Planning rules conflict with building regs in the UK. Planning means that most new houses are little boxes made of little more than ticky-tacky. So adding insulation to the walls makes them even smaller inside.

Unclear what this means - both of these sets of rules apply, so the planning system couldn't force people to not comply with building regs? The new approach appears to be prefab foil coated insulation board in the walls, under brick or breezeblock skin, given what I can see being built nearby.