House builder Gleeson has submitted a 23-page response to the Malmesbury Neighbourhood Plan consultation setting out the reasons why it believes the plan is flawed and unlikely to be found sound by an independent planning inspector.
The response says that the draft plan is not supported by a robust evidence base.
Among the details contained in the plan that Gleeson questions is Wiltshire Council’s assertion that Malmesbury has a significant employment base, resulting in the highest level of in-commuting of all of the market towns in Wiltshire.
Gleeson states: “There is a significant imbalance between jobs and houses which the Neighbourhood Plan should address in order to reduce the need to travel, provide more sustainable housing and sustain economic growth.”
The Sustainability Appraisal which supports the Neighbourhood Planning Process is heavily criticised in Gleeson’s response, concluding this work needs to be undertaken correctly in order to identify the sites which are most sustainable for development and for the plan to be found sound.
Some of the issues Gleeson highlights in relation to this document include proximity to flood zones and the impact on the setting of the AONB.
Gleeson’s response also raises concerns about the 85-metre contour which the plan uses to dismiss sites.
Scott Chamberlin from Gleeson said:”It is our professional opinion that the plan is flawed and as a result there has been a lot of time and expenditure into a plan which runs a serious risk of being found unsound and sent back to the drawing board by an independent inspector.
The key thing to note is is highlighted. With RSS now withdrawn it is unlikely that LPAs can now bet on an early review – as the interim Dacorum finding.
Dear Mrs Barratt,
Thank you for your letter of 28 March. As you know the date for the preliminary
session to consider whether the Council has met the duty to co-operate has been set
for 5 June. I will, through Amanda Willis, provide an agenda for that meeting shortly
but my response (below) to the matters raised in your letter of 28 March raises
questions regarding whether the Core Strategy should be withdrawn.
As I said in my letter of 22 March, the National Planning Policy Framework (NPPF)
requires evidence to be adequate and up to date. Whilst the 2008 Strategic Housing
Market Assessment (SHMA) may well be proportionate in terms of its breadth and
depth (taking into account the circumstances at the time it was produced), due to its
age, it cannot be said to be up to date. The passage of time has a bearing on how
reliable data is and the robustness of the projections, studies and assessments using
that data. The NPPF requires local planning authorities to have a clear understanding
of housing needs in their area. In addition to the passage of time, the economy and
the housing market has changed significantly since the SHMA was prepared and I do
not consider that it provides an adequate basis on which to objectively assess the
housing needs of the Borough.
I note that the joint SHMA that you are about to commission includes Warwick
District Council. Warwick District Council were not party to the 2008 SHMA and the
inclusion of this authority would appear to indicate an acknowledgment that
circumstances have changed and cast further doubt on the adequacy of the 2008 study.
I am pleased to see that you are working with some of your neighbours to prepare a
new joint SHMA but I am concerned regarding the timetable for this work. The Stage
1 Joint SHMA is not due for presentation until January 2014. I note that this exercise
will determine overall housing numbers after which you intend to undertake a Stage 2
SHMA with Nuneaton and Bedworth and Rugby Borough Councils. No timetable
has been set for this work.
I am not aware of the circumstances of that led to my colleague’s interim conclusions
with regard to the Solihull Local Plan. For the reasons given above, I do not see how
I could conclude that the Core Strategy is based on a strategy which seeks to meet the
objectively assessed needs of an area. A plan which cannot be shown to be seeking to
meet the objectively assessed needs of an area cannot be sound and, consequently, I
do not consider that it would be appropriate to defer housing matters to an early
review of the Core Strategy.
The updated SHMA may show that the Core Strategy meets the needs of the Borough
and it may not, leading to a need to revise the plan. Further, there is no indication of
when this assessment will be completed. The Planning Inspectorate’s Procedure
Guidance cautions against suspensions of longer than 6 months. January 2014 is eight
months away and that would only take us to the completion of the Stage 1 assessment
and there is no indication of when the Stage 2 SHMA would be produced. An open
ended suspension is not acceptable, particularly where the results of such a critical
study may require significant revisions to the Core Strategy. In light of this, I would
urge you to consider the withdrawal of the Core Strategy.
I note that you anticipate that updating the Employment Land Study would take
around 4 months. Should you decide to proceed, would you seek a suspension to
enable this work to be done? I note that you do not intend to update either the
Strategic Housing Land Availability Assessment or the Strategic Flood Risk
Assessment. Should the examination proceed, we will explore whether there is
sufficient available land in the broad locations identified by the Core Strategy to meet
the needs of the Borough.
Turning to retail, should we proceed, you may wish to consider whether the evidence
base shows that the Core Strategy is based on a clear understanding of business needs,
the function and roles of the town centres in the Borough and that it provides an
adequate strategic framework to meet your stated aim of ‘helping existing businesses
with the high streets’.
I would now ask you to give careful consideration to the next steps for the Core
Strategy and to advise me of the chosen path at the earliest opportunity. I do not
propose to hold an Exploratory Meeting but am happy to do so should it be
considered to be useful to assist the consideration of procedural issues. I will do all I
can to help the Council in relation to the way forward, although you will appreciate
the restricted nature of my role in this regard and that any advice given is without
A series of leaked emails between key figures in Ukip reveals growing chaos at the heart of the party as it struggles to fill a policy vacuum just days before crucial local elections in which it is expected to make spectacular advances.
In one email, a senior party figure claims that leading the anti-EU party is like “herding cats”. Ukip leader Nigel Farage is warned that his party is facing a decade without credible policies, as crippling internal rows rage, and it is suggested that the party should consider buying off-the-shelf strategy from right-leaning thinktanks.
Senior members must “get off their hobby-horses” if the party is to develop policies, Farage is told in the bombshell emails from Stuart Wheeler, the party’s treasurer, and Godfrey Bloom, a leading Ukip MEP.
A despairing Bloom, writing last Thursday, warns: “My experience thus far is that as soon as more than two people get in a room progress completely stops. Even where we have experts of our own, they disagree.” Bloom suggests the party should now consider buying policy “off the shelf” from thinktanks to lend it some credibility rather than attempting to “reinvent the wheel” by devising party positions on the major issues of the day.
Wheeler, a former Tory donor who gave £5.5m to the Conservatives in 2001 before being expelled for also donating to Ukip, responds: “I could not agree more strongly that some people will have to get off their hobby-horses.”
Details of the party’s internal crisis are revealed today as Ukip prepares to field an unprecedented 1,217 candidates in Thursday’s local elections. The party is unlikely to return large numbers of councillors but Downing Street fears it will deprive the Tories of victory in many seats and be the cause of major trouble for David Cameron’s leadership.
Along with its strong anti-European Union message and calls for a hardline on immigration, Ukip is campaigning heavily on issues likely to appeal to wavering Tories, including opposition to green belt development, wind farms and a second high-speed rail line. However, the party’s manifesto is vague on details as it attempts to appeal to the broadest audience, including disaffected Labour and Liberal Democrat voters.
The emails leaked to the Observer illustrate how powerless the party is to build a manifesto as it attempts to please its politically divergent support. Bloom says the party’s policies are “naturally coming under more scrutiny” as it grows, but warns Farage of the inability of members to agree on policy lines.
Bloom, who also complains that whatever the party says on tax and the economy will “be sneered at or decried”, writes: “The charm and frustration of Ukip is we have doctors who fancy themselves as tax experts, painters and decorators who know all about strategic defence issues and … retired dentists who understand the most intricate political solutions for the nation.
“Our website will have no policies at all on there for 10 years if we adopt a neo-Byzantine approach to formulating them. This means some quite senior members are going to have to stable their hobby-horses.”
The former financial economist also reveals a split between the old stalwarts of the party, formed in 1993 in response to the Maastricht treaty, and the new members who he fears are introducing “political correctness” among other “main party baggage”. Ukip is said to be picking up 1,000 extra members a month, with membership now exceeding 25,500. Bloom writes: “Having worked on the defence paper for over one year it would appear Ukip has more military and naval experts than we have soldiers. Most of them do not agree with each other. It is like herding cats. We are also attracting new members who bring main party ‘baggage’. Focus groups, quotas, even political correctness.
“We must be wary of listening to these siren voices. We did not get where we are today by following, but leading.”
Bloom claims that he has been in talks with two free-market thinktanks, the Institute of Economic Affairs, and Civitas, whose policies he suggests “buying off the shelf where it is close to our own small government, low tax, libertarian position”.
The Ukip MEP, who admits in the emails that his party “do not have the resources to write serious papers on major subjects”, adds: “If Nigel, or indeed any of the ‘frontbench’ spokesmen talk of welfare or tax, the endorsement of such institutions is a very strong shield from the sort of dismissive left wing interviewers with whom we usually cross swords.
“Imagine Nigel in a hostile (oh yes it will be) interview with a ‘Paxman’, being able to say “Yes it will work, our policy has been completely vetted and endorsed by……..” fill in the blank, Civitas, IEA, IOD, BMA, RCN etc…”
Wheeler, who reportedly made a £90m fortune in investment banking, writes that he agrees with “a great deal” of Bloom’s points, but adds that the party’s “policies must be Ukip’s policies”. He adds: “Obviously we cannot just say, when asked about what our policies are, that we agree with the IEA on X, Y and Z, and agree with Civitas on A, B and C, and some other thinktank on others etc.”
A spokesman for the party said: “What you are seeing is discussions about policy development. Mr Bloom would like to get things done rapidly, Mr Wheeler would like to ensure that consensus is reached.
“It merely displays creative tension that in the end will produce a far better policy platform than we might have otherwise without due discussion.”
Torren’s theory of value was that prices in the long run’ were regulated by the cost of capital advanced (equivalent to indirect (accululated) labour) for equal turrnover periods of capital, and not by cost of indirect + direct labour.
As he put it
“From the perpetually operating law of competition, the employment of equal capitals for equal times yields results of equal exchangeable value” (EICT 1820, 361)
The ‘results’ here being the price of the products produced plus the price of the capital reproduced (Torrens joint production method adopted by Sraffa) allowing for depreciation.
This theory caused some concern amongst classical economist, whilst accepting part of its validity the general view adopted by McCulloch and James Mill was that it was functionally equivalent to rather than a challenge to Ricardo’s theory(see O’Brien The Classical Economists reinterpreted Page 109), a position often repeated in current history books on classical economics. This is an error, as is the view set out below:
Kurtz and Salvatori Interpreting Classical Economics – Studies in Long Period Analysis Page 142.
Torrens adopted the special assumption…that in the same lines of production the same capital input proportions apply…hence the capitals advanced in different industries can easily be compared….It is clear that under the conditions specified Torren’s capital theory value and Ricardo’s labour theory value amount to the same thing.
This is an error as it it based on the original theory Torrens advanced in the 1819 first edition of his Corn trade where the capital input proportions of the sectors exchanging were the same. But following the critiques of Ricardo, Mill and McCullough Torrens made major changes to the 1821 and 1826 editions.
In the later edition Torrens adopted no less than 24 different models. (see Torrens and Malthus’ Challenge Rogério Arthmar Researcher of the Brazili Paper to be presented at the History of Economic Thought Society of Australia 2012 Conference, Melbourne) In some of these capital input proportions were identical in others they were proportionate. So for example in a two industry model if a capital intensive industry exchanged with a labour intensive industry the capital intensity of one sector was necessarily the inverse of another. The issue is whether in an n industry model this holds – i.e whether the capital industry of each industry when added necessarily adds to unity. Was Torrens distorting his models to make a special case seem general or was he rather advocating a deeper underlying principle that has been missed/forgotten, much like his Corn Model (which we shant forget Ricardo took from Torrens) as an underpinning structural and universal principle underlying the surplus approach.
It is I think highly unlikley Torrens willfully distorted his models to present a special case as more general, rather he was setting out a more general principle, a theory set out at length in his 1821 Essay on the Production of Wealth. This theory of ‘effectual demand’ is that at long run prices not dictated by monopoly prices the effectual demand of each and every commodity in the economy will be set by the requirements for use by each and every other sector. At that prices effectual demand = effectual supply. This was a modified form of Says Law/The Law of Markets – but Torrens was critical of the form of the law put forward by Say and Mill.
M. Say and Mr. Mill belong the merit of having been the first to bring forward the very important doctrine, that as commodities are purchased with commodities, one half will furnish a market for the other half, and increased production will be the occasion of increased demand, (page ix)
Which to my mind is a clearer explanation then either Say or Mill.
But this doctrine, though it embraces the very key-stone of economical science, is not correct in the general and unqualified sense in which these distinguished writers have stated it. Though one half of our commodities should be of the same value as the other half, and though the two halves should freely exchange against each other, it is yet possible that there may be an effectual demand for neither.
Effectual demand being the term from Adam Smith used here in the revised formulation of Ricardo to express the demand that results when commodities are sold at their ‘natural price’ around which (plus the ‘customery rate of profit’ the classical gravitation process oscillates).(see page 53 of the pamphlet)
It is quite obvious that there can exist no reciprocal effectual demand, unless the interchange of two different sets of commodities replaces, with a surplus, the expenditure incurred in the production of both. Now, what is that specific relation or proportion between commodities, which occasions the exchange of one half of them against the other half, to replace, with a surplus, the cost of producing both ?
It is clear in the final chapter of the essay that Torren’s solution is to set out such a n-sectors system where the proportions are reciprocal and add to unity. Torrens may have been the first to describe this as ‘Equilibrium’, but Torrens was clear that most of the time the economy was not in equilibrium and it was the classical gravitation process that created the pressures for equilibriation.
Accepting the principle of compatible capital proportions it is clear that Torren’s system does not only apply to a special case but is the general case in equilibrium, with incompatible capital proportions creating shortages in effectual demand driving away from equilibrium and the reallocation of capital top the most profitable sectors driving prices back towards it. Under these gneral conditions Torren’s theory of value is not the same as Ricardos. In Torren’s system prices (including wages and the price of money) and profits were determined simultaneously, a point misunderstood by both Ricardo and Marx (both suffering from the Ricardian Vice) that there must be some apriori cuase of capital values. In Torrens there is no apriori exogenous elements other than the techincal productivity of production.
Is then Torren’s system free from error and does it represent a modified and corrected labour theory of value. I shall leave the second question open however one issue Torrens was unclear about was the need to discount the costs of inputs, both direct and indirect. On this point George Scope writing in 1833 set out a corrected theory (in many ways he has the highpoint of the english school of political economy) where it is the time discounted costs of production that determine value,
We have been sympathetic critics of MMT on this blog, seeking to integrate some of its key insights with circuitism. Its basic insight, that a currency issuing country can spend before it taxes, is broadly correct – as state money is spent into existence. Also taxes net of state spending can equally destroy the purchasing power of money (we do not hold that taxes per-se destroy money – as Parguez, Seccarrecia and the ‘State in the Circuit’ theorists for example argue as – rather more subtlely that demand is altered by the net change in debt. So if a government spends less than the debts it writes down through tax raising then it reduces net effective demand and contra increases it – credit extinguished is purchasing power destroyed and vice versa.) This is an implication of the Steve Keen modification of Walras’s Law to incorporate changes in aggregate supply and demand through credit financed investment as first introduced at the MMT/Circuitist meeting last year. Though we accept that demand for taxes creates demand for currency we consider that this operates through the framework of credit based money – that is it is demand for credit that creates demand for money per-se as a store of value whereas taxes create demand for a particular currency as a unit of account. This is but a nuancing of the chartalist position and reflects historical cases where money has existed outside state monopoly currencies. Here we don’t really disagree with Randall Wray
we are not trying to claim that, um, taxes drive money, that that is necessary. It is merely sufficient. Taxes will drive a money. That’s a sufficient condition. Um, it’s perfectly conceivable – and people have many stories about this – of private entities creating a unit of account, denominating liabilities in that unit of account, and then exchanging those liabilities and using those in payment. It works pretty well in theory. It’s just that in practice we don’t find these. [rather I would say they are rare for example money in prison camps and the 18C Scottish banking system]
A final issue is that sectoral identities express accounting constraints but are not substitutes for a full monetary theory of production. So we would argue for example that ‘classical’ position (put most ably by Torrens) that demand itself will not lead to growth unless that demand is made effective through increased production of goods and services achieved through capital formation and accumulation. The purpose of state spending is to maintain that growth not per-se to increase money, indeed if the nominal purchasing power of money is decreased by credit creation by more than the growth in production then state money creation can harm price stability.
Within this framework it is difficult to reconcile neo-classical ideas such as a ‘state budget constraint’, ‘ricardian equivalence’ or ‘debt overhang’ (the latter might apply to the private sector but not to a sovereign currency issuer), but, in the post-Reinhart-Rogoff fallout (despite their ‘we are not really austerians ‘ post-hoc protestations in the NYT today) , does this leave any role at all for debt levels, particularly high public debt levels, in affecting economic growth?
So where does that leave the role of taxes? The MMT position is that taxes are used to control aggregate demand. (see Warren Mostler) This is correct though formally we would argue that there are dual channels. Firstly the writing down or creation of state debt based money is balanced by creation of private sector financial assets, taxes then can be used to net increase or decrease the money supply. For none-debt based money there is no accompanying financial asset so taxes in this case are necessary to directly rather than indirectly offset state money creation. But in the latter cases taxes would not be operating at the margin, so would have to be higher and this would suppress capital formation.
What then should the optimal rate of tax be? The optimal rate will need to be very different between debt based and none debt based state money regimes, according to the financial obligations the state sector owes to the private sector and between different real interest rates. If the real rate of interest is low then there is no effective difference, future debt obligations will be near zero. In these cases if there is a demand problem governments could create none debt based money to reflate demand and to take advantage to drive investment. The great disadvantage with this is the lack of a contractual obligation by the state to contract money later once the initial impulse from credit is spent, there is the political risk that taxes will not rise to deflate aggregate demand. The risk of debt free money is that the private sector could price in an inflation in the value of money and shift capital towards regimes with contractual obligations for debt repayment. Even in cases where interest rates remain low for a considerable period (as in Japan) there will be the considerable risks to the net inflow of state funds from an future upturn in interest rates which has seen an export of capital.
In cases where there are high real interest rates then future public debt servicing requirements will be high. To avoid the deflationary effects of paying down debt the state will need either to raise taxes – to maintain fiscal/demand neutrality, or further raise public debt, with implications for implied future deflation of demand. So we can see even in a world without a state budget constraint debt can be a problem if the change in debt impacts on future demand. The basic functional Lerner functional finance position which MMT inherits though is correct, growth in debt is manageable if outpaced by growth in the economy. In Keyne’s fundamental insight the ‘debt pays for itself’ if a boost to demand leads to a multiplier effect leading to increased tax revenues. Of course infinite growth in debt is impossible so there must be fiscal limits on the scope for such interventions without some form of debt write down.
As well as the impact of changes in debt there may also be impacts from the relative deficit levels. Public spending has a high local multiplier it is likely to be spent locally, whereas private investment in the local economy will see short term imports of capital goods and longer term benefits from exports. So austerity induced by high levels of public debt is likely to see capital outflows from those who receive interest payments to higher yielding markets without austerity induced stagnation. Indeed that is just what we have seen in Japan, where as Aziznomics correctly points out the private sector has now largely delevered leaving on high levels of public debt. Over the next few months graduate economometric students are likely to have a field day charting the relationship no longer only between public debt and growth but overall debt, private debt and changes to each under different initial conditions of growth and inflation. This is likely to be interesting but simply exposes the theoretical gaps we have in terms of the relationship between finance and debt.
Does old fashioned IS/LM help use here? No as the IS and LM curves only intersect at equilibrium and with high unemployment the labour market must be out of equilibrium and so must one or another of the other markets. as Hick’s stated in his late mea culpa it must be replaced by a disequilibriium understanding of the three way relationship of the money, labour and goods markets.
What then of the MMT solution to force the labour market back into equilibrium through an employment guarantee? Given the multiplier effects of public spending a rise in confidence could see capital repatriation and a rise in growth that would more than offset rises in future interest payments from the rise in debt. Indeed this is just what we have seen in the early months of Abenomics. Though prices are still declining now 3/4 of japanese consumers expect prices to rise. More radical measures could be tried to back an MMT inspired programme, for example a Central Bank could use its balance sheet expansions to invest in equity of firms that invest, hire workers and raise wages.
If then employment is forced back to a full employment equilibrium point the policy test is whether equilibrium can be restored between the goods and money markets. If there is still excess demand for money (hoarding) and ‘credit deadlock’ then the issue is how the holders of that money can be induced to spend it. Some ideas:
-A tax on idle balances used either to avoid austerity to fund interest on public debts;
-Cutting payroll taxes to zero and/or introducing a negative payroll tax (subsidy) to those at the bottom of the labour market;
-Shifting taxes to those things that will not deter capital formation and accumulation, such as land, &
-Directly monetising deficits/and or the central bank burning bonds it buys from state money creation. This would be inflationary but hey if you want to meet a minimum inflation target hey this is the way to do it.
This post was prompted by Tim Wortsall, of all peoples, post on whether progressive taxation makes sense a MMT world. In a sense he was right, and perhaps Randall Wray in response was not, the principles of taxation radically change in an MMT world as the overiding princple is how taxation can create inducements to restore full employment not how taxation can fairly fund public spending.
Hicks, J. (1982), Money, Interest and Wages, Collected Essays on Economic Theory, Oxford, Basil Blackwell.
Brett Fiebiger Modern Money Theory and the ‘Real-World’ Accounting of 1-1, The U.S. Treasury Does Not Spend as per a Bank
Scott Fullwiler, Stephanie Kelton & L. Randall WrayModern Money Theory: A Response To Critics
Brett Fiebiger A Rejoinder to “Modern Money Theory: A Response to Critics”
Thank you for your letter of 22 April to Eric Pickles about the Government amendment to
the Growth and Infrastructure Bill, which has now been agreed by the House of Lords, to
introduce a new light-touch neighbours’ consultation scheme for small scale householder
extensions. I have set out answers to your questions below.
We will update the Impact Assessment for the changes to permitted development rights for
homeowners, including a revised estimate of benefits, when we lay the secondary
Our revised approach responds directly to the concerns raised about neighbour
consultation. Where objections are raised by immediate neighbours, the council will
consider whether the impact on amenity is acceptable, considering issues such as privacy
and light. Our changes to householder permitted development rights will not apply to
protected areas, including conservation areas, National Parks, Areas of Outstanding
Natural Beauty and Sites of Special Scientific Interest. Existing safeguards under building
regulations (including ensuring adequate provision for rainwater run-off), the Party Wall Act
and Right to Light are unaffected by our proposals.
Our proposals to extend permitted development rights, as outlined in the consultation, are
for a three-year period and remain so. As we have said previously, if the scheme works
well, then in due course, there would be a good case for extending it, subject to
This is a very light-touch process, and we do not believe it will create a significant amount
of new work for planning departments, or impose significant costs on local authorities.
Indeed, our reforms will reduce the amount of time that planning officers need to spend on
producing reports for uncontroversial home improvements. We will, of course, make an
assessment of net savings and costs in the normal way in line with our own New Burden
guidance, and we will work closely with the Local Government Association on this and
other implementation issues.
These proposals will build consensus by encouraging homeowners to talk informally to
their neighbours in advance, and will be backed up by the council acting as an
independent arbiter. We believe that this strikes a good balance between the freedom of
homeowners to invest in their homes and protection of neighbours, and delivers the same
benefits as the 2007 Quality of Life report proposals, albeit in a different form.
The local authority assessment of the impact on the amenity of neighbours can only be
triggered by an objection from an adjoining neighbour, An application under these new
arrangements will be faster for the local authority to process than a normal planning
application. If no neighbour objects after the 21-day consultation period, the local authority
can let the homeowner know immediately that they can proceed. Even if there are
objections, the local authority will be considering the single issue of the impact on the
amenity of adjoining neighbours, rather than the full range of matters which would be
relevant to a planning application.
If permission for the development is refused by the local authority, the homeowner will be
able to appeal via the Planning Inspectorate in the normal way for planning applications.
This neighbours’ consultation scheme will only apply to the new additional householder
permitted development rights. Homeowners wishing to build extensions up to the current
limits (4m for a detached house and 3m for other types of house) will not be subject to
them, and nor will the new permitted development rights we are bringing forward for
commercial to residential change of use.
The introduction of the neighbour consultation scheme will mean that homeowners are
less likely to pay for a Certificate of Lawful Development, as they will be provided with
written confirmation that their application falls within permitted development. If a proposed
extension was larger than the new limits then it would not be permitted development and a
full planning application would be required. As is already the case, any extension which
does not either fall within permitted development or have local authority planning
permission could be subject to enforcement action using existing processes.
I hope that these answers have been helpful, and I am placing a copy in the Library of the
Housing benefit, despite contentious cuts, has soared in cost from £12.6 billion in 2003 to £24 billion now. “Is it a difficult issue? Yes it is. But have we got to make savings, yes we have.” Byrne argues that most of the 71 per cent rise is down to higher unemployment, and the initial step must be to get people into jobs through Labour’s compulsory jobs guarantee. He adds: “But we have also got to look at how we increase the supply of housing.”
His top priority over the next six months, he said, would be “to show how savings can be made on housing benefit by increasing the amount of homes there are for people to go to”. He did not go into details, but a study by the Institute for Public Policy Research has proposed phasing out housing benefit in favour of affordable housing grants to local authorities.
“Billions are spent with private landlords yet we ask nothing in return,” said Byrne. “We are spending £24 billion on housing but hardly building any houses. No wonder rents are soaring. We simply cannot go on like this.”
George Osborne is under growing all-party pressure to boost housebuilding to kickstart the economy and create jobs after his March Budget was criticised as a missed opportunity to tackle the housing crisis.
The Chancellor is being urged to use his government-wide spending review in June to give the go-ahead to the building of up to 100,000 council and housing association homes to complement the help for home-buyers he announced in the Budget. Critics say he needs to increase the supply of homes as well as demand through the mortgage market.
The pressure increased after new figures showed that 2m council houses and flats have been sold since Baroness Thatcher introduced her flagship “right to buy” policy in 1980 – the same number of people now on local authority waiting lists for housing. Lord Oakeshott, the Lib Dem peer who obtained the figures by tabling questions in the Lords, said: “The Thatcherite council house sales crusade won the Tories millions of votes and costs taxpayers billions of pounds. It’s imprudent housekeeping at its worst to flog off our social housing stock at taxpayer-subsidised discounts and then pay out £20bn a year to private landlords in housing benefit, often on the same resold properties.”
He added: “Social housebuilding has now almost ground to a halt. We must rebuild it by lifting the ban on councils borrowing to build, and guaranteeing institutional investment in housing association building on a massive scale. Or our economy will stay stagnant and 2m families will languish in housing need as Lady Thatcher’s worst legacy.”
Lib Dem activists called at the party’s spring conference for an extra 100,000 council and housing association homes and Lib Dem ministers including Vince Cable, the Business Secretary, are sympathetic. Mr Cable sees the move as part of what he has described as a “Plan A plus” – sticking to the Coalition’s deficit reduction plan but taking bolder action to secure growth.
Figures published on Thursday will show whether Britain slipped into a “triple dip” recession in the first three months of this year. Although City analysts predict that Mr Osborne will narrowly avoid that embarrassing fate, they believe the economy is still flatlining and Lib Dems argue that more housebuilding would give it an immediate shot in the arm.
Labour is expected to fight the 2015 election on a pledge to bring in a huge housebuilding programme. Ed Balls, the shadow Chancellor, has called for the proceeds of the 4G mobile phone spectrum to fund the building of 100,000 affordable homes. The £2.3bn proceeds will be spent by 2015 so Labour may finance such a promise by higher borrowing.
Mr Osborne used his Budget to announce a £3.5bn Help to Buy scheme to help people buy new homes with a five per cent deposit and to guarantee another £130bn of new mortgages. But the independent Office for Budget Responsibility (OBR) said the measures would do little to boost the construction industry and were likely to inflate property prices, sparking fears of another housing bubble.
The cross-party Treasury Select Committee described as “unconvincing” the Chancellor’s assertion that his measures would trigger an increase in the supply of homes. It has demanded replies to 19 unanswered questions about them. Andrew Tyrie, the committee’s Tory chairman, said: “The Government’s Help to Buy scheme is very much work in progress. It may have a number of unintended consequences. Without further detail it is not possible to estimate its effects. The questions the committee has asked the Government need answering.”
Policy Exchange, which is regarded as David Cameron’s favourite think tank, is pressing the Government to increase housebuilding and expressed alarm that the number of housing starts fell by 11 per cent to 100,000 new homes last year. It fears that the Coalition is on track to see the lowest level of housebuilding since the 1920s.
The Office for National Statistics (ONS) revealed last week that home ownership has dropped for the first time in almost 100 years as people struggle to get a foot on the housing ladder. The number of owner-occupiers rose to a record 69 per cent but fell back to 64 per cent in 2011. The number of people renting their homes rose from 31 per cent in 2001 to 36 per cent in 2011 as many found themselves trapped in the rental market.
Ministers have consistently said that the Coalition’s planning reforms are intended to speed up development to boost the economy.
Government statistics show that fewer applications are now being approved after introduction of the National Planning Policy Framework.
The figures show that the proportion of new small scale developments with fewer than 10 homes being approved within a Government target of eight weeks has fallen from 71 per cent to 68 per cent between 2011 and 2012.
Similar the proportion of larger developments approved by the slightly longer target of 13 weeks fell from 71 per cent in the 12 months to December 2011 to 68 per cent in the year to December 2012.
The statistics suggest that rather than spending up the planning process, the changes have made them more complex.
The NPPF distilled 1,400 pages of planning guidance into 52 and is biased in favour of “sustainable development”, was unveiled last year.
The changes were bitterly fought by campaigners and readers of the Telegraph through its ‘Hands Off Our Land’ campaign.
Labour’s shadow planning minister Roberta Blackman-Woods said: “In reality planning applications are now taking longer to decide and, unsurprisingly given planning was never the brake on growth the Government claimed it was, the economy is still flatlining.
“Following the Government’s botched planning reforms we have a situation in which many areas are unprotected by local plans, Labour’s brown field first policy has been fundamentally weakened and key environmental protections are being ripped up.
“We were sold all of this on the basis that it would speed up planning and boost the economy.”
Neil Sinden, campaigns director at the Campaign to Protect Rural England, said: “These figures show that even in their own terms the Government’s planning reforms are not delivering.
“They suggest that financial pressures on local authorities combined with confusion over policy direction and community resistance to poorly planned development mean that it is taking longer to make planning decisions.
“More importantly, CPRE fears the quality of planning decisions will suffer as well with damaging consequences for the countryside and rural communities. The time has come for a rethink.”
The Department for Communities and Local Government said that more than 2,300 major residential decisions have already been taken
Home Builders Federation research found 45,041 new homes were granted approval by local authorities in the final quarter of last year, up 62 per cent year on year.
A department spokesman said: “The Framework condensed 1,000 pages of confusing and obscure Whitehall guidance into 50 pages that makes the planning system more accessible, puts local decisions centre stage, protects our glorious countryside, and encourages responsible building.
“The Framework has been quietly working and getting on with the job. Nearly nine in ten planning applications are now approved – a ten year high.
“The Government agrees some councils are failing to meet their statutory duties on major applications, which is why it is introducing measures through the Growth and Infrastructure Bill to encourage councils to speed up the system.”
A “priority recommendation” from the Government’s Ecosystems Markets Task Force is for a new “biodiversity offset system” to let large developers would be given a right to build on one nature reserve or protected area, if they build one somewhere else.
The taskforce’s Government report said this was not “a license to trash nature” – although campaigners have warned that that is exactly what it is.
It said: “We need a system in which unavoidable net impacts on biodiversity of new development are more than compensated by restored and created habitats elsewhere through an efficient market.”
It is about better regulation, developing a well-defined market which delivers ‘net gain’ for nature which the current planning system has generally failed to do.”
In April 2012, six two year pilot projects were launched in Devon, Doncaster, Essex, Norwich, Nottinghamshire, and Warwickshire, Coventry and Solihull.
The review said that it would “revolutionise conservation in England by delivering restoration, creation and long-term management of in excess of 300,000 hectares of habitat over 20 years” and “incentivise location of development at sites of lower nature value”.
Environment secretary Owen Paterson suggested that he would decide on whether to expand the scheme when the trials’ results come back next year.
He said: “We shouldn’t to choose between either improving the environment or growing the economy. We should aim to have both which is why I’m keen to see the results of these trials.”
But Neil Sinden, from the Campaign to Protect Rural England, said offsetting failed “to recognise the complex way in which wildlife systems are sustained and thrive”.
He told The Daily Telegraph: “You can’t wipe out wildlife habitats and expect to be able to create on that can achieve the richness and diversity of wildlife sites that have evolved over decades and centuries.
“There is a big danger that it will be abused by developers to justify entirely unacceptable developments and will damage the rich, diverse and most valuable wildlife sites.”
We have been sceptical about the idea of biodiversity offsetting before because some habitats take many years to develop and appropriate discount rates on the ecosystem services value of babitats have not always been applied. To be fair to Defra the latest guidance – 9th April – they have begun to address this point, through the use of a ‘multiplier’ efectively a discount rate adjusted for the risk of non-habitat devlivery (see para 33. of the habitat provider guidance), and a discount rate of 3.5%.