As Cameron and Clegg announce new rules to 'kick start' the economy, John Humphrys asks if the new plans are enough
With his ministerial reshuffle behind him, the Prime Minister is now concentrating on the single issue most likely to determine the fate of his government: how to get the economy growing again. Or at least that is what David Cameron claims he is doing. He and his deputy, Nick Clegg, have announced a package of measures to get planning officers 'off people’s backs' in the hope that it will 'kick-start' the economy. But do planning rules hinder growth? And will these changes be sufficient to get the economy out of recession?
There has long been a belief in government that the planning system has become so much more complex over the years, as governments of all colours have added bits and pieces to it, that it’s been responsible for dragging down the economy by placing obstacles in the way of those who want to do things. It is certainly true that getting approval for big infrastructure projects such as power stations, major roads, airports and the like seems to take an inordinate amount of time. Quite right too, some people would say, since they affect large numbers of people and the consequences of getting the decision wrong are felt for generations. But for those anxious to get the economy moving, the system has seemed hopelessly obstructive.
From the moment it came into office the Coalition Government was determined to do something about it. It set up a review which came to the conclusion that while planning decisions should take into account the need for developments to be 'sustainable' there should also be 'a presumption in favour of development' guiding those who took the final decision.
This generated fierce opposition, especially among those who feared that there would be uncontrolled development of those parts of the countryside not protected by restrictions such as the national parks. The National Trust was particularly vociferous and the Government seemed to be modifying its plans in ways that seemed to placate its opponents.
But the economy has been essentially stuck in the doldrums for nearly a year or so. Indeed this week the OECD has downgraded its own forecasts for the British economy. Back in May it was expecting it to grow by 0.5% this year (itself a dismal figure in relation to the long-term trend growth rate of about 2.25% a year). Now it says the economy will actually shrink by 0.7% in 2012. The construction industry has been especially badly hit – and that’s where the Government is concentrating its focus.
It’s planning to make £40bn available in government guarantees to underwrite private sector infrastructure projects and a further £10bn to underwrite the building of new homes. It’s extending its FirstBuy scheme to help 16,500 first-time buyers who can’t raise the deposit mortgage-lenders require. And it plans to spend £300m in building 15,000 affordable homes and bringing 5,000 empty properties back into use.
But it’s the changes to the planning rules that will be most controversial. David Cameron said: "This Government means business in delivering plans to help people build new homes and kick-start the economy. We’re determined to cut through bureaucracy that holds us back. That starts with getting planners off our backs, getting behind the businesses that have the ambition to expand and meeting the aspirations of families that want to buy or improve a home."
However, the Local Government Association, which represents local councils responsible for most planning decisions, says it’s not true that the planning system is holding back the construction industry. It pointed out that there are projects that have already been given planning approval to build 400,000 houses and they are being held back for quite other reasons. So relaxing the planning rules may have no effect on increasing building in the short-run while, in the long run, the sort of blight planning is supposed to prevent will be more likely to happen. By contrast the National Housebuilders Federation said the Government’s new ideas were ‘a major step forward’.
One measure will be to relax the current rules whereby property developers are obliged to include a proportion of affordable housing in any new project. Where it can be shown that this requirement makes the overall project economically unviable, the obligation will be lifted.
Another measure will be to make it easier to build extensions. At the moment, under what’s called 'permitted development', owners of detached houses can extend their properties by 4 metres (and people in other houses by 3 metres) without having to seek planning permission. The Government intends to relax this limit to 8 metres and 6 metres respectively. This, they hope, will give a boost to the construction of such home improvements as conservatories and loft extensions. Similarly shops, offices and industrial units will be able to expand their floor spaces more easily without requiring planning permission.
The Government clearly hopes this will act as a spur to people wanting to improve their homes and employ the construction industry to do so. But critics say we must have planning rules to protect us all in the long-term. They say the very fact that the Government proposes to lift these restrictions only temporarily proves that their value in the long-term is recognised. The trouble is, they point out, that their temporary suspension could have the very bad long-term effect of disfiguring our environment permanently without actually having much effect in the short term on economic growth.
Labour says the measures are 'not up to the scale of the challenge' and that the real cause of the continuing recession is 'lack of confidence and demand in the economy'. It itself is engaging in a major exercise in head-scratching about what to do because it believes the situation requires the sort of radical change in economic policy that we saw after the second world war and at the of the end of the 1970s.
Certainly the OECD’s view (and the Government does not disagree) is that the continuing crisis in the eurozone and the rise in commodity prices constitute the main reason why the British economy, like most other developed economies, is so stuck in the rut.
In this context critics of the Government’s changes to planning regulations say they will have negligible effect on growth but could well lead to the sort of unregulated building blight the system has always been intended to prevent. Its supporters, however, will say that surely every little helps.
What’s your view?
- Have planning rules stood in the way of building developments you have wanted to make?
- Have they been helpful to you in preventing developments you did not want to happen?
- Do you think the Government is right, in general, to want to ease the planning rules?
- What specifically would you like to see changing?
- Do you agree with the Government that the rules requiring developers to include affordable homes in their plans should be relaxed where they might jeopardise the prospect of the whole development going ahead?
- Do you agree that the rules governing permitted development should be relaxed in the way the Government proposes?
- Do you think the measures the Government has announced will ‘kick-start’ the economy or not?
- How worried are you, if at all, that the relaxation of planning rules could lead to a blighted environment both in urban and rural areas?
- And what do you think the Government should do, if anything, to promote economic growth?
