Planning and licensing rules impose heavy costs on businesses and consumers
For example, a restauranteur will need permission to have a restaurant on the site he wants, will need permission for its appearance, then be told what time he is allowed to operate, whether alcohol may be served and even if music and dancing can take place. While the restauranteur owns the business and is liable for its losses, in important ways he doesn’t really run it.
To give a more specific case study, in one of my last planning committee meetings as a local councillor, we were presented with a change-of-use application to turn a retail unit on a high street into a dental practice. The planning officers recommended refusal as there already existed a dental practice on the street, and to lose a retail unit would be to reduce the percentage of such units from about 56 per cent to 50 per cent. The fact that the retail unit had been empty and unused for several months did not seem to concern them, and more importantly, nor did the fact that it was a private individual using his own money who wished to make this change. Essentially, the planning department and committee were allocating quotas for what belongs on a high street.
On top of that, in a system where one should presume in favour of the applicant, it is frequently the case that councillors attend such meetings thinking ‘how do I refuse this?’ The reasons are varied. An oft cited one, especially in the case of restaurants, is that there already exist several in the area (imagine if we applied this silliness to consumer products!), although frequently the real motive is fear that an approval could be electorally damaging.
Would it be so bad to simply abolish planning and licensing laws altogether and move to a system based on voluntary agreements? This would mean high street units could change and adapt rapidly, that private property owners could do as they pleased with their own property and help deliver the kind of environment residents and businesses actually want, not what planners and councillors think they should want. It would also mean people with a little bit of power could not penalise certain businesses out of personal distaste or electoral self interest, and better still it would end the legalised corruption that is S106 money. Any serious disputes would be much better settled through a compensatory system of arbitration based on common law, private contract and precedent than under the present arrangements where self interested local officials make decisions, influenced by the NIMBY instincts of local residents.
The planning and licensing system in this country is one of the most serious hindrances to wealth creation, as well as making a mockery of the idea that we believe in private property. Liberalisation should be an urgent priority.