Leeds, its German twin Dortmund, and its French twin Lille are all Cities with around 700,000 people living within 10km of the city centre, with an industrial heritage and below average GDP per capita for their country.

Unlike Leeds, Dortmund has an eight-line, 47-mile Stadtbahn network, essentially an underground tram system, with trains running every ten minutes. The city is also part of the wider Rhine–Ruhr S-Bahn network, a faster commuter rail system with four lines and about 25 miles of track running through the city.

Lille, has a slightly more modest system but still far more extensive than Leeds: two driverless metro lines and two tramlines with a combined network of 38.9 miles. The metro can run extremely frequently, with trains every 66 seconds on one line at peak times.

Why the difference?

Part of the explanation is cost. Infrastructure projects in Britain are unusually expensive. Our analysis suggests that tram projects in the UK cost about 85 percent more than in France and more than three times as much as in Germany.

But governance also plays a major role. The decisions, and the funding, for what happens in Leeds do not primarily come from Leeds or even the wider West Yorkshire region. Two years after the local Mayor was elected on a promise of building a tram the government is still ‘assessing the business case’ while writing reports about how maybe it should be a bus instead.

This is because every stage relies on permission and funding from the Department for Transport and other central government bodies in London. Tram projects are typically funded largely by central government, and even funding that is notionally local mostly comes from redistributed national taxation.

In France and Germany it is very different. More decisions are made locally, and far more funding is raised locally.

Getting permission: how rail projects are approved

A Leeds Tram in a Museum. I know that was then, but it could be again.

In Lille and Dortmund, the political decision to build a new rail line is made locally. In Leeds, the key decision is national.

In Lille, the metropolitan authority decides whether to pursue a new metro line. The metropolitan council votes on whether to begin the project and fund the initial studies. The French state becomes involved later through regulatory procedures such as environmental assessments, public inquiries and a Declaration of Public Utility if compulsory purchase is required. But the core political decision to build is taken locally. The city-region identifies the route, commissions studies, decides whether the project should proceed and assembles the funding package. National procedures mainly function as legal checks on projects that have already been decided locally.

In Dortmund the process also begins locally. The city council decides whether the city will pursue a new Stadtbahn line or extension. Council committees examine options and recommend whether to proceed, and the council votes to begin planning and later to approve construction. The project then passes through a formal plan approval process under German transport law. This process is overseen by the state authority in North Rhine–Westphalia rather than the federal government. The state’s role is regulatory: reviewing plans, environmental impacts and technical compliance before construction can begin. The political initiative, project design and delivery remain local.

Leeds operates very differently. In England, a new tramway normally requires a Transport and Works Act Order (TWAO). This order is granted by the Secretary of State for Transport after a statutory process that may include consultation, objections and a public inquiry run through the Planning Inspectorate. The order provides the legal powers needed to build and operate the line and to acquire land compulsorily.

This means Leeds cannot simply decide to build a tram and move forward. The city and the West Yorkshire Combined Authority can develop plans and business cases, but the project only becomes legally buildable once central government approves it.

Central involvement does not end there. Large transport schemes in England typically have to return repeatedly to Whitehall as they progress. West Yorkshire will need approval for the statutory order authorising the line, the business case securing government funding, the outline business case confirming the funding package and the final business case before construction contracts can be signed. They will also need permissions related to the environmental assessment. If and when objections are raised, the scheme will also go through a public inquiry run on behalf of the Secretary of State for Transport.

The result is a very different dynamic. Lille and Dortmund make decisions locally and drive projects locally, even while complying with national standards. In England, cities develop proposals but progress depends on repeated central approvals.

This also affects capacity. Dortmund’s civil engineering department alone employs almost as many people as the entire Highways and Transportation team in Leeds. British cities face a circular problem: because they have not been given the powers to deliver major infrastructure, they have had fewer opportunities to develop the expertise needed to do so. The resulting lack of capacity is then used as a justification for keeping those powers centralised.

Over time the UK should move toward a system closer to those in France and Germany, where cities make the core political decisions about local transport infrastructure. In the meantime, the current process could at least be simplified. Instead of repeated approval gates, major transport schemes should require no more than two approvals through the Treasury Approvals Process: one from the Department for Transport and one from the Treasury and Cabinet Office.

Paying the bills

The biggest difference between Lille, Dortmund and Leeds is not only how much they spend on transport, but how much revenue they can raise and control locally.

Lille benefits from a dedicated local transport tax. The Versement Mobilité (or Mobility Payment in English) is a levy paid by employers to fund transport. Local areas can set their own rate, some choose lower taxes, some pick more transport. In Lille this raises more than €300 million per year, forming the backbone of the metropolitan transport budget alongside fares and borrowing. Because the tax is locally controlled and predictable, it provides a stable revenue stream that can be used to finance major projects such as metro upgrades, new rolling stock and network expansion.

Dortmund does not have a dedicated transport tax like Lille. Instead it has significant control over its own tax base. German cities can set the rates for major local taxes, including the trade tax on businesses and property tax, through locally determined multipliers. Most of the revenue stays with the municipality and can be spent through the city’s own budget. This gives cities like Dortmund the ability to generate substantial local funding and allocate it to infrastructure priorities alongside federal and state grants.

Leeds has far less fiscal autonomy. Its main local taxes are tightly controlled by the national government. Business rates are largely set nationally and councils face strict limits on council tax increases. They also have limited discretion about what they spend their money on with most council budgets spent on statutory requirements councils have to prove. Therefore, major transport projects typically depend on funding packages negotiated with central government. Local contributions do exist through mechanisms such as developer contributions or borrowing, but there is no equivalent to Lille’s dedicated transport tax and far less ability to increase tax revenues locally.

The result is a very different starting point for infrastructure investment. Lille can rely on a large dedicated transport tax. Dortmund can raise substantial revenues through locally controlled taxes. Leeds must depend far more heavily on funding decisions made in Whitehall.

In very prosperous places with strong opportunities for land value capture, such as London, cities should be able to finance all their own infrastructure with minimal central involvement and no central money. Other cities may still require some support from national government, but probably far less than today if they were given the right fiscal powers.

Lille offers a useful example. It is the largest city in mainland France’s poorest region, yet it still covers most of its transport costs locally. Lille has a GDP per capita very similar to that of Leeds. British cities poorer than Leeds may struggle to pay all of their own bills, but if given enough freedom they could likely fund the majority of their own transport investment.

What can be done now

In the long term the UK should move toward a system more like France’s, with transport-specific local taxation, or Germany’s, with much greater freedom for councils to raise and spend their own revenue. Central government using the fact local politicians have a mandate to deliver something as a reason to block it has to end.

In the meantime, several existing UK mechanisms could be expanded or simplified.

Cities should be allowed to introduce a tourism levy on overnight stays in hotels and short-term lets, creating a small but reliable revenue stream linked to visitor demand.

Land value capture should also be strengthened. Mayors should be able to levy business rate supplements without requiring a local poll, learning from London’s Crossrail experience where a similar levy helped fund a transformational transport project. A council tax precept on properties near new stations could also be considered, expiring once construction debt is repaid.

Finally, Workplace Parking Levies should no longer require approval from the Secretary of State. At present new schemes can take up to three years to secure sign-off from the Transport Secretary. Decisions on whether to introduce such levies should be fully devolved to local authorities and metro mayors, as they are fundamentally regional transport policies.

Giving cities more power over both transport decisions and transport funding would speed up projects and over time build up the expertise needed to reduce costs. We need to Let Mayors Build.

The obvious effect of the cut will be to lower electricity bills a bit, estimates of the magnitude suggest a £8 to £20 saving for the average household, but it might have another surprising effect: lowering emissions. Carbon taxes are designed to make emitting carbon more expensive and encourage the switch to cleaner alternatives, so how can scrapping one be the green option? To understand, it’s worth going back to why the CPS was first brought in.

Your watch is over

In September 2024, 142 years after the first coal power station in Britain opened in 1882, Britain’s last coal power station was taken off the grid. Coal is by a long way the dirtiest way to generate power. When it was up and running, Ratcliffe on Soar, Britain’s last coal plant, was emitting 2 and half times more carbon per unit of electricity produced than nearby gas power plants.

Getting coal off the grid was just about the most impactful way Britain could cut emissions. The problem was the Emissions Trading Scheme (ETS) wasn’t working. In theory, ETS permit prices were meant to gradually rise as they were taken off the market, but instead they collapsed. The Great Recession temporarily caused emissions to collapse and meant firms were able to build big surpluses of permits (exacerbated by generous free allocations). The result was that by early 2013, permit prices fell to about £2.50. This was not a strong incentive to get off coal.

The Carbon Price Support (CPS) was brought in to top-up prices so they hit the level that policymakers intended ETS permit prices to reach so they would actually start changing behaviour. And they did.

The tax played a huge role in moving coal off our grid, generating massive reductions in UK carbon emissions. Per unit of electricity produced, Ratcliffe on Soar was therefore paying 2 and half times more Carbon Price Support than a gas power plant. The carbon price support was therefore serving a genuine policy purpose, removing coal off the grid and encouraging the uptake of carbon-free renewables and still lower carbon sources of electricity like gas.

Gas isn’t going anywhere and we don’t just pay this tax on gas

Gas is lower carbon than coal, but burning gas still emits carbon. The CPS makes gas more expensive – about £6 per megawatt hour more expensive.

In the short-term, we are stuck with gas on the grid. Renewables will need a back up for when the wind isn’t blowing. Batteries are nowhere near cheap enough to provide this backup and will not be any time soon. The government’s progress on nuclear regulation is impressive, but it will be years until it shows results. Therefore, gas is going to be part of our electricity grid for years to come. Increasing bills with taxes does not change this reality.

These taxes don’t just make gas more expensive, they make all of our electricity more expensive. 17% of our electricity comes from renewables on fixed term contracts. 30% comes from the wholesale market with a ‘Renewables Obligation’ top up. The rest comes straight from wholesale markets. Electricity producers bid to sell electricity, with the market clearing at the point where supply meets demand. All producers are paid the price of the marginal unit of electricity (aka the most expensive source), which is often gas. In wholesale markets gas almost always sets the price. Pushing up the price of gas therefore pushes up the price we pay to producers in the wholesale market that are not gas. The bulk is older renewables and our ageing nuclear fleet, as well as some sales to the grid from rooftop solar.

Therefore, driving up the price of gas means driving up the cost of nuclear and renewables that don’t emit any carbon at all.

Decarbonisation needs cheap electricity, the carbon price support got in the way

Decarbonising the whole economy involves two major steps.

1. Decarbonising our electricity supply

2. Electrifying everything that currently isn’t electrified.

On 1, we have not done badly. Removing coal from our grid, replacing it with gas, and increasing the renewables share of electricity has reduced emissions dramatically.

On 2, we are doing very badly. Only 21% of our energy comes from electricity. In transport, buildings, industry and agriculture we need households and businesses to make expensive investment decisions to convert from pure fossil fuels to electricity where 2/3rds of the energy comes from zero carbon sources. But they won’t do this if electricity is too expensive. In fact, prices are so high that despite the rollout of heat pumps and EVs, electricity use has been steadily declining.

The BBC recently documented a man in Glasgow who had bought a heat pump, but has opted to switch back to his gas boiler because it was costing him too much.

While heat pumps can be 3 or 4 times more efficient than gas boilers at converting energy into heat, electricity costs around 4 and half times more than gas. Turning off his clean heat pump and switching on his fossil fuel burning boiler made economic sense. Gas based electricity that carbon efficiently powers the heat pump has to pay the CPS. The less efficient gas boiler does not. Remember, the CPS only applies to electricity.

For those of us who don’t already have a heat pump, buying one is one and a half to twice as expensive than a gas boiler, even with generous taxpayer funded subsidies. It is going to be very difficult to get people to invest in a more expensive technology that will put their bills up. This is why Britain Remade have been campaigning to get the Government to make cheap power (not clean power) their top priority.

Returning to the decarbonisation two-step of decarbonising electricity and electrifying everything, sometimes there is a trade off between the two necessary steps.

The government’s Net Zero Power 2030 push will result in our electricity supply being less carbon intensive. However, it has resulted in buying offshore wind at £91.20 per MwH on 20 year contracts. This will likely push up bills for decades and slow the adoption of technologies like heat pumps necessary for the electrification of everything.

However, with the carbon price support there was no conflict, it was all downside. As gas is going to stay on the grid for many years to come regardless of the tax treatment (and new clean generation is funded via fixed contracts), all the CPS was doing was pushing up the price of electricity, and therefore slowing down our decarbonisation. That’s why retiring this carbon tax was a key ask for our Cheaper Energy campaign.

Ditching the CPS good news for bills and good news for reducing our carbon emissions.

The UK’s capital is on a par or has better productivity than every other G7 country’s main city, while our small towns and countryside hold their own our ‘secondary cities’, but big cities that are not London, do far worse than French, German, Japanese, Canadian and Italian equivalents. And all of these countries’ cities are far behind the US.

British cities look big but are actually really small

One of the main reasons for the lack of productivity is that transport outside of London is really poor. All else being equal the bigger a city is the more productive it should be. There are more opportunities for firms to specialise, more competition, bigger pools of workers for firms to recruit from and more places for people to choose to work at and buy from. In France, Germany, the US and almost every other developed country this is true. It is not true in the UK. Part of the reason for that is that, at peak times, the UK’s big cities are nowhere near as big as they look.

Our road networks are nowhere near as good as in the vast majority of US and Canadian cities. And our public transport is significantly worse than European and Japanese cities. This means that at peak times, due to cars and buses stuck in traffic jams and small or non-existent metro and tram networks, it can be very difficult for many people in our big cities to get to the centre.

Productivity and City Populations

From Rodrigues and Breach, 2021

Tom Forth has shown that, at peak times, the number of people who can actually travel into Birmingham City Centre in half an hour or less by bus from their nearest bus stop is just 0.9 million. However if Birmingham had a high-quality tram network that would rise to 1.7 million.

Mind the transport gap

We have compared UK cities to the Cities they are twinned with in France and Germany, the developed countries most similar to the UK in economic and population size. Cities twin with foreign cities because of shared history, to promote business and cultural ties and possibly also because it is an excuse for councillors to go on a trip abroad.

Many important British cities like Cardiff, Bristol and Leeds have no metro or tram infrastructure at all. Most of the places that do have a network, it only covers a small percentage of the city making it inaccessible for most residents, and less useful for those who can access it.

Why the difference? Too expensive and too little local power

There are two main reasons that tram and metros are less common in the UK. First, it is that tram projects cost more than double in the UK than they do in Europe and rail projects as a whole are 83% more expensive than they are in comparable nations. The UK gets significantly less money for its transport investment.

The other reason is that, especially in England, control of transport budgets is just too far away from the places that spend them. In Germany, local governments have extensive tax raising and cutting powers that allows local governments to make decisions on what to invest in. In France there local governments have the power to raise a transport levy on employers to spend on public transport.

Let Mayors Build

In the long run we need to give Mayors similar powers to what local governments in France and Germany and almost every other developed country have.

In the meantime, several existing UK mechanisms could be expanded or simplified.

Cities should be allowed to introduce a tourism levy on overnight stays in hotels and short-term lets, creating a small but reliable revenue stream linked to visitor demand.

Land value capture should also be strengthened. Mayors should be able to levy business rate supplements without requiring a local poll, learning from London’s Crossrail experience where a similar levy helped fund a transformational transport project. A council tax precept on properties near new stations could also be considered, expiring once construction debt is repaid.

Finally, Workplace Parking Levies should no longer require approval from the Secretary of State. At present new schemes can take up to three years to secure sign-off from the Transport Secretary. Decisions on whether to introduce such levies should be fully devolved to local authorities and metro mayors, as they are fundamentally regional transport policies.

Giving cities more power over both transport decisions and transport funding would speed up projects and over time build up the expertise needed to reduce costs. We need to Let Mayors Build.

It goes without saying that this is all extremely poor value-for-money. It is possible for £700m to do a lot more for nature. The Government appears to agree. They accepted the findings of John Fingleton’s review into nuclear regulation ‘in full’. The Fingleton Review recommended that instead of being required to provide ‘like-for-like’ compensation for adverse impacts on protected sites and species, developers should be given the freedom to fund a much wider range of measures so long as they represent a more cost-effective way of helping nature. (We called for the same thing in our Policy Playbook for Cheaper Nuclear.)

So, is the problem solved? Not quite. The Government endorsed giving developers more flexibility, but opted to do so through guidance only. That’s better than nothing, but it still leaves the door open for nature regulators like Natural England to interpret the guidance as they see fit. If Natural England (or the Environment Agency) still believe the law requires like-for-like compensation then they will demand it. And even if Natural England follows the guidance, there will still be activists ready to test whether that guidance is legally robust in the courts. Risk-averse developers wary of delays and legal challenges may simply opt not to take advantage of any new flexibility.

The Fingleton Review was about how to make it easier to build nuclear powerplants, but the fact that the Habitats Regulations require like-for-like compensation isn’t just a problem for nuclear. One of the worst affected sectors is offshore wind. From time to time, kittiwakes (a sort of posh seagull) fly into the turbine’s massive rotating blades. Like-for-like compensation here typically means creating new artificial nesting structures for the birds. Known as ‘kittiwake hotels’ these are typically towers in the sea with big boxes on the top where kittiwakes can nest.

Building kittiwake hotels isn’t cheap. Across the UK’s offshore wind pipeline, developers are set to spend over £300m on the structures. There’s another problem: kittiwake hotels aren’t a scalable solution. When you build 300 million pounds’ worth, you soon hit diminishing returns. There are only so many sites you can use and so many kittiwakes to use them.

If you really wanted to help kittiwakes, you’d be better off focusing on making sure they have enough food. Sand eels are kittiwakes’ snack of choice and have seen their numbers decline massively (70% by some estimates) because of overfishing and climate change. We can’t do much in the short-term about the latter, but we can address the former. The problem is that because fisheries are managed by other policies, any action to reduce sand eel overfishing doesn’t count as additional. The most effective environmental remedy is ruled out.

There are other problems too. It isn’t enough to build a hotel for kittiwakes, developers need to show the regulator the rooms are booked out too. This can take time – four years according to one RenewableUK blog.

In response to energy prices spiking in response to Russia’s invasion of Ukraine, the last Government committed to build a lot of offshore wind in a short amount of time. Put simply, the Kittiwake hotel and wait approach wasn’t going to work. Instead they committed to a special package of strategic compensation where offshore wind developers could pay into a ‘marine recovery fund’ instead of designing (and testing) inefficient site-by-site solutions.

Now here’s the curious thing. For nuclear, the Government is relying on guidance. Their view is apparently that the Habs Regs themselves aren’t broken – they’re just being interpreted badly. For offshore wind, they seem to have taken a different view and have chosen to legislate putting a statutory instrument before Parliament

The Conservation of Habitats and Species (Offshore Wind) (Amendment etc.) Regulations 2026 amends the requirement to provide like-for-like compensation and clarifies that compensation must instead “benefit the UK MPA (Marine Protected Area) network in a manner which is reasonably proportionate to the adverse effects…” and this only applies to “relevant offshore wind plan or project[s].”

Remarkably, days after ruling it out, the Government has done exactly what the Nuclear Regulatory Taskforce called for on like-for-like compensation just for offshore wind farms.

I have a few questions for DESNZ.

1. Is new guidance sufficient to allow non-like-for-like compensation? If so, why are we legislating for offshore wind?

2. If guidance isn’t sufficient and legislation is necessary, then why are we not legislating to amend the Habitats Regulations for nuclear too?

3. If we’re not legislating to fix the Habs Regs for nuclear (but we are for wind), then is the Government really serious about delivering a ‘golden age for nuclear’?
   

“Cutting the cost of living is this government’s number one priority.”
Rachel Reeves MP, Chancellor of the Exchequer

There’s been a clear shift in how the Government talks about the economy. A year ago, ‘growth’ was the priority. Today, it is ‘affordability’. It is easy to exaggerate what this means for policy. After all, the point of boosting growth is to put more money in people’s pockets so they can afford more stuff. But when the public talks about affordability and the cost of living, they are likely to be referring to two things, energy bills, and the cost of the weekly shop.

Unlike energy, Britain’s groceries are not particularly expensive by international standards. In the United States, the price of eggs went as high as $8 a dozen in late 2024. That’s more than twice as expensive as a free range pack here.

Still, the weekly shop is getting a lot more expensive. Average grocery prices are now around 23% higher than they were in 2022. Some goods have risen by much more. A 1kg bag of sugar cost about 53% more in January 2025 than it did in January 2022, while a loaf of bread costs about 30% more.

Most of the Government’s interventions post-affordability push have involved spending. Rail fares, for example, have been frozen at a cost of £600m. Extra charges are being taken off energy bills (and in most cases put onto general taxation). There are limits to this approach – we are already close to maxing out the national credit card. The good news is there is a way to cut the cost of the weekly shop without running up the deficit. Let me explain.

It is common to blame high prices on profiteering, but Britain’s supermarkets run on tight margins. The average supermarket profit margin is under 3% – about as low as any industry gets. Margins are low because Britain’s grocery sector is intensely competitive. And we have good evidence that competition has cut prices here.

Discount supermarkets Aldi and Lidl went from having a combined market share of just under 3% at the turn of the century to having 19% today. In that time, average profit margins have fallen a lot. The IFS studied Aldi and Lidl’s rapid expansion and found that when Aldi/Lidl enter an area, households make big savings. It’s not just that Aldi and Lidl have tighter margins and cheaper products, even shoppers who stick with Asda, Tesco or Sainsbury’s see lower prices as supermarkets respond to local competition by lowering prices, stocking cheaper ranges, and running more aggressive promotions. Some supermarkets even launched explicit “Aldi Price Match” marketing campaigns.

Aldi and Lidl want to open even more stores, yet there is one big problem stopping them from doing it as fast as they would like: the planning system.

Almost every time Aldi or Lidl try to open a new store, they face a legal challenge. Between 2020 and 2022, Aldi’s rivals submitted 77 planning objections and launched 12 separate judicial reviews designed to block the low-cost retailer’s expansion strategy. At the time, there were 40 Aldi stores held up due to planning complaints from rivals.

There’s nothing to suggest that the problem is getting better. Just last year, Tesco brought a lawsuit to try to block the opening of a new Lidl shop in Stockport. They were unsuccessful, but even the threat of legal action can lead to planning permission being withdrawn, as it did when Tesco threatened legal action against Wiltshire council’s decision to approve a Lidl.

By the way, don’t be fooled into thinking this is a story of heroes and villains. Aldi and Lidl are the losers’ overall from legal challenges against new stores because they are the supermarkets with the biggest expansion plans, but when they get a chance to block their rivals from expanding they take it. In an interview with The Telegraph, former Aldi UK Chief Exec Paul Foley stated “Aldi and Lidl also object to competitors that are opening up in areas where they are already established … It’s just the way it is.” In other words, don’t hate the player, hate the game.

Even when legal challenges fail, they still cause damage. Supermarkets are less likely to open new stores if they know there’s a risk of a long drawn-out (and expensive) legal battle. And every week of delay is a week of higher prices for shoppers.

Britain isn’t the only country with this problem. The problem got so bad in New Zealand, that as of 2009, supermarkets (and all other businesses) are heavily restricted from bringing planning complaints against competitors in the same trade. Supermarkets can only object if there’s a direct environmental impact on their store.

While I’m sympathetic to it, this wouldn’t solve the problem. It is much harder to restrict access to JR and even if a firm is restricted from objecting they can still bring a legal case down the line. Restricting standing (whether or not you’re allowed to bring certain legal challenges) is worth trying but if the challenges are on environmental grounds, even loosely, then it is likely to be incompatible with some of Britain’s treaty obligations.

Better to target the source. Since 1996, England’s planning system has had a ‘town centre first’ policy. The fear that out-of-town shopping centres and supermarkets would kill the high street led to rules that blocked out-of-town development unless developers could prove that there were no viable sites within the town centre (or edge-of-centre).

New out-of-town retail developments are also required to carry ‘retail impact assessments’. Just like a railway project might have to carry out an impact assessment to see whether a new line might kill rare bats, a new Aldi or Lidl must carry out an impact assessment to see whether it might kill any high street shops.

Planning policy is a devolved matter in Britain. Scotland, initially, didn’t bring in a ‘town centre first’ policy and when they did, they brought in a less strict version. This created a natural experiment for economists to study. LSE academics Paul Cheshire, Christian Hilber and Ioannis Kaplanis did just that.

The aim of the ‘town centre first’ policy is to protect the high street and cut car use. The evidence suggests it has failed on both fronts.

Consumer shopping patterns in England didn’t change much. People still preferred to drive out-of-town and do a big shop. And because supermarkets have greater ability to pay than smaller independent retailers, it pushed up rents for small shops as supermarkets opened up ‘Tesco Express’-style smaller branches. In fact, a policy designed to help small independent retailers appears to have had the complete opposite effect. A further study from the LSE’s Raffaela Sadun found that the extra competition from smaller centrally located supermarkets caused by the policy led to a 15% decline in employment among independents.

Worse still, it made England’s supermarket sector much less productive pushing up prices as a result. High street properties are more expensive to rent, often awkwardly shaped, and can’t stock as broad a range as bigger out-of-town stores. The study’s authors estimate that labour productivity in England’s supermarkets is between 20-25% lower as a result. In a competitive sector like supermarket retail, the benefits of higher worker productivity are likely to be quickly passed on to consumers in the form of lower prices.

This isn’t the only study to find that ‘town centre first’ policies cut productivity. A further study by Raffaela Sadun and Imperial’s Jonathan Haskel found that by nudging retailers to smaller stores, the entire retail sector saw declines in productivity. They estimate the policy explained 40% of the slowdown in retail sector productivity growth.

It’s likely that the full productivity loss is even greater than the above studies estimate once you take into account the impact on competition and the expansion of more efficient discount retailers like Aldi and Lidl.

Town centre first policies make up the bulk of the grounds supermarkets bring against the opening of new rival supermarkets. In the last decade, a multi-year court case was fought over it in Stockport (Tesco v Lidl). Planning appeals and inquiries have also been fought in Altrincham (Tesco v Lidl) and Sutton-in-Ashfield (Asda v Lidl) on the same grounds.

It would be one thing if there was evidence that the ‘town centre first’ policy works. Politicians would have to judge the benefits of lower supermarket prices against the risk more out-of-town shops would lead to less high street footfall. But the best economic evidence we have suggests that the ‘town centre first’ policy fails on its own terms. If Rachel Reeves is telling the truth and the number one priority really is cutting the cost of living then they should scrap the ‘town centre first’ policy and unleash supermarket competition. As one supermarket nearly said, every Lidl helps.

In Hinkley Point C and Sizewell C, Britain is building more new nuclear power plants than most countries. Yet, Hinkley Point C is set to be the most expensive nuclear power plant ever built. More than 75% more expensive than France’s, in theory identical, Flamanville C. Sizewell C will be cheaper, but not by much. And both projects are massively behind schedule. If we want to build our way out of dependence on fossil fuels, then we need to cut costs and speed things up.

The Government tasked ex-competition enforcer John Fingleton and a team of experts to come up with a plan to fix the way Britain regulates nuclear power. They set out radical reforms targeting everything from the way reactor designs are approved to the habitats regulations that force companies like EDF to spend the best part of a billion saving a trawler’s annual take of fish. Many of the suggestions mirrored ones we called for in our Policy Playbook for Cheaper Nuclear. They promised a radical reset and they delivered.

Of course, it’s not enough to just have the answers. We need politicians to have the courage to implement them. And let’s face it, this Government has a track-record of U-turning when the going gets tough. To its credit, the Government gave a full-throated endorsement of the review, with Starmer suggesting the entire economy should be subject to similar scrutiny. Yet their wording, “we agree with each and every recommendation in principle” gave wiggle room.

In the past few months, nature NGOs have mounted an aggressive campaign to discredit the report. They claimed that some of the review’s stats and facts, such as the claim Hinkley Point C spent £700m on fish protection measures, were essentially made up. This, to be clear, was entirely untrue. (For a claim-by-claim rebuttal, click here.) There was also a letter signed by a number of prominent leftwing backbench MPs and peers calling for some of the key nature measures to be scrapped. In anticipation of this, we organised our own letter, signed by leading figures from academia, business and politics, urging the government not to U-turn.

After months of waiting, we finally have the Government’s full plan to implement the Fingleton Review. Is it implementation in full, or have they given in to the green NGOs? Here’s Britain Remade’s assessment.

This is a massive step forward for nuclear power in Britain. It is nothing short of a complete transformation of the way Britain regulates the design of nuclear power stations.

We have a new single commission for nuclear to end the absurd situation where nuclear projects have navigate a maze of different quangos. The unscientific semi-urban population density criteria, which if it remained would have greatly held back the rollout of SMRs, will be revised to allow SMRs to be built in a much wider range of locations, including on the site of ex-coal plants. There will also be serious action to get rid of the duplicative requirement for ‘regulatory justification’.

There is a return to proportionality in regulation. Nuclear is the safest and cleanest way to produce power, but current policy forces vendors to redesign reactors in the pursuit of miniscule reductions (e.g. one banana’s worth) in radiation exposure. The way ALARP, the idea that risks be reduced to ‘as low as reasonably practicable’, works will undergo deep reform. There will be a clear steer to regulators over what is (and isn’t) a tolerable risk, while numerical targets on radiation exposure will be reviewed and made proportionate.

This is huge. It is the radical reset of nuclear regulation that we were promised. The era of Hinkley Point C being forced to make thousands of design changes to its French equivalent to comply with ONR regulations is over.

If you told me a couple years ago that not only would the Government commit to this, but also that these reforms would face essentially no opposition, I would have laughed at you. It shows how fast the debate on nuclear has moved.

Yet, as I suspected, this is not implementation in full. On planning reform in particular, some recommendations have been watered down, while one has been dropped altogether. While this is still a big step in the right direction, they could and should have gone further.

Let’s start with the positives on planning. Anti-nuclear activists have, in recent years, had great success in delaying nuclear construction. Hinkley Point C and Sizewell C have faced over a thousand days of delay due to legal challenges. Some, such as the challenge trying to stop Hinkley Point C dumping some mud in a mud dumping site, have caused delays that plausibly increased costs by tens of millions (if not more). Legal challenges on environmental grounds benefit from a ‘costs cap’ that means judges can’t force claimants to pay for the other side’s full legal costs if they’re unsuccessful. The Government’s response commits them to modernise the cost cap regime, though the specific proposals from the review (e.g. special caps for crowdfunded challenges) aren’t mentioned. The Government is also taking forward a sensible idea to indemnify nuclear projects against legal challenges. In other words, EDF will be allowed to crack on with Sizewell C even if they’re still waiting for a legal judgment.

In a show of political courage, the Government is taking action to scrap Michael Gove’s vague ‘national parks’ duty. I suspect the clincher in this debate was as much Fingleton as the fact that legal challenges designed to scupper the planned grid buildout were likely to rely on this duty.

What about the Habitats Regulations that led to £700m being spent on fish protection at Hinkley Point C? It’s a mixed, but still positive, bag. The key changes Britain Remade pushed, such as screening out de minimis impacts, broadening the types of compensation that can be offered (i.e. not just like-for-like), and removing the requirement for a bespoke Habs Regs Assessment for each regulator, are there. However, they plan to deliver the changes through new guidance for regulators, not via legislation. I suspect they will need to revisit this.

The most radical reform in the Fingleton Review on planning was the idea of an alternative route to comply with the Habs Regs. Instead of site-specific surveys, mitigations, and compensation, nuclear developers would instead be able to pay a ‘per-acre’ fee to a nature fund to discharge the obligations. New nuclear will inevitably disturb some habitats, but it is a net good for nature. Not only does nuclear cut climate-change causing carbon emissions, it also uses much less land than other forms of power. A simpler, faster process would be a win-win for nuclear and nature.

Unfortunately, this hasn’t been taken forward in full for energy. Instead, the Government intends to rely on reforms from the recently passed Planning and Infrastructure Act to meet the same goal. Our assessment is that this is unlikely to work and is reliant on Natural England to proactively create ‘Environmental Delivery Plans’ (EDPs) for all of the impacts of nuclear development.

Intriguingly, this reform will be taken forward for defence, which suggests the Government recognise that the Fingleton proposal is more effective. Of course, these days it is hard to separate energy from defence. How can we re-arm to face new threats when heavy-industry pays some of the world’s highest industrial electricity prices.

There are other dilutions. Fingleton called for legislation to create ‘modular low-carbon acceleration zones’. In these areas, nuclear projects would face radically reduced planning barriers. This would be the nuclear equivalent of a Spanish solar reform that led to a rapid rollout of cheap low-carbon solar panels in the wake of the gas crisis. The Government instead has committed to using existing policy tools, including the Planning and Infrastructure Act’s EDPs, to deliver it.

The Government has also opted not to introduce statutory time limits for decisions on permits. Their view is time limits can have perverse consequences, but that other measures can be used to speed up permitting. I hope they are right, but I fear few things will beat a deadline for focusing heads.

Disappointly, they’ve completely rejected the proposal to have community benefits count as material factors in the planning process. In a persuasive blog, Ben Southwood of Works In Progress described this as the Taskforce’s secret weapon. It would have meant that if a nuclear plant (or a wind farm) wanted to give locals who otherwise would object money off their bills, it would be a reason to grant permission. When a wind farm tried this in 2019, they were told that ‘planning permission cannot be bought or sold’ by a top judge. Even though in practice local opinion plays a massive role in whether planning permission is or isn’t granted, the planning system forces us to pretend and act as if all decisions were made completely independent of it on purely rational criteria. As a result, we get developers paying huge sums to directly address local objections about traffic or visual impact (think of burying pylons) when it would be far cheaper (and popular) to pay cash to affected locals. This is a case where eight decades of planning ideology trumps political reality.

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Make no bones about it. This is a huge step forward for nuclear power in Britain. This isn’t implementation in full, but it is the radical reset the sector needed. The last few weeks are a reminder that reliance on imported fossil fuels carries great risks, yet the recent wind and solar auctions show that simply going hell-for-leather on intermittent renewables won’t deliver the bill reductions voters were promised.

To get bills down, boost industry, and make us energy secure again, it is vital that the Government sticks to their words and follows through on this plan.

I find this debate baffling. Preston is doing reasonably well for a northern former industrial town. Productivity is below the UK average but above nearby towns such as Blackburn and Blackpool. Preston’s wider region has higher productivity than anywhere else in Lancashire, Merseyside or Cumbria. However, it is almost certainly not due to the ‘Preston model’ of shopping locally. Preston Council’s entire budget is just under £30 million a year. That is less than half a percent of Preston’s GDP in 2023 of £6.2 billion.

Nevertheless, Preston is a model for the nation, just not for the reasons that got lots of people down south excited or angry. Let me explain.

Preston builds a lot

New homes under construction in North West Preston The Paddocks, Higher Bartle | Our Developments | Wain Homes

I spend a lot of time looking at housing stats. Naturally, I look for places I know and Preston, where I lived for many years and still visit regularly, is one of them. Whether it is for raw housing delivery, delivery relative to affordability or delivery relative to population size, Preston always appears near the top. In fact, relative to its central government imposed housing targets Preston built more housing than anywhere else in England from 2021 to 2024. Since local housing targets were introduced in 2018, Preston has exceeded its target by a substantial margin every year.

Compare this to Camden, where I live now, which has one of the worst housing shortages in the country.

Preston’s performance is set to get even better and Camden’s even worse. Camden is projected to build just 60 new dwellings in the next two years, while Preston received the second highest number of planning applications relative to its housing target in England.

This matters because councils need far more planning applications than homes they intend to build. Around 90 percent of applications are approved, and only about 70 percent of approved schemes are actually built. A council that wants to hit its target needs a large pipeline. Preston comfortably clears this hurdle.

Preston Council is also much better than average at converting permissions into completed homes and is likely to remain so.

What makes building so hard?

The median voter is mildly NIMBY.

There are a decent number of hardcore NIMBYs everywhere. They turn up to council meetings and send endless letters and emails. But these people are usually a vocal minority. The median person in most places is neither a committed NIMBY nor a passionate YIMBY. They are slightly sceptical.

Living next to a building site is annoying. More people might mean more traffic. The area will look different to the one they moved to. So the reasonable question is: what is in it for me?

Most of the time the answer of the British planning system is: not much.

Despite thousands of pages of documents for every planning application and tens of thousands of pounds flowing to various public bodies, very little of the uplift from granting planning permission is experienced directly by existing residents. Some of the gain goes to the previous landowner. Some goes to the developer, which provides the incentive to build at all. But a large amount is dissipated through a slow, expensive system that produces paperwork rather than visible improvements.

The result is a system where developers spend huge sums satisfying overlapping and often contradictory requirements, but the average resident sees very little. The process is extractive for developers but gives little to locals.

The Community Infrastructure Levy (CIL), a local tax councils can levy on developers, and the New Homes Bonus, a payment councils receive from central government for building, are meant to change that. These are the mechanisms through which councils directly receive money from development. But how it is used matters enormously.

Take Camden, where I live,CIL revenue is spread very thinly. In 2022–23 over half of Camden’s CIL money was spent on general repairs to roads and street lighting. Another large share was divided into many small ward-level projects such as minor playground upgrades. Most residents likely assume these are funded from council tax. Few will connect them to new housing.

Camden doesn’t even appear to spend a lot of its CIL money and has created a system for reallocating funds from wards with more than half a million pounds saved up to wards with less. Camden uses the New Homes Bonus to fund general council budgets. The effect is to detach development from visible local benefit. Housing arrives. Money disappears into general spending. The median voter remains sceptical.

Preston chose a different path.

Making housing pay for locals

Preston’s CIL payments and New Homes Bonus are almost all paid into the ‘Preston and Lancashire City Deal’. Since 2013, because of Preston’s rapid building, these payments have amounted to £60 million, 2/3rds from developers, 1/3rd from central government.

The City Deal is an agreement between Preston City Council, South Ribble Borough Council, Lancashire County Council and several central government departments and agencies.

Under the deal, £47 million from the sale of Homes England assets in the area was retained locally, with the uplift in land value captured and reinvested. A further £80 million was committed by the Department for Transport. Around 2 percent of Lancashire County Council’s pension fund, worth approximately £100 million, was redirected into investments within the City Deal area. In the context of an annual council budget of around £30 million these are vast sums of money.

The central government and Homes England funding was conditional on Preston and South Ribble delivering at least 17,420 new homes.

Preston agreed to put the vast majority of its New Homes Bonus receipts, most CIL income and additional business rates into a single infrastructure pot, combined with the Homes England and Department for Transport funding. Housing delivery was the price of admission.

This cash was then used to fund very clear, very visible and very concrete improvements for local residents which the council made clear were only happening because of the housing.

The largest of these was the West Preston Distributor, now known as Edith Rigby Way. This created a new junction on the M55, effectively creating a large bypass around the north-west of the city. Road capacity has been increased far beyond the extra demand created by the new housing. It would not have happened without development and has delivered clear benefits across the city.

The West Preston Distributor

Another smaller road across the north of the city, called William Young Way, was funded using additional, CIL-like payments from nearby housing developments. It has played a major role in mitigating congestion from new housing in North Preston.

Other major projects include the South Ribble Western Distributor, the Penwortham Bypass and the Broughton Bypass. Both bypasses removed long-standing congestion bottlenecks from residential areas and had been planned for decades, forty years in the case of Broughton, but remained unfunded until the City Deal.

While a small minority of residents were and remain implacably opposed to development, the clear causal link between allowing housing and receiving new infrastructure significantly reduced wider resistance. Woodplumpton and Catforth Parish Council, where much of the new housing has been built, were initially sceptical and questioned why infrastructure could not be delivered in advance. In practice, promised roads were built, in some cases ahead of schedule, and the parish council received a share of CIL funding. Opposition softened as a result.

Preston is now preparing its local plan for 2026 to 2041. The strategy is to complete the build-out of North West Preston, then expand into West Preston between the new dual carriageway and the suburbs of Cottam and Lea.

Further growth is explicitly linked to delivering a new train station, Cottam Parkway, which received planning permission in 2023. Preston only has one train station and the promise of a second station is tied directly to building homes.

Cottam Parkway station will have regular service to Blackpool, Preston and onwards to Manchester.

This is the crucial difference. In Preston the mildly sceptical resident can see the bargain. More homes mean new roads, bypasses, parks and potentially a train station. The link is repeatedly made explicit.In Camden the link is largely invisible.

Get the incentives right, the housing will follow

Preston’s success is partly a story of good local leadership. But it is mostly a story of incentives. The City Deal meant that Preston councillors and staff knew that building enough housing would lead to real benefits. And they were able to show those benefits to voters and residents.

Preston shows that the mildly NIMBY median voter can be won round. Not everyone becomes a YIMBY. But many can be persuaded to accept development in their backyard if the bargain is obvious and credible.

Housing delivery was turned into the ticket to visible, city-wide improvements. Camden, by contrast, has less development money to spend and what it does have it spreads thinly across general maintenance and small projects that feel unrelated to new housing. The result is weak incentives for councillors, sceptical residents and poor delivery.

The median voter is not a NIMBY zealot. They are asking a simple question. What’s in it for me? Preston has found a convincing answer.

This is 10-24 Lamb Lane in Hackney. Standing on it currently is a derelict office block built in the 1950s. For the last five years, Hackney businessman Ben Chesterfield (pictured) has been battling with the council to obtain permission to re-develop it and turn it into this.

When complete, it will include 19 newly-built flats and 10,000 square feet of new office space. Chesterfield wants to do the right thing both environmentally and for residents’ bills, so the flats are designed to be extremely energy efficient and heated via low-carbon heat pumps.

The original plan was for all of the homes to be heated via a single communal air-source heat pump, however after talking with experts Chesterfield identified a better solution. They told him to swap out the communal air-source heat pumps for new exhaust-source heat pumps, which capture warm indoor air from kitchens, bathrooms, and utility rooms.

Exhaust-source heat pumps don’t work for every property but for extremely well-insulated properties like the ones Chesterfield wants to build they are a good option. There’s an added benefit for residents for switching. Communal systems mean complicated communal billing and maintenance arrangements. Individual heat pumps don’t.

This is a real concern. For example, one development in Greenwich saw residents hit with a surprise £200,000 heating bill due to issues with the billing arrangements.

The expert analysis suggested that using an exhaust-source system would be more than twice as efficient as a communal system. In terms of emissions, installing the latest exhaust-source heating technology across the 19 flats would produce around 3.5 tonnes of CO₂ per year — almost 27% lower than the 4.8 tonnes produced by a district heating network supplied by air-source heat pumps. Compared to communal heat pumps producing 7.4 tonnes per year, the exhaust-source system would mean 3.9 fewer tonnes of CO₂ were emitted each year, a cut of more than 50%. And that’s comparing heat pumps, relative to gas we are looking at 23 tonne annual saving across the 19 flats

Hackney Council declared a climate emergency in 2019 and have pledged to reach Net Zero by 2040. You might think then that the developer’s request to switch to an even greener option would be swiftly approved. You would be wrong.

Under Sadiq Khan’s London Plan, the whole of the capital is designated a Heat Network Priority Area, creating a presumption that developments should use communal systems with the ability to connect to a district heating network.

Unlike the communal heat pump, individual exhaust-source heat pumps cannot be connected to a district heating network. As a result, Hackney Council is blocking the change.

There’s just one small problem.

There is no district heating network for the development to connect to. Nor are there any concrete plans to build one it could connect to. The council has highlighted areas where heat networks could be viable (with additional grant funding), but none that cover this building. There is a proposed heat network nearby that could, in theory, be extended to cover the property, but as it stands, there is no business case, no planning application, and no funding secured.

In fact, there is just one district heat network in Hackney – the Shoreditch Heat Network – which serves three estates in the area. It’s cut emissions, but it has not been without problems. The BBC recently reported that hundreds of residents have been left without hot water this winter due to frequent outages. The article quotes one resident who ‘resorted to boiling saucepans of water in order to have a hot bath’ because her taps didn’t run hot enough. She also claimed one Hackney official told her to leave her oven door open for a few hours. (Hackney denies this latter claim.)

This isn’t to say heat networks can’t work. Visit Copenhagen and you’ll soon be disabused of that notion. In the Danish capital, 98% of buildings are heated via district heating. More of Britain’s homes, particularly in cities, could and probably should be heated via them.

Still, the developer’s exhaust-source heat pump is cheaper and greener than a communal heat pump connected to a district heating network. The experts who advised him to switch to exhaust-source heat pumps estimated that a communal heat-pump attached to a district heat network would use more than a third more energy (about 1.2 tonnes more CO2 each year).

In other words, Hackney Council isn’t making the perfect the enemy of the good. They are, incredibly, making the good the enemy of the perfect.

***

As the process dragged on, Hackney eventually (or at least appears to have) conceded the point that incompatibility with a non-existent (and unplanned) district heating network wasn’t sufficient grounds for blocking the more efficient heat-pump. However, they haven’t given the developer the green light yet. The Council are now demanding more evidence on the merits of the proposed heating system. It’s a slow process. As developer Ben Chesterfield notes, there’s a lengthy back and forth with month-long gaps between council responses.

All of this adds cost. With the building’s existing tenants out and work ready to begin, Chesterfield reckons that each month of delay costs something like £20,000. Add to that all the specialist reports he needs to commission, which he tells me cost ‘probably another £10,000 per month’. Trying to do the right thing for residents and the planet isn’t cheap.

***

It is often assumed planning regulations protect the environment. Yet our biggest environmental problem is climate change and it isn’t being caused by new development, it is caused by us continuing to burn fossil fuels to do things like heat our homes.

Just as it was an error to stall electrification because trains might one day be fuelled by green hydrogen (or bionic duckweed), it is a mistake to block a housebuilder from installing ultra-green exhaust-source heat pump because they can’t one day connect up to a district heating network that might never be built.

But in the planning system, small changes in wording can have large real-world consequences. Some of the brightest minds in the country are paid huge sums to spend months arguing over the definition of words in the NPPF. The precise phrasing of national policy often determines whether homes are built or blocked. And even when the courts rule in favour of development, legal uncertainty can delay the impact of pro-building reforms for years.

There is a real risk that the pro-development intentions of the NPPF are thwarted by unclear drafting. Several aspects of the draft risk undermining the reforms’ positive direction. Three problems stand out: a structural “get out clause” in the presumption in favour of sustainable development, a new national restriction on development outside settlements, and the rewriting of established policy in ways that could create legal uncertainty.

Problem 1: the S4(2)(c) get out clauses

Policy S4 establishes a presumption that development within settlements “should be approved unless the benefits of doing so would be substantially outweighed by any adverse effects,” but a few lines later policy S4(2)(c) states that development should not be approved where it:

“Fail[s] to comply with one of the national decision-making policies which state that development proposals should be refused in specific circumstances.”

This creates a structural flaw.

Across the framework there are numerous national decision-making policies on things like design and flooding that contain “should be refused” language. Because S4(2)(c) treats those policies as overriding the presumption, they effectively operate as automatic vetoes.

The result is creating a list of get out clauses for councils that don’t want to build and other NIMBYs to exploit that do not exist under the old version of the rules.

In practice, many planning appeals turn on exactly this kind of interaction between broad presumptions and detailed refusal policies. The way the draft is currently written risks giving objectors and resistant councils a ready-made list of routes for arguing that the presumption does not apply.

Even if the policies on flooding and design are, in practice, not that restrictive, it is likely that councils (or residents) who oppose development are likely to lean heavily on them. The planning inspectorate may eventually rule in favour of the development, but it could take years before it meaningfully changes council behaviour. At which point, another Housing Secretary will probably redraft the national decision-making policies again recreating the problem.

This Government cannot afford a few years of delay. Looking at housing starts, competitions, and the planning pipeline suggest that without a very large increase in planning approvals, they will not only miss their 1.5 million home target, but even fail to outbuild the Covid-hit last Government.

So, a better approach would be for those policies to weigh strongly against development without automatically flipping the presumption. Planning committees would then have to consider both the harm arising from conflict with national policy and the framework’s clear intention to encourage development within settlements.

Problem 2: a new national restriction on development outside settlements

A more worrying development is policy S5, which forms the counterpart to S4’s pro-development approach within settlements.

Policy S5 states:

“Only certain forms of development should be approved outside settlements.”

Development outside settlements is therefore supported only where it falls within a specified list of categories. Proposals outside those categories may only be approved in exceptional circumstances.

This represents a clear shift from the current framework. The existing NPPF does not impose a national restriction on development outside settlements. Instead decisions are largely shaped by local plans and, where housing targets are not being met, by the presumption in favour of sustainable development.

The intention is presumably to shift development away from car-dependent greenfield to land near train stations or within towns and cities. The risk is it stops the former, without boosting the latter.

For example, the rule may stop rural councils that actively want to build to keep villages affordable and vibrant places for people of all ages from building what they need.

Under the current system councils that don’t want to build in rural areas can find lots of excuses not to. However Policy S5 means that even those that want to build will find it difficult to do so and that the scales will be tilted against rural development.

It is understandable that ministers want to prioritise development in settlements. But introducing a national restriction on development outside them, before we have seen the impact of the Government’s pro-building policies inside settlements, risks unnecessarily constraining housing supply.

If building within settlements does not increase as much as expected, this change could end up actually reducing the overall number of homes delivered. The pro development approach in settlements is welcome, but this does not mean we need to have an anti-development approach outside of them.

Problem 3: rewriting flood policy creates avoidable uncertainty

Rewriting the whole NPPF allowed ministers to introduce major reforms. But it has also created avoidable uncertainty.

For example, the language on flooding has been completely rewritten. The apparent aim is to consolidate policy and clarify how the system should operate without making major changes.

However even small changes to long-standing policy wording can have significant consequences in the planning system.

Where ministers intend to change policy, that should be explicit. Where they do not, it is usually safer to retain established wording. Otherwise there is a risk that policy is unintentionally altered. The old wording has been interpreted through many appeal decisions and has therefore developed a substantial body of precedent. Planners, developers and local authorities broadly understand how it operates in practice.

One example is language about what alternative sites developers have to consider when building in areas with a low level of flood risk. The current language refers to “reasonably available sites”. The new draft suggests instead “catchment of the development in terms of its likely occupiers or users.”

It is not clear whether the new language is more permissive of development, less permissive or exactly the same. But we can be sure that planners, developers, councils, the planning inspectorate and ultimately the courts will have years of fun finding out. NIMBY councils will see this as a way to delay development. If the Minister’s intention is for the rules to remain the same in this area, they should keep the language the same.

These problems are fixable

None of these issues should be allowed to undermine the overall direction of the reforms. The draft NPPF still contains some of the most pro-development national planning policy England has seen for decades. But small drafting choices can have large consequences in the planning system. The government should respond to the consultation by fixing the S4(2)(c) get out clauses, softening the hard new national restriction on development outside settlements and removing unnecessary changes to language that can create delay. Then the new framework would be far more likely to achieve the Government’s stated goal: building more homes.

One of Labour’s first acts in office was to bring back mandatory housing targets. Councils failing to build enough homes (or without a valid local plan) would now, in theory, find it much harder to block new homes. At the same time, annual housing targets went up across the country.

In London, the place with England’s most acute housing shortage, where the average monthly rent for a one bedroom flat is £1,500 and the average house price is 12 times the average wage, annual targets went up. The Mayor would now have to plan for 88,000 homes, up from the 52,000 homes required for the current London plan.

Since Labour reinstated housing targets and added 36,000 extra homes to London’s annual target, a number of London boroughs (including Camden, Haringey, and Tower Hamlets) have put new local plans out for consultation. You might expect that a two-thirds increase in London’s target will translate to boroughs planning to build (or at least approve) far more homes than before. You would be wrong.

Here’s the problem: London boroughs like Camden, Wandsworth and Lambeth don’t get their housing target directly from the NPPF’s ‘standard assessment of housing need’, they get it from the most recent London Plan. In other words, whatever the London Mayor decides their share of London’s overall target is. The issue is the last London Plan was published in 2021 when the capital was expected to build 52,000 homes per year. That’s a problem because it allows boroughs to dodge tough choices on density and ‘nice to haves’ when determining their plans.

A new London plan is in the works, but it won’t be ready this year. The Mayor recently ran a consultation on what should be in the draft London Plan, which will itself need its own consultation. If all goes well, we could have a new London Plan in place by 2027, though some suggest 2028 is more likely. From then on, all new local plans will have to use the new London Plan’s higher targets.

However, a new London Plan does not immediately require boroughs to rewrite their existing local plans to take account of higher targets. In fact, once a local plan is in place, there’s a five year window before it’s treated as ‘out of date’.

In theory, London councils could delay higher housing targets by drafting new local plans that come into force just before a new London Plan is made official. There are measures within the new NPPF designed to mitigate this risk, but they don’t solve the problem fully. First, councils are required to have a five-year supply of land released for development capable of meeting their housing target. From July 2026, councils with valid plans working off old targets, like many London boroughs, must add a 20% buffer to their five-year land supply. This applies as long as their plan’s target is less than 80% of their new target. Second, if targets set by the London Plan (or any other spatial development strategy) increase significantly then boroughs should begin preparing a new local plan early. So how long will that take?

The process of preparing a local plan normally takes 30 months, but that’s without any ‘slippages’. The draft NPPF doesn’t define a significant increase, so expect some boroughs to haggle for months over what is and isn’t significant. Expect delays.

Even if everything goes to plan, local plans based on 2024’s higher housing targets will not be in place in London boroughs within this parliament!

In the last year or two, housebuilding in London has collapsed. John Burn-Murdoch at the FT reports that London is building fewer homes currently than any other major world city. It is possible that even under London’s old lower housing target, many boroughs would have underbuilt by so much that the tilted balance in favour of sustainable development applies. However, London’s extreme collapse is likely temporary. As the Building Safety Regulator backlog clears and the relaxation of affordability requirements takes effect, it is more than possible that London returns to recent housebuilding highs. That’s still far too low, but it might mean that many boroughs are at least hitting or close to their old housing target. In that case, higher targets take effect again.

Closing the London Loophole

It isn’t hard to think up alternatives where London’s new higher targets take effect much sooner. One simple way to close the London Loophole would be to force London’s boroughs to, at the very least, revise their plan on the presumption of a proportional increase in the capital’s target. In other words, if a borough is meant to deliver 2% of London’s old housing target, then it must now figure out how it can deliver 2% of London’s new target. Safeguards could be put in place to account for the fact that some councils are currently delivering far more homes under the London Plan than they are expected to under the old method. For these councils the requirement to plan for a proportional increase in housing numbers could be waived.

When he took power, Sir Keir Starmer chose to pull the housing target lever. In some parts of the country, such as Cambridge, higher housing targets are already having an effect. Yet in the bits of England where housing is most unaffordable, his higher housing targets won’t fully take effect until 2030. If the polls are correct, there’s a good chance someone else will be PM then. This is no way to run a country.

Rather than blame ‘a whole bunch of regulations, consultations, arms-length bodies’ for frustrating his agenda, he should remember that he is in fact a Prime Minister commanding a massive majority. He can get rid of them. In this case, he does not need to wait five years before London’s higher housing targets bite in places like the borough of Camden. He can simply close the London loophole.

And this is not just an Islington problem. Across London, councils miss targets year after year while rents climb and waiting lists grow.

So what did Islington Council propose as a small step towards fixing this? Eighteen new homes. Half of them would have been socially rented. The site? A patch of council-owned concrete hardstanding in Morton Road Park.

The council would have expanded the surrounding green space to compensate, including extending the park into a surprisingly wide nearby road. The result would have been a small reduction in total open space on paper, but an increase in actual green space.

The development would have been four to five storeys, in keeping with surrounding buildings. It sits around the corner from Essex Road station and about a 15-minute walk from the Tube. Even by Islington standards, Canonbury is expensive. If there is anywhere in the borough where a modest infill scheme like this makes sense, it is here.

It is hard to imagine a lower-impact development in a dense inner London neighbourhood.

It never even reached the planning application stage.

Instead, a misleading and disingenuous campaign took off. Signs appeared declaring “Save Morton Road Park”, as if the entire park were under threat. The concrete slab earmarked for housing was described as a “football pitch”.

On a recent visit, the playground and grass were full of children. The hardstanding was empty. While a football could technically be kicked around on it, calling it a football pitch is generous to say the least. There was no mention in campaign materials of the additional green space that would have been created.

A search online reveals other objections: claims that removing the hardstanding would increase knife crime, complaints that some nearby flats might lose their view of fireworks on the Thames. Others were more straightforward. They opposed the development because it was happening near them.

In the end, the council caved. Citing a petition signed by less than 3% of local residents, the New Homes Project Manager, backed by local councillors including the Executive Member for Homes and Neighbourhoods, chose not to continue with the scheme. This, in a borough with 16,000 people waiting for social housing.

The letter from Islington Council announcing that the project will not go ahead

According to the council’s own website, there are now zero housing developments under way in Canonbury.

Unlike some private schemes, there is no appeal route here. This was the council proposing homes on its own land. It could have built these 18 homes under the current planning system. It chose not to.

Sixteen thousand people are waiting for a home. Eighteen would not have solved the crisis. But when even 18 modest homes on a patch of concrete are too much, it becomes much easier to understand why the crisis continues.

And yet there is still no guarantee it will go ahead.

After more than 9,000 pages of documentation and a meeting that ran until almost midnight, the committee’s effective conclusion was simple: more documents are required.

The evening illustrated something deeper than disagreement about one development. For the most part, councillors and officers were trying to make the system work. The problem is that the system itself makes coherent decision-making extraordinarily difficult. Poorly drafted rules and expansive interpretations of vague policies mean that even where there is broad support, schemes can become trapped in procedural quicksand.

How does a development that most people like, and most elected representatives appear to support, end up here? This is an anatomy of a planning committee meeting.

Planners out of step with councillors

One of the main objections from officers was that the building failed to meet heritage and design standards set out in Hackney’s rules, particularly those governing the South Shoreditch Conservation Area.

The officers’ report described the scheme in strongly negative but also subjective terms: “overbearing”, “incongruous”, not “respecting the grain”. The height in particular was treated as a decisive problem. At one point the lead planning official made clear that, given the scale of the building, a recommendation for refusal would have been likely regardless of concessions elsewhere.

Councillors were largely unpersuaded.

Councillor Desmond, Hackney’s longest-serving councillor, dismissed the idea that the building was too tall, noting much larger towers just streets away. Councillor Wrout, who was often sceptical of the developer’s assurances, praised the design and thought the height struck an appropriate balance between nearby skyscrapers and the conservation area. Councillor Narcross, who ultimately voted against the scheme, nonetheless described the buildings as “really nice” and said they would improve the streetscape. Councillor Suso-Runge questioned the premise of treating contemporary development as a threat to heritage at all, observing that today’s buildings become tomorrow’s heritage.

The issue is structural. Design and heritage standards are necessarily vague. Whether something is “overbearing” or “following the grain” is a matter of taste. That vagueness transfers discretion from ordinary people to elected representatives to professional planners and heritage experts. Planning becomes less about clear compliance and more about aesthetic assessment. And we see time and time again that planning officers, architects and heritage officers have aesthetic preferences completely different to the general public who will be subject to their decisions.

In this case, there was a clear gap between officers’ conclusions and the instincts of most councillors. While most of the fault lies with the out of touch planning officials, Councillors bear some responsibility here. If they believe certain policies are either unimportant or so vague that officers can reasonably interpret them in ways councillors themselves reject, why were those policies adopted in that form? And why are they not being clarified?

A policy no one could explain

If heritage exposed a cultural gap, affordable workspace exposed a drafting problem.

Hackney’s Local Plan states that new developments should provide affordable or low-cost workspace equating to a minimum of 10 percent of gross new employment floorspace.

At the meeting, the developer argued that providing 10 percent of the additional workspace on the development as affordable met that requirement. They relied on a KC’s opinion and said the interpretation aligned with the understanding of a former council officer involved in drafting the policy.

Planning officers took a different view. In their interpretation, it was 10% of the sum total of all workspace on the site that had to be affordable, meaning the requirement was effectively higher.

Councillors repeatedly sought clarity. The developers wielded their KC opinion to argue one interpretation. Senior planning officers argued another. It wasn’t really obvious to anyone impartial who was right.

If a senior Assistant Director of Planning at a large London council and a KC disagree on what a policy requires, the policy is not clear enough. And if it is not clear enough, it is not fit for purpose.

The result was confusion at the committee table. Councillors were asked to apply a policy whose meaning was itself contested. That is not a recipe for confident decision-making.

The Chair and the breakdown of process

Councillors, planning officers and the developers conducted themselves professionally and were all clearly trying to do their jobs to the best of their ability in an insane system. The same cannot be said for the chair.

Councillor Webb made no secret of her agreement with the officers’ recommendation. That in itself is legitimate. But a chair’s role is to facilitate scrutiny, ensure members can test evidence properly, and allow the committee to reach a considered decision.

On at least four occasions, councillors attempted to ask direct questions to the developer, particularly on affordable workspace. The chair intervened to prevent the developer from responding. Instead, officers were asked to answer on the developer’s behalf, often speculating about their positions or intentions. This contributed to the meeting running late and left councillors visibly frustrated.

The contrast with earlier items was striking. For other applications that evening, councillors were able to question both officers and applicants freely.

Councillor Samatar’s exchanges were particularly revealing. She repeatedly sought clarity on the affordable workspace issue and, at one point, expressed doubt in her own understanding. Yet the central reason for confusion was that the chair has prevented competing interpretations from being aired fully in real time.

Later, Councillor Samatar explained that although she had historically followed officer recommendations, she felt compelled to support this scheme because it represented the kind of development she entered politics to champion. The chair responded by admonishing her for “grandstanding” and emphasising that the committee’s role was to apply policy. The exchange was sharp, unnecessarily personal and not behaviour that would be tolerated in most workplaces. While the tone from the chair was consistently combative it was noticeably sharper towards Councillor Samatar.

Another instance of bias was that councillors representing the area where the development would take place were also prevented from speaking on Shoreditch Works, though relevant local councillors had been allowed to speak on earlier items. This was despite clear interest from committee members in hearing from them. This is likely because Councillor Walker and Councillor Sizer had both spoken in favour of the development previously.

As the debate progressed, concessions from the developer appeared to be shifting the arithmetic. They offered to alter the sequencing of works to prioritise the protection of Grade II listed buildings and to increase payments to address affordable workspace concerns. Councillor Wrout, a clear swing vote who had pressed the developer throughout the evening, seemed increasingly persuaded.

With four councillors clearly supportive and a fifth likely leaning that way, it appeared possible that a form of conditional approval might be put to a vote.

Instead, the chair advised that councillors would not be voting to approve the application, but only whether to defer it. Councillor Desmond objected, noting he had first attended a pre-meeting on the scheme two years earlier and that progress was overdue.

After a break, further legal advice was presented. Councillors were told they could not vote to approve in light of changes proposed during the meeting and could only defer. The committee voted 5–2 to do so, with a revised recommendation to follow after additional documentation.

The procedural position may have been technically correct, though this isn’t clear. But the way it unfolded left the impression that the outcome was shaped as much by process management as by substantive debate.

The System is changing

As several readers pointed out on my first blog about this project, changes are coming. The National Planning Policy Framework is likely about to be substantially revised this year. If the draft survives consultation, it materially changes the way schemes like Shoreditch Works are assessed.

Under the draft NPPF, proposals within settlements:

“should be approved unless the benefits of doing so would be substantially outweighed by any adverse effects…”

Hackney’s planners’s recommendation of refusal found the heritage impact to be “less than substantial harm”. That matters because developments can only get out of this tilted balance in favour of development if there is substantial harm or total loss to a designated heritage asset.

That means Shoreditch Works would fall squarely within the tilted-balance test. All of the supposed “harm” around the building casting a shadow on itself, damage to heritage that only professional planners can see, and affordable workspace confusion would still be part of the debate. But under the draft framework the question would not be whether harms merely outweigh benefits, but whether they substantially outweigh them.

The threshold for refusal therefore becomes materially harder to meet. This does not guarantee approval. But structurally, the draft framework makes refusal significantly more difficult to defend.

If the draft framework is adopted as written, Shoreditch Works would be much more likely to succeed at appeal than under the current framework. It seems unlikely Hackney planning officers would risk that, particularly given that most councillors on the committee appeared to support the scheme. If the new NPPF rules are adopted as drafted, Shoreditch Works should be happening.

Shoreditch Works shows the dysfunction of the current planning system. Labour’s proposed NPPF reforms are probably the last, best hope for making the current system work. Shoreditch Works will be an early test case of whether the system is reformable, or whether it needs to be rebuilt from scratch.

It is true that building a house takes time, and the planning process takes even longer. Therefore today’s completions mostly reflect rules and decisions made under the previous government, not the current one. Which is why a fairer way to judge the government is not completions or even housing starts, but planning applications.

Planning applications are the earliest reliable indicator of future housing supply. If the system were gearing up for a surge in housebuilding, it would show up here first. Unfortunately, it does not.

The maths of the target

To hit 1.5 million homes over a five-year Parliament requires an average of 300,000 homes per year. But after the weak first year, the required pace rises sharply. From here on, England would need to build about 339,000 homes every year for the remainder of the Parliament.

Planning data make clear just how implausible that is. Historically, around 90 percent of planning applications are approved, and around 70 percent of approved permissions result in a completed home. Taken together, that means roughly 63 percent of applications turn into housing.

At that conversion rate, delivering 339,000 homes per year would require around 538,000 planning applications annually. That is roughly 44,850 applications per month.

England is nowhere near that level.

What the planning data actually show

Data from Barbour ABI, reveals across 2025, planning applications averaged just 18,389 per month. In the final six months of the year, the figure rose slightly to 19,769. Even in the strongest month, October, applications reached only 24,304.

That is 54 percent of the level required to stay on track.

There has been no sustained upward trend, and certainly no surge. In fact, application levels are lower than they were in both 2022 and 2023.

If applications continue at this rate, under realistic assumptions about approval and build-out, England would deliver around 706,000 homes over the course of the Parliament. Even under an optimistic scenario, assuming 90 percent of approved permissions turn into homes, delivery would reach only around 806,000.

Both outcomes fall dramatically short of the 1.5 million target. Indeed, the more realistic figure would fall short of the 742,000 homes delivered in the 2019 to 2024 Parliament.

Almost everywhere is missing

This is not a problem confined to a handful of areas. The vast majority of the country is set to miss its housing targets based on this planning application data.

Almost every council in England is receiving too few planning applications to meet its housing requirement.

Under realistic assumptions, only 3.4 percent of people live in a local authority that is on track to meet its housing target given their 2025 stats. Even under the optimistic assumptions, that figure rises to just over 12 percent.

Map of English local authorities on track to achieve their housing targets under realistic build out assumptions.

In other words, even if the planning system performs unusually well, nearly nine in ten people live in places that are not building enough.

Why delivery may be even worse

These projections may still be too generous. There are strong reasons to believe the conversion rate from permission to completion will be lower than in the past.

The Building Safety Regulator now has to approve all new buildings over 18 metres. Its rollout has been deeply disruptive. Around 69 percent of pre-construction applications have been rejected, and median approval times have stretched to nine months.

This matters most in large cities, especially London, where new housing is disproportionately delivered in the form of tall apartment blocks.

The Barbour ABI data and our projections show that London is on track to achieve 27.1 percent of its housing target. However, Mollior, a specialist London housing market research practice, looks in more detail at individual projects. They think that London will achieve just 8 percent of its housing target in 2027 and 2028.

Why delivery may be better

There is one important caveat. Data from Terraquest shows an increase in planning permissions in 2025 from 2024 outside of London of 60%, though London applications are fairly flat.

The discrepancy with the data we use from Barbour ABI is that Terraquest also includes outline planning permissions. Outline planning permissions can be applied for by any development, but are generally used by larger developments.

However, the drop-off rate from outline planning permission being sought to an actual home being built is far higher than the drop-off rate from full planning permission being applied for and resulting in a completed home.

The surge in outline planning permission applications happened in the last six months of 2025. It is possible this will lead to more full applications, but it is far from guaranteed.

The other reason to think these projections might be an underestimate is the reforms to the National Policy Planning Framework (NPPF) announced by the housing minister Matthew Pennycook in December, which if implemented could result in a large surge of planning applications.

Will Labour reach the 1.5 million target?

No.

In fact, it still remains possible that this Parliament will deliver fewer homes than the previous one. However, the green shoots of the outline planning permission surge and the NPPF reforms mean the likelihood of that has fallen, even if they have come too late to make the 1.5 million target achievable.

There is also the possibility that the outline planning applications will not lead to more full applications. And it would not be out of character for the government to U-turn on elements of the NPPF reforms.

But even if the Building Safety Regulator’s problems are resolved, the outline surge is real and the NPPF reforms are delivered in full, it will not be enough to get close to 1.5 million homes within this Parliament.

It could be late 2028, or even well into 2029, before the first new homes built under the new NPPF rules have people moving into them. Labour has left these reforms too late for them to have a big impact on this Parliament’s figures. With full planning applications showing no meaningful progress, time has almost certainly run out for the target.

Britain Remade worked with ITV Economics Editor Joel Hills on this research. To watch his report and see Britain Remade’s Chief Exec Sam Richards discuss the findings at a building site in Worcestershire on a very rainy February morning, click here.

In anticipation of the letter, I published a blog highlighting the errors. My aim was two-fold. First, that MPs and Peers considering signing the letter would read it and think twice. Second, that Parliament’s many pro-nuclear MPs and Peers would have it as ammunition to defend vital reforms.

Unfortunately, I appear to have failed on the first front. 70 MPs and peers signed the letter to Ed Miliband calling on him to drop the Recommendation 11, 12, and 19 of the Fingleton Review. The letter re-iterated the Wildlife Trusts’ claim that the Fingleton Review’s use of evidence was flawed.

“Environmental groups have highlighted that these recommendations were primarily made based on just one nuclear case study in the review, that of the Hinkley C nuclear project. This case study included incorrect statistics which understated the environmental impact of the project and overstated the cost of environmental mitigation measures. It also omitted to set out the marginal role that environmental matters have played in the escalating costs and delays to the project, due largely to mistakes made by the developer. These [sic] result of these inaccuracies, and the extrapolation of the one flawed case study to wider development, has been the erroneous portrayal of nature protection as a significant blocker to nuclear energy requiring a sledgehammer solution in the form of recommendations 11, 12 and 19.“

And in response to my rebuttal, the Wildlife Trusts’ public affairs team, published his own, making it a rebuttal of a rebuttal of a rebuttal of a rebuttal. It’s called ‘the deceptions driving deregulation’. It describes Britain Remade as ‘corporate lobbyists’ (we aren’t) and being deceptive in the arguments we make (we weren’t).

I won’t do another line-by-line rebuttal, but I do want to pick on one specific bit. In their original briefing, they say Fingleton misleadingly claims Hinkley Point C spent on £700m on fish deterrence when the plant’s acoustic fish deterrent only cost £50m.

Except he didn’t. The Fingleton Review states clear: £700m is the total cost of three separate fish protection measures at Hinkley Point C.

When you’re in a ditch, the advice is to stop digging. The Wildlife Trusts’ lobbyists have not followed that advice.

Instead of conceding the point, they have decided to quibble about definitions. In their view, only the £50m acoustic fish deterrent counts as a ‘fish protection measure’. The £500m spent on low-velocity side intake heads, which allow fish to escape being sucked into the intake pipe from as close as 2 metres in a 20-kilometre-wide channel and the £150m spent on a fish recovery and return system do not count.

“The other two – the most expensive - components of this package are not purely fish protection measures. Low velocity intake heads and a fish return system form part of a core structure for the nuclear plant itself; the cooling system which brings in water to stop the nuclear reactor overheating.

…all nuclear plants spend money on measures to prevent solids getting too far into the cooling system, including low velocity intake heads and fish return systems. Plant protection, not nature protection is the core aim of these measures”

In other words, they’re claiming that because the measures might have benefits beyond fish protection they cannot be described as fish protection measures. (They made this claim again in a recent press release.)

The only evidence they provide that fish return systems are a normal feature of nuclear plants is a powerpoint presentation from an ecologist advocating for the use of an Acoustic Fish Deterrent at Hinkley Point C. Curiously, it notes that Oldbury nuclear power station (within the Severn Estuary) was built without a fish returns system. It also notes that while fish-returns systems were trialled at Sizewell B, they ultimately were not used.

In fact, none of the existing nuclear power stations built in the Severn Estuary (Hinkley Point A, Hinkley Point B, or Oldbury) used either low velocity intake heads or a fish return system.

Of course, they were built a long-time ago. It might be the case that the industry has moved on since and now these features are de rigeur. Flamanville 3 in France and Olkiluoto 3 in Finland use the same European Pressurised Reactor design as Hinkley Point C.

I called up EDF to find out if either of them use a fish return systems or low velocity intake heads. So do they? No, they don’t. And they re-iterated to me that Hinkley Point C contains more fish protection measures than any nuclear plant built in the history of the world.

Put simply, the Wildlife Trusts are completely wrong to say that the £650m spent on a fish returns system and low velocity intake head was not money spent on fish protection.

Amusingly, the MPs and Lords letter criticises the report because it relied on a single case study, Hinkley Point C, to argue environmental protections make nuclear more expensive. Not only is this untrue – they cite multiple examples of environmental requirements delaying or adding costs to infrastructure projects – it is also absurd.

Hinkley Point C, when complete, will be the first nuclear power station built in Britain in over three decades. Hinkley Point C will also be the most expensive nuclear power plant ever built. Finland and France have both built plants using the same reactor design for far less. Put simply, there are no other recent British nuclear projects for the authors to study.

***

The Wildlife Trusts are not the only environmental organisation to attack the Fingleton Review in the last week. The Times covered a press release from the Campaign for National Parks, which claimed that the Fingleton Review’s recommendation to abolish the National Parks/Landscapes duty from the Levelling Up and Regeneration Act 2023 was based on nothing more than a single blog post.

So are they right? No. Like the Wildlife Trusts’ briefing, they present an extremely misleading picture.

Their PR was based off an Freedom of Information (FoI) Request to DESNZ asking what evidence was used to support the recommendation to remove the national parks duty. The Campaign for National Parks did not link to the Department’s full FoI response.

This isn’t surprising given the FoI response, which I have seen, does not align with the hyperbolic press release. It is clear that it was not based on a blog, but a careful review of a number of judicial reviews and decisions. Contrary to the idea there is certainty about the duty, there have been 6 judicial reviews relating to the duty in its short two year existence. The claim the costs are uncertain is also belied by a number of decisions, some of which see groups seeking tens of millions of pounds: on one road scheme, £38m was requested, on Gatwick, millions were requested, and a recent offshore wind decision saw just over £2m paid out.

Likewise, the Campaign for National Parks claim that no due diligence nor quantified impact assessment was produced to support the recommendation. Yet this isn’t unusual, I know of no independent review where each and every recommendation is accompanied with a detailed impact assessment. For one thing, it would be cost prohibitive to do so when there is no guarantee (in advance) the Government will take the recommendation forward.

The claim that there are no cases where the duty has delayed a nuclear development also misses the point. No planning application for nuclear development has come forward in the short time that the duty has been in place. The point is, as the Fingleton Review says, it could pose a risk in the future given the number of nuclear designated sites near or within National Landscapes. For example, a quick search reveals that this applies to Sizewell, Hinkley, Oldbury, Wylfa, and Sellafield/Moorside. In addition, the new sitting policy means new development could come forward outside of designated sites, meaning it could affect even more development.

***

Of the three fish protection measures at Hinkley Point C, it is the acoustic fish deterrent, or as Michael Gove dubbed it, the ‘fish disco’, that has attracted the greatest scrutiny. It may be the cheapest of three measures, but it stands out as the most absurd. Regulators insisted EDF implement the plan to install 250 speakers underwater even after it was revealed that maintenance of the acoustic deterrent would be extremely complex (and potentially dangerous). The dispute dragged on so long that EDF that in the meantime someone was able to invent an easier-to-maintain deterrent based on ultrasound tech used by commercial fishing operations.

This week, EDF published data that suggested the deterrent, despite the fish disco mocking, is in fact very effective at keeping protected fish away from the intake: “The data suggests an effectiveness of more than 90%.”

However, the study also revealed information that further raises questions about the necessity of spending £700m on measures to protect critically endangered fish like the Atlantic salmon.

“It shows that salmon, migrating to the Atlantic, generally use the main channel - well away from Hinkley Point C’s water intakes. In two years, only 2 tagged salmon were detected within 1km of the intakes.”

The Fingleton Review recommended a number of concrete changes to the way nuclear power is regulated. But it didn’t just focus on regulatory structures and rules, it also targeted a culture that prioritised process over outcomes. To change that culture Fingleton called on the PM to issue a strategic steer to Britain’s myriad regulators.

The PM did that and, to his credit, didn’t pull his punches. Here are some choice lines:

“Across our economy, delays cost money. Given the long timescales, this is particularly significant in nuclear. Every month wasted means higher bills for energy consumers and the taxpayer, more uncertainty, and the UK left exposed to the next global shock.”

“Regulators and dutyholders need to collaborate more effectively to stop wasteful gold-plating which is ultimately paid for by the British public.”

“Time must be treated as a clear risk factor in its own right. Where further mitigation offers only marginal benefit, that judgement should be recorded, and we must move forward without delay.”

Have the regulators listened? I’ll leave you with a line from Natural England’s blog responding to the latest study on Hinkley Point C’s fish deterrent:

“This evidence is vital to explore whether further mitigation would be required.”

The economic case for building 80,500 sqm of commercial, lab, and creative space (plus 40 homes) is clear cut. The impressive thing about the proposed Shoreditch Works development in Hackney is they’ve figured out a way to do it that the public seems to actually like. The public might like it, but their opinion isn’t the important one. Hackney’s planning officers have recommended that councillors refuse the scheme planning permission.

To my untrained eye, Shoreditch Works is exactly the sort of thing we should be building. Why then are Hackney’s planning officers recommending blocking the scheme? To find out I have read their full report and looked through hundreds of documents submitted by the developers. It was an education in just how broken the planning process in Britain’s most expensive city is.

In their quest for planning permission, developers submitted 9,084 pages across 450 documents.1 There is a sunlight and overshadowing report; an affordable workplace strategy and 975 pages dedicated to an environmental impact assessment (for an exclusively brownfield development a stone’s throw from the City’s glass and steel skyscrapers). All of this was insufficient in the view of Hackney’s planners.

“The level of detail submitted to support the scheme is, for many elements, that which would be expected of an outline scheme, rather than a full application.” – Hackney Council Planning Officer Report

Bad Policy

When Britain Remade looked at planning applications from the 1930s, we discovered they were remarkably short - a few pages at most. Most of London’s buildings, including almost all of the buildings that Hackney council seeks to conserve, were built under a remarkably simple planning regime.

How, then, can a planning application stretch to 9,084 pages? Well for Shoreditch Works, the applicant had to demonstrate compliance with 42 separate Hackney policies, 75 separate London Plan policies, the Hackney Borough Site Allocations Plan, five other separate sets of standards and policy frameworks, two sets of ‘emerging’ unfinalised policies, plus all relevant national legislation and guidance. That is before getting into supplementary planning documents, technical guidance, and informal expectations. This is a huge task not just for developers, but for planners as well. The system is set up to be adversarial, slow (4 years and counting), and extraordinarily expensive before a single brick is laid.

Be afraid (of your own shadows)

Many of the policies themselves are either poorly suited to central London or reflect objectives that are questionable.

A good example is daylight and sunlight. One of the objections planners raised was that parts of the new development would not receive enough natural light. Someone choosing to live in a dense, central London location might reasonably decide that access to jobs, transport, and amenities matters more than generous sunlight. They might even just prefer paying a bit less for less natural light, a reasonable choice adults should be allowed to make for themselves. Planning policy disagrees.

Rules to prevent overshadowing are not inherently irrational. Much of London was built under rules designed to prevent development from casting shadows or overlooking nearby properties. This is a classic case of intervention to prevent market failure, where the costs of an economic activity fall upon non-consenting third parties.

But strikingly, the recommendation for rejection notes that the main reason for the lack of natural light is the shadows cast by other parts of the same development. In other words, a development can be penalised for casting shadows on itself. Buildings are required to be scared of their own shadows. This issue was not ultimately the decisive reason for refusal, but it shows how detached some policy tests are from basic economics.

Is it green enough?

Climate policy provides an even starker example. A major theme of the refusal recommendation is that the developers have not provided sufficient evidence (across some 9,084 pages) that the scheme will reduce carbon emissions.

Reducing emissions is a noble goal, but blocking new homes in London is self-defeating. Hackney already has among the lowest per capita emissions in the country. Thanks to high quality public transport and the close proximity of jobs and services, only 8.5 percent of journeys by Hackney residents are made by car or motorbike. The scheme provides no parking other than for disabled people, so residents and workers would be even less car dependent. On top of that, dense urban form, widespread use of flats and terraced housing, and the urban heat island effect mean Hackney residents use far less heating than average. As a result, the average Hackney resident’s transport and domestic emissions are less than half the UK average.

If Hackney genuinely cares about climate change, the most effective thing it can do is allow more people to live and work there. Density is climate policy. If Hackney had the same population density as central Paris, it would accommodate around 100,000 additional residents. If those people would otherwise have average UK carbon emissions, housing them in Hackney would save about 154,556 tonnes of carbon every year. That is more than all the shops and offices in Hackney emit combined, and more than the emissions from everyone in the borough taking a return flight to Spain.

Planning policy does not allow this logic to be considered at all. Instead, it fixates on narrow, site-level metrics that ignore displacement. Councils in rural or semi-rural areas are often criticised for declaring climate emergencies while blocking renewable energy projects. But big-city councils that declare climate emergencies while actively restricting the supply of low-carbon urban lifestyles through housing and employment constraints are guilty of the same hypocrisy. By ignoring where people and jobs go if they are blocked in Hackney, the council can trumpet its green credentials all the while increasing national and global emissions.

The same narrow thinking appears in the treatment of embodied carbon and materials. A large section of the refusal focuses on the fact that significant amounts of existing building fabric would be replaced with new materials, and on technical arguments over what percentage of materials should count as reused. But this again takes an artificially limited view of environmental harm. The 4,150 people who would work on this site will work somewhere else if they do not work here. Given the site’s location, it is reasonable to estimate that virtually none of them would commute by car. This development, in fact, removes parking spaces. The council itself notes that the area has a PTAL rating of 6b, the highest possible level of public transport accessibility.

If this economic activity is displaced elsewhere it will almost certainly be a more car dependent place. None of this is allowed to enter the assessment. Yet dense urban office space, closer to housing leads to low car-use and lower heating demand, supporting the most sustainable lifestyles available in the UK.

Catch-22

The problem is not just that many individual planning policies are poorly designed. It is that they interact with each other in ways that make compliance close to impossible. Even when individual objectives are sensible in isolation, taken together they form a system that blocks any development.

The rejection explicitly recognises that Hackney does not build enough homes and will need to step up delivery in coming years. This is a correct observation though Hackney is far from the worst offender in inner London.

However, it then uses this fact as a reason to refuse the application. That is despite the scheme increasing the number of homes on the site from 38 to 78, and increasing the number of social rent homes from zero to sixteen. A development that more than doubles housing provision is deemed unacceptable because it does not provide enough housing. The practical result is that instead of around forty new homes, there will be none at all. At first glance, this looks like a clear case of letting the perfect be the enemy of the good.

However, the scheme is primarily an office and commercial development, providing space for around 4,150 jobs by the developer’s estimates. A natural response might be to suggest reducing office space and increasing housing. One problem:the site is designated a “Priority Office Area” in Hackney’s Local Plan.

The red square marks the approximate location of the development, not to scale.

But the designation does not make it easier for this project to get approval. Instead, it is used as a reason to refuse the scheme, because it does not meet specific requirements around the provision of subsidised office space. The development, as well as building a huge amount of high quality office space that would push down local market prices, was committed to increasing the amount of low cost office space on the site relative to present levels. But not by enough to satisfy Hackney’s policies.

So the planners think the building needs more subsidised office space and more housing. A solution to this might be to make the building bigger.

But this option is closed off. The site sits within the South Shoreditch Conservation Area. A key objective of the conservation designation is to preserve the contrast between the taller buildings of the City of London and the lower-rise character of Shoreditch. Height therefore becomes a problem in itself. The rejection states that elements of the scheme are already too tall in at least 30 paragraphs.

The developer is therefore faced with a set of constraints that cannot all be satisfied at the same time.

• The scheme does not deliver enough housing.

• It cannot easily deliver more housing, because it is already too tall.

• It is expected to prioritise offices, because it is in a Priority Office Area.

• But it must also meet additional requirements that reduce the amount of viable, market-facing commercial space.

• The scheme must be profitable for the developer investing millions into it.

The rejection itself acknowledges that this is unlikely. Reducing market office space, increasing housing, and complying with additional obligations would render it unbuildable. A policy objective that Hackney should build more homes is taken to an extreme where, in combination with other policies, it results in no homes being built at all.

The outcome is a form of policy deadlock. The development is simultaneously too tall and not tall enough, provides too much office space and not enough, and is required to deliver additional social objectives that make it financially impossible to construct. It becomes a kind of Schrödinger’s building: too big and too small at the same time.

A similar contradiction is displayed on green roofs. Parts of the scheme include roof-level green space for residents. A reasonable person might think that someone choosing to live in one of the most built-up parts of Britain has already decided that private access to green space is not their top priority. Planning policy does not allow this judgement to be made.

At the same time, biodiversity rules apply. The biodiversity officer notes that resident access to green roofs may disturb wildlife. The result is that some parts of the council argue that residents do not have enough access to green space, while others argue that they have too much. Both positions follow policy correctly. The problem is that when policy is applied correctly, access to green space and improving biodiversity become mutually exclusive. While ultimately the relevant officers in both of these cases didn’t think these were sufficient reasons to reject the application it further shows how complying with all of the rules is often completely impossible.

If a policy framework produces outcomes where sensible improvements cannot be made because rules cancel each other out, the problem is not the applicant or even the planning officers but the policy.

Planners versus the people

A central reason given for refusal is that the scheme is considered unacceptable in design, conservation and heritage terms. This judgement rests heavily not on clear, objective harms, but on the aesthetic preferences of planners and the design review process.

The planning officer goes out of their way to criticise the fact that the development uses a ‘single era of 21st Century design, by one Architecture practice.’ Consistency of design is treated as a flaw. The implication is that a coherent architectural language, applied across a large site, is itself suspicious. This is striking given that the style adopted is one that ordinary people tend to like and we have opinion polling evidence they much prefer the new design to the existing building.

The purpose of the planning system, at least as applied here, does not appear to be to enable buildings that the public finds attractive. Instead, it seems to prioritise the tastes of a narrow professional class. Earlier in the documents, the scheme is criticised for not “going with the grain” of the surrounding buildings. Yet elsewhere it is implied that the scheme should not even go with the grain of itself, and should instead fragment into multiple architectural approaches. It is difficult not to suspect that had the scheme done this, it would have been criticised for incoherence instead.

The treatment of heritage reinforces the impression there is little regard to the public’s wellbeing. The developers point out that the scheme would make several existing heritage buildings visible to the public for the first time. Officers acknowledge this, but dismiss it as a very minor benefit. Heritage, in this framing, exists for its own sake, not for people to see, enjoy, or engage with. Visibility and public experience count for remarkably little.

The Hackney Design Review Panel is heavily relied upon in the refusal. It is described as being critical of the “general architecture and massing of the Verso building, the scale and grain of St James’s House, the quality of the public realm and overall the public benefits delivered by the scheme”. These are sweeping judgements. What is notable is what is missing. Nowhere is there any engagement with what normal Hackney residents would think.

Members of the panel are paid by the council: £450 per meeting for the chair, and up to £200 per meeting for other members, at £50 per hour. There appear to have been at least three meetings, and possibly more.

One of the rotating chairs of the panel works at Cazenove Architects who work in a style that produces a mix of strikingly beautiful modern buildings and what look like corrugated sheds (readers’ views may vary). However, regardless of the merits it is not clear that any of their work pays much attention to going with the grain with the existing building, especially when working on council projects which can be seen in the extension built on buildings below. It feels very do as I say, not as I do, from the panel

These design judgements are not confined to the panel. The planning officer’s own commentary reveals a broader hostility to dense urban development. There is a lengthy section lamenting the impact of existing City of London buildings on views from the Honourable Artillery Company army barracks. The officer describes nearby City buildings as “incongruous and imposing”, despite the fact that they are outside Hackney and form part of the UK’s main financial district. One hopes the soldiers who work at this army barracks are robust enough to not be upset by viewing some tall buildings from their sports pitches.

This mindset matters, because it shapes discretionary judgement. The development is subjected to thousands of words of criticism about its alleged lack of architectural quality. These critiques amount largely to the personal opinions of other architects and planning officers. The fact that when the public are actually asked in a carefully controlled national poll, 78% prefer the proposed building to the old one is treated as irrelevant.

Officers accept that none of the buildings proposed for demolition are of architectural or historic interest in their own right. Yet they still find arguments to keep them stating that they are ‘reflective of their era’ ignoring the fact that every building, by definition, reflects the period in which it was built.

What this section reveals is not a neutral application of design standards, but a system in which subjective preferences, professional gatekeeping, a deep suspicion of popular taste and massive status quo bias are given decisive power. This is yet another set of requirements that the developer is expected to satisfy.

What approval would have meant

Even if the councillors do overrule planning officers and approve the scheme, this does not mark the end of the process. The documents make clear that approval would merely have opened the door to further design changes, additional reports, and significant new financial demands. The idea that planning permission provides certainty is largely illusory.

Across the refusal documents, there are at least fifteen separate points where officers state that further work, further money, or further changes would have been required had the scheme gone ahead. Approval would not have fixed the scheme; it would simply have allowed the next phase of negotiation and extraction to begin.

Officers indicate that publicly accessible routes through the site would need to be revisited and potentially redesigned. A programme of “social, cultural and business uses” would have been required to be secured through the legal agreement, to ensure that parts of the scheme functioned in a way definable as Affordable Workspace. In other words, even after permission, the basic shape and use of the scheme would still have been open to renegotiation.

Alongside this came a long list of financial obligations, many of them small in isolation but significant in aggregate, and all layered on top of costs already agreed.

The council’s biodiversity officer estimates that the development would result in a 1,375 percent increase in biodiversity. Despite this, the developer would still be required to pay £17,309 to monitor whether biodiversity net gain actually occurs.

The developers are expected to pay £352,687 for employment schemes related to construction and £1,320,451 for employment schemes related to the end use of the buildings. These may be worthy objectives, but it is far from clear why property developers are the appropriate people to pay for them.

Further charges include £2,000 to monitor the provision of cargo bike delivery hubs and other transport measures, £10,000 as a contribution to an electric vehicle car club plus £60 of credit for every resident, £9,000 to monitor the travel plan, and £17,500 to monitor the construction management plan.

All of this sits on top of substantial payments already agreed as part of the Community Infrastructure levy: £4,034,134 to Hackney Council and £8,564,287 to the Mayor of London.The transport element reveals another structural problem. The developers had already agreed to contribute £850,000 to Transport for London for road and cycling improvements. However, the planning documents make clear that Hackney Council would have required the developers to push back on TfL’s demands as a condition of approval, because TfL extracting too much money would reduce what the council itself could secure. Paying off one arm of the state leaves less money for another.

It ain’t over yet…

The good news is that this isn’t the end of the road for the Shoreditch Works scheme.

The application now goes to the Hackney Planning Subcommittee, where tonight(!) councillors can choose to overrule the officer recommendation. Whatever they decide tonight is unlikely to be the end of the process. If approved, many of the costs, conditions and renegotiations described above will still apply and may render the project unviable. If rejected, the Mayor of London is likely to take an interest.

The system is clearly broken. But in the system as it is, public engagement still matters and if you live or work in Hackney, writing to councillors today (list here) or attending the meeting can make a real difference. Planning decisions are often presented as technical and inevitable, but they are ultimately political choices about whether homes, jobs and investment are allowed to happen at all.

Britain is currently building both the world’s most expensive nuclear power station and the world’s most expensive high speed railway line. British tram projects cost on average twice more than the average European tramway and three and a half times more than the average German tramway. The planning application for the Lower Thames Crossing (a road tunnel between Kent and Essex) cost more to produce than it cost Norway to build the world’s longest road tunnel and the world’s deepest subsea tunnel combined.

Fact 2: Britain is an extremely centralised country. Local leaders in Britain lack the power to independently approve or fund (via local taxes) new transport infrastructure.

To obtain permission to build new transport infrastructure, English local authorities must submit a planning application (Transport Works Act Order/TWAO) to the Department for Transport. In the case of a recent one mile tram extension, it took four years from submission to approval for the West Midlands Combined Authority (WMCA) to obtain the TWAO.

To fund projects, cities and regions submit bids to the Department for Transport, who in close collaboration with the Treasury, decide whether or not to fund projects from general taxation. By contrast, Dijon (France) was able to plan, approve, fund, and build a 12 mile tram network in just 4 years. The project was funded via a local payroll tax on large employers (the Versement Transport). On a per-mile basis, the West Midlands project cost six times more than the Dijon project.

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Is the latter (centralisation) to blame for the former (high infrastructure costs)? Alon Levy of the Transit Costs Project (TCP) doesn’t think so. In a recent blog, they argue that while there may be good reasons to devolve power, Britain’s centralisation isn’t the driver for Britain’s high infrastructure costs.

For those unaware, Alon Levy and the TCP have been extremely influential in highlighting the massive disparity in infrastructure construction costs between the Anglosphere and the rest of the world. The TCP has produced a number of country-specific deep dives into infrastructure construction. Readers can skim the Sweden, Italy and Istanbul studies to find out what works, or read the Boston and New York studies to find out what doesn’t. For those looking for even more lessons on what not to do, there will soon also be a UK study, covering Crossrail, the Northern Line Extension, and the DLR.

Levy’s key takeaway from this, as yet unpublished, UK study is that Britain’s infrastructure cost problems are not the result of excessive centralisation, but rather down to the gradual adoption of what Levy dubs the ‘globalised approach’. In essence, Britain, like other Anglosphere countries, outsources almost everything. Low-cost countries like Sweden and Italy maintain a core of engineering expertise within the state and complex projects are designed in-house then put out to tender. Britain, by contrast, is heavily reliant on private-sector consultants to design projects and public tenders bundle up design and construction. When projects finish in Britain, teams disband. Lessons learnt are lost. By contrast, the Swedish engineers who designed the Citybanan (a crossrail-style tunnel through Stockholm connecting up commuter rail lines) moved on to designing Nya Tunnelbanan (a massive expansion of the city’s metro system).

Levy points out that Italy can build cheaply (far cheaper than Britain) despite high levels of centralisation. What sets Italy apart is the deep banks of engineering knowledge within the state – knowledge that the British state can only access when it hires consultants at high cost (and at a severe informational disadvantage). It should be noted Levy concedes that Italian centralisation does differ in one key way: Britain relies on ministerial approvals while Italy lets civil servants with expertise in engineering get on with it.

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My view is slightly different. I am persuaded that Levy is right that success is less about whether power is held centrally or locally and more about whether there is a clear programme of construction with in-house engineering expertise retained across projects, limited use of consultants and flexibility for builders to make changes . There is good evidence, for instance, that when the best engineers retire subsequent infrastructure projects are more expensive. However, I still think centralisation is an important part of the story. Let me explain.

I have argued before that while the direct costs of regulation, such as the requirement to build a £120m bat tunnel (a tenth of a percent of HS2’s total budget), are insufficient to explain why British infrastructure is so expensive to build, regulation is still a major cost-driver via an indirect route.

What matters for cost reduction is ultimately the ability to retain expertise between projects, to build supply-chains that spread fixed-costs over multiple projects, and to innovate in construction and design. The problem is regulation undermines all of these proven cost-reducers. In the case of nuclear, safety regulations force frequent design changes between projects undermining learning-by-doing. While a long drawn-out and uncertain planning process (plus the threat of judicial review) mean that investments in supply chains become incredibly risky – workers and equipment may sit idle for years between projects.

So why might centralisation be an issue? Because it exacerbates the planning and regulatory problems that drive costs increases.

In Britain, local authorities have every incentive to block new development and little incentive to say yes. New homes put pressure on public services and infrastructure. In some parts of the world, new development also brings a new cash flow. A $500,000 (£400,000) home in Houston generates around $9,000 (£7,200) in annual property tax revenue. Council tax in England is far lower, a home of equivalent value might bring in just £2,200 a year, roughly a third as much. And in Britain, councils have fewer freedoms to spend that revenue on their priorities – most of that £2,200 will go on statutory services like social care.

Britain’s most significant tax on housing is Stamp Duty, which flows directly to HM Treasury (and not to the local authority). Business Rates, which apply to commercial development, are only partially retained. Outside of special areas, local authorities only receive half of the revenue raised from business property taxes on new development. And funding formulas for local government often change for redistributive ends. Put simply, the fiscal incentives to approve development in Britain are extremely weak.

Some argue that the way to overcome local opposition to development is shifting decision making up a level. Labour’s re-imposition of housing targets and California’s Builders’ Remedy (where places that fail to build are forced to approve new homes) are two examples of this approach. The Nationally Significant Infrastructure Project system, where planning approval for major transport and energy projects is decided on by independent central experts (and not the areas affected) is another.

The problem is that nationalising planning policy doesn’t eliminate anti-development energy. It redirects it. The most effective way to stop unwanted development locally may not be to oppose it directly, but to lobby for national rules that make all types of development harder.

Want to stop new homes being built on farmland near the edge of your town? Lobby for a stronger green belt that blocks homes being built on farmland on the edge of every town. Want to stop a new motorway that might shift traffic to your area? Campaign for tougher nature protections that apply equally to motorways in Kent, trams in West Yorkshire, and nuclear power stations in Somerset. Anti-pylon activists in East Anglia are some of the strongest defenders of the National Landscapes duty, which blocked a station car park expansion in Essex, created problems for airport expansion in Bedfordshire, and delayed housebuilding in Kent.

And if you are a Government minister who wants to repeal a law that makes it easy to sue developers or a law that mandates extensive consultation, be prepared to fight a coalition of people opposed to motorways in Kent, homes in Hampshire, and nuclear power stations in Somerset who would have little in common other than opposing development near them.

Not every development is unpopular, but even popular developments have to comply with regulations and requirements designed to stop unpopular developments. There are few environmental wins more clear-cut than taking cars off the road and replacing them with trams. Trams are good for air quality, cut carbon emissions, and reduce noise. They are also popular. Poll after poll shows high levels of support for a tram in Leeds. Yet the same environmental bureaucracy built-up to delay and block more controversial types of development is also holding up popular new green infrastructure. Over 5,000 environmental surveys have been carried out for the now-delayed Leeds tram.

In other words, the incentive mismatch caused by Britain’s excessive centralisation has not only prompted the creation of tools to stop controversial development, but also created the crud that makes it hard to build almost anything.

This incentive mismatch is not the only driver of the growth of planning and environmental red-tape. People support environmental regulation in part because they sincerely want to protect the environment. Post-Grenfell fire safety rules make it much harder to build new residential towers, but they were adopted out of a genuine concern for safety. Planners genuinely believe that the planning restrictions they advocate around light, outdoor space, height, and so on, do create more ‘liveable’ places. Yet centralisation matters here too. If local authorities depend on new development for revenue, they would have a strong incentive to push back on excessive restrictions on building. There would be a political cost to regulatory growth. The problem is for many opponents and veto-players, the trade-off for greater environmental protection/fire safety (less development) is a feature not a bug.

France’s rapid nuclear buildout is sometimes understood as a triumph of the state overriding local objections. Tony Benn was famously told by a French official that ‘when you drain a swamp, you don’t consult the frogs’. Sizewell C by contrast had 7 separate consultations in 8 years. Yet there’s another side to the story. France’s tax system, which levied taxes on business structures (a bit like business rates), meant that areas which hosted nuclear power stations benefitted massively financially. Alex Chalmers notes that “French councils paid an average of €35 in subsidies … per local resident. In the 19 areas that hosted nuclear power, the average was €450.” This may be why support for France’s nuclear programme remained strong even in the wake of disasters like Chernobyl.

It is a world away from the incentives in Britain. Hinkley Point C’s community benefit package of £128m over 40 years works out to roughly £6 per Somerset resident per year. Britain’s tax on business structures provides much weaker incentives to approve development: councils retain only 50% of the rates they raise locally, face levies of up to 50% on ‘disproportionate’ growth, and see gains redistributed nationally based on ‘needs’ at regular intervals. Unlike in France, Hinkley Point C’s rates windfall will not lead to local tax cuts visible on every household bill.

There are other ways centralisation creates problems in Britain. Transport projects are typically funded out of national pots. There is a separation between who pays, who benefits and who approves. If a project is over-budget or gold-plated in various ways, locals don’t bear the burden. Londoners are not paying £4bn more in tax because Crossrail was £4bn over-budget. Instead, the costs are spread across the whole country. This can happen, as it did with HS2, but when a project has sufficient momentum behind it, it becomes a prime opportunity to get pet projects funded.

Britain’s planning system contains multiple veto points where public bodies who have, at best, weak incentives for projects to be delivered cost-effectively can cause significant delay (and in some cases, kill projects all together).

When Crossrail was being planned, Tower Hamlets Council submitted a list of 96 objections. After extensive negotiation Crossrail were able to resolve the dispute – by accepting 94 of them – though the Council came back with even more. Due to the length of Crossrail, this process was repeated for 15 other councils. In some cases, redesigns in response to objections (the Fire Brigade requested eight large emergency evacuation shafts across Central London) were themselves redesigned (read: cancelled) in response to objections from boroughs.

This isn’t Alon Levy’s first foray into the centralisation-cost debate. In response to my former colleague Ben Hopkinson’s deep dive on the ultra-cheap Madrid Metro, Levy responded by arguing that the article’s focus on decentralisation was misguided, in part, because OECD data suggests that while Spain is decentralised (and cheap), many other cheap countries are highly centralised (e.g. Italy). And some of the most decentralised countries, as measured by the OECD, are the US, Canada and Australia are also the most expensive.

The problem with Levy’s argument here, as Hopkinson points out, is that OECD fails to capture some of the most important aspects of why decentralisation is important. For example, the Madrid Metro and the West Midlands Metro both count as subnational spending under the OECD’s criteria, but Madrid’s ability to plan, control, and finance the project is hugely different. Likewise, there is a difference between devolving power to a region like the community Madrid and devolving power to a US state – a much larger (and more populous) entity.

It isn’t devolution itself that is important, but rather whether institutions are incentivised to support growth. In Britain, as it stands, there’s a mismatch of incentives and powers. Local authorities lack the power to approve and fund new infrastructure. And while in most places, an uplift in development as a result of new infrastructure is a fiscal benefit, in the UK it is often a fiscal burden. This creates hostility to development and drives a growing regulatory burden on new development whether that’s infrastructure or housing.

Levy’s attack on the ‘globalised model’ is compelling. The hollowing out of state capacity has made it harder to build. As Britain has relied more on consultants and contracts designed to shift risk elsewhere, building infrastructure has become more expensive. But, we need to look deeper. Why have we hollowed out state capacity and tried to shift risk elsewhere? The cause is a political system that generates risk, uncertainty, and delay at every turn.

I expected it to be controversial, yet what we saw was cross-party agreement and the only real controversy was whether or not Rachel Reeves’ endorsement at the Budget was full-throated enough. In the week that followed, the Prime Minister described the review as a model for economic reform to be applied far beyond nuclear and publicly committed to full implementation within 2 years.

The green NGOs who had fought hard (and failed) to kill key parts of the Planning and Infrastructure Act were remarkably quiet on the Nuclear Regulatory Taskforce report. That’s despite the review going much further than the Planning and Infrastructure Act. In fact, the Fingleton Review essentially sets out what the Planning and Infrastructure Act should have been. Well, the green NGOs are quiet no more.

A new briefing note from the Wildlife Trusts argues that the review is “based on flawed evidence” and “implementing the Nuclear Regulatory [Taskforce’s] recommendations would devastate nature without speeding up the nuclear planning and delivery process.” They are encouraging their millions of members to write to Ed Miliband. I am also reliably informed that MPs opposed to planning reform (and nuclear power) are organising off the back of it.

There’s just one big problem: many of the claims made by the Wildlife Trusts are inaccurate, misleading, or frankly irrelevant.

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Most of the claims relate to Hinkley Point C and how the extensive mitigations required to comply with environmental regulations did (or in their view, didn’t) drive costs. (For a full account of Hinkley Point C’s issues from fish discos to legal challenges, read this.)

Before we get to their claims, it is interesting what they don’t dispute:

• To win planning approval, EDF were required to produce over 30,000 pages of environmental documentation.

• Vital dredging works were delayed by a year due to an unsuccessful legal challenge over whether or not a permit variation to dump mud in a designated mud-dumping required an additional environmental assessment. EDF estimated this added £150m in costs.

• In fact, Hinkley Point C faced three separate legal challenges on environmental grounds. All were unsuccessful.

• EDF were also forced to pipe naturally draining water far out to sea because the water was high in Zinc.

• EDF were required to apply for planning permission for a minor change in how they stored their spent fuel, despite it having no safety or meaningful visual impacts.

Now let’s look at what their report does say and whether it adds up.

Wildlife Trusts: “A £700 million figure has been widely circulated in the press relating to fish deterrents and is quoted in the Review. This is incorrect. The cost of the fish deterrent system is £50 million.”

My assessment is that this is straightforwardly dishonest from the Wildlife Trusts. Below is the exact text from the Review.

Fingleton Review: “Hinkley Point C will have more fish protection measures than any other power station in the world. It has spent £700 million on their design and implementation, as set out in the HPC’s Development Consent Order (DCO). There will be three systems in place: Low Velocity Side Entry water intake heads (£500M), a Fish Recovery and Return System (FRR) (£150m), and an Acoustic Fish Deterrent (AFD) (£50M).”

It may be the case that some reporting around the Review has been misleading (and gave the impression the full £700m was the cost of the fish disco), but quite clearly this is not what the review says.

Wildlife Trusts: “Hinkley Point C’s original budget was £18 billion. It has since risen to an estimated £46 billion. The fish deterrent (at £50 million) comes to just 0.1% of this increased £46 billion budget. Nearly £30 billion in cost increases for Hinkley Point C have nothing to do with nature.”

Let’s put aside the fact that fish protection cost far more than £50m and that fish protection was far from the only cost of complying with environmental legislation – the 31,000 page environmental impact assessment covered far more than fish.

As I’ve argued before, it is a mistake to focus only on the direct costs of compliance. What ultimately cuts construction cost is learning-by-doing, certainty around design, and building up a supply chain – all of which are undermined by uncertain planning processes where builders don’t know how long it will take to win approval, whether they will be required to modify their design or construction plans, and there remains a risk they might be rejected outright. This, rather than the direct cost of the acoustic fish deterrent, is the real culprit.

Wildlife Trusts: “The Nuclear Regulatory Review says (for example) that just 0.08 salmon, 0.02 trout, and 6 lamprey per year would be saved. This deliberately downplays the impact on nature. This statement relies on analysis by the developer EDF, who captured fish and put trackers on them and used old data from Hinkley B power station. Since then, a more thorough analysis has been completed for the Environment Agency, who have found that 4.6 million adult fish per year being killed is a more accurate number, or 182 million fish in total over sixty years. These fish populations are a foundation stone for the wider ecosystem of the Severn Estuary, supporting internationally important migratory bird populations and other species. Many of the fish are rare or endangered. Damage on the scale suggested by the Environment Agency figures could have calamitous impacts on that ecosystem and the economic and social activities that rely on it.”

The implication is that the disparity is because the taskforce trusted the developer’s numbers while other more trustworthy numbers were available. This is misleading.

When it comes to biodiversity, not all fish are equally valuable. The Nuclear Regulatory Taskforce’s analysis only focused on the fish granted special protection by the Habitats Regulations, not the total of all fish (including much more common fish) affected. This is why there is such a large disparity.

It is true that EDF’s estimate of impacts were smaller than the Environment Agency’s figures. EDF’s data suggested that 0.75 million fish would be killed. This amounts to 0.003% of fish in the Bristol channel approach. Even if you multiply it by 8 to reach the EA figure, you are still left with a very small percentage. (And remember, this is the impact of a structure capable of powering millions of homes without releasing carbon dioxide into the atmosphere.)

It is also important to contextualise these figures.

First, 4.6 million fish sounds like a lot. But the impact of Hinkley Point C is small compared to the impact of commercial fishing. The forty-four tonnes (EA numbers) of marine life crushed each year by Hinkley Point C’s cooling system is a tiny fraction of the 745,000 tonnes of fish caught each year by the UK’s fishing fleet. In fact, Hinkley Point C’s impact is on par with that of a single small fishing vessel.

Second, they are not predictions, but reasonable worst-case scenarios. This is what the ‘precautionary’ Habitats Regulations require. Differences between numbers also depend on methods of calculating ‘equivalent adult fish’. In reality, far more than 4.6m fish will be killed each year, many will however be extremely young, small and would not have made it to adulthood.

Wildlife Trusts: “The Review also refers to the Bat Conservation Trust as an example of how to spend money on nature far more effectively, saying that they received £180,000 from the green recovery fund for horseshoe bat habitats. This is incorrect; the Bat Conservation Trust has not received any money from the green recovery fund for this purpose, nor did the Trust carry out the referenced project.”

This is quite a serious charge. Did the Nuclear Taskforce invent a £180,000 bat conservation project to prove a point?

No, but they did attribute it to the wrong organisation. Following the citation in the Review does take you to the Bat Conservation Trust website where a £180,000 grant was used to repair and upgrade a barn that became the site of a large colony of horseshoe bats. However, while the Bat Conservation Trust gave it an award, the actual upgrades (measures to exclude owls and improve temperatures) were carried out by the Vincent Wildlife Trust.

(I do find it strange that the Wildlife Trusts’ researcher asked the BCT, but didn’t follow the hyperlinked citation in the report.)

The core point still stands. It is possible to spend money on bats far more effectively than building a £120m bat tunnel. Funnily enough, the Wildlife Trusts report suggests that this £120m expenditure wasn’t required and could have been avoided. This, to me, feels unlikely as a recent explanation from HS2 ltd’s top ecologist points out: there were no cheaper ways to comply with the law (and any route change would have increased environmental impact.)

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The above are the big errors, but the issues don’t end there.

On a number of occasions, they rely on soft dogwhistle tactics.

Nuclear is described as a ‘potentially risky technology’. Clearly, they are trying to tap into radiophobia and fears about Chernobyl style-disasters. Chernobyl, by the way, was the result of a reactor design that lacked a containment dome – Hinkley Point C’s containment is built to withstand a 1 in 10,000 year earthquake and direct hit from a jumbo jet - and the decision to run it in extremely unsafe ways. (For more detail, I recommend this paper from Prof Gerry Thomas, who ran the Chernobyl Tissue Bank at Imperial College London until recently.)

No form of energy generation is without risk, but nuclear stands out as the lowest-risk. Our World In Data reviewed multiple studies and found that nuclear power is one of the safest ways there is to generate power. Only solar is safer, but that doesn’t account for casualties as a result of mining the rare earths used in renewables.

EDF is described as a ‘company owned overseas’. As if that invalidates their arguments or makes them commenting on public policy in Britain (a country where they employ over 12,000 people) suspect.

Then there’s also a tendency to make arguments that frankly don’t stand up to the slightest bit of scrutiny. Here are some examples.

Wildlife Trusts: “The combination of these changes would not only substantially weaken protections for nature but would also introduce significant uncertainty in the nuclear sector and for other sectors about whether standards and regulations that are bedding in and increasingly becoming well understood are in fact about to change.”

Clearly, the nuclear sector disagrees having welcomed the Fingleton Review so strongly. By the way, have you noticed people never call for stability when they don’t like the status quo.

They make the same argument for the National Landscapes duty.

Wildlife Trusts: “The duty created by the Levelling Up & Regeneration Act 2023 on Local Authorities relating to National Parks and Landscapes is already providing much needed clarity on what the duties are for those who need to comply. Now that the new duty has been used on the ground several times, its application is becoming well-understood. Suggestions of changing or removing it, not long after its introduction, will introduce uncertainty and delay, as well as weakening National Park and National Landscape protections.”

This is not, I would point out, the position of any planning lawyer I have spoken to. The duty has already been used as grounds to mount multiple legal challenges. This has led to long-drawn disputes over compensation and I’ve been told first hand by anti-pylon MPs that they will attempt to block major grid upgrades.

Then there’s this sleight of hand.

Wildlife Trusts: “The Office for Environmental Protection previously reviewed the effectiveness of environmental assessment regimes… In its review it found that the majority of project applicants and planning authorities already find HRA to be clear and well understood, and it applies to an existing, extensive and ecologically important network of sites.”

This sounds as if developers actually support the regulatory status quo. However, the survey itself wasn’t a developer survey, but an opt-in survey (N = 123) of ecologists and environmental practitioners distributed by membership groups. No wonder they were in favour.

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Let’s remember what’s at stake. Nuclear power is the greenest form of power there is. Not only does it generate zero carbon emissions in operation, it is also the most land-dense form of electricity generation. To produce the same amount of power as Hinkley Point C would require a solar farm the size of the Isle of Wight. And that’s before you get into the need for backup generation and new transmission upgrades.

If we are to tackle the biggest driver of nature loss (climate change) then nuclear must play a role. But nuclear’s role is limited by its cost. Yet the high costs paid in Britain are not inevitable. France, Finland, and South Korea all build plants for much less. Britain could bring costs down, but not when rules and regulations undermine long-term investments in supply chains and push up costs. Rules and regulations that even the NGOs concede have not prevented a ‘nature crisis’. That’s why the Fingleton Review is so important (and why it has seen such strong support). It explains clearly what’s needed to bring those costs down.

If the Government delivers the plan in full, then it will be transformative. But, they must hold their nerve in the face of organised opposition and misinformation from green groups.

This is Energy Minister Michael Shanks MP’s defence of the Government’s decision to lock in 20-year contracts for 8.4GW of wind power at £91 per MWh. DESNZ’s data (published yesterday) estimates that the levelised cost of energy for a new gas plant built in 2030 is £147 per MWh.

In essence, he’s arguing that even if £91 per MWh is more expensive than energy is at the moment, it isn’t more expensive than building more gas plants in the years to come. Comparing new wind with old gas plants fast approaching decommissioning.

Shanks is right to look forward (and not at current prices). Britain’s existing gas fleet is old and in need of investment. Nearly a quarter of the existing capacity was built in the 90s. Gas appears cheaper than it is because we are sweating a fleet that won’t be there in a decade. And it has become more expensive to build new gas plants due to the surge in demand from AI hyperscalers like Microsoft.

Shanks’ argument has elements of truth, but I think it is ultimately misleading.

First, the high cost of new gas is partially a policy choice. Gas power emits CO2, which causes climate change. Britain imposes a carbon tax on gas so the polluter pays for the damage they cause. This represents around 30% of the cost of building and operating a new mid-merit gas plant on DESNZ’s assumptions. If this carbon price was scrapped, as Reform and the Conservatives now advocate, then the LCOE for new gas would fall to a £105 per MWh.

I am in favour of carbon pricing, but when advocates talk about ‘gas being expensive’ without making clear that we deliberately make it more expensive in order to tackle climate change, they are, deliberately or not, muddying the waters to create the impression that decarbonisation is without trade-off.

Second, high carbon prices and more wind on the grid also push down gas load factors. In the past, gas plants ran most of the time. In the future, they may go weeks without switching on. With lower carbon prices (and less wind on the grid), we would also sweat our gas assets to a much greater extent. The £147 figure is based on a gas plant running at 30% capacity.

Run it at 93% and costs fall to £109 (and £69 excluding carbon prices). At low capacity factors, there’s less generation to spread fixed costs like construction across.

Sidenote: It is more than a little frustrating that they modelled 93%, which no one expects to be reached, rather than 70% which was average capacity hit between 2014 and 2024.

Third, LCOE is a flawed metric. While it can be helpful to track cost increases or decline for a given technology, it can mislead when you compare technologies. Nuclear runs 24/7 at a high capacity factor, wind is intermittent, and gas can fill the gaps. If you only look at the LCOE, you ignore the big benefits of baseload (nuclear) and dispatchable (gas and coal) forms of generation.

Fourth, even if we build loads of wind generation, Britain will still need new gas plants to fill the gaps when the wind isn’t blowing and the sun isn’t shining. And the Government is planning to order new gas plants. The debate then isn’t just whether or not to build new gas plants, but whether to run them at higher or lower capacity factors.

We deserve a better debate. Our current debate isn’t sustainable. What we have today is a legacy of a brief period after the gas crisis where wind and solar were indisputably cheap. Back then there was no energy trilemma. Energy security, decarbonisation, and affordability all pointed us in the same direction: a dash for clean power. Since then gas prices have come down and the cost of building wind farms has gone up.

We need to be able to engage with trade-offs. First, because the public cares about this and if bills don’t come down, then there will be a backlash. Second, the trade-offs matter for decarbonisation. There is no way to reach Net Zero without mass electrification. And electrification will only succeed if it is a good deal for consumers. There is no point in decarbonising the grid, if it stops us from decarbonising our heating, transport and industry.

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Britain’s electricity prices are the highest in the developed world (or at least, in the top three accounting for subsidies), yet the weekly average wholesale price of electricity is currently £75-80 (per MWh). And that price is, by recent standards, high.

Electricity pricing is really complicated. Working out the final impact on bills is tricky. Analysts at Aurora Research and Baringa claim that bills would go down, even if the auction cleared at £94 per MWh. That’s because although CfDs top up generators if the wholesale price is below the strike price, renewables still bid down the wholesale price the rest of the market clears at. And in their model, this latter impact outweighs the former.

Another recent study suggested that renewables are already lowering bills by a fair clip because while they may often be more expensive than the average wholesale price, they still knock some of the least efficient (most expensive) gas plants from the merit order.

It was this logic that prompted the Government to almost double the auction budget after bids came in a fair bit lower than the £114 maximum price.

Other analysts disagree. Independent energy analyst Ben James suggests that a strike price above £70 is likely to be at best neutral (and above £80 bill increasing). Part of the issue is that the more optimistic models only look at part of the costs.

They fail to account for the fact that wind is often constrained by a lack of grid capacity. If the new wind (most of the new capacity is wind) is behind transmission constraints, then wind generators will actually be paid to switch off. One way to loosen those constraints is to invest in new transmission infrastructure. That costs money, but those costs aren’t accounted for by the model.

There are other problems too.

Wind generation is highly correlated. When it’s windy in one part of the country, it’s probably windy in another. The new generation will cut wholesale costs primarily when wholesale costs are very low (and in some cases) negative.

And there’s knock-on impacts for gas. If lower wholesale prices mean gas plants run for even less time than they currently do then gas generators are likely to require bigger capacity market payments to compensate.

It is hard to escape the conclusion that when all the costs are factored in, the deals struck today will push bills up at a time they are already high.

In the minds of most British voters, Labour were elected on a pledge to slash annual energy bills by £300. And just like their pledge to build 1.5 million new homes, most independent experts expect them to fail. There were some steps in the right direction at the Budget. Some policy costs (charges on bills to pay for things like home insulation and historic investments in renewables) were taken off bills, moved either on to general taxation or eliminated altogether (one insulation scheme has been scrapped).

This isn’t, however, the way voters were told bills would fall. High energy bills were blamed on Britain’s exposure to global gas prices. Labour would fix this with a dramatic dash for clean power by 2030. Gas would still be on grid as backup, but the hours in the day where gas set the price of power would fall dramatically.

When they made the pledge, renewables were ‘cheap’. The two auctions before Russia invaded Ukraine cleared at £55 and £52 respectively. When wholesale prices are higher than CfD prices, generators refund billpayers. In the months following the invasion, wholesale prices hit £511.20. Wholesale prices went above £100 in September 2021 before the invasion, and stayed above £100 and far beyond until December 2023 while the weighted average of CfD prices was £156/MWh. Bills were over £1bn lower as a result.

Like most things, renewables got more expensive after Russia’s invasion. No offshore wind projects bid below AR5’s £61 auction price ceiling and as a result, no new offshore wind was bought as a result. The last offshore wind auction did clear, but at a much higher price: £82.

Today’s auction price is £9 higher per MWh, but that understates the cost increase. In the past CfDs were offered for 15 year terms. In this auction the contract length was extended to 20 years of inflation-linked fixed prices. Before the auction, civil servants estimated that this would knock around 12% off the final price. When you account for this, the cost jump from AR6 to AR7 is more like 30%.

Put simply, it has got more expensive to build new offshore wind farms.

Why have renewable projects got more expensive?

Finance

Renewables are extremely capital intensive. For fossil fuel generation, the big driver of costs is fuel. By contrast, once a wind turbine or solar panel is installed, it costs very little (maintenance is still important) to generate power. It is the upfront construction cost that matters. Wind and solar projects are extremely sensitive to the cost of borrowing.

When interest rates are low, it is much cheaper to build. When they go up, project costs can jump. Ørsted, who recently cancelled the Hornsea 4 Offshore Windfarm, have seen their interest rates go up. In 2019 they were able to borrow in pounds at a 2.125% interest rate. By 2022 this had jumped to 5.375%. Using those interest rates the debt repayment cost for a 15 year term (the previous length of a CfD) has risen by 25%. In their modelling for this renewable auction, DESNZ estimated that projects need to generate a 8.5% rate of return to go ahead.

Supply Chains and Inputs

It’s not just borrowing however. Almost every bit of a wind turbine has become more expensive. One analysis suggests that financing costs aside, the cost of building 1MW of wind capacity has gone up by two-fifths.

Wind turbines are 90% steel. British and European steel prices jumped by more than two-thirds between 2019 and 2022. One big driver of that cost increase is the UK’s high industrial electricity costs. High electricity prices caused by high gas prices paradoxically can make it harder to get off gas. They’ve gone down since, but are still 60% higher than in February 2021. Other inputs such as the neodymium magnets used in turbines have jumped in cost by two-fifths.

Offshore wind in particular has been affected by a number of bottlenecks as supply tries to keep up with growing demand. Lead times for electrical equipment like HVDC stations and export cables have jumped. In some cases lead times have stretched longer than two years. For 400kv transformers lead times can be up to four years long. There’s also a big shortage of the specialist installation vessels that take wind turbine parts out to sea. Projects are constrained by a lack of capacity at ports too.

In the long-run investments in new factories and port upgrades should loosen the constraints significantly and reduce costs. This is one reason to think that buying lots of wind at high prices today is a bad idea.

Planning

Like with most things, Britain’s planning system makes it more expensive to build new wind and solar farms. Before 2020, no offshore wind farm had to pay compensation for bird nesting sites. Since 2020, almost every single one has. Dogger Bank South, which successfully bid into AR7, will be paying £170 million in mitigating its impacts on seabirds.

Offshore wind farms will also need to comply with new regulations to reduce underwater noise. Industry sources tell us that this will push up the cost of every future offshore wind project by up to £120M.

Another way the planning system increases costs is by reducing scale. One offshore wind project, East Anglia 1 North, was cut in size by 40% due to the risk it might kill 13 Red Throated Divers in the Outer Thames Special Protected Area (Outer Thames SPA). It should be noted that the population of red throated divers increased in the Outer Thames SPA (from 6,000 to 18,000) at a time when three other offshore wind farms were built.

Bigger wind farms have economies of scale. They can spread the fixed costs around things like design, planning and transmission over more capacity.

Planning delays can bite too. A number of projects off the coast of Norfolk were delayed for two years trying to design a legally compliant compensation package to offset seafloor impacts. Legal challenges can delay projects too. One wind farm was delayed for a year by legal challenges once planning permission was granted. On top of the higher financing costs (and construction inflation), there’s also the need to pay the Crown Estate for the seabed lease. All of these push costs up.

Are we at the limit of CfDs usefulness?

When CfDs were launched, offshore wind was very expensive. Building up a supply chain. learning from past projects, and innovation have meant costs have more than halved. It is more than possible costs that fall again when supply chain constraints relax and further planning reforms, such as the measures proposed by the Nuclear Regulatory Taskforce.

The role of CfDs has, however, changed. They were intended as a stop-gap. A way to support less mature (but desirable) technologies. As technologies matured, the expectation was that subsidies and support would be reduced and renewables would increasingly be ‘merchant’. That is to say, they would compete like any other technologies. Their role is much bigger now. More and more of the market will be set by long-term fixed price contracts.

This is a problem for a few reasons.

Competitive CfD auctions were effective at driving down renewable costs. If you want to double onshore wind, triple solar and quadruple offshore wind by 2030, as Labour promised, then CfDs are likely the best way you can procure that. But, increasingly the question isn’t just – “How can we buy the wind and solar we need as cheaply as possible?” – it is how much wind and solar we really want on the grid. We are stuck with the problems of central planning.

One of the key ways to bring down bills and decarbonise is by making more and more demand flexible. Heat pumps, batteries, and EVs can all reduce the strain on the grid and save consumers money by shifting demand to when wind and sun are abundant. Likewise grid-scale batteries can eat up demand when power is cheap and plentiful and release it when it isn’t. Yet flexibility only works if there are strong price signals. If the wholesale price is increasingly irrelevant, because generators are paid a fixed-price, then there’s little incentive to invest in flexibility.

More than anything Britain needs cheaper power. To save jobs and industry, we need to bring down industrial power prices. To get emissions down, we need it to be attractive to switch to electrify heating, transport and just about everything else. The deals struck today don’t do that.

Nothing, however, has been recovered from the companies most responsible, foreign-headquartered cladding manufacturers such as Arconic, Celotex and Kingspan. This is despite the fact the Grenfell Inquiry’s found they misled regulators and developers about the safety of their products. Many developers implicated in cladding installation have also ceased trading, leaving no money to collect. That leaves roughly £3 billion unfunded.

The Government’s Response: Tax New Homes

To fill the gap, ministers proposed the Building Safety Levy: a tax on every new home built. The history of the company is irrelevant. Even if a developer did not exist at the time of the cladding scandal, or has never installed any cladding at all, the levy still applies.

This fits a long-standing pattern in English housing policy. Whatever the issue: social housing, nature recovery, infrastructure, or now cladding remediation, if policymakers can find any connection, however flimsy, to new housing, the instinct is simply to tax new housing more.

This approach is a big problem. Locals have little incentive to support new development currently. In theory, the huge windfall developers gain from the grant of planning permission could be used to buy-in opponents. It could be used to renovate a community centre, expand an over-stretched GP surgery, or upgrade a road. To an extent, that’s already the case with Section 106 Agreements and the Community Infrastructure Levy.

The Building Safety Levy, however, means a chunk of that surplus goes to fund repairs to flats in completely different parts of the country.

A Tax Highest in the Areas With the Worst Housing Crisis

The levy varies enormously by location. A 100sqm home on a greenfield site would attract a charge of £1,270 in Durham but £10,035 in Kensington & Chelsea. The higher local property values are, the higher the levy is.

There is a kind of economic logic behind this: the government has built a system that functions as a roughly 0.5–2% tax on sales value, so viability is impaired in roughly similar ways everywhere. But the practical effect remains perverse, the areas with the most acute housing shortages face the highest charges for building new homes. London already has higher costs. For instance, new housing in London is more likely to be subject to the Building Safety Regulator (another well meaning, but poorly designed, post-Grenfell invention), stricter affordable housing mandates, and tougher embedded carbon and energy efficiency rules imposed by London boroughs. All of that comes on top of the higher costs associated with developing in an already built-up area.

The Brownfield Discount

The levy offers a 50% discount for building on brownfield land, acknowledging that these sites are usually more difficult and expensive to develop. Brownfield land contains existing structures and/or old infrastructure that must be cleared or repaired before development can begin. In some cases, past industrial uses mean that land needs to be decontaminated. These constraints add cost, complexity, and time compared with building on undeveloped greenfield sites. So the 50% discount would be welcome, that is, if the levy used the same definition of brownfield that the government uses everywhere else. Unfortunately, it does not.

Under the National Planning Policy Framework, brownfield land includes land with a permanent structure and its curtilage, including fixed surface infrastructure such as large areas of hardstanding. This is intuitive. The following sites pictured below would all count as ‘brownfield’ under any common-sense definition.

Yet the Building Safety Levy’s statutory instrument takes a completely different approach. Its draft regulations define a “previously developed site” as one where at least 75% of the land in the planning red-line boundary must itself be “previously developed”. Land is only “previously developed” if a building stood on that exact patch of ground at some point after 1 July 1948.

The guidance repeats this, simply re-phrasing the same rule: PDL is land that has, or had, a building on it, and at least 75% of the total site area must meet that test.

The consequences are obvious. Because the levy definition makes no reference to curtilage, hardstanding or associated infrastructure, enormous numbers of sites that are brownfield under the NPPF (and would be recognised as brownfield by anyone using common sense) cease to be brownfield for the purposes of the levy. Supermarkets, retail parks, industrial estates, office parks, surface car parks, and disused sidings will almost always frequently fail, because substantial parts of the site consist of parking, verges, access areas or roads where no building ever stood.

In other words, the levy introduces a definition of brownfield that the rest of the planning system does not use and which simply does not work in the real world. The result is both inconsistent and harmful. Sites that are already more expensive and more complex to deliver will be taxed as if they were greenfield, undermining the very rationale for the discount.

What the Government Should Do

If ministers insist on pressing ahead with the Building Safety Levy, they should at least avoid making brownfield development harder than it already is. The levy’s bespoke definition of Previously Developed Land bears no resemblance to the National Planning Policy Framework, excludes the curtilage and hardstanding that make up much of a typical brownfield site, and will mean that supermarkets, retail parks, office parks, industrial estates, and surface car parks frequently fail to qualify for the 50% discount.

This misalignment is not just a technical flaw; it actively undermines the purpose of the discount by taxing complex, regeneration-focused sites as if they were easy-to-deliver greenfield. Fixing the definition so it matches established planning policy would restore consistency, reflect the reality of how brownfield sites actually exist on the ground, and prevent the levy from becoming yet another barrier to urban development and renewal.