Hands Off Our Land: desperate Treasury to water down planning laws again

The poor performance of the economy now threatens to put the issue back on the Government’s agenda.

New figures last week showed that the UK economy continued to shrink in the second quarter of the year, and is now smaller than when the Coalition came to power in 2010.

Mr Osborne is under mounting pressure to move away from his austerity programme and borrow in order to boost demand.

The chancellor has insisted that there will be no departure from the current deficit-reduction plan, meaning he has to find alternative means to stimulate growth.

Treasury officials are now working on a package of “Plan A plus” measures that will be set out in the autumn.

Last week’s GDP figures showed that construction activity declined particularly sharply, and some Conservatives and economists have identified planning laws as a potential impediment to growth.

Earlier this year, the Government revised planning laws in the new National Planning Policy Framework, which simplified rules on new construction.

During the drafting of the NPPF, the Treasury pushed for much more radical measures that could have allowed almost unrestrained building in rural areas.

Early versions of the document were rejected by groups including the National Trust and the Campaign to Protect Rural England.

Under pressure from those groups – and the Daily Telegraph’s Hands off our Land campaign – ministers compromised and produced a document that includes protections for rural areas.

Mr Osborne has made little secret of his frustration that environmental groups and other campaigners are opposing measures he sees as necessary to boost economic growth.

Last week, he was forced to back down on a bid for larger cuts in subsidies for windfarms than the Liberal Democrats had wanted.

Government advisers now believe that Mr Osborne could push for a new dilution of planning laws in his autumn economic package.

“George has even less time now for all of the green groups,” one Government source was reported as saying yesterday.

Whitehall officials also pointed out that the economic effects of the NPPF have not yet been felt because few planning decisions have been made under its rules.