Rishi Sunak will abandon mandatory housing targets to avoid an embarrassing backbench rebellion, prompting criticism that he is putting party unity above the national interest.
The capitulation, which comes amid a national housing crisis, will fuel fresh concerns that the prime minister is too weak to take on Tory rebels. It followed up to 100 Tory MPs threatening to back an amendment that would force the government to scrap the target of building 300,000 homes a year in England.
Instead, the target will be “advisory” and councils will be able to build fewer homes if they can show that affecting it would significantly change the character of an area, an exemption expected to apply particularly to rural and suburban communities .
The move was described as “extremely worrying” by housing campaigners but spares Sunak and housing secretary Michael Gove a humiliating showdown in the Commons. They were forced to vote on the Leveling and Regeneration Bill last month when the rebellion came to light.
For weeks, No 10 Gove and rebel leaders Theresa Villiers and Bob Seely have held meetings to find a “landing zone” that can satisfy both sides and avoid another blue-on-blue row over planning.
Sources suggested the government initially hoped to buy off conservative 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 its development) and a crackdown on second homes, a problem in some tourist hotspots in Cornwall and Devon.
But the rebels refused to budge, and the Guardian understands Sunak and Gove accepted the demand for the mandatory housing target late last week.
In a letter to Tory MPs on Monday, Gove said he recognized there was “no really objective way of calculating how many new homes are needed in an area”, but the “housing planning process must start with a number”.
The change would make the centrally determined target a “starting point”, with councils able to propose building fewer homes if they faced “real constraints” or needed to build at a density that would “significantly change the character” of the your area He said he was “grateful” to MPs who had been pushing for “much needed changes”.
Seely said the deal reached was a “happy compromise”, adding that the would-be rebels “had received everything we asked for, because the government said ‘it’s a good idea'”. He claimed that more than 100 Conservative MPs had backed the proposed amendment.
But a government source suggested the bill had been “reduced so much that you’re only left with a glass of water”.
The bill was withdrawn during report stage in the Commons, but could be introduced again as soon as next week with government amendments added.
Changes made in addition to the review of targets include the ability to fine companies that do not build on land despite having planning consent and letting councils refuse more permission in their area.
A registration scheme for short-term rentals will also be created, and ministers will consider whether new planning permission should be granted for homes to be converted into Airbnb-style rental properties.
Other changes seen as fulfilling Sunak’s leadership campaign promises over the summer were for the green belt to be protected by issuing new guidance to councils saying they should not consider such land for housing delivery .
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Sunak’s attempt to quell a rebellion may inflame criticism from another group of conservative MPs, who had urged him to stand firm.
Immigration Minister Robert Jenrick is believed to have strongly supported the mandatory target and the presumption in favor of remaining development.
Senior backbench MPs have previously criticized the rebels. Simon Clarke, the former level secretary, said his proposed amendment was “deeply wrong” and would only cement “fundamental intergenerational injustice”.
Sajid Javid, another former housing secretary, previously warned that scrapping the mandatory target would “turn significant policy upside down” and represent “a colossal failure of political leadership”.
Other critics of the amendment included Robert Colville, who helped write the 2019 Conservative manifesto.
Lisa Nandy, the shadow housing secretary, said it was “irrational in the midst of a housing crisis” to abandon the mandatory target. Labor had offered to support the government, he said, meaning the rebels would have been easily defeated, but it was understood Sunak did not want to rely on opposition votes to pass the bill.
Nandy claimed Sunak and Gove had put “party before country” and added: “This is very weak. The Prime Minister and Cabinet are in office but not in power.”
The Priced Out campaign, which is lobbying the government to ensure more affordable homes are built, said it was an “incredibly worrying” development as the target was “a key tool to get us the homes we need”.