Britain Chose Stagnation. There’s Another Way
We need to stop the home of the Industrial Revolution becoming the sick man of Europe.
At Persuasion, we’ve been thinking a lot recently about economic growth—and why the West seems so bad at it right now. Last week, we published an article by Francis Fukuyama on why the best response to the DOGE attack on the administrative state is for progressives to take up the Hamiltonian mantle of building things. Today, we are running a complementary piece by François Valentin about the dire state of the UK economy and the need to slash through red tape that’s suffocating ambitious new projects.
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Last year, a story about a “bat tunnel” went viral in the UK. Nothing to do with Batman or Bruce Wayne, the bat tunnel was built as part of the High Speed 2 (HS2) train—Britain’s ambitious high-speed rail project between the North of England and London—in order to protect a rare species of bat from hitting the trains.
The issue? This one kilometer-long “bat mitigation project” cost HS2 an additional £100 million. How many bats were saved? No one will know, but an estimated 300 bats live in the neighboring woodland. £340,000 per bat is a steep price, even for the animal-loving Brits.
But the bats are only one of many issues that HS2 has faced. It needed some 8276 “consents” from various public bodies between London and Birmingham alone. The rest of the track between Birmingham and the North was abandoned due to the ballooning costs, but even in this reduced form, the total bill could amount to £66 billion.
And HS2 itself is just the tip of the iceberg—or a rather grotesque metaphor for a country that has made building nearly impossible, with thousands of infrastructure projects across the country choked into an ignominious death. Open any newspaper and you’ll find a smorgasbord of examples, each teetering on the thin line between tragedy and comedy.
Here a James Cameron-backed £750 million film studio on a former land infill site that was blocked because it was deemed to be the “wrong development in the wrong location.” There a project to build a tunnel connecting Kent and Essex that saw its planning documentation process alone skyrocket to £297 million, twice as much as it cost to build the longest road tunnel in the world. And how could one forget the £2.5 billion data center, something the UK desperately needs, blocked over concerns that it might spoil the view from some bridges on the M25 highway.
Housing is in a similarly appalling state. Anyone who has looked at the horrific housing market in London can testify: rent is comparable to a city like New York but without the associated salaries. While there are many reasons for this housing dearth, the fundamental issue is that supply is not meeting demand. The number of new houses dropped from 300,000 in the 1970s to 124,000 in 2024. This number is made even more paltry when compared to the UK’s net migration flow of 728,000 in the 12 months preceding June 2024. By contrast, France, which has a comparable population, builds between 400,000 and 500,000 houses a year.
It’s not just the quantity, it’s also the quality of the UK’s infrastructure. Some 1.5 million children in England are studying in schools that require repairs or already face major structural hazards. Buildings for the National Health Service face a £13 billion repair bill. Issues include collapsing ceilings, power failures and sewage leaks. There’s also an aesthetic issue, with the UK now littered with so-called “street scars”—sloppily repaired walls and roads—and ugly “orange boxes with tiny windows” for housing.
To cap it all off, this is happening in a rather depressing state of economic affairs. The UK economy grew by less than 1% in 2024. Productivity growth has never recovered to pre-2008 trends. The Bank of England is having to deal with the conflicting forces of economic stagnation and inflation, estimated to be at 3.6% in the second quarter of 2025. UK business investment has been stalled since 2016. And electricity prices are some of the highest in the world, if not the highest, with the cost of power four times more expensive than in the United States.
These various anecdotes paint a picture of a country that has become completely incapable of investing in its critical infrastructure. Inflation, energy prices, productivity—they all link back in some way or another to overly restrictive planning laws blocking housing development, infrastructure projects and, ultimately, productivity.
The tunnel connecting Kent and Essex saw its planning documentation grow to an unruly 360,000 pages across 2,383 documents as a result of red tape gone mad and inflexible public bodies. Higher electricity prices nationwide can be tied back in part to the lengthy delays in the construction of the new Hinkley Point nuclear power plant, which will be the first the UK has built in a generation.
And it’s not just the economy—this extends into all areas of daily life. If you are reading this while in London and your 5G network is giving up on you as it often does, then you can blame it on local councilors blocking the construction of new masts for trivial aesthetic reasons.
This sorry state of affairs has not gone unnoticed: it increasingly dominates the conversation in policy spaces. And it is not a partisan issue. Over the last few months alone, policy wonks left, right, and center have sunk their teeth into this issue.
Here is Onward, a center-right think tank (for which I previously worked) mapping out what a conservative economy should be and leveling repeated frontal criticism at the UK’s exceedingly restrictive planning laws. There is the “Foundations” essay, written by a group of centrist think tankers and published online last year, which might be one of the most thorough breakdowns of the UK’s economic woes ever written. It has become a must-read in policy circles and even caught the attention of The Atlantic across the pond. As they put it succinctly: “The problem is not too little investment by the state. It is that the state has prohibited most of the investments we need to make.”
Tragically, the electorate does not seem to get the problem. A poll in 2022 found only around 38% of Britons support building new houses locally. Worse still, as is often the case, opponents of infrastructure projects tend to be considerably more mobilized than their supporters. Under the guise of environmental concerns, or concerns about these projects constituting a threat to the “character” of local areas, hundreds of projects are being held back.
Back when they were in power, Conservative Party MPs and ministers would regularly lead NIMBY brigades into blocking various projects. Scroll down their Twitter accounts, and you will find them with their boots strapped, mingling with gray-haired protesters in the middle of a muddy field that somehow incarnates the precious character of a community. Some of these very same politicians are comfortable with the idea of building more across the country—just not in their constituencies. Many Labour politicians have hardly done any better. London, led since 2016 by a Labour mayor, has seen a marked decline in house building.
Thankfully, Prime Minister Keir Starmer seems to have taken notice of the issue. The man who self-defined himself as a “YIMBY” (Yes In My Backyard) came into office last year with plans to force councils to approve new homes. His government aims to build 1.5 million houses in the next five years, which would be about on par with the 1970s, though still insufficient to deal with the backlog that has accumulated over the last decades.
Beyond housing, the government plans to “fast track” 150 planning decisions on major infrastructure by the end of the current parliament. This past week it has announced a series of proposals to cut red tape, including reversing a decade-old restructuring of the NHS (which is widely considered to have been deeply inefficient), and proposing a new Planning and Infrastructure Bill that reduces the number of “consents” needed to approve key projects.
Whether this will be enough to undo years of stagnation remains to be seen. Whatever happens next, Britain’s economy in the early 2020s will provide a formidable case study for economic historians in the future. They will ask themselves in hindsight how a country with a rich economic history consented to what can only be described as economic self-sabotage at an industrial scale.
François Valentin is a political analyst and host of the Uncommon Decency Podcast.
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This piece frames local resistance to development as irrational “stagnation,” but I think that oversimplifies the real issue. Growth isn’t inherently good if it primarily benefits developers and investors while sidelining the needs of local communities. Often, people aren’t opposed to building in principle—they just want it to be thoughtful, sustainable, and actually beneficial to those who live there.
The article dismisses environmental and aesthetic concerns as mere red tape, but who decides what gets built, where, and for whose benefit? A lot of large-scale projects prioritize short-term profit over long-term livability. Housing, for example, isn’t just about quantity—it’s about quality, affordability, and integration into existing communities. The UK’s problem isn’t just not enough housing, but too much bad, profit-driven development that ignores local needs.
Deregulating planning laws won’t fix deeper issues like underinvestment in public infrastructure, austerity-driven decay, and a financialized economy that prioritizes speculation over sustainable development. If we want to improve infrastructure and housing, we need democratic decision-making that includes local voices, not just top-down deregulation that gives corporations even more power to reshape communities without accountability.
Growth for whom? That’s the real question.
We have exactly the same situation in the States, to greater (California) or lesser (Texas) degrees depending on where you are. It’s ironic that the “progressives” are now calling for the streamlining of approval processes, as they are the ones who created these processes in the first place, and then exercised them to the maximum extent to prevent construction of housing and infrastructure. Better late than never, but a lot of damage has been done and a lot of time lost.
Another aspect of the economically destructive regime of NEPA and CEQA that I haven’t seen commented on is the sheer magnitude of human effort and associated cost required to produce the many tons of environmental review documents. Imagine if all that college-educated brainpower had actually been directed into productive activities instead of being devoted to adding friction, often at a fatal level, to any effort to build something. And had all the capital to pay for this friction been instead allocated toward production? Perhaps we would not find ourselves confronting a geopolitical environment in which China is likely soon to be the dominant power, economically and militarily.