Low-tax is gone, but does pro-growth supply-side reform remain?

You could hardly have missed the news the new Chancellor of the Exchequer, Jeremy Hunt, has effectively gutted the mini-Budget his predecessor presented to the House of Commons on 23 September. Effectively every single tax change detailed in that statement, barring the cut to the rate of National Insurance and a change in the Stamp Duty threshold, has been axed, with an accompanying warning that department spending budgets will be squeezed to fill the “blackhole” in the Government’s finances.

In an attempt to salvage something from her so-called low-tax, high-growth platform, the current Prime Minister theoretically remains committed to supply-side reform as a means of preventing the structural stagflation some economic commentators are forecasting. This coupled with a large dollop of infrastructure investment is posited too provide another means through which she can realise the high-growth aspirations she spent all summer talking about.

The “investment zones” announced in mini-Budget are, we are told, here to stay. This was reiterated yesterday by the Secretary of State, Simon Clarke, who said the Government have had lots of interest from areas wanting to apply to become one. Quite where they will be, we are yet to be told, but the theory is these zones will see planning and environmental regulations loosened to encourage investment and, thus, drive growth. Whether this policy will withstand interaction with local MPs and local communities remains to be seen. Don’t forget our new Chancellor represents a predominantly rural seat (77% of his constituency is Green Belt) and back in October 2020 he spoke in a Parliamentary debate opposing reforms to the planning system stating:

“I am concerned that these proposals do not recognise serious risks. The argument for building new houses has been won, but what is on the table risks eroding local democracy, reducing affordable housing and encroaching on our beautiful countryside. The Government must think again.”

Does that sound like a man willing to condone the loosening of planning rules? We are now talking about the most powerful Chancellor in a generation, so his view will carry quite a lot of clout in Government.

During the mini-Budget and the ensuing debate, we were also told the Government would be looking to overhaul Development Consent Orders for major projects, change the rules around the judicial review process, relax rules for onshore wind, spend more on roads and broadband projects, and accelerate the release of surplus government land for development. The Chancellor’s statement reversing much of the mini-Budget said little about these things, so we wait to see how the Ministry of Housing, Communities and Local Government, under the leadership of Simon Clarke, will go about enacting these policy directions.

Where the Government really heads next on planning and infrastructure remains to be seen. The atmosphere in Parliament, in which Conservative MPs are reportedly spending as much time looking for new jobs, as they are lamenting Trussonomics, does not feel like a positive context for the sort of radical supply-side reform of planning that previous Governments of all political hues have been too frightened to carry out. However, without something radical to turn the tide, the Tories look like they are limping towards inevitable doom at the next election.

For observers of planning policy, the really interesting times may lie ahead…