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It has become a norm for British governments to set housebuilding targets only to underdeliver. Few had high hopes that the current Labour administration would be different — or meet its lofty manifesto pledge to construct 1.5mn new properties by the end of its term in 2029. Recent assessments by analysts suggest it will fall short of that goal. But the story of housing in many ways encapsulates what is going wrong for Prime Minister Sir Keir Starmer’s party. It sets ambitious goals, then puts all kinds of obstacles in the way of meeting them.
Starmer’s administration got off to a promising start on housebuilding by prioritising much-needed simplifications to the county’s byzantine planning system, where predecessors had failed to act. Though it takes time for new homes to sprout once red tape is removed, Labour has created new bottlenecks. This week, the Association of Colleges said that construction training courses would take a hit after ministers “reneged” on promises to increase further education spending. Alongside the government’s broader plans to clamp down on immigration, this will exacerbate a severe shortage of building skills.
Underfunding councils has also led to delays in planning applications, while tax increases and fiscal uncertainty have undermined developers’ investment plans. Construction activity, based on S&P Global’s purchasing managers’ index, has shrunk every month since the beginning of 2025, with chancellor Rachel Reeves’ decision to raise employers’ national insurance contributions in her opening Budget in October 2024 cited as a key strain on builders. It is the industry’s most prolonged slump since the global financial crisis.
Housebuilding is just one example of the government’s broader self-defeating approach. Take its pledge to back “working people”, particularly the young. Labour has passed legislation to boost workers’ rights and last year raised the statutory wage level for 18- to 20-year-olds by the most on record. But the cumulative burden of higher payroll taxes, new regulations and higher minimum wages has raised employers’ costs and led them to cut jobs and curb hiring. The latest payroll data shows there are around 100,000 fewer “working people” now than when the government’s term started in July 2024.
Then there is the party’s “number one mission” to kick-start economic growth. Its efforts so far include streamlining planning processes, boosting public investment and freeing up pension capital. But it has undermined these measures by raising burdens on the private sector, with new costs, red tape and ongoing political uncertainty — in sharp contrast to the stability it promised. As Reeves and Starmer have both made clear, improving ties with the EU is also an increasingly important pillar of the government’s growth plan. But the party’s strategy to seemingly cherry-pick arrangements with the bloc will make substantive progress on negotiations difficult.
Labour’s muddled style stems, in part, from having too many broad and sometimes competing objectives. Growth, wealth creation, the cost of living and the needs of working people have all been described as top priorities by various cabinet members. Ambition is welcome, but the government is better off focusing on making actual progress in fewer specific areas.
To be sure, other reasons for the government’s often contradictory policy stances include the limited fiscal wriggle room it inherited to adequately back its goals and rebellious backbenchers who push the party further leftward. But Labour’s 2024 manifesto was boldly titled “Change”. Until it stops clogging up its own agenda, it risks delivering little more than drift.