The newly appointed Chancellor of the Exchequer, Rachel Reeves, has declared she will make revitalizing the economy a “national mission” while seeking to box out the economy from the political turmoil currently gripping both France and the US. Speaking at the Treasury to audiences of business leaders, Ms. Reeves is expected to levy a plan that takes a shot at Britain’s planning rules, declaring the era marked by “chaos and irresponsibility” over. Compulsory house building targets are also set to make a return as part of this overhaul of planning rules.
Ms. Reeves, a former Bank of England economist, has been drafted as Chancellor after her party’s emphatic election success last Friday. Peppering an audience of investors who have been hesitant to dip their toes into the British economy amid the tumultuous years that followed Brexit, she stated that her team worked hard through the weekend in preparation for this speech to audiences of industry leaders. The chancellor aims to announce some instant relaxation of planning red tape that has held back areas like construction, infrastructure, and the energy grid in hopes that investors will open up the taps, dispensing billions of pounds into green industries and house-building.
The Labour manifesto had already promised development for some of the so-called “grey belt” land, which the Chancellor aims to make good on. Additionally, An embargo at onshore wind power suggested Ms. Reeves is lifting, providing it generates more funds for hundreds of new planning officers. In an interview with the BBC on Friday, she also stated that she’s willing to fight those that have held up infrastructure investment and building in planning systems. On Monday, the Chancellor asserts that “where previous governments have been unwilling to take the difficult decisions – I will deliver. It is now a national mission. There is no time to waste”.
The Chancellor anticipates that the UK economy is approximately £140bn smaller than if it had grown like other developed economies. The new Chancellor will meet with the Bank of England Governor later this week and the Office of Budget Responsibility, where a Budget and Spending Review are expected in the Autumn. Although the Chancellor will not declare any new tax-and-spend strategies, she has been engaging in discussions to raise the investment required to boost the economy.
The share prices of UK house builders have spiked significantly after the election, following Labour’s triumph. During the election campaign, Labour focused on housing supply challenges, seeking to build over 1.5m homes during the next parliamentary term, while also announcing mandatory housing targets, unlike the Conservatives. The implementation of compulsory house building targets aims to make sure that councils deliver the required number of buildings. Opponents, nevertheless, suggest that such policies have not been successful and in some cases risks forcing development on green fields against local communities’ wishes. Some warn that reforming the planning system, as Labour has promised, will be a challenging and fraught step-by-step process
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