The Sunday Times’ exposure of a corruption scandal in London is just the tip of the iceberg, says Rohan Silva. Outmoded development laws allow crime to thrive.

Exactly seven years ago today, on December 17, 2010, a young man named Mohamed Bouazizi set himself on fire outside a government building in Tunisia, kicking off the Arab Spring that turned the geopolitics of the region on its head.

In the aftermath of the turmoil, the influential economist Hernando De Soto interviewed Bouazizi’s family — and the families of the dozens of other people who killed themselves in similar ways in countries from Saudi Arabia to Egypt.

De Soto wanted to find out why these young men and women had committed violent acts of self-immolation — and he concluded that every case had the same root cause: “Desperation over property.”

According to De Soto, the absence of enforceable property rights in Tunisia — and across the Arab world — meant people were at constant risk of their property being confiscated by the government, and made it almost impossible to escape poverty and build a better life for their families.

Here in the UK, we tend to think property rights are a developing-world issue — with our long history of land registration and ownership, it’s easy to assume everything is hunky-dory.

If only. Last weekend the Sunday Times published a damning exposé of corruption in east London, with a £2m bribe sought from a developer in exchange for the promise of permission to build a skyscraper, Alpha Square.

Off the back of this exemplary journalism, the National Crime Agency is investigating the incident. Hopefully the bent politicians and officials will be brought to justice.

But the depressing truth is that corruption is endemic in Britain’s bureaucratic planning system. In every corner of the country, you can find stories of bribery, with local councillors and officials rigging the planning process for their own gain.

Doncaster, Enfield, Greater Manchester, East Devon — these are just a handful of the local authorities where corrupt practices have been discovered in planning departments. In other words, the corruption is systemic and it’s caused by the inadequacy of Britain’s property rights.

To understand why, we need to look back to 1947, when post-war socialist planning was all the rage, industries were being nationalised and the state was steadily gaining control of the “commanding heights” of the economy.

That year, the Town and Country Planning Act was introduced, giving the government the power to determine the direction of property development. This piece of legislation is the basis of today’s planning system — and it took land development rights away from property owners and gave them to the planning authorities. It was another form of nationalisation, in other words.

Ever since, when you buy a piece of land in the UK you receive its property title, but you have absolutely no idea what you’re allowed to build on it — that’s up to planning officials in the local council.

Given that the value of a property can increase by tens — or even hundreds — of millions of pounds depending on what the planners decide, the incentive for corruption among low-paid officials and councillors is overwhelming.

Unfortunately, the lack of clear property rights doesn’t only lead to corruption. It also slows down every aspect of the development process, creating a boon for expensive planning consultants and lawyers.

All this bureaucracy helps explain why too few houses have been built over many decades, with monumental social and economic consequences.

As Mark Littlewood of the Institute of Economic Affairs has pointed out, our outmoded planning system has artificially inflated property prices in the UK by as much as 41%, adding more than £3,000 to the average family’s annual rent or mortgage payments.

What’s more, our post-war planning system stifles innovation. Developers have to play it safe, putting forward generic projects designed to get through the bureaucracy, rather than delivering what consumers want.

As the architect Lord Rogers has asked, why should bureaucrats get to decide on aesthetics? It’s a recipe for the kind of soulless grey buildings you now find in every British city.

Corrupt practices. Market failure. Lack of innovation. These are just some of the consequences of our broken planning system — the last vestige of socialist command-and-control we have left in the UK. (Until Jeremy Corbyn gets elected, anyway.)

It doesn’t have to be like this. In US cities, when you buy a piece of land, it comes with property rights that tell you what you’re allowed to build on it and how much extra space you can add.

This is known as “by-right” planning permission — because you don’t need a bureaucratic process to tell you what you can do. You apply for planning permission only if you want to build more than you’re entitled to.

Now is the time to bring this approach to this country and clamp down on corruption. By strengthening the UK’s framework of property rights and dismantling the failed post-war planning system, we can cut red tape and stamp out bribery.

Thanks to this newspaper’s exposure of corrupt practices, change is surely coming. You might even call it a British Spring.

Rohan Silva is a former adviser to David Cameron and co-founder of Second Home

Source: The Sunday Times, 17 December 2017

Local Comment: Does the nationalised planning system work for you and your community, making your environment a more pleasant place to live? Or, does it primarily serve the interests of big business and private profit?  Is it acceptable for a democratically unaccountable planning officer in Wirral Council to wield power so unequally in Birkenhead and Tranmere as compared with other parts of the Borough?  Would communities in leafier parts of Wirral lose a car park and a childrens’ playground to residential development without any compensatory provision being made?  Probably not.  Would a church-run sports hall in other parts of Wirral be threatened with closure because its fire assembly point is going to have houses built on it?  Almost certainly not.  One way to help ensure that your family and your community is treated fairly by the planning system is to support the work that the Birkenhead & Tranmere Neighbourhood Planning Forum is doing to produce a neighbourhood plan for the area.  Please think about becoming more involved in the work we are doing together. – Philip Barton