A Second Investment Zone Prospectus – Published, on Saturday!

Suggests things so rapidly moving civils servent at the department worked overnight Friday – so missed this one

DHLUC/Treasury Guidance

Introduction

This document sets out the in-principle policy offer from the government to all Mayoral Combined Authorities (MCA) and Upper Tier Local Authorities (UTLA) in England, who will work in partnership with their relevant constituent or district councils, that would like to introduce an Investment Zone in their area. Whilst we expect this offer to be UK-wide, how Investment Zones can operate in Scotland, Wales and Northern Ireland is subject to work with devolved governments.

The government envisages working in partnership with places across the country together to get the United Kingdom working, building and growing. Investment Zones will accelerate the housing and infrastructure the UK needs to drive economic growth. They will cut back unnecessary bureaucratic requirements and processes and red tape that slow down development, [most of which the tories introduced – in power 12 years] cut taxes to back business, and, as a result, attract new investment to create jobs.

The government has progressed conversations with stakeholders ahead of this announcement to shape the policy detail and support rapid delivery. This has helped to identify 38 MCAs and UTLAs who could potentially set up Investment Zones. These MCAs, and UTLAs where there is no MCA, will now have the opportunity to complete a full Expression of Interest to submit to the government. This will launch shortly and will be open to all MCAs, and UTLAs where there is no MCA, across England, regardless of discussions to date. Further detail on the Expression of Interest MCAs and UTLAs will be invited to complete will be set out shortly. Existing Freeports will also be able to apply, should they wish to do so. The government wants to immediately support those who are prepared to deliver now.

The government will look to introduce primary legislation in order to enable the offer on tax and simplified regulations. The final offer will be subject to the passage of that legislation through parliament. {why not simplifed everywhere – reason few voters libe in industrial estates in Cornwall or Diss – all hype liitle substance]

Investment Zones

The government envisages that Investment Zones will be one or more specific sites within an MCA or UTLA where a variety of tax, regulatory innovations and flexibilities, and planning simplifications will apply within those site’s boundaries.

As MCAs and UTLAs consider coming forward to express interest in pursuing Investment Zones with the government, they should consider which sites will best drive a substantial contribution to the UK’s economic growth and a significant acceleration of delivery of additional housing. There is a strong expectation that Investment Zones will bring forward additional development, and that they bring forward a mix of both commercial and residential development. Both of these will be considered in the EOI assessment process. [ but zero incentive to put forward additional housing zones, without new ones no net new growth that wouldnt have already happended, all you are doing is burning up a too small land supply more quickly]..

Sites may be aligned with existing local growth strategies and transport plans. Sites that already have a masterplan, development order or outline permission could be considered by MCAs and UTLAs as a potential Investment Zone, as could sites where planning consents are not yet in place. Development sites where planning simplifications apply may be co-located with, or separate to, tax sites, depending on what makes most sense for the local economy.

The government is committed to tackling barriers to growth across the United Kingdom.

As this is a UK-wide mission, we will work in partnership with devolved governments and other stakeholders to agree how we can use our levers to deliver Investment Zones in Scotland, Wales, and Northern Ireland.

In Scotland, we will work with the Scottish Government to agree the interaction between Investment Zones and the Scottish Green Freeports competition in which we’ve had expressions of interests from 5 areas.

In Wales, a competition is currently underway to deliver the Freeports programme as set out in the Prospectus published jointly with the Welsh Government. This work leaves us well placed for fast-paced discussions Investment Zones.

We welcome investment proposals for Northern Ireland, and will work with the devolved administration and local partners to maximise the significant investment we have made in Northern Ireland’s research and innovation strengths through the city deals across the Belfast Region, Derry-Londonderry & Strabane, Causeway Coast & Glens and Mid South West by identifying suitable sites such as the Belfast Innovation District.

Speeding up planned development and simplifying new opportunities

The government wants to do everything possible to streamline and accelerate delivery of high-quality development for jobs and homes. When proposals come forward for Investment Zones, they will benefit from a liberalised planning process. [what does this mean zoning, we know zoning desont work without sytrategic planning, masterplanning and design codes, nowhere in world does it work without these]

For developments in the early stages of planning, and to encourage new development to come forward, there will be a new faster and more streamlined consent to grant planning permission. This consent will reduce many of the burdensome requirements [which ones] which has made the planning of large sites slower and more complex than it should be, to enable developers to bring forward good quality development which responds to the market [err like design control, what are we talking about here? Are we sying look more like china, bad development buildt quickly falling down quickly?]. In particular, we will:

  • remove burdensome EU requirements which create paperwork and stall development but do not necessarily protect the environment;
  • focus developer contributions on essential infrastructure requirements;
  • reduce lengthy consultation with statutory bodies; and
  • relax key national and local policy requirements.

Key planning policies to ensure developments are well designed, maintain national policy on the Green Belt, protect our heritage, and address flood risk, highway and other public safety matters – along with building regulations – will continue to apply. [but which ones wont – which parts of the NPPF wont, will local plans survive in these areas, these are already all of the footnote 7 areas disspalying presumption?]

For developments which already have permission, we will work with developers and local planning authorities to ensure planning is not a barrier to the accelerated delivery of these sites.  All Investment Zones will have a mandate to boost growth; in Zones, the planning system will not stand in the way of investment and development. [what does this means – all conditions and section 106s diapplied – there goes planning balence – very lawful – sounds like spotty Treasory 22 year olds dictatingt o Dept as always happens when Treasury is in driving seart who thought it wasnt Treasury about to be abolished for making bad decisions?]

Where relevant, a development corporation or a dedicated delivery vehicle could be established, providing it does not slow down development. We would expect MCAs and UTLAs proposing Investment Zones to fund these [err wasnt the government funding these as in the £64 million to Sheffield and Milton Keynes, how do you afford to fund a city doubling population of a city like MK without funding or land value capture for a DC?] MCAs and UTLAs will also need to demonstrate that they have business sponsors ready to lead and drive investment opportunities. The government will explore the necessary delivery arrangements further with places that come forward.

Time-limited tax incentives

Specified sites in England could benefit from a range of time-limited tax incentives over 10 years. The tax incentives under consideration are:

1. Business Rates – 100% relief from business rates on newly occupied business premises, and certain existing businesses where they expand in English Investment Zone tax sites. Councils hosting Investment Zones will receive 100% of the business rates growth in designated sites above an agreed baseline for 25 years.

2. Enhanced Capital Allowance – 100% first year allowance for companies’ qualifying expenditure on plant and machinery assets for use in tax sites.

3. Enhanced Structures and Buildings Allowance – accelerated relief to allow businesses to reduce their taxable profits by 20% of the cost of qualifying non-residential investment per year, relieving 100% of their cost of investment over 5 years.

4. Employer National Insurance contributions relief – zero-rate Employer NICs on salaries of any new employee working in the tax site for at least 60% of their time, on earnings up to £50,270 per year, with Employer NICs being charged at the usual rate above this level.

5. Stamp Duty Land Tax– a full SDLT relief for land and buildings bought for use or development for commercial purposes, and for purchases of land or buildings for residential developers.

Infrastructure and development

The government wants to back local leaders to ensure that their Zones can innovate, and have the infrastructure and skilled workforce they need. The full offer the government will be able to make will depend on discussions with MCAs and UTLAs about the requirements of their Investment Zone. We want local leaders to be ambitious and use all available tools to unleash the full potential and would consider;

  • Wider support for local growth: for example, through greater control over local growth funding for areas with appropriate governance. Subject to demonstrating readiness, Mayoral Combined Authorities hosting Investment Zones will receive a single local growth settlement in the next Spending Review period.
  • Strategic direction over affordable housing fund: including how it is used, with flexibility to acquire and regenerate derelict and empty housing consistent with the strategic aims of the fund.
  • Prioritised access to infrastructure funding: for example, this could potentially include the remaining circa £1.3 billion Brownfield Infrastructure Fund where additional development can be delivered at pace. [all sensible deveolution staff as proposed for County Deals]

Investment Zones and Freeports

Freeports have established local partnerships, governance, robust business plans and development sites and so are ideally placed to capitalise on the new Investment Zones offer to deliver investment, jobs, and growth if they want to do so. This will not only ensure that those Freeports that want to are able to build on the successes they have had to date by accelerating investment in their areas, but that both programmes complement one another.

The government will work with Freeport Boards and local partners involved in current and prospective Freeports to consider whether and how the Investment Zones offer can help to support their objectives, as part of the wider process for identifying Investment Zones. This will ensure that both programmes complement one another.

Next steps

The government recognises that further detail is required on provisions and mechanisms for delivery. We intend to do this in discussion with MCAs and UTLAs who come forward. The guiding mission is that Investment Zones will get the United Kingdom working, building and growing, and get spades in the ground.

We know that MCAs and UTLAs will have many potential sites in mind that could make up an Investment Zone. We will set out further detailed criteria that sites will need to meet with the launch of the Expression of Interest process under the following broad themes:

  • Potential to increase long-term UK economic growth for example through addressing housing need, unlocking commercial sites, or attracting inward investment.
  • Local capacity and capability for example (but not limited to) the presence of a Mayoral Combined Authority, willingness to use development corporations, and places which have the ability to trial new policies.
  • Readiness to deliver Investment Zones in order to generate economic growth in short order and address the ongoing crisis.
  • Alignment with other significant investments such as HS2 rail stations to ensure critical mass and greater growth opportunities.

The government’s expectation for MCAs, and UTLAs where there is no MCA – who will work in partnership with their relevant constituent or district councils – coming forwards with proposals in this Expression of Interest period is that as an absolute minimum they will:

  • Agree that Investment Zone benefits will be conditional on MCAs, UTLAs and local partners honouring the commitments made in the EOI and subsequent negotiation and, and on local consent and Parliamentary approval of any legislation. [i.e. agree to what we tell you in negotiations and what parliment later tells us- hmm]
  • Investment Zones will also be conditional on complying with Subsidy Control and the Public Sector Equality Duty.
  • Work with the government to agree suitable governance mechanisms for any potential Investment Zone; and for the complementary functions.
  • Work with the government to agree suitable accountability and readiness arrangements as part of any potential Investment Zones.
  • Demonstrate how an Investment Zone will meet the MCAs and UTLA’s own objectives, including in relation to transport, regeneration, economic growth, and tackling local challenges.
  • Provide metrics of success closely aligned with the growth and housing ambitions of the programme to the government.

This is not a prospectus design to attract takers – except in industrial estates. In housing areas for growth it seems designed to as far as possible put off all takers – it is utterly toxic on land not yet allocated for growth, and those that are – in removing all controls and policy – the last thing you want in an investment zone. Dinsterested zone is more like it.

Bond Vigilantes Force UK Treasury Today into Radical Planning Reform and Loosening Immigration Controls – Growth Plan Only lasted One Day on Markets

Panic Mode

As the pound plunged to lowest value ever – as Bond Vigilantes struck having no confidence that the forecast free massive boost in government dent, and supply changes changes with no forecast of whether they would work, the markets were panicing as there was no security for the market that inflation would not sprial at the same time that government debt would not spiral, at a time when gilts would be forced to sellat ever higher prices dur to risk premium and at a time when the Bank of England forced to compensate for reckless macro-economic policy forces interest rates up to defend the pound – as otherwise a falling pound would cayse an inflationary spiral as import prices rise, and risking a downward spiral – like an emerging economy – like Britain was in the 1970s – ending in an IMF bailout and massive austerity.

In this panic mode the Tresasury put out an emergency statement at 5.30 today designed to reassure the Bond Vigilanties.

Treasury Update on Growth Plan (also it didnt last a weekend did it?)

On Friday 23 September, the Chancellor of the Exchequer, the Rt Hon Kwasi Kwarteng MP, set out how the government would fulfil its commitment to cut taxes for people and businesses and announced wider supply side policies to grow the economy.

Building on this, as the Growth Plan set out on Friday, Cabinet Ministers will announce further supply side growth measures in October and early November, including changes to the planning system, business regulations, childcare, immigration, agricultural productivity, and digital infrastructure.

Next month, the Chancellor will, as part of that programme, outline regulatory reforms to ensure the UK’s financial services sector remains globally competitive.

He will then set out his Medium-Term Fiscal Plan on 23 November.

The Fiscal Plan will set out further details on the government’s fiscal rules, including ensuring that debt falls as a share of GDP in the medium term.

In the Growth Plan on Friday, the Chancellor set out that there would be an Office for Budget Responsibility forecast this calendar year. He has requested that the OBR sets out a full forecast alongside the Fiscal Plan, on 23 November.

As the Chief Secretary to the Treasury set out this weekend, the government is sticking to spending settlements for this spending review period.

The Chancellor also confirmed that there will be a Budget in the Spring, with a further OBR forecast.

Yes ypu heard that right. More immigration. At a time of near full employmenbt the only way GDP can grow is more immigrants = more wge owners,= a multiplier effect and more consumer expensiture leding to more growth.

PLanning reforms back on agenda.

The first weathervane u-turn an OBR forecast.

The announcment didnt clam the markets the pound fell further.

I planned this blog to be a very academic article on the ‘Treasury View’ which in recent years was morbid fear of Bond Vigilantes raising borrowing costs. The old Treasury view, attributed to Ralph Hawtry (greatest son of Slough, Keynes Great friend and sparring partner) was that public spending would crown out private spending. Both views are based on similar foundations, and those who argue the opposite like MMT theorists make same mistake. The old Treasury view was never true in a recession, the new Treasury view is only true when markets are in turmoil. Both make the mistake of judging economic forecasts on crude views of accounting identies, rather than a sophisticated view, bounded by sectoral balences and accounting identities, of how the market adjusts to expected changes and the dynamics of how when markets shift in nominal terms from changes to inflation and the weighted value of a currency, and hence the speculated value of investments. You cant argue solely from a sctoral balence and an accounting identity, it is the dyanics of change of those identities that matter (equally you make similar mistke arguing without them) and how feedback and multiplier effects impact in the monetary economy and the revaluation of company and household assets.

It all rather pathetic, the right we wrong said a most boost to spending would cause teh vigilantes to pounce are forced into reverse gear when they propose a vastly higher increase in public spoending after claiming the Treasury view – which was their only defence against state spending – as wromng all along. They created the situation, market tourmoil, which iss the only case when the new Teasury view in right. The markets found out the bullshiot economics of claiming 10 different incompatible and posite policies persued at once was alright. As it always would

What is a bond vigilante: those who spculate on government debrt pounching on uncertainty to make superprofits when in their herd like behavious they spot unsustinable macroeconomic mistakes by governments.

Think Nigel Lawson singing in the Bath on Black Wednesday as Sorbos bet against the pounds and earned billions.

Today the markets smell bolld, like sharks when a surfer deliberately cuts themsleves to prove their machismo.

Yahoo

Paul Donovan, the chief economist at UBS, said investors now viewed the Tory party as a “doomsday cult”

As I keep arguing on here, Truss doesnt want to win, its all about performance art – and hence blaming god when the world didnt come to an end on a certain day

How lomg till the IMF are called in? Outside the Eu the UK is now just yet another weak, unsustainable emerging economy, forced into Barber Boom/Healy style cycle of inflationary boom and decline with the IMF forced to bail them out – probably early next year.

FT Uk Lenders Pause new Mortgaes during Market Turmoil

When the Credit Impulse goes down, a recession always follows, if it collapses housing market we get the worst kind of spirlling down debt-deflation recesion – as we saw in 2007. Usually a once in every other gneration phenomena – not this time, the lessons was never learned and we made it far harder not easier to buld housing.