The coalition’s confusion over planning

The government clearly can’t decide between localism and economic growth.

One of the many timeless phrases that the current Baron Prescott of Kingston-upon-Hull gave to the nation – and to his opponents in the Tory press – was his 1999 musing on preventing inappropriate housing development. "The greenbelt is a Labour achievement," he said. "And we intend to build on it."

Scoffing aside, actually Prescott had a point.

He wanted to build homes and, as much as was practical, he wanted the building to be in existing urban areas. His idea was simple: to direct the development that the country needed to derelict land that has already been used.

In 2000 Prescott ruled that 60 per cent of all new homes had to be built on previously used land. He added a raft of guidance making it harder for councils to approve greenfield planning applications if there were empty so-called "brownfield" sites available.

The target was exceeded: 80 per cent of new homes were built on brownfield, saving thousands of acres of green fields from the bulldozer.

In deprived areas the rules ensured that developers concentrated on regeneration, not on suburban luxury homes, which contributed to the hollowing out of town centres. Of course, it was far from perfect, but the principle was helpful.

"Enemies of enterprise"

In Wednesday's Budget, George Osborne abolished this target. Councils are now to be free to decide whether regeneration is important to them.

But this doesn't just put Prescott's legacy at risk by sending a signal to developers that the government doesn't mind if they build unsustainable, out-of-town developments. It also goes to heart of the coalition's confusion over planning.

The reality is that the number of planning applications has fallen every single quarter since "localist" planning reforms were instituted by the Communities Secretary, Eric Pickles, in May last year. Applications are 22 per cent down from a year ago.

In addition, council plans for 217,000 homes have been scrapped. Meanwhile, the Treasury witnessed a 0.6 per cent fall in construction GDP at the end of last year when things were supposed to be improving. Growth is being jeopardised.

David Cameron identified planners as "enemies of enterprise" but others have pointed the finger at Pickles. For Osborne, something had to be done.

Fundamentally the government is struggling to decide between localism and economic growth – between giving power to the blue-blooded nimby Tories of the shires, or to the red-blooded capitalist Tories of the city. The latter say deregulate to allow out-of-town superstores, edge-of-town housing estates and new motorways; the former say no to all of these.

So Osborne will have been pleased to read the plaudits from the CBI, hailing his achievement in tackling the "chronic obstacle" of the planning system.

But those businesses hailing it should read the fine print. His announcement on brownfield (just one small but important part of the package) was actually localism dressed up as deregulation. In fact, the move, giving powers to every council to set its own targets, could be exactly what developers don't want, replacing one rule with 400.

It means leafy shire districts opposed to development will be able to set higher targets to block development from going ahead. This development is essential if the next generation is to be able to buy homes in these leafy surburbs.

Give us a grin, Prezza

Meanwhile, the other planning measures in the Budget are either so unclear as to be uninterpretable, or are reannouncements of existing policies. No wonder the Office for Budget Responsibility had to admit it was unable to identify anything in the package which caused it to improve its growth forecasts.

Ultimately, the Budget simply underscores this contradiction between localism and growth – there is no attempt to solve it. The localist reforms to the planning system, viewed largely with hostility by those expected to build new homes, go on.

No doubt Prescott will have a wry smile.

Joey Gardiner is assistant editor of Building magazine.

Joey Gardiner is assistant editor at Building magazine

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.