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Caroline Spelman: Labour's planning reforms will compromise democracy and accountability

Speech to the British Property Federation conference

"As you know yesterday saw the publication of the Government's long awaited Planning White Paper, so I'll start by giving you giving you our reaction to the Paper before broadening it out a bit.

Today, by the way, there is a statement about HIPs where we have put up stiff opposition. The word on the street is that the Government is going to delay their introduction so I hope you will excuse me getting away promptly at 2 45 to deal with that.

The planning system is certainly in need to reform, but I would say the Government has had ten years to do that and legislated as recently as 2004.

But the fact that we have a White Paper at all is welcome.

The centrepiece of the White Paper is the Independent Planning Commission for large scale planning decisions.

But the creation of this sort of planning quango immediately raises the question of accountability.

It's the same with any public body that lacks elected representation - the public know that nobody can be held responsible.

The move to centralised, unelected decision-making - either at regional or in this case national level - strikes me as being sharply at odds with growing culture of empowerment and localism.

As far as we can discern Government involvement in such a Commission is limited to appointing those that sit on it, and defining the planning guidance which will shape its decision-making.

This offers potentially the worst of all worlds - the Government can refuse any responsibility for the decisions taken, yet covertly it can shape the likely outcomes through appointees and guidance.

It is my firm belief that the creation of such a quango will increase public cynicism about a planning system it already believes is failing.

The problem is that large infrastructure projects are, by their very nature, those that excite most public opinion - which is why you need clear, democratic lines of accountability based on objective, empirical planning planning considerations.

We will have to probe the government on where they will draw the line over the new quango's remit - nuclear power station, airport runways and rail connections are in, but what about incinerators, land fill sites and sewage plants?

I know that the mechanism for delivering large scale infrastructure needs changing. The sorry example of Heathrow laid bare the inadequacies of the present system.

But I don't accept that sacrificing democratic accountability is the best way forward.

Increasing permitted development rights where it is non-contentious is a step in the right direction and we have supported that.

But I think for large scale projects the key lies in separating the planning decision so that it is a decision of "site and type", rather than the application becoming a protracted debate about general policy framework.

To put that in practical terms, an energy station application would be assessed on the basis of the suitability of that type of installation in that specific location - rather than being embroiled in debating the role of nuclear in a national energy strategy.

The White Paper also has significant implications for out of town retail development.

The purpose of John Gummer's 1996 planning guidance was to help deliver the balance between creating the economic and commercial opportunities that out of town shopping undoubtedly gives consumers and the economy without triggering town centre decline.

The responsibility for getting that balance was invested in local authorities so that they could assess the needs basis for such development.

There was concern on all sides of the House about any measures which would reduce the scope for local authorities to make that assessment.

I know that businesses applying for out of town development rights will have done sophisticated modelling to determine customer demand and anticipated footfall.

But that analysis has to be weighed against the impact on the town centre, the environmental implications of the development and the infrastructure demands.

So it becomes more than a simple question of business viability - it becomes a value judgement about local priorities and how appropriate a development is.

The decline of town centres is not, in my opinion, exclusively the result of out of town retail, but also other factors which affect viability like rates, rent and parking.

To address all of those you need accountability and you need local involvement in decision-making.

The public appetite for involvement in the decisions that affect them and shape where they live is one that politicians cannot and should not ignore.

In fact a large part of the reason why planning decisions are so encumbered with objections, appeals and public anger is because the mechanism for involving local people in the planning process is inadequate.

In some cases that is due to poor or tick box consultation, but the government must also bear some responsibility for drawing decision making up to a regional level and crafting guidance that so regularly over-rules councils.

The hostility this has created is one of the single biggest factors in holding back the development which is so vital to our economic growth and well-being.

I don't want that tension to undermine the commercial growth of this country.

The irony is that by sidelining local opinion, the Government is creating a political climate which makes councils more sceptical of new development because they anticipate a public backlash.

In the White Paper the Government makes great play of improved consultation whilst weakening the scope for elected representatives in the community to make the key decisions.

Another measure which we fear will hinder development is Planning Gain Supplement.

As you know this is effectively a tax on the uplift in land value that occurs when a site is given planning permission.

The argument is made that this will be a revenue stream for much needed infrastructure, but the funds go directly to the Treasury and there is not a clear mechanism for returning it to local authorities.

I think it is fair to presume that the cost implications of this tax will be passed on in the form of higher prices - penalising further those looking for property in both the residential and commercial sector.

Another unintended consequence that comes from increasing the tax will be the creation of a disincentive for regeneration and the restoration of genuine brown field land.

Redevelopment, particularly commercial redevelopment, has the potential to be such a powerful driver for regeneration because it combines the physical improvement of an area with economic stimulation.

In the past regeneration schemes that have failed have done so because they neglected the economic imperative that underpins long-term regeneration - the jobs didn't follow the make-over.

That's why we have to be so careful about any fiscal measures which divert the focus of commercial development away from regeneration.

So that brings me onto the recent Ratings (Empty Properties) Bill which is due to come back on June 7th for second reading.

This is a tax on business and our calculations put that cost in the region of £1bn per year.

There are two things to weigh in consideration with this Bill.

The original purpose of the tax relief was to discourage the practice of letting vacant business premises fall into such a state of disrepair and vandalism that they were removed from the rating lists.

By scaling back the relief businesses have little to lose, and arguably something to gain, if their vacant premises slip into that level of decline.

That can't be a good thing.

The other issue is that a developer, as you will know, very often needs to get to a critical mass with a certain number of commercial units in order to make a regeneration project viable.

These opportunities often come on stream over a period of time rather than all at once.

The business rate relief provided for that with the six month relief - but now that relief is being phased out I would anticipate project costs going up and - as with planning gain supplement - the cost will be displaced to the end buyer and the incentive to redevelop existing commercial sites will be lost.

The reason I'm so exercised about the government creating financial deterrents for regenerating commercial property is because I think that mix of urban and residential is central to meaningful regeneration.

Just this morning Stephen Hester of British Land was saying on the Today programme that rental yield in the retail sector was a mixed picture outside London.

Typically those areas where rental value will be low will be where we desperately need regeneration.

My worry would be the combination of increased costs and relatively low rental demand will mean that these places go the back of the queue for regeneration.

I have a real passion to regenerate the suburbs which are in decline around Britain's cities with a mix of family sized affordable housing, retail and small business units - so that we get away from that old model of people living in one place and commuting to another for work.

Start-up businesses tell me there is a dearth of step-up facilities once your bright idea has outgrown the back bedroom.

This kind of model could give rise to urban villages of three to five thousand inhabitants clustered around amenities like the primary school and the GP practice, and would help foster a real spirit of community in our more amorphous suburbs.

This way we might stop the migration to the outer suburbs, the green belt and beyond which result in the hollowing out of the near city ring, making it prone to crime and anti-social behaviour.

In my view Government should be making it easier for developers, particularly those in commercial property, to go into run down areas and invest in regeneration.

In conclusion, there is a broad consensus that we need a swifter, simpler planning system, but the consensus breaks down over who has accountability.

I don't think any Minister, whichever Party is in power, should be able to pass the Ministerial buck - and let's face it John Humphries won't let them.

Democracy has been at the heart of the planning process for sixty years - it's in no-one's interests to compromise that relationship with the people now.

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