Labour announcements are a welcome boost for the UK real estate industry

Rachel Reeves gave an all guns blazing first speech as the new Chancellor of the UK yesterday (8 July), following Labour's recent election win, with a particular focus on growth, house building and reform.

She set the scene by saying that Labour have inherited the worst set of government finances since World War II, inheriting a legacy of "14 years of chaos" under previous Conservative governments.

The Chancellor has commissioned a full review of the state of the finances and following that a budget will be announced later in the year.

The message was clear that Labour want to show private investors that the UK will have a stable government with stable financial conditions, with the aim of promoting growth in order to keep taxes, inflation and mortgages as low as possible.

Amongst the announcements were her plans to get Britain back on track with housing and growth through the creation of a new £7.3 billion National Wealth Fund to help catalyse important projects in partnership with private investment, and radical planning reform in housing, energy and infrastructure. A summary of this is as follows:

Reform the national planning policy framework

• Growth focussed approach to planning decisions.
• Build 1.5 million homes in the next five years through reforming the national planning policy framework network and restoring mandatory targets within local councils.
• Scrapping the decision to ban onshore wind farms to allow more clean energy projects.
• Decisions of large developments will be taken at national level, not by local councils.

Give priority to energy projects

• Planning priority will be given to energy projects currently in the system to ensure they make swift progress.

A new task force

• A new task force will be created to accelerate stalled housing sites, with a focus on Liverpool Central Docks, Worcester Parkway and Langley Sutton Coalfield, which between them will deliver 14,000 homes.

Support for local authorities

• Support the local planning departments with resource of a further 300 planning officers.

Direct intervention by ministers

• Changes to the planning system to allow for escalation of important projects/decision to the Deputy Prime Minister and Chancellor.
• Review of greenbelt boundaries.
• Prioritise brownfield and greyfield sites across the country for development to meet housing targets.
• Already reversed two planning decisions for data centres in Buckingham and Hertfordshire. 

Reform planning system and policies

• New policy intentions for the delivery of critical infrastructure within the year.
• Secretary of State for Transport and Secretary of State for Energy and Net Zero to prioritise projects that have been sat unresolved for too long.

With all new projects, the Chancellor acknowledged that there will be trade-offs and various concerns around environmental and infrastructure impacts, but she was clear that Labour "won't succumb to the status quo which responds to the existence of trade-offs by saying no and relegates the national interest below other concerns".

All in all, there are very clear signals for both private and large institutional investors that the UK is open for business and they will get the full support of the Labour government. Labour is showing its intent to make tough decisions to get Britian building again, and will only be able to meet these targets with the support of private sector investment.