Image copyright PA

Developers could get automatic planning permission to build on disused industrial sites in England.

Ministers would also get powers to seize disused land, while major housing projects could be fast-tracked, and rules on extensions in London relaxed.

Business Secretary Sajid Javid unveiled the plans as part of a broader push to boost Britain's productivity.

It came as official figures showed new house building fell by 5.8% in May, the sharpest decline in nearly four years.

There is a question mark over whether building more homes will boost productivity as much as ministers claim and Labour said the Conservatives had a record of making "empty promises" over the past five years.

Treasury sources say workers are more productive when they live closer to their jobs - but critics say increasing airport capacity and electrifying the Transpennine rail line would have a much bigger effect.

'Suitable sites'

Emran Mian, a director of the Social Market Foundation think tank, said: "I think if I was thinking about a productivity plan, housing wouldn't be the first issue I would leap to."

Electrification of the Trans Pennine line between Manchester and Leeds and a section of the Midland Mainline has been delayed and a decision on a third runway at Heathrow, recommended by an independent commission, will not be made until the end of the year.

Analysts have also questioned whether there is enough brownfield land - a term which refers to land that has previously been developed but is vacant or derelict - available to meet the UK's housing needs over the next 15 years.

Under the new proposals - which will need to be approved by MPs - automatic planning permission would be granted on all "suitable" brownfield sites under a new "zonal" system.

Another change would see ministers seek to scrap the need for planning permission in London for developers who want to extend buildings to the height of neighbouring properties, which they say will "add dynamism" to house building in the capital.

Green belt land

Planning powers will be devolved to mayors in London and Manchester, while enhanced compulsory purchase powers will allow more brownfield land to be made available for development.

There would also be new sanctions for councils that do not deal with planning applications quickly enough, and the government would be able to intervene in councils' local development plans.

Image caption Land designated to be within the Green Belt is largely protected from development

Image copyright Getty Images Image caption George Osborne, seen visiting a building site in 2013, says reforms are needed to planning laws so more homes are built

Mr Javid told the BBC the 141,000 new homes built last year were a fraction of those needed to meet demand.

"Local people will still have control over planning," he said.

"The point of this is to make sure we build more homes, that local people are still rightly involved in those decisions and we find ways to speed it up."

There was "no need" to build on green belt land, he insisted, to meet the government's targets.

Carrot and stick

"The green belt can be rightly protected. There is plenty of land which is not green belt that we can build on and which is suitable for housing and we need to get on with it. We need to find new ways to encourage it."

In 2013, ministers were forced to back track on plans to allow single-storey extensions of a certain size to be built without planning permission, so that neighbours would have the right to be consulted on building work.

Mark Field, Conservative MP for Westminster and the Cities of London, said the chancellor may have "run out of patience" with councils for dragging their feet on the issue and he expected "some kickback" against the plans, including from Conservative-run county councils.

"We have tried the carrot approach with our councils and now we need to have more of a stick," he told the BBC's Daily Politics. "Whether that stick works is another matter."

But the Local Government Association said councils were not holding up new homes and that developers were not prioritising brownfield sites. It called for stronger compulsory purchase order powers to allow councils to buy up sites "stuck in the system".

'Dithering'

Labour said productivity had stagnated since 2010 and was forecast to fall in every year up to 2020.

"Today's document is a patchwork of existing schemes rather than a substantial reform to boost skills, business growth and wages," said shadow Treasury secretary Shabana Mahmood.

"Working people need delivery, not more empty promises. Instead of investing in the infrastructure and skills we need, the government are dithering on airports, have cancelled the electrification of key rail lines and have rebadged existing training as apprenticeships."

The Fixing the Foundations package also includes measures on higher education, transport, devolution of powers to cities and trade although much of its contents were announced in Wednesday's Budget

Speaking in Birmingham at the report's launch, Mr Javid pledged to get "Britain moving, building and learning".

He acknowledged the UK was falling behind its competitors in terms of productivity, saying it took British workers five days more than their German counterparts to match their output per hour.

This, he said, was not the fault of workers, whose commitment was "second to none", but of the failure of successive governments to modernise infrastructure and invest in skills and training.

Up to £100bn would be spent on improving the transport network by 2020, he said, warning that unless action was taken 100 million working days would be lost every year to congestion by 2040.