Labour unveil Land for the Many but not good news for all!

Context

Housing is a core domestic policy priority for all of the major UK political parties, who have identified increasing the number of homes built in the UK as key to attracting young voters, and ultimately to winning the keys to Number 10 at the next General Election.

Both Labour and the Conservatives have committed to relatively ambitious housing delivery targets. However, the two parties differ in their approach to how this target should be achieved.

Labour under the leadership of Jeremy Corbyn has advocated a much more interventionist agenda – with a central role for the State in not only acquiring land, but also in building and constructing homes. 

Labour policy on housing is set out in their 2017 General Election Manifesto, and their vision for housing is developed in greater detail in Housing for the Many (2018).  

Land for the Many follows in the footsteps of these previous documents, both developing existing policy and advancing new policies and shifting the emphasis to land. Whilst Land for the Many is an independent report commissioned and published by the Party, the recommendations contained in it will feed into Labour’s policymaking as they look towards their next General Election manifesto.

Overview of major policy proposals

Newington has identified below the main policies set out in Land for the Many that would impact on housebuilders, developers and landowners.

Development and planning

Land for the Many is clear that development should predominately be led by democratically accountable public bodies - not by private developers. 

Labour’s flagship policy would be to reform the 1961 Land Compensation Act, to remove the ‘hope value’, which they argue would limit windfalls to developers and increase the amount of land coming forward for development as it would make it easier for local authorities to buy up land. Delivery of homes would be carried out by a mixture of housing associations and local authorities. Whilst there would still be a role for private developers, this role would be significantly reduced, with the public sector essentially contracting out construction work to private developers, within tightly defined parameters.  Ideas in Land for the Many include:

  • The establishment of new Public Development Corporations. These would be given power to purchase, develop and sell land in the public interest for the creation of new towns and communities.

o   These development corporations would contract out construction to housebuilders – prioritising small- and medium-sized firms.  This would remove the role of private developers in purchasing and bringing forward land. 

  • Reform of the 1961 Land Compensation Act – removal of the ‘hope value’, allowing these new Corporations to acquire land for less and more straightforwardly.

o   The report notes that the change to this Act would incentivise landowners to sell land – and therefore in practice the number of compulsory purchases would not dramatically increase.

  • Empowerment of local authorities – allowing them to set their own targets for affordable housing and an attempt to rebalance the planning system away from developers – allow local authorities to vary planning fees.
  • Removal of permitted development rights that allow office/agriculture building to be turned into houses.
  • The creation of a Common Ground Trust  - this would be a publicly-backed but independent non-profit institution that would purchase the land houses are built on.  This Trust would act as a vehicle for bringing land into common ownership. The Trust would make home ownership more affordable, create lower deposits and reduce house prices. The scale of the Trust is unclear, but it would be aimed at those struggling to afford a mortgage. People would only own the bricks and mortar - land would be owned by the Trust. 

Community engagement in planning

Communities are at the centre of the Corbyn political agenda, and Land for the Many sets out proposals to democratise the planning system. Recommendations include: 

  • A call to hold a formal review of participation in planning – to explore different ways to help communities become more engaged in the planning process. Creation of a Community Participation Agency to ensure underrepresented groups are involved in the process.
  • Jury service style plan making – involving local groups. The juries would be comprised

of local people selected at random and they would participate in designing local and neighbourhood plans at the earliest possible stage.

  • Introduction of a community right to buy – in line with the Scottish model. In Scotland, communities are provided with the first option to buy land offered for sale. Whilst often in Scotland this occurs in a situation where there is a willing seller, community groups are now also able to purchase land without a willing seller under certain circumstances, such as where land has been abandoned or neglected.
  • Introduction of community sale orders – require land that has been left vacant or derelict for a defined period to be sold by public auction – community groups could be offered first refusal.

Increased transparency

A recurrent theme in Land for the Many is a desire to increase transparency around who owns land and how much land is worth.  There is a clear belief that individuals should be able to see who owns land in their local area and the report recommends a move towards open data/registers.  

·         Publication of the owners of land (including Trusts) in England and Wales as open data and compulsory registration of corporate bodies that own land.

·         Publication of the price paid for all property.

Land taxation

Land for the Many includes plans to radically overhaul the way in which land is taxed. It notes that there has been a clear shift in the UK away from a tax on land, towards a tax on income and expenditure. The report recommends:

  • Business rates replaced by a land value tax – based on the rental value of commercial land value.  Vacant and derelict land would be brought into the regime to discourage hoarding of land – designed to stop “unearned windfalls”.
  • Stamp Duty – phased out for people buying homes they live in themselves.  It would remain in place for non-doms and second homes.
  • Capital Gains tax – increased in line with income tax on second homes and investment properties.
  • Offshore company property tax – 15% tax paid on the price of any land or real estate purchased by a company owned in a secrecy jurisdiction.

Next steps

Whilst some of the policies outlined in Land for the Many may represent opportunities for your business, others pose a significant risk to businesses in the property and development world. 

There are still however, a number of opportunities for you to engage with and to help shape Labour’s polices on housing and planning. The policies set out in Land for the Many still need to be formally adopted as official Labour policy – at present they are recommendations from an independent review commissioned by the Party.   Therefore there is a window to engage with the Labour policy making process ahead of the drawing up the next General Election manifesto. 

If you would like to engage in the policy adoption process and make sure your thoughts are heard, Newington can advise and support you based on our vast experience across the sector at local and national levels. 

We would be delighted to discuss with you how we could support you in engaging with these issues and the wider housing and planning debate.