Britain’s planning system is proving a blocker to growth and is impeding our ability to tackle the climate crisis that threatens our environment. The UK’s failure to build new sources of power and homes is catching up with us and is a key cause of the cost of living crisis that has affected so many hard-working people.
When global gas prices spiked in 2022 after Russia’s illegal invasion of Ukraine, Britain’s reliance on imported gas was laid bare. The average annual household bill shot up by 95% and it was only because of the £23 billion Energy Price Guarantee that they didn’t rise even further.
Even before the invasion, Britain’s electricity was among the most expensive in the world. In 2021, British households paid 45% more per kWh than French households, 89% more than South Korean households, and 130% more than American households.
Our energy prices are so high and volatile because we have not diversified our energy supply by failing to build enough clean domestic power sources. We’ve not built a nuclear power station in 30 years and Hinkley Point C, currently under construction, is set to be the most expensive nuclear power plant ever built. This is in part because it had to make 7,000 design changes to meet British nuclear regulations despite the same reactor design being built safely in France and Finland for half the cost.
Investments in new infrastructure, whether from industry or from Government, only proceed if they represent value for money. High costs and planning delays discourage investment. Too often high costs lead to projects being scrapped, curtailed, or delayed, depriving Britain of vital infrastructure.
Almost a decade ago, the last Government promised to dual the A1 in Northumberland, which is one of the few single-lane stretches of the key road that links England and Scotland. After spending £67 million on planning, approval was pushed further and further back, with the scheme finally being cancelled. This failure to build means workers face longer commutes and businesses face delays in shipping goods between Newcastle and Edinburgh.
Planning delays also slow down the roll-out of clean energy. East Anglia Two, an offshore wind farm, which will power 800,000 homes, had to produce an 85,000 page long planning application. Solar farms can see the cost of their planning applications double because of a requirement to do larger-than-necessary archaeological digs. Onshore wind was banned in England for a decade and new construction still faces large barriers in the planning system. All of these pages of paperwork, extra requirements, and planning delays add costs to our electricity bills, which stretches household budgets and makes it harder for businesses to expand in Britain.
There’s a similar story in housing. British homes are the least affordable of any Western European country for a simple reason: we have consistently failed to build enough. For 70 years Britain has consistently built fewer homes per capita than almost every other Western European country.
The UK has 437 homes per 1,000 people, the lowest rate of any large Western European country. To get to the average homes per capita of France, Germany, Spain, and Italy, the UK would need to build 5.6 million homes. To get to France’s rate of 560 homes per 1,000 people, Britain would need to build a whopping 8.4 million homes. The lack of supply of homes in the UK drives up prices and makes buying unaffordable for many working people.
The root cause of Britain’s housing shortage is a planning system that gives local planning authorities power to say ‘no’ but little reason to say ‘yes’. It takes longer and costs more to get planning permission than ever before. Small builders that employ local people have seen the real costs for planning applications increase by five times over the past 30 years. It can take more than a year to get a yes/no answer when it used to take just three months.
This has made the dream of homeownership for young people almost unattainable without the financial support of families. In 1991, 67% of 25-34 year olds owned their own home. Today, less than 40% do. In England the average home costs 8.6 times the average salary and in cities like London, Cambridge, or York this can rise to 12 or more times the average wage. Since 1999, the median household disposable income has almost doubled in nominal terms while the median house has increased in price by 4.5 times, vastly outstripping wage growth.
The challenges within our planning system significantly impact working people. We surveyed Community members to ask how they’ve been affected by high energy and housing costs. A majority have seen their monthly budgets significantly affected by high electricity costs. These high energy prices force hard-working families to cut back on daily expenses, leaving them worse off. In fact, 84% of Community members have reported reducing how much they heat their homes in response to high energy costs.
High housing costs are also negatively affecting the quality of life for Community Union members. The monthly budgets of a majority of members are significantly or moderately worsened by high mortgage or rent prices. Furthermore, members are concerned about the impact of high house prices on their and their family members’ ability to buy a home. Forty-five percent of respondents believe that high house prices have made it completely impossible for them or their families to buy, and an additional 18% said that high house prices have made it partially harder to buy. Among respondents who rent or pay a mortgage, 81% reported that high rent or mortgage payments have forced them to cut back on other expenses.
The change Community members want to see
But Community members don’t want to accept high energy prices or unaffordable homes, they want to build. An overwhelming majority of respondents, 72%, believe Britain isn’t building enough clean energy sources like wind farms, solar panels, and nuclear power stations. Similarly, 61% feel the UK is failing to construct enough homes in and around major cities. The support for improving transport links like rail and roads is even stronger, with 79% of respondents saying Britain needs to build more.
This desire for change extends to policy. Over 70% of Community members who responded support reforming the planning system to accelerate the development of domestic clean energy. Given that offshore wind farms can take up to 12 years to begin generating power, despite construction taking only two, these reforms are crucial for speeding up approvals and grid connection times.
There’s also significant support for new nuclear power plants, with nearly two-thirds of members in favour compared to less than 20% opposed. Finally, 62% of Community members who responded support planning reforms to make it easier to build more homes in well-connected areas, while only 21% oppose such measures.
