Amendment of the Law

Alan Whitehead Excerpts

Monday 28th March 2011 Commons Chamber

[Mr Pickles]

The hon. Lady will be aware that we have abolished the density targets, which led to a glut of flats. We will ensure that the market decides a reasonable mix. That seems to be a more sensible and reasonable way of going about the process.

For too long, the planning system has been a source of friction between councils, communities and businesses.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Will the Secretary of State give way?

[Mr Pickles]

In a moment. The purpose of the planning system is to ensure that the country benefits from the right kind of development—not to frustrate and delay, and generate endless paperwork. The Budget therefore confirms fundamental changes. By the end of the year, we aim to condense the morass of unwieldy national planning policies into one concise, easy-to-use document.

At the heart of our approach to planning is a presumption in favour of sustainable development. We need a system that consistently and predictably says yes to the right kinds of development. We will consult on plans to streamline the information required to support planning applications. We will introduce a planning guarantee so that no planning application will spend more than 12 months with decision makers, when a timely appeal is made. We will consult on proposals to bring empty commercial buildings back into use as residential properties. Let us cut the red tape and make it easier to turn run-down old eyesores into much-needed new housing. At the same time, we will maintain protection for the environment, including by safeguarding the green belt, which was under threat from Labour’s regional plans.

[Dr Whitehead]

rose—

[Bob Russell]

Will my right hon. Friend give way?

--- Later in debate ---

[Mr Pickles]

The coalition agreement is not quite holy writ, but it is pretty close to it, so of course those paragraphs will be included.

I apologise to the hon. Member for Southampton, Test (Dr Whitehead) for not giving way earlier.

[Dr Whitehead]

Does the Secretary of State consider that his abandonment of the code for sustainable development and the target for zero-carbon home building by 2016 will aid sustainable development, build more houses or merely build less worse houses?

--- Later in debate ---

[Dr Alan Whitehead (Southampton, Test) (Lab)]

This Budget trumpets much about growth, and indeed accompanying it we have a whole White Paper, “The Plan for Growth”, which claims to set the seal on those aims so loudly trumpeted. In truth, however, the Budget contains very little that, in the real world, stimulates economic activity or, in a time of deficits or depression, shows any sign of moving the economy forward so that the Government can tackle the deficit other than by just cutting everything they can lay their hands on.

That is a conundrum. Unless all those measures are a cynical put-on, the Government obviously believe that they are setting out a path for growth. They have, as a default position on the economy, chosen a particular path that they believe will, if followed, lead to growth. In technical terms, that assumption is called the Ricardian equivalence: the assumption that Government borrowing is essentially deferred taxation; and that, even in a depressed economy, it is important to send out a signal that the Government will not borrow, so that people discount what they had set aside to cope with what they saw as deferred taxation and, instead, invest and spend, thereby miraculously bringing about growth, deficit reduction and so on. In reality—and in previous depressions—the opposite is usually the public’s reaction, but we will pass that by.

Then, the public, once they are cured of the unhealthy habit of holding money back to deal with perceived deferred taxation, must also have regulations and other matters stripped away if they are to invest and spend. Hence it is necessary to pull apart regulations, collapse planning impediments and so on.

This Budget sets out that false premise admirably, although some of the zeal with which it is being pursued is, to say the least, a little alarming, especially as I imagine the Government still believe that growth should be low-carbon growth in order for them to be, as the Prime Minister has stated “the greenest Government ever”.

The removal of most housing targets and the new announcement of the removal of any prescribed level of house building on brownfield sites, which I am sure is bad news for the hon. Member for Colchester (Bob Russell) and the fields near his constituency, both follow from the philosophy of pulling down regulation so that the private sector can supposedly rush in to invest where the public sector has withdrawn. That must come as a shock, however, to anyone who believed for example that being the greenest Government ever implied some view about the merits of arbitrarily concreting over at a random cost to the environment and to carbon emissions targets.

Two other planning and investment decisions in the Budget must come as a similar shock. The green investment bank has been downgraded to a “fund” for the foreseeable future, so even the merits of the private sector investing in the bank have been eschewed in favour of its functioning as a bank only, as the Budget papers state,

“once the target for debt to be falling as a percentage of GDP has been met.”

In other words, “After all these good people have rushed in and invested to replace the loss of public sector funds, then we might consider some public sector-based funding, even if it is with private money, at a point when the prime need will have passed anyway.”

Not the most significant measure, but perhaps the most shocking—indeed, the measure in the smallest print—is the decision to remove the target to require homes to be built on a zero-carbon basis by 2016, as the Government say:

“To ensure that it remains viable to build new houses”.

Not green, not worried about quality or longevity—anything goes so long as the theory of Ricardian equivalence is upheld. The Government are also apparently holding discussions with industry to see how the principle of the green deal can be extended to new homes. The code for sustainable buildings has been taken out and shot, and B&Q is now going to come in and put the roof on our houses once they are built. Even if that supposition were to be taken just a little seriously, then the signal that has already been loudly given out that spending is to be cut savagely and that the fear of deferred taxation is no more should have started to bear fruit. However, it has not, and that, among other things, is why the Government have had to downgrade their growth forecast so significantly. Consumer and business confidence has collapsed and stays at a very low point. Unemployment is rising, house prices are uncertain or falling, and we had negative growth in the fourth quarter of last year.

Let me give a palimpsest. In my constituency, virtually all the day centre schemes for the elderly are to close in mid-April because the money has been cut. According to Ricardian equivalence, that is a signal to get these old people on their feet and investing in their own facilities—perhaps a private entrepreneur could come in and invest in a gap in the market—but of course that is not going to happen. Jobs are being lost, old people are staying indoors instead of going out and about, and ill-health among elderly people is likely to increase. In short, it hurts but it certainly will not work. No amount of flannel to disguise what an empty set of propositions this Budget, this plan for growth and this massacre of planning and sensible regulation consists of will pass muster. It really is time for plan B, or at least to start reading rather more sensible economists.