Chancellor of the Exchequer Rachel Reeves has unveiled the government's "Plan for Change" announcing a string of major commitments aimed at unblocking the planning system, growing the economy and ramping up housing, infrastructure and commercial property development.
Speaking to an audience of business chiefs at Siemens in Oxfordshire, Reeves said the government would go "further and faster" to unlock economic growth. She lambasted the UK planning system, saying she had been "genuinely shocked" by its slowness, adding that the government was pushing through its Planning and Infrastructure Bill to unblock applications. She said developers would now pay into a Nature Fund as they should not have to worry about "the bats and the newts".
A standout announcement was the backing of a "badly needed" third runway at Heathrow Airport. Reeves said she wanted the contentious proposals brought forward by the summer, saying it could create 100,000 jobs. The Chancellor confirmed the government will review the Airports National Policy Statement, which provides the basis for decision making on granting development consent for a new runway at Heathrow.
The Chancellor also announced a partnership between global logistics giant Prologis and East Midlands Airport to build a advanced manufacturing park within the East Midlands Freeport zone to unlock £1 billion of investment and 2,000 jobs. MAG (Manchester Airports Group), which owns and operates East Midlands Airport (EMA), separately confirmed Prologis as its partner to take forward the development of the new industrial logistics and advanced manufacturing park.
The park is a designated East Midlands Freeport tax site, south of the airport, offering operators the option of tax and customs relief and simplified import and export procedures. A planning application for the park has been submitted to the local council.
MAG is looking to work in partnership with Prologis to establish its three major airports as economic anchors within a growing corridor of innovation across the North, Midlands and South East England. This will stimulate key economic sectors identified in the Government’s industrial strategy such as life sciences and advanced manufacturing. Prologis has developed logistics parks at some of the world’s largest international airports including London, Amsterdam and New York.
To ensure a string of highlighted major projects come out of the ground Reeves said the government plans a "new approach" to planning applications around railway stations. She said the government would change the "default answer to yes".
The Planning and Infrastructure Bill will be introduced in the spring to "enact further sweeping reforms and take an axe to the red tape that slows down approval of infrastructure projects", the government said in a separate release. It has committed to making decisions on 150 major economic infrastructure applications over the five-year parliamentary term.
Reeves also said the government has thrown its weight behind Greater Manchester mayor Andy Burnham's plans for redevelopment around Manchester United's Old Trafford home with housing and commercial development and a new stadium.
Reeves again said the government would be focused on making the Oxford-Cambridge growth corridor the "Silicon Valley of Europe" via a series of new developments. Reeves was pointing to what the government is terming a new approach to the Oxford-Cambridge Growth Corridor which will be spearheaded by the former chief scientific adviser Sir Patrick Vallance as a "ministerial champion".
Reeves confirmed the Office for Investment is expanding its support to local leaders to help develop and promote their investment plans, and ensure investment comes to the regions outside London and the South East. The government says that new strategic partnerships from the National Wealth Fund will provide deeper, more focused support for city regions starting in Glasgow, West Yorkshire, the West Midlands and Greater Manchester.
She also wants a reopened airport in South Yorkshire. Reeves said: "We will work with Doncaster Council and the Mayor of South Yorkshire Oliver Coppard to support their efforts to recreate South Yorkshire airport city as a thriving regional airport."
Reeves said the government will work with devolved governments, including by "partnering with them" on industrial strategy. And the government will review the "Green Book", which is used to evaluate big investment projects, and how advice is supplied to areas outside London to ensure all regions are "given a fair hearing by the Treasury". There were also more details announced on Investment Zones, with the Wrexham and Flintshire Investment Zone to focus on advanced manufacturing. Backed by the likes of Airbus and JCB, this is expected to crowd in £1 billion of private investment over a decade and create up to 6,000 jobs, the government said.
Reeves also put achieving net zero at the front of the economic growth drive. "There is no trade-off between economic growth and net zero" she said, adding that it is the "industrial opportunity of the 21st century". Reeves said the new National Wealth Fund would invest in Cornish lithium and an electric vehicle charging network and said more marine areas would be set aside for wind farms.
Melanie Leech, chief executive, British Property Federation, said that the property industry body fully supports the Chancellor’s focus on removing the barriers to growth and welcomed the speech as a necessary re-affirmation of the Government’s commitment to action.
She also welcomed the commitment to unblocking the planning system.
“Investors need certainty and a reason to put their money into the UK – the planning system has been an investment deterrent for too long. The Government is absolutely right to remove barriers to the delivery of new homes and essential infrastructure by streamlining decision-making, encouraging development by transport hubs, simplifying the planning regime through a greater use of Local Development Orders and re-focusing the role of statutory consultees.
“The property sector strongly supports the introduction of more strategic planning. Such ‘larger than local’ planning will enable both housing and employment uses to be holistically planned across local boundaries, which will be hugely beneficial to local and national economies."
But Leech warned that while these intentions are good, without adequate resourcing of planning departments, the ambitions will falter.
"The Government needs to plan for more than 300 planners and allow planning departments to fully recover their costs while ring-fencing the income to protect the service."
Leech welcomed a new mandate for the National Wealth Fund and Office for Investment to work with local leaders to develop tailored investment strategies and deliver a pipeline of incoming projects linked to regional growth priorities.
“The BPF has long argued for pension reform that would enable pension schemes to more easily invest in real estate. Increased flexibility on how defined benefit pension funds can invest is welcome and will enable this huge pool of capital to be more readily deployed into renewing the UK’s built environment, ” she added.
Justin Sullivan, President of the Royal Institution of Chartered Surveyors, said Reeves is correcting the course of Labour’s growth journey, adding that the tough decisions have been made and now it is time to press ahead with much-needed reforms.
“Since the Budget confidence amongst companies in the built environment has tailed off spelling bad news for housing and infrastructure delivery – particularly among SMEs, the backbone of construction supply chains, whose ability to borrow, grow and deliver disproportionately relies on sentiment across the economy. These have combined to undermine the positive impact of changes to the National Planning Policy Framework, announced in December. But Rachel Reeves’ speech today will help reset the mood.
“By streamlining decisions on critical infrastructure projects and slashing red tape, policymakers should achieve their ultimate aim of economic growth by capturing the potential of high-growth, knowledge-intensive ecosystems like the Oxford-Cambridge Arc.
“While Reeves is focusing on the biggest, most newsworthy projects – like the East-West Rail link – her department must work with MHCLG and local councils to realise the strategic benefit of improving more local, smaller scale infrastructure projects – like local road networks, water utilities, and public transport links. Part of this focus must be on addressing the skills crisis that affects every corner of the built environment.”
Nick Pettit, senior partner, Bidwells, welcomed the Oxford-Cambridge region, which he described as the "beating heart of British innovation".
He added: "That the Chancellor sees its potential is not only a significant validation of its critical importance to UK GDP, but a vindication of the tireless efforts made to promote its potential."
Artem Korolev, chief executive, Mission Street, added that the Government’s commitment to put the Oxford-Cambridge Arc back on the table is, "we hope, a forerunner to concrete policy".
He added: "A holistic strategy that spans the wider arc region is critical to capitalising on the research excellence in Oxford and Cambridge with a critical mass of businesses, investment, homes and infrastructure capable of competing with the world’s leading ecosystems.”