Keir Starmer’s Labour Party is hitting the ground running. Well, you would be a bit impatient having sat on the opposition benches for 14 years. The new chancellor of the exchequer, Rachel Reeves, used her first speech to underline the party’s goal of “fixing the foundations” of the economy. A central theme is reform of the planning system which, she says, operates on a “status quo which responds to the existence of trade-offs by always saying no”. In other words, houses and vital infrastructure do not get built if there is a risk of upsetting somebody. Sound familiar?
Reeves promises to move fast. Labour will publish a draft national planning policy framework before the parliamentary recess in August. The clear direction is to get housing and infrastructure built more quickly and “face down vested interests” in getting this done. We will have to see how this works in practice. And focusing on planning and regulation in part reflects the reality that the Labour government has precious little cash to spend. But the decision by Reeves to put this front and centre in her first speech is significant, and the determination to move quickly is striking.
Across the Irish Sea, there has also been much talk of planning reform. But you would have to wonder how serious we are. Detailed work on the planning Bill started in 2022, including promises that it would be enacted early in 2023. Now a promise from Minister for Housing Darragh O’Brien that it would be passed before the summer recess “come hell or high water” will not be met. The Bill – vital to planning big infrastructure projects as well as housing – is only due to pass the Seanad next week and will not be fully through the Oireachtas until the autumn.
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Will it even get passed before a general election is called? It is exposed to any political “crash” that ends this Government’s term, while there is serious doubt even if it is passed about whether all the steps needed to implement it can be taken before an Autumn election. Meanwhile, the Opposition complains about not enough time to scrutinise it properly and planners warn that it is flawed.
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In Ireland, as in the UK, planning is only part of the story. But it is a vital one. Reeves is trying to attract big private investment into house building and infrastructure and this requires certainty about planning. This does not mean a guaranteed pass for projects – but it does mean there is a clear framework within which they can be planned, and a reasonable expectation of how long a decision will take. You could, for example, make valid arguments either way about Apple’s plan to build a data centre near Athenry, in Galway, but not for a planning process that took the guts of four years to make a decision on it and work through legal challenges.
With large infrastructure needs in energy and water as well as housing, these kind of delays cannot be allowed to persist. There are other vital issues, too: the way the whole State apparatus works, labour shortages in construction, and delays and spiralling costs in big projects come to mind. But with the exchequer flush with cash, Ireland has a chance to address all this with the budget in surplus, in contrast to Labour in Britain, where the public finances are under real pressure. It would be ironic if the UK were to make enough progress to re-emerge as a stronger competitor than Ireland for foreign investment.
The warning signals that we are not moving at anything like the required speed are getting ever clearer. Presenting its half-year results this week, IDA Ireland said high energy costs were now “severely impacting FDI growth prospects”. Attracting large new investment into wind energy was vital, it said. In reference to Government promises to deliver on housing and infrastructure, chairman Feargal O’Rourke said “the biggest risk we face is execution” – that is, not getting things done. For a relentlessly upbeat organisation, this is the equivalent of waving a very big red flag.
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Similar warnings have come from a string of other bodies, such as the National Competitiveness and Productivity Council, and business lobby Ibec, which says in its pre-budget submission that Ireland’s business model urgently needs to be “future-proofed”.
The risk is that by the time there is a wider acceptance of the need to move more quickly, it will be too late. Already there are hints of some investments starting to drift away from Ireland. Housing is not only the biggest social issue, it is also an economic one. And big investors are asking ever more awkward questions about whether their staff can get somewhere to live, or whether they can get access to clean and green energy and water.
There is not sufficient political energy or focus to address this. For example, anything tricky was put off in the run-up to the local elections – and so Government approval for the Shannon water pipeline – designed to underpin supply across much of the State – to go to the next stage of planning was forthcoming only after the poll. Months were lost. We have yet to see the revised National Planning Framework, due last April, with vital work on population projections, where houses should be built and where infrastructure needs to be prioritised. Work on offshore wind, meanwhile, does not give confidence that this great hope is going to be delivered in any kind of reasonable timescale.
And it will only get worse. The summer will be spent arguing about whether to give people a second child benefit week in autumn, or to cut inheritance tax, or give people another round of energy credits to butter them up for the general election. The important - and politically more difficult - stuff will be sidelined.
Calls to establish new “agencies” to get things done should be greeted with suspicion. Surely it is better to get people to do their jobs? Yet the Commission on Housing‘s call for a new powerful body to take charge of housing delivery struck a chord. The current system is not up to it. Perhaps the new body could take in wider infrastructure, too. These are the most important longer-term economic and social issues facing the country and Ireland is simply not delivering.