Chancellor Rachel Reeves is expected to announce a package of significant planning reforms ahead of next month’s Budget, aimed at reviving private investment and tackling Britain’s sluggish economic growth.
The moves are designed to make it easier for developers to build homes and infrastructure projects, while contributing an estimated £3 billion towards closing Reeves’s £30 billion fiscal gap.
However, divisions have emerged within government over how far-reaching the reforms should be. While the Treasury is pushing for bolder measures to accelerate development, several ministers believe the changes should amount to “technical adjustments” rather than a full-scale overhaul.
A government source told Property Portfolio Investor: “The Treasury is desperate to make announcements on planning, but the truth is we’re already doing most of what we set out to do — reopening it all again risks slowing things down.”
The planning shake-up comes as business confidence hit a record low in September, according to the Institute of Directors, amid concerns about delayed investment decisions and sluggish growth.
Reeves and Prime Minister Sir Keir Starmer have placed planning reform at the heart of Labour’s growth strategy, arguing that Britain’s outdated system is one of the biggest barriers to productivity and investment.
A government spokesperson said: “The chancellor and the housing secretary are working together to reform the outdated planning system that’s been holding this country back — so we can build the 1.5 million homes hardworking people need and deliver major projects like the Lower Thames Crossing to drive jobs and growth.”
Ministers divided over new planning bill
Some ministers are calling for an entirely new planning and infrastructure bill, which Starmer has described as “almost certainly” necessary. Others warn it could reignite political tensions and distract from implementing existing legislation.
A senior government official said: “The risk is by doing this, Reeves makes the bill even harder to pass — it could have the opposite effect of what’s intended.”
Sources say the chancellor is considering amendments in the House of Lords to strengthen the current bill, including a proposal from Labour peer Lord Philip Hunt to make it easier to approve projects with minimal environmental impact. Another potential amendment, tabled by Conservative peer Charles Banner, would allow developers to adapt plans more easily after approval.
If passed, officials believe the Office for Budget Responsibility could judge the reforms to add around £3 billion a year to long-term economic output.
Proposals to limit judicial reviews and streamline projects
Among the ideas under discussion are tighter limits on judicial reviews that can delay infrastructure projects, including restrictions on how many times opponents can challenge a decision and whether judges can overturn planning approvals while appeals are still pending.
Some in Whitehall want to go further, proposing a new bill that would give the prime minister power to designate nationally significant infrastructure projects for automatic approval — a move inspired by Canadian Prime Minister Mark Carney, who recently introduced a similar fast-track system.
However, housing department officials are sceptical. “What would a new bill even say?” one senior source said. “There would be about two clauses and that would be it.”
Nature bill to rewrite environmental protections
In parallel, Environment Secretary Emma Reynolds is preparing a Nature Bill aimed at reforming environmental rules that ministers argue unfairly hold up development.
Officials are exploring whether to replace the EU’s protected species and habitat lists with a British equivalent, designed to prevent planning delays linked to species such as newts that are already abundant in the UK.
Supporters say this would streamline approvals; critics argue it risks weakening environmental safeguards. Craig Bennett, chief executive of the Wildlife Trusts, warned:
“We were promised no regression on EU environmental law after Brexit — and Labour made the same commitment in opposition. Diluting protections now would break that promise.”
Planning lawyers and environmental groups have criticised the government’s piecemeal approach. Alexa Culver, a planning expert at RSK Wilding, described the current reform process as “a chaotic slew of destructive new bills, with no strategy, vision, due process or democratic mandate.”
Nevertheless, Nick Williams, a former infrastructure adviser to the prime minister, said Reeves’s proposals could have a meaningful impact if handled carefully.
“The existing planning and infrastructure bill is already hugely ambitious,” he said. “But there’s room to go further — whether through amendments to the current bill or future legislation.”
The coming weeks will test Labour’s ability to balance its pro-growth agenda with its environmental commitments.
If Reeves can push her planning changes through Parliament before the 26 November Budget, she may yet claim an early win for Labour’s economic strategy. But with ministers divided and environmentalists mobilising, Britain’s planning overhaul risks becoming the next political battleground in the government’s growth agenda.
