Addressing the Labour Party Conference in Liverpool today, Chancellor Rachel Reeves reiterated the Labour Government’s promise to “get Britain building again.”
The Chancellor also pledged to make improvements to the planning system, in a bid to support “builders frustrated by a system that hands power to the blockers.”
Vowing to “rip out the blockages” in the current system, Reeves said that the Labour Government aimed to increase building and introduce new infrastructure across the UK, echoing back to its campaign promise to build over 1.5 million homes this Parliamentary term. Alun Williams, partner at London law firm Spector Constant & Williams said:
“The chancellor is another in a long line of politicians who appears pretty adept at identifying the illness plaguing the planning system. The question is whether Labour will be the first to successfully administer a cure.”
Fergus Charlton, planning partner at national law firm Michelmores said that the Chancellor has “dipped lightly” into the world of planning in her speech to conference. He continued:
“‘Ripping out the blockages’ of a system that places great value on community consultation and which turns on both local and national level political decision taking, suggests that the Chancellor is inclined to extend permitted development rights. Such rights typically avoid consultation and constrain the ability of a politically driven decision maker to say ‘no’.
This would be consistent with the direction of travel signalled over the weekend by the Ministry of Housing, Communities & Local Government’s planning reform working paper that is proposing ‘brownfield passports’ akin to permissions in principle, and which also extols the use of Local Development Orders.”
The Treasury is also considering potential increases in capital gains tax, inheritance tax, and other pension-related levies to bolster public finances.
In the 2022-23 tax year, 369,000 individuals paid capital gains tax, with their combined profits totalling £80.6 billion. The tax generated £14.4 billion, a 15% decrease from the previous year, largely due to a drop in property prices.
Rachael Griffin, a tax and financial planning expert at Quilter, suggests that if Labour maintains or tightens current inheritance tax rules, they should also reform gifting laws. She emphasises that while the system is filled with numerous tax reliefs, simplifying it doesn’t have to lead to more people paying inheritance tax. AJ Bell director of public policy Tom Selby told the Mortgage Finance Gazette:
“While the chancellor’s tone may have been more positive today, she left the conference in no doubt that painful decisions are coming in the Budget on 30 October – although the country remains in the dark on where exactly the axe will fall.
Like nature, politics abhors a vacuum, and the lack of clarity has led to inevitable speculation about possible revenue-raising reforms to pension tax relief and tax-free cash, as well as capital gains tax.”
