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by Tom Scotson and Margaret Taylor
09 July 2024
Paul McLennan pledges 'collaborative' approach to Labour's housebuilding plan

Paul McLennan is to seek a meeting with UK housing minister Matthew Pennycook | Alamy

Paul McLennan pledges 'collaborative' approach to Labour's housebuilding plan

Housing minister Paul McLennan has vowed to “work collaboratively” with the UK Government after Chancellor Rachel Reeves yesterday said the Labour administration will bring back housebuilding targets as part of its plan to change Britain's planning rules and grow the size of the economy.

In her first speech as chancellor, Reeves said the government was prepared to make “tough” choices on growth to increase living standards across the UK.

She claimed Labour was willing to bear the brunt of short-term “political pain” on issues such as housebuilding to “fix Britain's foundations”.

The chancellor said a set of new planning rules would help businesses build key infrastructure. It would also aid Labour's ambition to reach its target of constructing 1.5 million homes in its first term in office, she said.

“Last week, the British people voted for change,” she said. “And over the past 72 hours, I have begun the work necessary to deliver on that mandate.”

She went on: “Our manifesto was clear: sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people.

“Where previous governments have been unwilling to take the difficult decisions to deliver growth – or have waited too long to act – I will not hesitate. It is now a national mission. There is no time to waste.”

Although responsibility for planning is fully devolved to Scotland, McLennan said he hopes to meet with UK housing minister Matthew Pennycook to discuss the implications for the UK as a whole.

“I will be seeking clarity on this issue as housing minister in Scotland,” he wrote on X, adding that he will “work collaboratively [with] the UK Government in delivering more social housing in Scotland”.

“Hope to meet my opposite number soon in the UK Government to discuss,” he added.

The previous Conservative government promised to liberalise Britain's planning rules after the party included the pledge in its 2019 manifesto.

It also said it would build 300,000 homes every year, but former housing secretary Michael Gove dropped the plan to implement housing targets after a rebellion of more than 50 Tory MPs.

In response to questions from journalists, Reeves said that the government would not fund the housebuilding itself but instead would put policies in place that would stimulate private sector investment.

“We need the private sector to build homes,” she said. “We're not going to be in the business of building those homes directly.”

The chief executive of Barratt Developments, David Thomas, welcomed Reeves’s speech, saying reforming planning would give the private sector the confidence it needs to invest.

“We welcome the government's commitment to reform of the planning system and their drive for growth,” he said.

“Building more new homes will bring huge economic and social benefits to the UK, and it is vital that local and central government are united with industry to plan positively to deliver high quality new homes and developments across the country.”

Mark Reynolds, chief executive of construction firm Mace Group and co-chair of the Construction Leadership Council, said the sector is “fully behind” the chancellor’s plan.

“[The] announcements show a welcome proactive approach to tackling the delays to the planning system that are costing the UK up to £11bn a year in growth and hampering the delivery of the homes and infrastructure we sorely need,” he said.

“The focus on cutting the red tape to progress nationally important projects, such as data centres, combined with increased resourcing of the planning departments, will bring a renewed energy and focus to the construction sector.

“It's particularly welcome to see the chancellor has put this at the top of her agenda – we stand fully behind the delivery of the government's ambitions.”

Scottish business leaders have long made the point that the Scottish Government should take action on planning, which is said to be the main block on attracting investment in housing and large infrastructure projects, to help stimulate the economy north of the border.

Speaking to Holyrood ahead of the general election, Sean McGrath, chief executive of the Entrepreneurial Scotland Foundation, said he was “baffled” that it hadn't become a bigger election issue. 

“I wonder if the electorate realises just how important planning is to solving a lot of those issues [around employment and investment],” he said.

“We can't blame immigration, we can't blame Europe or inflation for this. It's about who gets to build what, where and when.

“There's no need to take back control of that; we have control of that here, we just don't address it.”

Claire Monaghan, partner and head of real estate and construction in Scotland at RSM UK, said that, with the chancellor pledging to overhaul the system in England, Scotland cannot afford to fall behind.

“We repeatedly hear of the challenges faced by developers and planning reform is critical to resolving the housing crisis, with progressive thinking and an appropriate pipeline of stock including affordable housing,” she said.

“Investment in infrastructure, such as hospitals and schools, is important, but consideration has to be given to where staff, required to support these institutions, will reside.

“While it will take time for the chancellor’s targets to be delivered in the UK, there is a risk that Scotland falls notably behind without similar targets and loosening of planning rules.

“The construction sector has had a tumultuous few years and it is likely without change in Scotland we will see a shift in investment focus to England as developers will have less red tape to navigate and will be able to see much needed returns. This is a divide the Scottish economy cannot afford.”

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