Chancellor unveils a new era for economic growth

The new Chancellor has promised to take immediate action to fix the foundations of the economy, rebuild Britain and make every part of the country​ better off.

In her first speech as Chancellor, Rachel Reeves pledged to leaders of some of the UK’s pioneering industries to build growth on strong and secure foundations built on stability, investment and reform, and forged through a new partnership with the private sector.

Taking decisive action, the government announced a series of measures to lay the foundations for a dynamic, modern and growing economy, including taking urgent steps to build 1.5 million homes over the next five years and the immediate removal of the de facto ban on onshore wind in England, as part of its clean energy mission.

Deputy Prime Minister Angela Rayner said: “Our country is under new management and a new era for economic growth will be built on secure foundations.

“The Chancellor and I will work in lockstep to kickstart the economy, unleashing housebuilding and powering local growth.

“Change starts now. We will unblock the bottlenecks and drive forward a transformational package to build the homes people need.”

The government is taking swift action on its central growth mission by announcing the following:

Planning

The government will identify and unblock key ‘stalled sites’ to get large housing schemes moving forward, starting with four sites across England to unlock over 14,000 homes: Liverpool Central Docks, Northstowe, Worcester Parkway and Langley Sutton Coldfield.

The Chancellor has also welcomed the Deputy Prime Minister’s commitment to make the economic benefit of development a central consideration when intervening in the planning system.

To facilitate this new approach, the Deputy Prime Minister will also write to local mayors and the Office for Investment to ensure that any investment opportunity with important planning considerations that comes across their desks is brought to her attention and to the Chancellor’s. This will help to ensure the planning system can unlock major schemes from clean energy projects and transport infrastructure to film studios and art-entertainment venues.

The Chancellor has also confirmed that the government will support local authorities with 300 additional planning officers across the country.

Further announcements will be made to accelerate the development of housing and infrastructure, including launching a landmark consultation on an updated, growth-focused National Planning Policy Framework to include mandatory housing targets and a requirement to review greenbelt boundaries where necessary to meet them.

These will prioritise Brownfield and “grey belt” land for development to meet housing targets where needed, partnered with new ‘golden rules’ that will make sure the development this frees up will also deliver thousands of affordable homes, including more for social rent.

Critical major infrastructure

The current planning regime acts as a major brake on economic growth which is why the government will make the changes the country needs to forge ahead with new roads, railways, reservoirs, and other nationally significant infrastructure.

The government will set out new policy intentions for critical infrastructure in the coming months, ahead of updating relevant National Policy Statements within the next 12 months to provide certainty to industry.

The Chancellor has asked the Secretaries of State for Transport and Energy Security and Net Zero to prioritise taking decisions on critical infrastructure projects which are with them now.

To go further, to help speed up delivery on infrastructure such as transport and energy, the government will review how it can unlock critical infrastructure, without weakening environment protections.

Alongside this, the government will make sure energy projects are prioritised in the planning system and consult on including onshore wind power developments in the Nationally Significant Infrastructure Projects (NSIP) planning regime.

Martha Lane Fox, President of the British Chambers of Commerce, said: “The commitment to deliver large scale infrastructure at greater pace, especially green energy projects and more housing where people want to live, is very welcome.”

RICS responsed: “It is clear the current planning system is not fit for purpose and we welcome reform to the National Planning Policy Framework to help meet our future housing and energy needs.

“We welcome the government’s announcement on the Grey Belt, a plan which may yield around 100,000 to 200,000 houses. However, a holistic, rather than piecemeal, approach for the Green Belt is required to provide access to green infrastructure, protect biodiversity, and recognize the economic need for urban growth. It must also reflect the constrained capacity of our energy infrastructure, which is increasingly blocking housing production, and RICS is calling for urgent investment in our electrical grid capacity to help support our future housing and infrastructure needs.

“All of these elements will need to be tackled in a coordinated manner and this will be particularly pertinent in Labour’s quest to achieve economic growth. Many studies have agreed on the positive correlation between GDP growth and the availability of homes. If housing delivery is backloaded towards the end of parliament, then the electorate may not see benefits quickly enough.” 

Richard Beresford, Chief Executive of the National Federation of Builders, said: “The NFB has been at the forefront of lobbying for planning reform, so it is exciting to have a government that understands why reforming it will deliver and sustain employment, housing, transport, regional and national strategy, and investor confidence. Tax cuts enable growth because they free up funding, but if money cannot be invested due to anti-growth agendas, it gets wasted on bureaucracy, held back or goes abroad. It is fantastic to have a Chancellor who understands this reality.

“Labour have had a consistent message on planning reform throughout their campaign and it bodes well for the country that they appear to be sticking to their promises – something sorely missing over these last five years. The NFB Manifesto, ‘Supporting Construction to Power Growth,’ contains many planning reform recommendations and we look forward to having a chance to explain them to the new government.”

“The announced NPPF review is a necessary first step in implementing Labour’s promise to reintroduce housing targets and ensure the ambition of the ‘grey belt’ is realised. The new Government has already announced the removal of footnotes in the NPPF that hinder onshore wind development.”

Rico Wojtulewicz, Head of Policy and Market Insight, said: “Labour is correct to review the NPPF because the most recent review removed housing ambition, took powers away from councils to allocate land, increased the discretionary planning process by introducing vague language, and where sensible approaches were introduced, such as National Development Management Policies, powers were taken away to enable them in practice.

“Without planning reform, growth Is either temporary or in sectors without substantial knock-on investment, such as the services sector. This needs to change and we should look at Birmingham as an example of how to do it well.

“With new technologies coming thick and fast and green industries growing exponentially, the UK cannot afford to delay enablement. Labour’s immediate decision to unlock onshore wind projects should give the nation hope that ‘national renewal’ and ‘growth’ are not just slogans.”

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