Planning Reform

Dan Poulter Excerpts

Wednesday 13th March 2024 Westminster Hall

[Sir Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

I beg to move,

That this House has considered reform of the planning system.

The housing shortage that we face in this country is the great crisis facing the United Kingdom today. Since 1973, house prices have more than tripled in real terms, with the average house price today reaching over £284,000. Just in the last 20 years, the ratio of house prices to incomes has more than doubled. The average household faces paying more than seven times their annual income for a home to call their own; in 2000, it was three times their income. For the average individual, the statistics are even starker. The housing shortage means that the overwhelming majority of our young people simply cannot hope to afford a home. It means that people cannot move to be closer to work or to their family, and that people are stuck in cramped, unfit and often unsafe homes throughout the country.

The housing shortfall is strangling our economy and choking off the growth that we need to restore our economic fortunes. Put simply, the housing shortage is making us all much, much poorer. The only solution to this crisis is to build more homes. According to a Centre for Cities report, the UK has a shortfall of well over 4 million homes. Even with the Government’s target of building 300,000 homes a year, that deficit would take at least half a century to fill, and sadly we are nowhere near that number.

Evidence from around the world shows the power of home building to make lives better for people right across the income spectrum. In 2016, Auckland liberalised its planning system and precipitated a boom in housing construction, which resulted in significantly lower rents six years later. Across the Atlantic in the United States, new buildings attracting more affluent residents have freed up the homes that they used to live in, lowering demand and rents for homes across the entire market, even at lower income levels. A Swedish study found that the benefits of new housing are evenly distributed among residents from different income groups.

How we actually get to building more homes is clearly far from simple, but what we do know is that the planning system is not fit for purpose, so how do we reform it to get where we need to go? There is growing consensus across the House that the planning system is holding us back from delivering the homes that are needed. Fixing our outdated, top-down and restrictive processes must now be a priority for both main parties and, I hope, all parties in the House. But how do we do that?

The first and most important thing is to make home building more popular with the British public. When asked, people across the country broadly support the idea of new housing. The 2020 British social attitudes survey found that 58% of Britons want to see more home building, with only 25% inherently opposed, and yet, as colleagues will know, specific house building projects in one’s own constituency always seem to attract far more opposition. Some of that opposition is unthinking, knee-jerk nimbyism, and we should have no time for it, but not all of it is unreasonable. Despite the benefits of new homes, existing residents see very little immediate benefit when development comes to their home area. They do, however, experience real costs, ranging from crowded roads to overburdened GP surgeries, and sometimes they witness low-quality homes being unceremoniously dumped on the edge of their town.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I do not disagree with a number of my right hon. Friend’s points. One concern that people have at a local level in Suffolk, and more generally, about additional house building is that it very rarely comes with the additional infrastructure that he mentions. More houses are built, but more pressure is put on the local infrastructure—on schools, hospitals, GP surgeries and the roads. What does he suggest as a mechanism to change that, so that if people accept more house building, they actually get the infrastructure that is needed?

[Sir Simon Clarke]

My hon. Friend is absolutely right. I have seen that in my constituency, where a new GP surgery in Nunthorpe, a suburb in the south of the town, has changed people’s attitudes to new homes coming in. However, we need to institutionalise that sort of offer to residents. The planning system must deliver a worthwhile settlement that gives residents a reason to say yes to extra homes.

The Government have legislated for one important potential solution: community land auctions. CLAs allow local government to see a substantial share of the profits from new development, enabling local authorities to capture the uplift in value that comes from planning permission being granted. The value of agricultural land can rise by up to 80 or 100 times. The council getting their fair share of that increase in the underlying land value allows them to deliver benefits to local people, which they can then spend on the new infrastructure that my hon. Friend rightly says is essential to make new developments viable. Residents then get to see their fair share of the upside, too, while the country sees homes unlocked with more community support. I hope to see the Government press on and make the most of the Levelling-up and Regeneration Act 2023 by getting trials of CLAs moving quickly, because they have huge potential.