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Land and Sherman

by Roger Warren Evans

This short article, published in Prospect in November 1996, was a response to an attack by Sir Alf Sherman on the entire town-and-country planning system; the full Sherman article is not reproduced.

Land and Planning

I know Sir Alf Sherman, from way back. And I much enjoyed his diatribe against “socialist” town planning (Prospect, August 1996). He hammered home the Thatcherite argument that land prices were too high because of Left-inspired planning. 

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Alf and I met at Bovis, when that firm was the family fiefdom of the Josephs (who were Conservative) and the Vincents (who were Labour). It was in the early 1970s, before Alf achieved his guru status under Sir Keith Joseph and Margaret Thatcher, and when I was a young Bovis general manager, and Labour Councillor in Hackney.

We share, Alf and I, a common despair at the high land-price regime which characterises the UK, and dominates UK property development. We derive our understanding of land markets from the same practical source, namely the operation of the housebuilding industry. I agree with him that the town-planning system, introduced by Labour in 1947 and maintained on a bi-partisan basis ever since, is partly responsible for that high-price regime.

But as with so much Thatcherite political theory, that proposition represents only part of the truth. Alf fails to mention that the Tories in 1952 removed the key element of the Labour scheme. Labour had in 1947 nationalised all development values, and actually paid out compensation to all landowners for future increases in the development value of their land (as distinct from “existing use value”). One of the first acts of the 1951 Churchill government was to repeal those provisions, restoring to landowners their rights to exploit the development profits generated by the new planning system.

That transformed the system, at a stroke, from one of enlightened reform into an engine for the advancement of landed property. Throughout the 1950s, 1960s, and 1970s, the ownership of development land remained a Tory licence to print money. Labour tried to tax those profits, first in 1966 and then in 1976, but both Acts were repealed by the Tories. Alf has hitched his star to the most ruthless wealth-grabbing machine in Europe.

The Tories supported the town planning system because it underpinned high land and property values, and inhibited social change. “Land and Freedom” (the title of Alf Sherman’s August 1996 article) means for them the freedom to maximise land profits. Green belts, the product of a socialist London County Council in 1938, were by 1968 converted into a ruthless system for the maximisation of suburban property values.

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  Planning law is only part of this sad story. Other factors have conspired to maintain high land-prices. The planning profession, and local Councillors of all parties, have promoted a sense of scarcity which come to inform town planning. The result is that everyone believes - contrary to fact – that in the UK we are short of development land. And that belief in turn keeps prices high.

The chartered surveyors have also played their part. As brokers to the landed interests, surveyors have created ever more sophisticated markets for the trading of land and property. Successive government subsidies (whether mortgage interest relief of CAP subsidies) have fed through into land values, pushing them inexorably higher.

It is a tale of market rigging on grandest scale, favouring the rich. I wonder whether Alf Sherman would agree? He might, because the true Thatcherite was no respecter of entrenched property interests. My sadness is that my own Party, the Labour Party, has failed to grasp the extent of this capitalist victory, reinforcing the rigidities of English society. Labour Councillors have proved vigilant in the defence of Green Belts, zealously doing the dirty work of the Right. And concern for the environment will now be mobilised to restrict further the supply of development land, forcing prices still higher and further burdening the poor.

Alf Sherman would like to abolish the town planning system altogether. I want to keep it. My socialist conviction argues that every site should be released for residential development that is physically and environmentally suitable – even if that were to result in “over supply”. That is now the only strategy that will bring prices down, and keep them down. The planning authorities should contain tight control of how land is developed, but they should give up entirely the function of balancing supply and demand in the housing market place.

Planning should stay, rationing should go. Post WW2 planning authorities, both Labour and Tory, imposed upon the land market an excessively restrictive control regime. The result has been the highest land prices in the world, outside Tokyo. Planning authorities should abandon rationing, and allow supply to rise to meet demand.

What do you think? Drop me a line.  

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