by Vivian Linacre
We are all aware by now of a crisis in the administration of our system of town and country planning, a crisis as acute as that afflicting State education or the National Health Service. The Secretary of State for the Environment has provoked the opposition of local government on three fronts: (a) by calling in more applications and upholding far more appeals; (b) by imposing more quangos that usurp local authority functions; and (c) by dismantling strategic planning with no prior commitment to any form of replacement nor any long-term policy for reform of the structure of local government itself.
The planners — councillors and officials alike — are largely demoralised. The conservationists and the development industry are in perpetual conflict; but only half-heartedly, for they are equally bemused by the lack of central direction. How strange it is that Mr Ridley, while overwhelmed with his own departmental problems, was yet burdened with the colossal distraction of presenting and implementing a highly contentious new form of personal taxation — the community charge — that has nothing at all to do with the environment.
Not quite so surprisingly, it was left to the Chancellor of the Exchequer to introduce the only sensible new housing measure: the extension of the Business Expansion Scheme to residential development for letting, although this initiative is still subject to several unnecessary restrictions.
The long-running crisis in housing has of course been severely exacerbated by the recent crisis in planning. In terms of economics and political management, planning and housing are two sides of the same coin; but whereas every government since 1945 has contributed towards the housing disaster, this planning debacle is the present regime’s very own.
Our national press is obsessed by the issue of development in the green belt or on green land around London, because of the pressures to enlarge the market for tax-free capital gains generated by the combination of (i) tax relief on mortgage interest and (ii) an absolute shortage of modern housing, greatly worsened by the failure of this government and all its predecessors to liberate the market in rented housing. (As the leading article in this journal concluded on January 23: “The Government, however, with a golden opportunity for radical reform of the Rent Acts, is squandering the potential with a weak-kneed (and misguided) reliance on shortholds and assured tenancies.”)
Within the last 10 years the number of mortgagors has nearly doubled, from about 5.5m to some 9m, while the amount borrowed has more than quadrupled, from £39bn to £166bn at the end of 1987. The danger which this massive debt poses to the UK economy is scarcely recognised. If a fraction of that amount had instead been invested by institutions (operating in a free market) in new leasehold housing, especially in central urban areas, catering for young couples and the elderly as well as all those in the service industries on which the running of cities depends, then the pressure on the country’s green belts would never have arisen … and the “Inner cities’ crisis” would have been solved into the bargain.
As it is, we suffer the worst of all worlds. A rise of only 1% in real personal disposable income produces an increase of more than 2% in house prices, because the extra spending power funds additional mortgage borrowing which in turn forces up property values.
House price inflation reinforces labour market immobility, drives out the local populace from suburban fringes and the market towns as commuters migrate outwards, and widens the disparity between the prosperous South East and the rest of Britain. The nation is paying a ruinous price for the Government’s funking the decisions to phase out both mortgage interest tax relief and the Rent Acts.
From the 1780s to the 1880s, industry attracted the masses to the North. The pull to the South East in the 1980s is absurd in both economic and environmental terms. Industry and commerce should flourish where land and labour costs are relatively low, while society should place a higher value on the countryside where it is relatively scarce.
But these fundamental laws have been overturned by (i) the ever-intensifying concentration of government and institutions in the metropolis, (ii) the huge growth in the financial services industry focused on the City and also in the new hi-tech industries attracted to the Home Counties by sheer amenity and convenience (easy access to international airports and to Europe as well as to everybody else based in the capital), (iii) the Government’s abandonment of regional planning which has accelerated all these trends and (iv) the popular stampede for windfall profits from trading homes.
If only 1m of the new houses required to be built before the year 2000 involve local battles between district authorities and developers, with the Secretary of State intervening at will, then — as Professor Peter Hall of Reading University reminded a recent Institute of Economic Affairs conference — “at, say, 5,000 houses a time it is going to be an extraordinary costly and time-consuming business”.
Last year the ISVA published a report entitled The Future of the Planning System (in response to the DOE’s consultation paper on the development plan scheme) in which it proposed the establishment of single-tier local government by the abolition of county councils, and the appointment of Regional Planning Commissions to coordinate the various district councils’ development (or unitary) plans.
These commissions would also act as development agencies, bringing land forward for assembly and designation and servicing and appropriate disposal, paying special attention to the allocation of sites for the voluntary housing movement.
Furthermore, the commissions would promote the merits of their regions for the attraction of industrial investment and dispersal of bodies within both public and private sectors out of London.
These proposals offer the most coherent and far-sighted reforms to the planning system that have yet appeared. They therefore deserve far wider consideration.
They would depoliticise the local planning process, restoring the wider public good as the sole priority, while protecting the district authorities from Westminster’s capricious intervention and arbitrary dictation. The protagonists could work in peace together, and we would have a proper framework within which the whole nation could live and flourish.