Foreword Political debate around planning is dominated by the myth that land in the UK is a scarce resource. The result is a system that strictly rations a commodity in bountiful supply. In an earlier report Alan W. Evans and Oliver Marc Hartwich brilliantly exposed both this myth and the forces that keep it alive, not least the contribution that urban densification has made to perpetuate the misconception of an overcrowded island. The effect of this artificial rationing on our economy cannot be overestimated. If wealth creation is about making things of value, and for most people their homes are their most valuable possession, then a system that rigorously prevents the construction of better homes must inhibit wealth creation. So far, the impact of land rationing is too indirect on people’s everyday lives to create the required political pressure to force change. The connection between soaring house prices and restricted supply is little understood. Government has even attempted to engineer affordable housing through further restrictions to development – with the ironic but inevitable effect of increasing house prices! Even less understood is the effect that our restricted housing market has on interest rates. Limited supply of housing means that economic growth in the UK tends to create disproportionate increase in house prices. In turn, this inflationary pressure contributes towards a need for higher interest rates. The argument in favour of quicker, simpler and less restrictive planning will be hard to win. Those sympathetic to house building are caricatured as wanting to “concrete over” the whole country. In fact using less than one percent of rural land would be sufficient to increase land available for housing by more than ten percent! This equates to less land than is currently designated as agricultural set-aside. The
battle can only be won through the slow process of breaking down prejudice using persistent and rational argument. To this end the Evans and Hartwich series on planning has made significant headway by providing a clearly researched and well argued case in favour of a different approach to planning.
There is even a danger that we get so used to the “ delays and inconsistencies of our planners that we cease to see it as a problem ”
This report takes the argument one step further by demonstrating how the UK’s restrictive planning regime undermines the competitiveness of our economy by increasing costs, reducing choice and inhibiting flexibility. To many of us involved in commerce, frustration with the planning system is an accepted fact of life. There is even a danger that we get so used to the delays and inconsistencies of our planners that we cease to see it as a problem. My own place of work has been forced to build a multi-storey car park (at huge expense), while un-farmed scrubland, complete with electricity pylon and motorway view, is “conserved” right next door! Even when the answer is favourable, the time taken to make planning decisions in itself slows down our economy. A shop opened six months late as a result of a planning enquiry is six months lost profit. In the time it took Hong Kong to build a new airport the UK could not decide whether to build an extra runway at Heathrow! The time value of planning delays is never quantified but must undermine our ability to compete in a global market. The more I think about it the more I believe that the debate about planning is really a debate between optimists and peswww.policyexchange.org.uk
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