Following its landslide election victory on 4 July, the new Labour government has now set out its legislative agenda.[1]
The State Opening of Parliament heralds the commencement of the new parliamentary session, typically around one-year in length, with King Charles III announcing the government’s legislative priorities.[2]
This King’s speech – the first under a Labour government since 1950 – includes a total of 40 draft bills (the largest since 2005), ranging from railways and education to immigration and green energy. [3]
We have identified five bills concerning planning and development which the industry will be keen to monitor over the parliamentary session, which include:
The National Wealth Fund Bill
The National Wealth Fund is central to the Government’s overarching ambition to deliver growth and a green economy and will contribute toward the Government’s industrial strategy and clean energy superpower mission.
Integrated with the UK Infrastructure Bank and the British Business Bank, and capitalised with an additional £7.3 billion, the National Wealth Fund seeks to catalyse private investment and aims to generate £3 of private sector investment for every £1 invested from the taxpayer.
The Labour Party Manifesto set out further detail on how the £7.3bn will be allocated:
- £1.8 billion to upgrade ports and build supply chains across the UK
- £1.5 billion to build new gigafactories
- £2.5 billion to rebuild the steel industry
- £1 billion to accelerate the deployment of carbon capture
- £500 million to support the manufacturing of green hydrogen.
The Bill aims to attract a further £20 billion into priority sectors in support of the Government’s Green Prosperity Plan.
Implications for developers: The creation of the National Wealth Fund will support the Government’s ambition of reaching 100% clean power by 2030, thereby encouraging a developer-led pipeline of renewable energy and infrastructure developments. The Bill will consequently provide new opportunities for developers to bid for government support in exchange for investment in green industries, supporting new and emerging technologies, such as green hydrogen, to grow across the UK.
Planning and Infrastructure Bill
The current planning regime is widely recognised as a blockade on growth, with a number of challenges collectively having a detrimental impact on development coming forward in a timely manner. The Planning and Infrastructure Bill seeks to address this constraint by streamlining the planning process and unlocking more housing and critical infrastructure, ensuring that democratic engagement focuses on how, not if, homes and infrastructure are delivered.
The Bill will include the following measures:
- Streamlining the delivery process for critical infrastructure by simplifying the consenting process for major infrastructure projects and establishing a review process for new National Policy Statements to come forward and be updated every five years;
- Reforming compulsory purchase compensation rules to ensure that compensation paid to landowners is fair but not excessive, thereby unlocking more sites for development;
- Improving local planning decision making by modernising planning committees;
- Increasing the capacity of local planning authorities to improve performance and decision making; and
- Using development to fund nature recovery through dialogue with nature delivery organisations, stakeholders and the sector over the summer to determine the best way forward.
Implications for developers: Without doubt this Bill is likely to be one of the most anticipated pieces of legislation for the planning and development industry. Whilst the Government has yet to set out specific detail on planning reform, the Bill does set out welcome proposals to simplify and speed up the NSIP and TCPA planning regimes. Central to this aim is an acknowledgement that timescales for planning decisions are too long, despite high demand for major infrastructure.
Streamlining the process for large developments to come forward has been promised, with a focus on reducing the ballooning cost of EIAs and restricting the scope for legal challenges, alongside vaguer pledges around interconnecting development with nature recovery – a key aim of the BNG framework. Likely of most interest will be the rather vague commitment to reforming planning committees. Whilst this move has been tentatively welcomed by the industry, exactly what form this takes and how quickly it can be rolled out will be closely scrutinised.
The devil will, most certainly, be in the detail of the draft Bill, however without doubt the sentiment is positive and should be seen as a step in the right direction.
English Devolution Bill
England remains one of the most centralised economies in the developed world and has some of the highest levels of geographic inequality. Devolution deals now cover almost half of England’s population and more than half of its economic output. The current approach is inconsistent and fragmented, and the Government has committed to expanding and deepening devolved powers to empower local leaders, authorities, and communities.
The Bill will deliver:
- The creation of a standardised devolution framework into legislation, with enhanced powers for local leaders over strategic planning, local transport networks, skills and employment support, whilst introducing new duties for local leaders to produce Local Growth Plans;
- Devolution as the default setting, granting powers without the need for elongated negotiations with central government when governance conditions have been met;
- A simpler process for creating new Combined and Combined County Authorities by establishing a legislative foundation upon which to widen and deepen devolution;
- Improved local decision making through more effective governance arrangements;
- Empowered local communities with a strong new ‘right to buy’ valued community assets, such as empty shops, pubs and community spaces, supporting the revamp of the high street.
Implications for developers: The proposal to widen and deepen English devolution represents a significant moment for the UK and will likely have a far-reaching impact. Devolution in England has grown asymmetrically since its inception in 2014, with a collection of Mayors and Combined Authorities interspersed randomly across England with markedly different sets of powers and responsibilities.
The Bill seeks to fill this gap and create a new generation of Combined Authorities with increased powers over local economies. Crucially, this includes over strategic planning, giving Metro Mayors a key role in identifying and allocating land for development at the local authority level. This move, whilst positive, will pose an interesting question in areas like the south west of England where there has been two failed attempts at bringing forward a regional spatial strategy. Another sizeable question relates to how Mayoral Combined Authorities with greater powers over regional planning frameworks will align with ongoing Local Plan preparation and review processes.
Without doubt, however, is the fact that an English Devolution Bill will mean that there will be a growing imperative for the development industry to engage on a more regional basis at the early stage of the strategic planning process.
Great British Energy Bill
The Bill establishes Great British Energy – a new, publicly-owned energy production company which will own, manage and operate clean power projects. GB Energy will be headquartered in Scotland and support the private sector in the delivery of the Government’s aims to double onshore wind capacity and deliver a three and fourfold increase in solar capacity and offshore wind respectively.
The Bill establishes Great British Energy to:
- Develop, own and operate assets, investing in partnership with the private sector. GB Energy will have a capitalisation of £8.3 billion of new money over the Parliament, ensuring a stake for the British people in projects and supply chains which accelerate cheap clean power and the technologies of the future; and
- Facilitate, encourage and participate in the production, distribution, storage and supply of clean energy to support the green transition.
Implications for developers: There remains some uncertainty as to how Great British Energy will operate alongside developers, though the draft Bill does provide some clarity. GB Energy will operate as both developer and facilitator, owning assets which produce and store clean energy, and investing in private-led projects and supply chains to reduce risk and cost for developers. This presents opportunities for developers to work collaboratively with government to turbocharge the energy transition, whilst increasing competition in the sector, with the entry of a new operator in the market.
The Crown Estate Bill
The Crown Estate maintains and improves public infrastructure in England, Wales and Northern Ireland and generates a financial return for the Government which has been worth over £3 billion in the last decade. One of The Crown Estates’ most important roles is the ownership and stewardship of England and Wales’ seabed, developing, preparing and leasing out plots of seabed to offshore wind and other energy developers.
The Bill will modernise The Crown Estate by removing restrictions on its activities and widening its investment powers by:
- Granting The Crown Estate the power to borrow from the Exchequer to free up its large cash reserves to be invested in new projects, such as offshore wind deployment;
- Widening The Crown Estate’s existing investment powers to enable investment in activities which complement its strategy and wider government objectives, from digital technologies to port infrastructure;
- Changing the source of funding for expenses and salaries of the Commissioners to the return made by The Crown Estate, saving parliamentary time; and
- Increasing the maximum number of Commissioners on The Crown Estate Board from 8 to 12, in line with modern corporate governance best practice.
Implications for developers: it is estimated that the Bill will allow The Crown Estate to bring forward 20-30GW of new offshore wind seabed leases by 2030, significantly boosting offshore wind capacity off the coastline of England and Wales. This presents new opportunities for offshore developers to boost their pipeline capacity and invest in the port infrastructure necessary to deliver the Government’s ambition of quadrupling offshore wind by 2030.
Conclusion
The 2024 King’s Speech was historic in many ways: the first Labour King’s Speech since 1950, one of the longest in recent history, and the first Labour legislative programme in nearly 15 years.
Prior to the election the Labour Party and Keir Starmer spoke about unleashing a ‘decade of national renewal’. The now Labour Government will hope that the Speech signals their intent to bring about a turning point in the economic fortunes of the nation, and to that end, it is unsurprising that the first King’s speech of the Starmer administration focused so intently on planning reform and green growth.
Bills on the creation of a National Wealth Fund, Great British Energy, and reforms to The Crown Estate seek to use government funding and reforms to create a conducive environment for business to catalyse private investment. Much of this strategy relies on the mood of the private sector and only time will reveal whether Labour can successfully translate warm words around a revitalised public-private partnership into economic reality.
The Planning and Infrastructure Bill could prove to be one of Labour’s most consequential acts in government, if (and it’s a big if!) it is able to enact the sorts of structural reforms to the NSIP and TCPA regimes that it has hinted at. Further detail is likely to be revealed when the Bill is introduced, but a focus on shortening the timeframe for, and modernising the processes of, the determination of planning applications is a welcome indication of the Government’s intent.
Finally, whilst not necessarily one of the most eye-catching announcements, another of Labour’s most significant pieces of legislation is the English Devolution Bill which could fundamentally realign local and regional democracy as the cornerstones of economic growth, reversing the post-war decision to re-centralise power from the counties to central government. The creation of a legislative framework for devolution could therefore prove transformational in widening devolution settlements to southern England and beyond and deepening existing governance arrangements in the North and Midlands. The success story of Greater Manchester, which has the most advanced devolution settlement and the highest growth rate in the UK, demonstrates how devolution to the regions and giving decision making powers to those ‘with skin in the game’ (to coin the Prime Minister), can reignite economic growth and deliver prosperity.
The next few weeks and months will be illustrative as developers, businesses and the wider sector seek to understand how Labour’s ambitious proposals to support and turbocharge growth will be practically delivered.
[1] BBC News, King’s Speech summary: Key points at a glance, 17 July 2024. Accessed via: https://www.bbc.co.uk/news/articles/c51y7pqy1v3o. Institute for Government, What was in the 2024 King’s Speech? 17 July 2024. Accessed via: https://www.instituteforgovernment.org.uk/explainer/2024-kings-speech.
[2] The King’s Speech 2024, Prime Minister’s Office, 10 Downing Street, 17 July 2024. Accessed via: https://www.gov.uk/government/speeches/the-kings-speech-2024.
[3] The King’s Speech 2024, Background Briefing Notes, 17 July 2024. Accessed via: https://assets.publishing.service.gov.uk/media/6697f5c10808eaf43b50d18e/The_King_s_Speech_2024_background_briefing_notes.pdf.