Cable added: "Development and in particular badly needed construction, is paralysed, often in parts of the UK that need it most.
"That is why we are bent on planning reform, examining innovative ideas such as land auctions."
In 2007, Liberal Democrat MP Ed Davey – now a colleague of Cable in the Department for Business, Innovation and Skills – proposed a "two-stage land auction system to replace the way planning permission is granted" in an article written for the Financial Times.
Under the system proposed by Davey and academic Tim Leunig a council would ask any local landowners to submit sealed-bid letters stating the price at which they would be willing to sell their land. This price would be binding and councils would be given the right to buy that land for a set period.
In the second stage, the council would choose which land offered they would like to see developed, would grant that land planning permission, and auction it to developers. The system would allow local authorities to capture almost all of the increase in land value created by allowing development.