Rishi Sunak is to drop mandatory house-building targets to avoid an embarrassing backbench rebellion, sparking criticism that he is putting party unity ahead of national interests.
The capitulation, which comes amid a national housing crisis, will fuel fresh concerns that the Prime Minister is too weak to take on unruly Conservative backbenchers. It followed up to 100 Tory MPs threatening to back an amendment that would effectively force the government to scrap its target of building 300,000 homes a year in England.
Instead, the target will be “advisory” and councils will be allowed to build fewer homes if they can show it will significantly change the character of an area, an exception expected to apply particularly to rural and suburban communities.
The move was described as “extremely worrying” by housing campaigners, but spares Sunak and the housing secretary, Michael Gove, a humiliating showdown in the Commons. They were forced to withdraw a vote on the equalization and regeneration proposal last month when the uproar first became known.
For weeks, No 10, Gove and rebel leaders Theresa Villiers and Bob Seely have been holding meetings to find a “landing zone” that can satisfy both sides and avoid another blue-on-blue feud over planning.
Sources suggested the government initially hoped to buy off Tory opponents by offering to add amendments to the bill.
These included further restrictions on “land banking” – the practice of buying land for investment without any active plans for development – and a crackdown on holiday homes, a problem in some tourist resorts in Cornwall and Devon.
But the rebels refused to budge and the Guardian understands that the demand for the mandatory housing target to be scrapped was accepted by Sunak and Gove late last week.
In a letter to Tory MPs on Monday, Gove said he recognized “there is no really objective way of calculating how many new homes are needed in an area” but “the housing planning process has to start with a number”.
The change will make the centrally determined target a “starting point”, with councils able to propose building fewer homes if they face “genuine constraints” or have to build at a density that would “significantly change the character” of their area. He said he was “grateful” to MPs who had pushed for “much needed changes”.
Seely said the agreement reached was a “happy compromise”, adding that the would-be rebels had “got everything we asked for, because the government said ‘it’s a good idea'”. He claimed that well over 100 Tory MPs had backed the proposed change.
But a government source suggested the bill had been “watered down so much that all you’re left with is a glass of water”.
The bill was withdrawn during report stage in the Commons, but could be tabled again as soon as next week with the government’s amendments added.
Changes made on top of the overhaul of targets include potentially fines for firms that fail to build on land despite planning consent and allow councils to refuse further permission across the area.
A short-term rental registration scheme will also be created, with ministers considering whether new planning permission needs to be granted for homes to be converted into Airbnb-style rental properties.
Other changes billed as fulfilling Sunak’s leadership campaign promises over the summer were for the green belt to be protected by giving new guidance to councils saying they would not need to assess such land for home delivery.
Sunak’s attempt to quell a rebellion could ignite criticism from another group of Tory MPs, who had urged him to stand firm.
The Immigration Minister, Robert Jenrick, is believed to have strongly supported the mandatory target and the presumption in favor of continued development.
Senior MPs on the backbenches have previously criticized the rebels. Simon Clarke, the former equalization secretary, said their proposed change was “very wrong” and would only cement “fundamental intergenerational injustice”.
Sajid Javid, another former housing secretary, has previously warned that scrapping the mandatory target would “put meaningful policy into reverse” and represent “a colossal failure of political leadership”.
Other critics of the change included Robert Colville, who co-wrote the 2019 Conservative manifesto.
Lisa Nandy, the shadow secretary, said it was “unconscionable in the middle of a housing crisis” to drop the mandatory target. Labor had offered to support the government, she said, meaning the rebels would have been easily defeated, but it was understood Sunak was unwilling to rely on opposition votes to pass the bill.
Nandy claimed that Sunak and Gove had put “party ahead of the country” and added: “This is so weak. The prime minister and the cabinet sit, but do not have the power.”
The Priced Out Campaign, which lobbies the Government to ensure the building of more affordable homes, said it was an “incredibly worrying” development as the target was “a key tool to get the houses we need”.