We need radical state intervention to cut through our NIMBYist bureaucracy
The tragedy of the Conservative leadership contest is that most senior Tories know an easy way to ‘level up’ the country but feel their voters won’t allow it.
Britain’s house-price-to-income ratio is almost twice that of the United States. This isn’t a London-centric phenomenon — a host of cities, including Manchester, Cardiff, Leeds and Plymouth, are now less affordable than New York (Birmingham just about ties). Young Britons must save for five more years than their 1990s predecessors for their first (increasingly tiny) property. Cities are stifled by their inability to expand. Would-be factories face years of consultations with no guarantee of success. Infrastructure projects which aren’t cancelled are the world’s most expensive and can take decades to green-light.
Yet, for all its potential, reform is a no-go. Tories are clear that ‘blue wall’ voters won’t abide change. For their part, ‘NIMBYs’ know newbuilds are rarely accompanied by necessary investment roads, schools, or sewage (developments in Surrey have faced repeated flooding). How to square economic necessity with political reality? Stopping the import of the equivalent population of Hull every year would be a good start. For the rest — look to China.
Chinese local governments have the power to sell ‘ready-to-go’ permissioned land to developers. Their eagerness to do so is driven by profit: despite broad tax powers, they derive a third of their income from selling land. Applying this system in a sentimental democracy like Britain would take three steps.
The first is to empower local authorities to side-step planning laws and grant open-ended (but time limited) planning permission on land they acquire, allowing them to sell ready-to-go land with whatever caveats they desire. Profits on this would be immense — permissioned rural land can see a value mark-up of 30000%. Second: replace pitiful developer contributions to local infrastructure with a mechanism allowing authorities to transfer their profits to voters. This could take the form of tax relief and/or a more localised dividend. Part of the profit should also be siphoned off for the necessary infrastructure.
Finally, we should improve the quality council officers. Chinese central government officials must first work their way up through local government – ensuring a high quality of local administrator. The Civil Service could adopt a similar system. An alternative solution — one which may better align incentives — would be to create well-paid development teams who share some of the dividend from land sales.
Together, these proposals side-step the political minefield of centrally-imposed targets, with local voters empowered to weigh their desire for continuity against financial gains. The system would also be more responsive to demand, with residents in high-potential areas standing to gain the most. Crucially, open-ended permission would clear aside the barricade of bureaucracy preventing regional development.
These proposals are transferable. Fracking has the potential to economically transform much of England and Wales, yet projects have been held up by local protests and nervous MPs. A dividend would allow communities to cash-in on expanding global demand. The same can be applied to other hampered projects, such as onshore wind.
Britain isn’t doomed to stagnation. Empowering communities to control their destinies could radically transform the lives of millions. The alternative is an increasingly bitter, zero-sum conflict between the haves and have-nots. For a prosperous tomorrow, Conservatives must look to the People’s Republic.