Chancellor Rachel Reeves has said that the Labour government’s planning reforms are expected to permanently increase the level of growth in the UK economy.
Delivering her Spring Statement to the House of Commons on Wednesday, Reeves set out the Office for Budget Responsibility's forecast on how the government’s planning reforms – including changing the National Planning Policy Framework, reintroducing mandatory housing targets and bringing “grey belt” land into scope for development – will impact the economy.
According to the OBR, these reforms will permanently increase the level of real GDP by 0.2 per cent by 2029-30 and by 0.4 per cent of GDP within the next 10 years – an additional £15.1bn in the economy.
“That is the biggest positive growth impact that the OBR have ever reflected in their forecast, for a policy with no fiscal cost,” Reeves told MPs.
“Taken together with our plans to increase capital spending, this government’s policies will increase the level of real GDP by 0.6 per cent in the next 10 years."
The OBR forecasts published yesterday presented a mixed picture for the UK.
The independent body downgraded this year’s growth forecast for the UK and every other G7 economy, with the forecast for 2025 down to 1% from 2% in the autumn.
However, Reeves said that the OBR has upgraded its growth forecast for next year and the years following, with GDP growth forecasts of 1.9% for 2026, 1.8% in 2027, 1.7% in 2028, and 1.8% in 2029.
Reeves told MPs that inflation is expected to average 3.2% this year before falling to 2.1% next year and meet the 2% target from 2027 onwards – with inflation having peaked at 11% under the previous Conservative government.
Zoe Crowther is a reporter at CSW's sister title Politics Home, where you can find the original and full version of this story