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The economic statement – did the Chancellor deliver?


Rishi Sunak’s ‘New Plan for Jobs’ involved vast sums of money to keep unemployment down. Ellis Wiggins, Associate Director – Home Counties examines whether the Chancellor’s statement also offered reassurance to the planning and local government sectors.

Caroline Lucas, the Green MP for Brighton, came under attack on social media when she tweeted “Is that it?” in response to the Chancellor of the Exchequer’s statement on the economic recovery from COVID-19. Critics were quick to point out the £30bn worth of spending commitments being made, alongside the multiple tens of billions of pounds that have been spent or committed since the Coronavirus crisis began.

Viewers from the worlds of planning and local government, though, may have felt entitled to agree with Ms Lucas.

A welcome holiday

In a statement that included significant spending commitments, there were few measures to kick-start the development industry. The stamp duty holiday, temporarily raising the taxation threshold for property sales to £500,000, will be welcomed by builders and sellers of homes as a helpful stimulus to get people buying again.

Any hopes that the Chancellor might bring out any more substantial pledges to get construction going again were quickly dashed. The development industry will instead now be looking ahead to the planning reforms repeatedly hinted at by senior members of the Government, including most recently by the Prime Minister in his ‘New Deal’ speech.

Permitted development concerns

In a worrying sign for ministers, one of the proposals has already run into its first hurdle. Conservative MP Sir Peter Bottomley criticised plans to change permitted development rights to allow an additional two storeys on blocks of flats. Arguing that it will “wreck the lives” of leaseholders looking to obtain their freehold, Sir Peter told the Chancellor that he intends to put down a ‘prayer’ in response to the Statutory Instrument implementing this change – in effect using an Early Day Motion to force a debate on a measure that would not otherwise be discussed. Sir Peter’s status as the longest-serving sitting MP, making him Father of the House, means that his opinions carry some weight, particularly among his Conservative colleagues. Whether this becomes a bigger issue for the Government remains to be seen.

More money for councils?

It was councillors and local government officers, however, who probably had the most reason to feel short-changed. Local authorities were mentioned just once in Rishi Sunak’s statement, when he made reference to the support already given to councils. Labour’s Kevan Jones was left to raise the issue of when a comprehensive financial settlement for local government was going to be brought forward. The Chancellor instead focused on the “record increases in core spending power” over the last two years, leaving councils none-the-wiser as to when a settlement will be coming forward.

A serious disquiet is already growing in some town halls across the country around the shortfall in the Government’s Coronavirus funding. The measures brought in to tackle the virus may well have left many councils, including the Conservative ones, feeling that they are being left to pick up at least some of a bill that they cannot afford. Expect to see an increase in pressure from councillors on their colleagues sitting in Parliament over the coming weeks.

On board – for now

Rishi Sunak’s ‘New Plan for Jobs’ certainly contained plenty of schemes designed to keep rising unemployment at bay. For the moment, Conservative backbenchers seem mostly willing to (reluctantly) give the Chancellor a free hand to continue with massive increases in certain areas of Government spending, while some issues are yet to be resolved. But the cracks are starting to show, and if the concern around councils continues to go unaddressed, the occupants of No. 11 and No. 10 Downing Street may be forced to take more decisive action to avoid what a large number of local authorities see as a looming cliff-edge.