Mortgage plan is straight from the Gordon Brown songbook

EVERY so often, you read something about the British planning system which makes your jaw drop. It happened to me at the weekend when I picked up my local paper, the Oxford Times.

For some years now, Chiltern Trains has been working on a scheme to run a new service from Oxford to Marylebone. Most of it will be on existing tracks and all was going smoothly until a colony of bats was discovered in a disused tunnel. Then someone spotted a nearby habitat of great crested newts. Now a planning inspector has decreed that everything must be put on hold until the comfort of the bats and newts can be assured.

Even a local group that is trying to restrain development around North Oxford was taken aback. "It seems a completely mad world," its spokesman was quoted as saying, "when the inspector seems to pay more attention to the needs of bats and newts than people."

In fact, this sort of thing is common place in today’s planning system. Further on in the same newspaper there was another story about a church in which bats have taken up residence, so the congregation is no longer allowed to use it.

With such a dysfunctional system, it is not surprising that we have a housing crisis. The population is soaring, mainly thanks to immigration, yet we are building fewer new homes than at any time since records began 90 years ago – particularly in the places where they are most needed.

Yesterday the Government unveiled its housing strategy, but it hardly mentioned planning. Fears are growing that its efforts to reform the system, about which there was so much fanfare a few months ago, are running into the sand.
 
The coalition's first move - abolishing Labour's house building quotas - backfired badly when councils responded by cutting the number of new homes they are planning for.  According to the National Housing Federation, more than 260,000 planned homes have been axed as a result, mostly in the South of England, and the number is still growing.

Other moves to liberalise the system have also started to go awry, following fierce opposition from environmental groups led by the National Trust and local authorities determined to defend their powers.

The financial crisis has not helped matters either. With mortgages hard to come by, house prices are soggy, despite the underlying imbalance between supply and demand. Yet would-be buyers still find themselves left out because banks, worried that prices might slip further, are demanding far higher deposits.

The Government seems to have concluded that pushing the banks to do more is a lost cause - even the ones it partly owns. Instead, it announced yesterday, up to 100,000 borrowers will receive help from the taxpayer so that they only have to stump up a five per cent deposit. Another £400 million of public money will be made available to builders to “unblock” stalled housing schemes.

Schemes like these are straight out of the Gordon Brown songbook, and it is worrying that David Cameron is resorting to them. Does he really think it is prudent to encourage young people to gear themselves up to the eyeballs, in order to take a punt on a housing market that could easily fall further in the years ahead? Surely he must remember what happened with Northern Rock.

Yesterday the Prime Minister admitted that the economy is "well behind where we need to be." Like his Chancellor, George Osborne, he is anxious to pin as much of the blame as possible on the eurozone crisis. But Britain’s lack of growth cannot all be put down to the euro. A big part of the problem is that he and Osborne are well behind where they need to be on economic reform.
 
A planning system that can accommodate first-time buyers, at least as well as it does newts, will remain a distant aspiration unless they are prepared to face down the vested interests that oppose change. Likewise if they want more finance made available, they must screw up their courage and tackle the banks more vigorously - not in a few years, but now.

By Christmas the coalition will be a third of the way through its five-year term, assuming it goes all the way. Time is no longer on its side. Any idea that doling out subsidies and blaming all our ills on the euro will be enough to see it through to happier days is - to coin a phrase - bats. ·