The election? ‘It’s all about planning’

With the starting gun fired on the general election, what might a new administration mean for planning? Taylor Wessing’s head of planning, Alistair Watson, has been offering his thoughts to the Labour Party, and says there is likely to be much to look forward to. “A Labour government will be all about planning,” says Alistair Watson, head of planning at law firm Taylor Wessing. He should know – he has been helping the party work through ideas for how reform should work if it comes to power. Watson clearly loves his job and the real estate sector, as well as its role in driving the economy. “That building, when fully occupied, will have desks for thousands of people,” he says, as he looks from a meeting room window towards Goldman Sachs’ City of London offices. “Thousands of people coming to London, coming into the area, generating economic growth.” Which is why, when he was approached by “senior Labour policymakers” to discuss the future of planning policy under a Labour government, he was happy to help. “There was no political motivation from me at all,” he says. “I was asked what I thought, so for me it was all about the planning.” Long-term plans Watson’s “interesting discussions and debates” with senior figures in the party have given him insight into what is likely to occur if Labour forms a government after the 4 July general election. And he has concluded that a major focus on planning is on the cards. “There is no industry that drives economic growth in the same way as real estate,” he says. “Everyone and every company needs somewhere to be.” Industries create their own demand, he adds. Tech, for example, needs data centres. The cloud needs real estate. Labour’s policymakers appreciate this, he says. As a service to clients, Taylor Wessing has been working with developers and investors to understand how they can reassess existing buildings, sites and portfolios of investments should Labour’s plans become policy. There is, says Watson, pent-up energy. “Planning is long-term and needs certainty,” he says. But recent secretaries of state have introduced uncertainty, he adds, citing Michael Gove’s intervention in Marks & Spencer’s plans to demolish and rebuild its flagship Oxford Street store. Clearing the backlog Watson and his team have mapped out a timeline of what to expect in planning if there is a Labour government. By early August, current deputy prime minister Angela Rayner will publish a written ministerial statement and write to all chief planning officers instructing local authorities to approve planning applications in areas which do not have a local plan and fail other key policy tests, such as the housing delivery test. By September, the administration will publish its changes to the National Planning Policy Framework, which will reverse concessions that the current government made to Tory backbenchers in December 2022, thereby reinstating and enforcing compulsory local housing targets and helping to clear a planning backlog. These changes will accelerate planning permissions while strengthening local consent on how developments can best support local communities, Watson and his team say, rather than determining whether or not the homes that people need are built at all. This will put the local plan front and centre in the planning system and create a genuinely plan-led system. Finally, before the end of the year, Labour will strengthen the presumption in favour of developments aligned with local plans, with a lighter-touch process for approval in line with plans and, where criteria are met, a strong community right to appeal against off-plan and speculative development. Nice problems Other Labour policy proposals that Taylor Wessing says will have a direct effect on the real estate sector include plans to fast-track planning processes for priority growth areas such as battery factories and 5G infrastructure. The party also plans to overhaul the National Grid and reduce the delays that companies face in connecting to the energy network, and to set up a cross-departmental infrastructure acceleration unit. The latter move comes after the Conservative government cancelled the northern leg of the costly HS2 high-speed rail project. The acceleration unit would be responsible for ensuring that crucial national infrastructure projects are delivered on time and within budget. Further proposals for the planning system include giving new powers to mayors and fast-tracking approvals for developments on brownfield sites. A simplified and more dynamic planning system will create its own problems. There are, Watson points out, simply not enough builders and skilled tradespeople in the UK to deal with a development boom, so a future administration may need to address labour shortages. And there will inevitably be delays and hitches as an increase in planning spurs others to invest in the UK real estate sector. But those, he says, are “nice problems to have”. Taylor Wessing on how a Labour government could help real estate Taylor Wessing’s team has worked through portfolios with developers and investors to understand what expressive and permissive policy support could bring about in terms of the speed of obtaining planning permission, the ability to attract investment for development and ensure certainty in development funding, and the spread of development across the country. If these policies are enacted, the firm says the UK could see much-needed development and investment in the following sectors: Residential People need more homes. The declaration of a national emergency in relation to well-designed housing that will trump other material considerations in the planning process will bring a boost to the supply of all types of housing – market, social and affordable, and both for-sale and BTR. This would have beneficial effects, direct and indirect, and induced and catalytic effects on the entire supply chain in the real estate industry, from site agents and surveyors at the start through to architects, landscape gardeners, fit-out contractors and core building trades on sites. Those employed within each of the services and trades that are involved in and are an important part of the residential development sub-sector can plan for growth for their own companies and develop and enhance their own skills. Logistics If plans to set up a cross-departmental infrastructure acceleration unit get momentum and electric vehicle charging hubs fall under infrastructure, we could see rapid growth and use of large-scale EV charging hubs (200-500 charging points) for commercial fleet vehicles. More middle and final-mile facilities can be expected, with a resulting increase in sustainability efficiencies. Sheds and beds as an asset class will continue to grow in popularity. Data centres As the use of AI accelerates, there is the opportunity for a new government to attract this advanced and essential infrastructure through planning reform; the country needs delivery of more edge and hyperscale centres across the country – not just in the South East. Planning reform advancing water and energy efficiency strategies would also support the growth of data centres, as well as other sectors of the economy, and would bring about development of related infrastructure. Life sciences  Even as a vital and productive sector of the UK’s economy, life sciences needs central government support and encouragement via policy. Delivery of planning reform could bring about an increase in inward investment from global companies into both labs and headquarters buildings in the Golden Triangle of Oxford, Cambridge and London. Land use zoning of other areas of the UK would attract development to the regions and their further and higher education establishments. Upskilling of the construction workforce (as with the other sub-sectors) can be achieved through advanced and more sustainable building methods. Photo © Taylor Wessing