George Osborne is to declare war on nimbys, saying English planning laws have made it impossible to build enough houses.

In a sign of his intent at the launch of a sweeping policy initiative on Friday, the chancellor will say he wants London residents to be freed to build extra storeys on to their properties without needing local council planning approval.

He will also say the overcrowded capital needs to expand upwards and that anyone should be free to build up to the level of their neighbour’s property.

At present there are limited rights to build extra storeys at the back of buildings. The government has already relaxed planning laws on house extensions and the right to convert shops into houses, but this latest move on so-called “permitted development rights” takes the drive to increase housing density to another level.



The fresh assault on Britain’s planning laws will be the centrepiece of what Treasury officials describe as the “second half” of an audacious budget that Osborne claims has allowed the Conservatives to occupy the new centre ground of British politics, and created a new settlement between state and individual.

This second half, which is being billed as a productivity plan, is also likely to prove controversial with employers as it will call for a compulsory training levy on companies – a step that Ed Miliband held back from proposing for fear of being labelled too interventionist.

The 90-page blueprint, called Fixing the Foundations: Creating a More Prosperous Nation, is due to be unveiled in Birmingham on Friday by Osborne and the business secretary, Sajid Javid.



It is expected to cover higher education, transport, trade, devolution to cities and regions, skills, long-term investment, tax, digital matters and science.



The chancellor will say: “Britain has been incapable of building enough homes. The reforms we made to the planning system in the last parliament have started to improve the situation: planning permissions and housing starts are at a seven-year high.”

During the election campaign, David Cameron rejected arbitrary national housebuilding targets, but claimed action taken during the past five years meant the UK was on course to deliver 200,000 new homes a year by 2017.

Osborne has claimed his summer budget has redefined the centre of British politics. Watch highlights from the speech Guardian

Osborne is expected to say: “We need to go further and I am not prepared to stand by when people who want to get on the housing ladder can’t do so.



“We’ll keep on protecting the green belt, but these latest planning reforms are a vital part of a comprehensive plan to confront the challenge of our lifetime and raise productivity and living standards.”

The main changes to planning law will include:

A new “zonal” system, as employed in many other countries, which will give automatic planning permission on all suitable brownfield sites, removing unnecessary delays to redevelopment.

Power for the government to intervene and have local plans drafted setting out how housing needs will be met when local authorities fail to produce them, and penalties for those that make 50% or fewer planning decisions on time.

Stronger compulsory purchase powers to bring forward more brownfield land and devolution of planning powers, including powers over land, to the mayors of London and Manchester.

The right for major infrastructure projects that include elements of housing development to be fast-tracked through the Nationally Significant Infrastructure regime – meaning the project does not need to go through full democratic consultation.

Proposals to end to the need for planning permission for upwards extensions for a limited number of storeys up to the height of the adjoining building in the capital.

A package to support small and medium-sized housebuilders, including new sanctions for local authorities not processing smaller planning applications on time, with earlier fee refunds.

Local authorities say planning delays are caused by the lack of resources in planning departments, but the government is likely to provide a blueprint for how these planning requests should be handled.

Osborne fought a number of bruising encounters with conservationists in the last parliament, but seems to be determined to do so again on the basis that the supply of land at the right price has been the single biggest factor holding back housebuilding.



During the election, Cameron specifically promised that 200,000 homes would be made available to first-time buyers in England by 2020. The coalition government had already announced plans for 100,000 cut-price homes for people aged under 40.

Osborne will point out that if the British government could match the productivity of the US, the GDP of the UK would rise by 31% – the equivalent of £21,000 a year for every household in the UK.

Narrowing the gap even a little, so that trend growth is raised by just 0.1%, would mean the UK economy would be £35bn larger in 2030 – approximately £1,100 extra for every household.

The new plan will reflect the first output from the new commercial secretary to the Treasury, Lord (Jim) O’Neill, who was appointed by Osborne to help with the devolution agenda following his report on the importance of cities outside London to boosting UK productivity.

Chris Leslie, the shadow chancellor, pointed out that – in the words of the Office for National Statistics – the UK economy had undergone a period of “unprecedented” stagnation under Osborne.