Labour Manifesto - BPF Analysis

This analysis focuses on the policies in the Labour manifesto relevant to the real estate industry. All the relevant policies are listed thematically below, with commentary underneath the sections on those where the BPF has a view. 

Business, tax and growth 

• Labour will introduce a new industrial strategy and Industrial Strategy Council, on a statutory footing, to provide expert advice. They will ensure representation on the Council from all nations and regions, business and trade unions.
   
• Labour will also act to increase investment from pension funds in UK markets and adopt reforms to ensure that workplace pension schemes take advantage of consolidation and scale, to deliver better returns for UK savers and greater productive investment for UK PLC. Labour will also undertake a review of the pensions landscape to consider what further steps are needed to improve pension outcomes and increase investment in UK markets.  
  
  
• Labour are committed to one major fiscal event a year. They will publish a roadmap for business taxation for the next parliament which will allow businesses to plan investments with confidence.  
  
  
• Labour will cap corporation tax at the current level of 25 per cent for the entire parliament. 
  
  
• Labour will retain a permanent full expensing system for capital investment and the annual investment allowance for small business. And we will give firms greater clarity on what qualifies for allowances to improve business investment decisions.  
  
  
• In England, Labour will replace the business rates system, to raise the same revenue but in a fairer way. This new system will level the playing field between the high street and online giants, better incentivise investment, tackle empty properties and support entrepreneurship.  
  
  
• Labour will develop a ten-year infrastructure strategy, aligned with the industrial strategy and regional development priorities. They will create a new National Infrastructure and Service Transformation Authority, bringing together existing bodies, to set strategic infrastructure priorities and oversee the design, scope, and delivery of projects. 
  
  
• The national grid has become the single biggest obstacle to the deployment of cheap, clean power generation and the electrification of industry. With grid connection dates not being offered until the late 2030s, important business and infrastructure investment is being stalled or lost overseas. Labour will work with industry to upgrade our national transmission infrastructure and rewire Britain.  

BPF analysis

We welcome recognition of the importance of defined contribution (DC) pension scheme capital in greater productive investment, especially in illiquid assets such as property and infrastructure. Having fewer, larger DC schemes will greatly facilitate this. 

Notwithstanding stated aspirations around a single fiscal event per year, the temptation to make political capital out of a second one will surely remain. That said, the tax system would certainly benefit from more certainty and less tinkering and the idea of a business tax roadmap is sound (as long as it is then actually followed). 

It’s good to see that Labour are committing to retain a permanent full expensing system for capital investment and provide better clarity around what qualifies. The property sector faces a huge challenge to retrofit our buildings to improve their energy efficiency and sustainability standards – quicker tax relief on these investments will support that endeavour.  

We look forward to seeing more details on Labour’s proposals to replace business rates, and to inputting into their thinking to help steer it. The biggest challenge with the existing business rates system is that the tax rate, at close to 55%, is unsustainably high. We recognise the fiscal constraints, but a stated aspiration to bring down the rate over time would have been welcome. Decoupling business rates from inflation and delivering more frequent revaluations will be important steps in developing a fairer system. 

Our manifesto called for better grid connectivity and so it is good to see recognition of the problem - this is often flagged by members as major obstacle to development. We will want to engage with a Labour government on how this can be achieved quickly. 

Housing and Planning 

• Labour will build 1.5 million new homes over the next parliament. They will immediately update the National Policy Planning Framework to undo Conservative changes, including restoring mandatory housing targets. 
   
• Labour will set out new national policy statements, make major projects faster and cheaper by slashing red tape, and build support for developments by ensuring communities directly benefit. Labour will also update national planning policy to ensure the planning system meets the needs of a modern economy.  

• They will take action to ensure that planning authorities have up-to-date Local Plans and reform and strengthen the presumption in favour of sustainable development.  
  
  
• Labour will support local authorities by funding additional planning officers, through increasing the rate of the stamp duty surcharge paid by non-UK residents.  
  
  
• Labour will ensure local communities continue to shape housebuilding in their area, but where necessary they will intervene to build houses.  
  
  
• Labour will take a brownfield first approach, prioritising the development of previously used land wherever possible, and fast-tracking approval of urban brownfield sites. 
   
• Labour will take a more strategic approach to greenbelt land designation and release to build more homes in the right places. The release of lower quality ‘grey belt’ land will be prioritised and they will introduce ‘golden rules’ to ensure development benefits communities and nature.  
  
  
• In partnership with local leaders and communities, Labour will build a new generation of new towns. Alongside urban extensions and regeneration projects, these will form part of a series of large-scale new communities across England. 
   
• Housing need in England cannot be met without planning for growth on a larger than local scale so they will introduce effective new mechanisms for cross-boundary strategic planning.  
  
  
• Labour will require all Combined and Mayoral Authorities to strategically plan for housing growth in their areas. They will give Combined Authorities new planning powers along with new freedoms and flexibilities to make better use of grant funding.  
• Labour will reform compulsory purchase compensation rules to improve land assembly, speed up site delivery, and deliver housing, infrastructure, amenity, and transport benefits in the public interest. They will take steps to ensure that for specific types of development schemes, landowners are awarded fair compensation rather than inflated prices based on the prospect of planning permission.  
  
  
• Labour will deliver the biggest increase in social and affordable housebuilding in a generation. They will strengthen planning obligations to ensure new developments provide more affordable homes; make changes to the Affordable Homes Programme to ensure that it delivers more homes from existing funding; and support councils and housing associations to build their capacity and make a greater contribution to affordable housing supply.  
  
  
• Labour will prioritise the building of new social rented homes and review the increased right to buy discounts introduced in 2012 and increase protections on newly-built social housing.  
  
  
• Labour will work with local authorities to give first-time buyers the first chance to buy homes and stop entire developments being sold off to international investors before houses are even built. 
   
• Labour will introduce a permanent, comprehensive mortgage guarantee scheme, to support first-time buyers who struggle to save for a large deposit, with lower mortgage costs. 
   
• We will immediately abolish Section 21 ‘no fault’ evictions, prevent private renters being exploited and discriminated against, empower them to challenge unreasonable rent increases, and take steps to decisively raise standards, including extending ‘Awaab’s Law’ to the private sector.  
• Labour will also take action to improve building safety, including through regulation. They will review how to better protect leaseholders from costs and take steps to accelerate the pace of remediation across the country. They will put a renewed focus on ensuring those responsible for the building safety crisis pay to put it right. 
   
• Labour will bring the feudal leasehold system to an end. They will enact the package of Law Commission proposals on leasehold enfranchisement, right to manage and commonhold.  
  
  
• Labour will take further steps to ban new leasehold flats and ensure commonhold is the default tenure. They will tackle unregulated and unaffordable ground rent charges and will bring the injustice of ‘fleecehold’ private housing estates and unfair maintenance costs to an end.  
  
  
• Labour will develop a new cross-government strategy, working with Mayors and Councils across the country, to put Britain back on track to ending homelessness. 

BPF analysis

The Party continues to set out its credentials to be pro-development and support growth through planning reform. That is no bad thing and has created competition between the political parties over who is supporting growth more. The challenge will be ensuring that any pro-development policies at a national level, are followed through at a regional and local level. Also, that expectations are realistic about how quickly things can change.  Several BPF policies on planning feature, and so we cannot be disappointed:  

• Up to date local plans.
  
  
• Restoring housing targets.
  
  
• Introducing a strategic planning mechanism (though a patchwork of combined authorities raising questions about where CAs don’t exist). 
  
  
• A new approach to green belt. 
  
  
• More local authority planners.

On broader housing policy the commitment to expand affordable housing is something that aligns with more private sector investment in that form of housing, and we hope that means supportive policies. 

The manifesto is not unexpectedly committed to immediate abolition of s21, but it is not clear what ‘immediate’ means in practice – whether the legislation is fast-tracked, or simply at the stage it is implemented there will be no hiatus to allow for the courts to be improved, for example. 

Whilst the direction of travel is against leasehold, and freeholders’ interests, the manifesto at least paints that in broad terms, allowing for sensible timescales, and some flexibility, for example on tackling rapidly-escalating ground rents, rather than the very specific policy of the Conservatives of a £250 cap and phasing to a peppercorn. 

On land value capture, we are pragmatic to the needs of new towns, but outside that context generally feel depriving landowners of hope value will make CPOs even more contentious and long-drawn-out. A challenge too is that infrastructure such as water supply, is far more challenging in the south of the country, which may mean more new towns in the north, where LVC will pay for less infrastructure. Public sector investment will therefore need to be more supportive of any new towns programme. 

A mortgage guarantee scheme, although still a demand-side measure, should be less damaging than help-to-buy, as it will apply to second-hand homes, and therefore not be concentrated on new builds. ‘First-dibs’ policies have not proved problematical to Build-to-Rent in London, and we will need to ensure any nationwide policy does not impinge on house builder sales for the Single-Family market. 

It’s disappointing to see still higher rates of SDLT being levied on overseas owners of residential property without recognition of the important role of overseas pension fund capital in supporting the building of new homes. However, that money raised is being earmarked to pay for an increase in planning resource. 

Communities & Local Government 

• Labour will transfer power out of Westminster with devolution legislation.
  
  
• In England, Labour will deepen devolution settlements for existing Combined Authorities. They will also widen devolution to more areas, encouraging local authorities to come together and take on new powers. Towns and cities will be able to take hold of the tools they need to pursue growth, create jobs, and improve living standards. Local areas will be able to gain new powers over transport, adult education and skills, housing and planning, and employment support.  
  
  
• Labour will ensure those places have the strong governance arrangements, capacity, and capability to deliver, providing central support where needed. At the centre of our approach is a new statutory requirement for Local Growth Plans that cover towns and cities across the country. Local leaders will work with major employers, universities, colleges, and industry bodies to produce long-term plans that identify growth sectors and put in place the programmes and infrastructure they need to thrive. These will align with the national industrial strategy.  
  
  
• Labour will review the governance arrangements for Combined Authorities to unblock decision making. They will provide greater flexibility with integrated settlements for Mayoral Combined Authorities.  
  
  
• On housing and planning we will seek to consolidate powers to allow for improved decision making.  
  
  
• Labour will give councils multiyear funding settlements and end wasteful competitive bidding.  

BPF analysis

It is welcome to see greater devolution proposed to Combined Authorities. Metro Mayors have a great deal of potential to drive growth at the ‘larger than local’ level, and to set up structures that can support investment at the scale that the industry seeks to do. Having more flexibility over housing and planning policy, and budgets to train local people in relevant skills should also enable local growth. Devolution to tiers of Government below the Combined Authority level, however, risks creating too varied a landscape for investors to navigate.  

Longer term funding settlements should aid budgeting and thus aid local authorities in their ability to plan for long term regeneration schemes – although the size of local authority finances will clearly remain challenging. 

Net Zero and Nature

The Labour Party will:  

• Deliver clean energy by 2030 (i.e. a decarbonised electricity grid). It will work with the private sector to double onshore wind, triple solar power, and quadruple offshore wind by 2030. 
  
  
• Create Great British Energy which will partner with industry and trade unions to deliver clean power by co-investing in leading technologies; will help support capital-intensive projects; and will deploy local energy production to benefit communities across the country. To support this, Labour will capitalise Great British Energy with £8.3 billion, over the next parliament. 
  
  
• Pass a new Energy Independence Act to establish the framework for Labour’s energy and climate policies. 
  
  
• Deploy more distributed production capacity through our Local Power Plan. Great British Energy will partner with energy companies, local authorities, and co-operatives to install thousands of clean power projects, through a combination of onshore wind, solar, and hydropower projects. 
  
  
• Work with industry to upgrade the national grid. 
  
  
• Invest an extra £6.6 billion over the next parliament, doubling the existing planned government investment, to upgrade five million homes to cut bills for families. The Warm Homes Plan will offer grants and low interest loans to support investment in insulation and other improvements such as solar panels, batteries and low carbon heating to cut bills. 
  
  
• Ensure homes in the private rented sector meet minimum energy efficiency standards by 2030. 
  
  
• Take steps to ensure we are building more high-quality, well-designed, and sustainable homes and creating places that increase climate resilience and promote nature recovery. 
  
  
• Implement solutions to unlock the building of homes affected by nutrient neutrality without weakening environmental protections. 
  
  
• Ensure the institutional framework for policy making reflects our commitments to reach net zero and meet our carbon budgets. 
  
  
• Make the UK the green finance capital of the world, mandating UK-regulated financial institutions – including banks, asset managers, pension funds, and insurers – and FTSE 100 companies to develop and implement credible transition plans that align with the 1.5°C goal of the Paris Agreement. 

BPF analysis

Delivering clean energy by 2030 is one of the Labour Party’s five core “missions”, and setting up Great British Energy would be one of their “first steps” in Government. If elected, we think Labour will want to move quickly to start delivering on their net zero commitments. The proposed new Energy Independence Bill will likely feature in their first King’s Speech. We would like to understand more about how Great British Energy will work, and whether there is potential for the new company to work with the real estate sector on renewable energy projects. 

We welcome the recognition that the electricity grid needs investment. We also recognise that the commitment to decarbonise the grid by 2030 is ambitious. We welcome the ambition, but the sector will want certainty as decarbonising the grid is directly linked to BPF members’ plans to decarbonise their buildings. 

We welcome the additional investment into retrofitting homes. 

The Manifesto states that the domestic PRS will need to meet minimum energy efficiency standards by 2030 but is silent on what the new standard will be. We support higher minimum standards but need clarity on the new standard or target. The sector will also need realistic lead-in times. It will be important to understand the methodology underpinning the new standards and to see the detail on the rules around exemptions and enforcement. 

We welcome the commitment to find solutions to address nutrient neutrality. 

Find out more about our work leading up to the general election, including our media statements and manifestos, here.

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