However, there are other pathologies that have had an enduring effect in the UK. Not the least of these is what might be described as the financialisation of the commercial property market. This process accelerated rapidly in the 1980s and 1990s. The result has been that the ownership of commercial properties is now preponderantly in the hands of financial institutions. These include real estate investment trusts, property companies large and small, pension funds, banks, foreign sovereign wealth funds and many other remote owners.

The assets within the commercial property market are conventionally classified as prime assets and subprime assets. The former include large office buildings and department stores and the latter comprise the majority of the buildings to be found on Britain’s high streets. The salient fact is that the majority of the properties in both categories are not owned by their current occupants. They are owned by parties who are remote from the locations in question and have no day-to-day involvement. The structure of ownership affecting large retail chains and department stores has been revealed in recent years by their financial collapse.

A prime example has been the Arcadia empire of Philip Green, which was created by the leveraged acquisitions of numerous businesses. Existing assets served as collateral for borrowings that were used to finance further acquisitions. In the process, Philip Green accumulated a personal wealth almost unprecedented in Britain. The sources of this wealth were the assets of the businesses that he had acquired. Many of these businesses had owned their own premises. They were sold by Green to the institutional investors of the property market. The consequence was that, when major trading losses arose, the property owners were able to call time on his businesses. There were no resources, other than Green’s personal wealth, available to sustain the businesses during the economic downturn. The truth of the matter was revealed when Green was able to sell British Home Stores for £1, without personal loss to himself, until he was constrained to supplement the pension fund.

The other side of the story concerns much smaller high street businesses that have suffered closure. The committee’s report reveals a startling fact about the landlords and property owners in the high street. A survey of 22 British high streets conducted in 2019 found that only 5.3% of retail and leisure units were owned by their current occupiers. As with much larger businesses, the retailers lacked the capital to sustain the temporary losses occasioned by an economic downturn and the businesses were forced to close.

The properties in question are liable to feature as entries on spreadsheets of large institutional investors, which have little incentive and little ability to quickly find occupants to replace those who are departing. Occupants might be found more quickly if property owners were inclined to reduce their rents; doing so would reduce the number or value of their assets and they would prefer to leave their properties empty for longer.

A further detriment arises from the remote ownership of commercial bodies, which affects their upkeep. Neither the owners nor the current occupants have a sufficient incentive to enhance the properties since any investment undertaken by one of the parties will be to the substantial benefit of the other party. The division of responsibilities for the upkeep of properties is typically determined by clauses in the lease, and these vary widely from case to case.

In Britain, there is a small and diminishing residue of municipal ownership within high streets. If a landlord is a local authority and if they have access to funds, then favourable opportunities for enhancement or the regeneration of a property or the wider environment can arise. However, this is an uncommon circumstance. It is notable that the circumstances are very different in neighbouring European countries. In Holland, for example, large proportions of town centre properties are under municipal ownership, and this is outwardly reflected in the superior upkeep of these locations.

A question to be faced is: what can the Government do to alleviate the distress of our high streets? The answer is that very little can be done, unless local authorities, development corporations and other relevant bodies are given the funds to enable them to undertake significant developments of high street environments. The high streets must be made more attractive, and they must cater to developing circumstances. Amenities must be brought to the high streets to replace the retail outlets that are closing. We have heard suggestions that doctors’ surgeries, libraries, restaurants and leisure activities should be attracted to the high streets. If the high streets and adjacent streets have been cleared of motorised traffic, then adequate public transport must be provided and parking facilities in adjacent areas must be established.

However, the question of funding is paramount. The report criticises the chaotic system of special funds that are available to local authorities, which are invited to compete for them. In many cases, it is too time-consuming for a local authority to make a bid when there is little chance of succeeding. Attempts to reform the system are, I hope, under way. The principal source of funds for local authorities is local taxation, which consists of domestic rates and business rates. We are led to understand that, in the future, 70% of a local authority’s income will be raised locally. A large proportion of this income will come from business rates, of which the councils will keep 50%. This will give them, so it has been said, a real incentive to go for growth and encourage enterprise and job creation.

The problem with rates being raised on properties is that they bear only a tenuous relationship to the income of the householder or to the turnover of a business, and they are often subject to angry resentments. However, it must be a priority to reform the system of local taxation and, in the process, to make it more productive of revenue. This will require the replacement of the rates by local income taxes and local turnover taxes.

Housing: Modern Methods of Construction

Viscount Hanworth Excerpts

Thursday 5th September 2024 Lords Chamber

[Viscount Hanworth (Lab)]

My Lords, the recently elected Labour Government have proposed that there should be mandatory targets for housebuilding that local authorities must adhere to. The ambition is for 1.5 million houses to be built in the current Parliament, with annual targets of 370,000 units.

This target, which far exceeds recent levels of housebuilding, is comparable to what was achieved in the early post-war years. A large proportion of those houses were council houses, and they were subject to direct procurement, financed by local authorities. They were built mainly by small local building firms, which typically employed their labour on a permanent basis. Nowadays, a few large firms build most of the residential accommodation. They hire their labour on a temporary basis. However, the supply of such skilled labour has shrunk drastically. Moreover, the big firms do not undertake to train their workforce.

It has been widely proposed that, in order to accomplish a revolution in housebuilding and to meet the targets, it will be necessary for builders to adopt modern methods of construction. These will involve a substantial proportion of off-site construction in factories with assembly lines. Contemporary methods of housebuilding are slow and wasteful of materials. They also make inordinate demands on a scarce labour force. It is doubtful whether, if such methods were used preponderantly, any of the targets could be met.

The houses that are so urgently needed must be subject mainly to direct public procurements. Much of the new housing stock would therefore remain in public ownership, albeit that the right of the occupants to buy their houses should be preserved. It was an ideological aversion to public ownership that inspired the Thatcher Governments to promote the right to buy, while preventing councils from investing the proceeds from the sales in replacement buildings. This has been a major factor in creating the current housing crisis.