The Strategic Tradeoff in New Style Strategic Plans

The story of strategic planning since the 2004 Act has been in large part an innovation of new styles of plan facing the harsh reality of  contact with the Planning Inspectorate.

Now the results of the NEGC and West of England examinations into new style joint strategic plans offers an opportunity reflection similar to that following the unsoundness fining of the first core strategy for Stafford.

Although strategic planning has seen an inevitable revival the reason why it has not been welcomed with open arms is that in England we have never got the structure or geographical level of strategic planning right.  Numerous messing around with local government structures always short of a comprehensive form has led to a messy combination of strategic plan structures covering districts, unitaries, counties and combined authorities.  Though we have moved beyond the weak duty to cooperate to an effective duty to plan strategically there is still no consensus on what the new style strategic plans should look like or do.

When some of the first of the large new unitaries were created such as Cornwall and Wiltshire they adopted a core strategy approach with allocations plans coming along later.  The problem was this first generation of plans was highly variable in quality in terms of settlement structure and policy (stop gap solutions) and leading to a delay of 5-7 years between core strategy adoption and allocations adoptions.

Far from advancing on from the problems of Structure Plans/Local Plans they repeated them.

The concept of  strategic plans created on a broad brush scale with broad locations on a key diagram on a non map base came from the PAG report in the 60s. It was the model for the structure plan.  Structures plans were slow to produce and the transition to allocations not much quicker.

After the 2004 act it became clear that core strategies were not getting the job done in terms of bringing strategic sites forward.  Even before the NPPF came out the ministry made it clear that strategic sites could be allocated in strategic plans.

The trade off that strategic plans face is between simpler plans more quickly produced at a high level and plans that give certainty on allocation of land. The latter requires lines on maps. Lines that define policy such as Green Belt and allocate land.

The concept of the spatial development strategic was explicitly PAG based, not being on a map base and not able to define policy areas or allocate site according to current law.  Though footnote 15 on page 9 hints that the law would be changed (following the GMSF issues).  So even if an SDS is agreed you cant break ground on strategic sites until an allocation plans comes along to implement the Green Belt changes in the SDS and draw lines on a map.

The problems of the West of England solution to the trade off between simplicity and certainty is to return to a pure PAG approach of ‘broad locations’ likely to spread fear across whole counties as to where these might be and without the opportunity to pursue landscape led and design led solutions to mitigation, natural capital and infrastructure.  It is a discredited 60s style of planning that wont work.  Broad locations dont exist on a higher plane from the geography of roads, rail lines and topography they create places.

There are solutions to the simplicity/certainty trade off and we perhaps see them best in the new Cheshire unitaries.  Where we have as a first stage strategic plans defining strategic growth locations and refining the Green Belt, allocations of numbers to broad locations of small towns, villages, clusters of villages.  And then followed swiftly by allocations plans to define smaller scale sites.  Note they are unitaries of an appropriate functional regional scale.

The lesson to be learned,  If you are a small scale authority outside joint arrangement just produce a single simple local plan.  If you are a large unitary outside joint arrangement do the Cheshire two stage approach.

If you are a large joint planning area then do the two stage approach – allocating strategic sites in the joint plan, and make your governance arrangements as unitary like as possible.  If you dont all of the evidence so far suggests crude political disagreements will either unacceptably delay the plan or lead to it failing at examination for not having strategy options distorted by raw local political interference, of the Not in My Term of Office variety.

Parish Council Claims Boys Scouts will be Molested if New Housing Built

Bucks Free Press

Chalfont St Peter Parish Council have blasted the proposed Local Plan, saying that one local scout camp will be forced to close should the proposals be approved.

The Council claim that the proposed construction of 200 homes in the open greenbelt land located next to the Paccar Scout Camp will have massive implications on the group.

They claim that the Paccar Scout Camp will be ‘driven out’ if the proposals go ahead, given the possible safeguarding problems that building 200 new properties could cause.

EIPS and Equally Justified Strategies

Although the main failing of new style strategic plans so far had been on failure to look at reasonable alternatives, once they have taken a step backwards and done so through a new SEA there is no guarantee that one strategy only will pull clear of the rest.

A good example is North Essex where the SEA concludes that the preferred strategy and one incorporating elements (more development East ofColchester) of the opponents preferred approach score roughly equally.

Look at the soundness test in the NPPF

Justified – an appropriate strategy, taking into account the reasonable
alternatives, and based on proportionate evidence;

Note no longer the ‘most appropriate strategy’.  Providing that there is not on strategy which has significantly more environmental effects than another it is perfectly possible for more than one to pass the hurdle.

Then what is the role of the EIP panel – well if the strategy preferred passes this test it has to be found sound.  It is not the panels job to have a beauty contest of strategies. which might come to a surprise to opponents of the preferred strategy.  At the end of the day the choice between strategies where significant environmental effects are avoided/mitigated is a job for elected politicians not keyboard warriors or land promoters.

Of course this is partially to do with the relatively weak and subjective goals achievement matrix type scoring used, and the lack this far of good land-use/transport wide area models which assess carbon impact.  Im sure these will improve and will help justify.

Hence I think the attention will switch among oppositionist to challenging the justification given by cllrs towards one strategy than other.  I dont think justifications such as West Somerset/Bolton wouldn’t countenance any Green Belt Sites and Stockport said they had enough would justify as land use planning considerations as it would lead to weighted and unfair consideration between alternative sites in terms of their objective environmental impacts.

Braintree Leader – Opponents of Garden Communities a Minority of ‘Keyboard Warriors’

Of course when leaders start pandering to Keyboard Warriors Chief Planning get suspended

Essex Live

Graham Butland, the leader of Braintree District Council, said: “Clearly there are feelings that run high.

“I don’t believe that there is the amount of opposition that some are trying to tell us. Someone mentioned keyboard warriors. I think it is a lot like that.

“I think we have to resolve.

“No-one wants housing. The people who lived in White Court didn’t want Great Notley.

“Now it’s all part of one community.

“But what is important, and I’m delighted that some of the younger councillors spoke, because this is what this is about.

“I’m one of the lucky generation who picked the right time to be born when it was automatically assumed that when you were in your mid twenties and got married you would buy a house.

“And if you didn’t there was sufficient council housing to rent.”

Oldham Chief Planner @StevethePlanner – Recommends Approving Housing – Suspended as classed as ‘Gross Misconduct’

Place Northwest

What happens when you have an incompetent planning chair and seeking to shift blame for an inevitably unpopular development

Oldham’s head of planning Stephen Irvine has been suspended amid claims of “gross misconduct”, with the borough’s Liberal Democrat leader calling for an investigation as to whether the allegations focus on two controversial planning applications, including one by Russell Homes at Knowls Lane.

In a letter to Oldham Council’s deputy chief executive Helen Lockwood, Cllr Howard Sykes, leader of the borough’s Liberal Democrat group, flagged the Knowls Lane application as one of two schemes to be investigated following the allegations against Irvine. The other project relates to 32 houses for First Choice Homes at Hodge Clough Road.

Cllr Sykes said: “If it is the case that the allegations of ‘gross misconduct’ apply in any way to either of these applications, then I would ask that a similar process to the way that the approval decision for Saddleworth School was passed and then ‘revoked’, the decisions in relation to these applications are similarly ‘revoked’ and returned to the planning committee with appropriate reports for decision.

“The impact of both these applications is huge, especially in relation to openness, transparency and public confidence.  People need their faith restoring in modern politics, the Liberal Democrats want answers for local residents.”

Irvine has been in his role since November 2015, having previously worked as a planning director at NLP, and at Cheshire East Council, where he was planning manager.

Oldham’s planning committee has been embroiled in controversy in recent months particularly around Russell Homes’ application; local groups vehemently opposed the project, which will see 265 houses built on a 39-acre greenfield site in the Lees area of the borough.

At the committee on 1 July, following the initial cases for and against the scheme, an initial motion to refuse was defeated by five votes to three; with shouts from the chamber calling for a decision to be deferred, and a confused break where the process of putting forward a motion to approve was explained, another vote was held.

Commitee chair Cllr Clint Phythian, councillor for Royton North, initially announced the decision was unanimous to an incredulous response from other speakers. A final figure of the vote was not announced by the chairman, who simply said the application had been approved, before adjourning the meeting. The decision was greeted by a wave of heckles and cries of “kangaroo court” from the public gallery.

At the same committee, proposals for 27 homes at Pearly Bank were also passed despite a vote having to take place three times. During the meeting planning process was explained to the committee’s chair in detail, before it was announced the project had been refused; however, following another vote, the scheme was approved following several miscounts.

The Council Leaders Own Blog

Shock suspension of Head of Planning at Oldham Council

After a formal request, Councillor Howard Sykes MBE, Liberal Democrat Leader in Oldham Borough has been informed that the Head of Planning and Infrastructure, Steven Irvine, has been suspended from the Council.  He has been suspended from duties whilst allegations of ‘gross misconduct’ are ‘fully investigated’.

Councillor Sykes MBE wants to know how long for and what steps have been put in place to maintain a planning service.  “Currently it is far from perfect and I and other councilors are getting lots of complaints from residents and business,” stated Councillor Sykes.

“There is currently a large amount of public unrest in relation to the Planning Officer’s Reports in relation to two applications leading to decisions of approval:

1: PA/342008/18 Land at Hodge Clough Road Oldham

2. PA/343269/19 Land at Knowls Lane, Oldham

The implication of the approval for both these applications is significant, particularly in relation to openness, transparency and public confidence.”

“If it is the case that the allegations of ‘gross misconduct’ apply in any way to either of these applications, then I would ask that a similar process to the way that the approval decision for Saddleworth School was passed and then ‘revoked’, the decisions in relation to these applications are similarly ‘revoked’ and returned to the Planning Committee with appropriate reports for decision,” Councillor Sykes demanded.

“The impact of both these applications is huge, especially in relation to openness, transparency and public confidence.  People need their faith restoring in modern politics, the Liberal Democrats want answers for local residents.”

Copy of letter below:

1 August 2019

Dear Helen Lockwood,

Re:  Suspension of Head of Planning

After a formal request I have now been informed that the Head of Planning and Infrastructure, Steven Irvine has been suspended from duties whilst allegations of ‘gross misconduct’ are ‘fully investigated’.

It would be useful to know the time period for the above and what specific steps have been put in place to maintain a planning service for residents and businesses.

However, that is not the main point in my writing.

There is currently a large amount of public unrest in relation to the Planning Officer’s Reports in relation to two applications leading to decisions of approval:

1: PA/342008/18 Land at Hodge Clough Road Oldham

2. PA/343269/19 Land at Knowls Lane, Oldham

The implication of the approval for both these applications is significant, particularly in relation to openness, transparency and public confidence.

If it is the case that the allegations of ‘gross misconduct’ apply in any way to either of these applications, then I would ask that a similar process to the way that the approval decision for Saddleworth School was passed and then ‘revoked’, the decisions in relation to these applications are similarly ‘revoked’ and returned to the Planning Committee with appropriate reports for decision.

I await your comments and response with interest.

Yours sincerely

Howard Sykes

Although the Cllr management of the committee and the nature of the suspension is disgraceful there was a howler of an error in the reports that any planner will spot

Lets consider the relevant Policy 3 JLP lemma

Managing the release of housing land
Planning applications for residential development, in whole or as part of a mixed-use scheme, will be permitted where:

a. the site is allocated for residential development or mixed-use and has come forward in line  with the council’s approach to phasing, reflecting the residential distribution described above;
b. the site is allocated for residential development or mixed-use and has come forward
prematurely from the phasing set out in the Site Allocations DPD and does not undermine other national and local guidance and policies: and
i. a deliverable five-year supply of housing land cannot be demonstrated; or
ii. it contributes to the delivery of the borough’s regeneration priorities; or
iii. it contributes to the delivery of affordable housing that meets the local affordable housing needs.
Proposals on a non-allocated site for residential development will be considered favourably where it meets the three criteria listed under b above or it is for a small development, comprising a change of use or conversion or not identified in the council’s SHLAA.

The Committee report omits the highlighted section and then says that as the site is not -allocated the three criteria apply.  Which has led some objectors to state that the policy doesn’t apply as the site is not allocated.  There certainly was an editing error in the report however planning committee members can be expected to read and know the key policies of a local plan, as can, with some help often, objectors.  There is a case only for a mile reprimand from the CE and not suspension as the outcome of the case would have been the same recommendation and the same decision.  As the leader of the Council should know if he took 30 second to read his own local plan.  The suspension is a disgrace and should be revoked immediately.

Inspectors You had One Job ‘ We are Not just Going to Choose a [Housing] Figure We Prefer’

No wonder the West of England Joint Plan ran in to trouble with such strangeness.

Just is what a panel for – to choose the ‘style’ of plan they like [facepalm].

Bristol Live

Councils don’t want too many houses built in the West of England over the next 20 years in case they are “left empty”.

The local authorities for Bristol, North Somerset, South Gloucestershire and Bath and North East Somerset have estimated the region will need 105,000 new homes by 2036.

They defended that number on July 4 as an examination of their joint spatial plan by government officials entered its third day.

Planning inspectors Malcolm Rivett and Steven Lee will determine whether the plan should be adopted, revised or withdrawn.

Developers, transport chiefs, campaign groups and other interested parties weighed in over the councils’ housing target, with home builders calling for it to be boosted to 140,000 and opponents saying it should be cut by as much as half.

But consultant Jonathan Lee, representing the four councils, defended the 105,000 figure, saying it was based on a “sound” assessment of housing need.

He admitted that figure would not deliver all of the 30,000 affordable homes needed, but said the council did not want to risk adding too many more homes to the market.

“We have to understand who is going to live in those houses,” he said. “We don’t want houses to be left empty.”

Barrister Christopher Young, representing a consortium of eight housing developers, said he found Mr Lee’s comments “strange”.

“I don’t think there’s any problems with houses being filled,” he said on behalf of Barratt Homes, Bloor Homes, Crest Nicholson, L&Q Estates, Gladman, Redrow Homes, Robert Hitchins, and Taylor Wimpey.

Mr Young argued vociferously that the housing market was “broken” and a “substantial boost” in the numbers was needed to improve housing affordability.

The consortium proposes boosting the housing target to 140,000, a figure backed by the Home Builders Federation.

The federation’s James Stevens said: “This is one of the most highly charged housing markets in the country. You could build 200,000 homes here and have no problem at all.”

Simon Fitton, from Crest, said “overallocation” of housing was the only way to build sufficient flexibility into the housing plan.

And Matt Griffith from industry group Business West warned that constraining house building risked jeopardising economic growth in the region.

But representatives from residents’ groups TRAPPD (Thornbury Residents Against Poorly Planned Development) and Nailsea Action Group expressed concern that the councils’ target of 105,000 homes was too high.

Robert Davis from the Campaign to Protect Rural England (CPRE) Avonside suggested a much lower target of 70,000 to 80,000, saying the West of England had already done “its fair share” of house building over the last 20 years.

Mr Davis said area was becoming “overcrowded” and that adding too many more new homes would put too much pressure on the community.

Mr Young asked the planning inspectors whether they would contemplate an “uplift” in the housing target to the level sought by developers.

But Mr Rivett replied: “We’re not just going to choose a figure we prefer.”

The councils’ calculation of housing need took into account predictions of population growth, demographic trends, migration, job growth, household numbers, house prices and other factors.

Student growth was also taken into account, except in the Bath area, where student housing is to be considered separately under the local plan.

Each factor used in the calculation was argued over by participants in the meeting.

The examination of the joint spatial plan continues next week, and further hearings are planned in September and October.

A decision is not expected before the end of this year.

West of England Joint Plan Found Unsound for not examining Alternatives, But Want Strategic Planning to Go Back to Dark Ages

Inspectors Report

This was supposed to be the model.

As I long ago argued and the panel now agree

we are not persuaded that there is evidence to demonstrate that the Strategic Development Locations, and thus the overall spatial strategy, have been selected for inclusion in the plan, against reasonable alternatives, on a robust, consistent and objective basis. We therefore cannot conclude that these fundamental aspects of the plan are sound

Sadly though they go down a totally impractical soft planning route where it will be impossible to test SEA wise vague non specific areas

it might be appropriate to consider developing a high-level strategy
for the plan area which, not based on specific SDLs, identifies how housing, employment and other development should be broadly distributed. Proposals for specific strategic development locations would then follow on from this.
Obviously such a strategy would need to be tested against reasonable
alternatives. This approach would also potentially provide the plan, and the follow-on local plans, with the flexibility to select lternative/additional SDLs should this be necessary if one were to “fall away” or if the quantum of development needs were to change over time.

Bearing in mind the amount of additional evidence which has already
been prepared since the plan was submitted for examination in respect of the SDLs and the spatial strategy, we seriously question whether the production of even more evidence, as opposed to going back several stages in the plan making process, would be likely to address our soundness concerns. Importantly, we also question whether such work could be seen as genuinely having been carried out with the necessary objectivity, rather than being an exercise to justify a predetermined spatial strategy.

The predetermined strategy being in this case to deliberately allocate as little in the Green Belt as possible without causing impossible congestion.

The panels suggested approach – not following on from anything in national policy or guidance, would require communities to accept vague structure plan/RSS like locations like ‘5000 houses South West of Thornbury’ without any idea of the extent or supporting infrastructure for that community or the availability, viability or deliverability of the site.  For anyone involved in developing such plans will know this is simply politically impractical, and as experience of such plans such as in South Hampshire over a generation they simply result in non master planned sprawl, planning by numbers without any design., and very often complete lack of delivery where local communities are hostile and local plans arn’t delivered.  It would also be impossible for such a non map base plan to delete Green Belt sites – exactly the alternative the panel want considered – as Greater Manchester has found. It would also delay the first spade in the ground for strategic sites by a decade or more – the worst of planning in the 80s and 90s.  Lets not go pack to a time when strategic planning was a process a thing but slow and delivering poor quality results.  We know that strategic plans that are high level and still define strategic locations can and do work (North Northamptonshire for example), with a local tier below, or not (North Devon, Plymouth and South West Devon).  So why not go with what works rather than the out of date PAG styles plans the panel yearn for from what they were taught at planning school.

The local authorities should use their powers to demand recommendations to make the plan sound (as often mentioned on here – under Section 20(7C) of the PCPA)  and consult on real options, as successfully pursued in NEGC.  The panel cant legally refuse this.

It also raises severe questions about whether Anchorman, PINS and Home England have any clue or degree of coordination about what a new style strategic plan promoting new communities looks like and what form and procedures (complying with the SEA directive) should apply.  Is it every authority and panel make it up as they go along until the egg hits the fan.  At this rate new style strategic planning is going nowhere.

Homes England Persue 10,000 Home Community West of Crawley

Crawley Observer

I do like the infographic

A massive 10,000-home development west of Ifield is being proposed by Homes England.

The large-scale strategic site on the edge of Crawley would include 35 per cent affordable housing, primary and secondary schools, a new western relief road, community facilities and would help to create 10,000 new jobs.

The target is for 50 per cent green space in the new development, with Ifield Meadows protected and a comprehensive flood protection scheme.

Homes England has launched a public consultation on the plans which will run until December.

The Government’s housing agency has also been in discussions with Horsham District Council as the authority carries out a review of its local plan and looks at potentially allocating new strategic sites.

Homes England said: “At the appropriate time we will support the local authorities to secure the opportunity to create the next new neighbourhoods for Crawley, complete with the social, health and transport infrastructure to make it a place which residents will be proud to make their home and existing residents can benefit from.”

They added: “We are seeking to create a new sustainable community on land to the west of Ifield. The neighbourhoods will deliver homes in West Sussex where they are most needed, new infrastructure and green spaces to create a vibrant new community. In addition to providing the new homes, we will also provide a link road, schools, and other community facilities and we want you to feedback on our proposals.”

It went on to describe how it would work with residents to ‘build a great community for both existing and new residents’ and would invest in the right infrastructure as well as homes.

HE said it recognised infrastructure had to be delivered early to benefit both existing and future communities and is also committed to creating a sustainable new community with biodiversity net gain ‘leaving a richer more diverse environment after the work’.

A Horsham District Council spokesman said: “We are currently in the process of reviewing our local plan, as the Government requires us to do every five years. The Government is seeking a ‘step change’ in the number of houses which are built nationally. Horsham District Council has no option but to contribute to meeting the increased level of housing development through the revised local plan.

“As part of this process, we are looking at a range of strategic sites which have been put forward to the council to consider as part of the local plan review and the proposed development site on land West of Ifield is one of those.

“As we carry out this plan led process of reviewing the local plan we will focus on the need to create sustainable developments, providing homes where they are most needed and where we can meet Government requirements.

“Whilst we appreciate that the proposed development of some 10,000 homes on the land West of Ifield is a significant figure, any development of that scale has the potential to help bring forward much needed infrastructure in terms of new road systems, primary and secondary schools and GP surgeries, alongside green spaces and opportunities for new jobs for local people.

“It should be noted that all strategic-developments offer a significant number of homes and if progressed, would be spread over a period of time depending on their size. “

A Crawley Borough Council spokesman added: “The Government wants to significantly increase the number of houses which are built nationally, including on the land the Government owns West of Ifield. Despite being on the border of Crawley, this proposed development by Homes England is located in Horsham district and consequently they will be the decision makers on any application which eventually comes forward.

“This site is likely to be one of several strategic sites that Horsham District Council will have to consider for development as part of its local plan review and this council will be involved in that process at the appropriate time. Whatever the outcome we will work tirelessly to ensure that Homes England and Horsham District Council are aware of how the development will impact upon our town and our residents.

“We’d urge anyone with an interest in these proposals to have their say at Homes England’s consultation events over the coming months.”

Freeports not possible In the EU? – Why Boris and Truss are spouting Bullshit that they make a case for Brexit

The department of International Trade announced the creation of 10 Freeports Today   here

They are also sometimes called Special Economic Zones

At the end it states

UN Source: “Free Trade Zones as originally conceived do not exist anymore in the EU”; United Nations Economic and Social Commission, Free Trade Zone Development

This might seem off.  The first freeport in the World was at Shannon which still exists, Spain has four, as a HOC Library note states, the legislation to set them up in the UK stills sits on the statute book .

The Treasury currently has the power to designate free ports by
Statutory Instrument under section 100A of the Customs and Excise
Management Act (CEMA) 1979.
Seven free ports operated in the UK at various points between 1984
and 2012. In July 2012, the Statutory Instruments that set up the
remaining five free ports (Liverpool, Southampton, Port of Tilbury, Port
of Sheerness and Prestwick Airport) expired.

However it fails to state that clauses of the act enabiling to trade within them outside the customs union were abolished by the Freezone Regulations 1991 which cited two european regulations.  Council Regulation (EEC) No. 2504/88(1) and Commission Regulation (EEC) NO. 2562/90(2) which state

Whereas free zones and free warehouses are parts of, or premises within, the Community customs territory, separate from the rest of that territory, in which there is generally a concentration of activities related to external trade; whereas, because of the customs facilities available in them, these free zones and free warehouses ensure the promotion of the aforesaid activities and, in particular, that goods are redistributed within the Community and elsewhere; whereas, therefore, the provision concerning them forms an essential instrument of the Community’s commercial policy;

Whereas free zones and free warehouses should not be given any competitive advantage where the application of import duties is concerned; whereas, on the other hand, the customs formalities in such zones or warehouses should, in view of the special circumstances, be simpler than those applying in other parts of the Community customs territory;

Whereas non-Community goods placed in free zones or free warehouses should be allowed to remain there for an unlimited period without the payment of import duties or the application of such duties and measures, the goods in these free zones or free warehouses should therefore be considered as not being within the customs territory of the Community;

I.e. Freeports are permitted in the EU, if you import into a Customs union , like the EU customs union, however you are charged, like any other freeport in the world.  The Treasury deletion of the freeport regs therefore would appear to be goldplating, or more likley an effort to increase revenue raising through increasing VAT liability.  Court of justice caselaw is clear that exporting from a freeport to outside the EU ios not a VAT liable event,

Freeports exist outside of any customs union in which the host country is a member of.  This means that goods an be exported and imported without tariffs.  Other exemptions from taxes or regulations might apply however these are not necessary to meet the definition.  They have an economic rationale where in makes sense to entrepot.  Where goods are imported, manufactured and then exported.  For example if a country was offshore to the European Union and a member of the customs union able to trade tariff free it would make sense to import goods, add raw materials and goods manufactured  in the UK and entrepot.  If you couldn’t do that Tariff free there would be little point.

The issue is can you operate free ports in the EU customs Union?  As the HOC note states

In the majority of cases, these free ports “existed before the host state
became a member of the EU and retained their status after accession to
the Union.”3 56 of the EU’s 83 free ports are located in states that
joined the EU post-2004.

In many cases as in Spain they explicit state they lie inside the Customs Union preventing tariff free entreopt with states outside the European Ciustioms Union that does not have a free trade agreement.

The argument goes that European Single Market and State Aid rules prevent creation of ‘full’ freeports.  However the restriction imposed by State Aid rules is not top the ‘freeport’ element but to the ‘enerprize zone’ element – that is tax exemptions.  Let the UK Trade Policy Observatory explain.

The operations of free zones – as well as enterprise zones – must be compliant with EU state aid rules. This is because tax exemptions and financial incentives offered to businesses choosing to locate in these zones can, in principle, be considered as a state subsidy that distorts competition – and would be in breach of the Treaty on the Functioning of the European Union (TFEU).

The General Block Exemption Regulation (GBER) defines categories of aid that are compatible with the EU internal market, and these depend on the size of the company. As such, medium-sized enterprises are entitled to aid of 10% of the total investment (in addition to any regional aid they have already received), while small companies are entitled to 20% more.

The requirement for compliance with the EU state aid rules constrains the options for free zone and enterprise zone operations, but exemptions may be granted under Article 107(3)(a) and (c) TFEU, whereby the use of state aid is considered beneficial to the economic and social development of underdeveloped regions of the EU (for example, aid for regional development, promoting innovation, improving environmental standards, assistance to small and medium-sized enterprises). Specifically, Article 107(3)(a) and (c) TFEU states that the following may be considered to be compatible with the internal market:

  • aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment, and of the regions referred to in Article 349, in view of their structural, economic and social situation;
  • aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest.

This ‘economic development exemption’ clause may explain why many free zones and enterprise zones in operation in the EU are located in the ‘new’ EU Member States in Central and Eastern Europe,[25] whose level of GDP per capita often lags behind that of the ‘old’ EU.[26] Poland has been particularly active in this field. Most countries in Central and Eastern Europe began setting up special economic zones in the mid-1990s as a way of attracting foreign direct investment (as they were making a transition from centrally-planned to market economies), offering incentive schemes such as tax holidays, reduced corporate income tax rates or customs duty exemptions / deferrals. In the run-up to the EU accession, however, these countries were required to revise their incentive schemes to make them compatible with EU state aid rules.

Most of the locations suggested such as Teeside would easily qualify, after all they already operate enterprize zones.  Bristol clearly would not however it is full;y possible to operate a freeport outside the EU customs Union under the 1979 Act.

The matter has become highly charged because of the assertion that European rules prevent Freeports and being outside the Eu and therefore an advantage  for example Boris

The source of this nappears to be the CPS report on Freeports by Rishi Sunak MP

This does not mention or quote the above regulation creating tariff exemptions.  It appears solely to refer to the case of tarrif inversion.

Tariff Inversion. The complexity of modern tariff regimes means that
finished goods often command a lower tariff rate than their component
parts. This incentivises importing finished goods rather than importing
high tariff components and using domestic manufacturing to create the
actual product. A Free Zone allows a company to import components
tariff free, manufacture the final product in the free Zone, and then pay a
lower duty rate on the finished product when it enters the host economy.

Is this possible, yes of course as the report admits

This kind of tariff inversion is theoretically possible in the EU through the
provisions of Union Customs Code (UCC), which came into force in May 2016.
This allows EU companies to apply to process goods under what are known as ‘special Procedures for Inward Processing’. Once granted, this status allows a firm to pay duties only on the finished product – effectively offering one of the key benefits of a Free Zone on a company-by-company basis. While this mayseem straightforward, the hurdles to achieving special status are considerable.

Here the report descends into pure bullshit

In order to use the Inward Processing Procedures, the UCC requires a UK
company to first obtain authorisation from HMRC. This wouldn’t be a problem were it not for the fact that, in making its decision, HMRC is legally required to establish that “the essential interests of Union producers would not be adversely affected” before granting authorisation

However this applies to any firm into the union inside a freeport or not and it doesnt seem to be a problem

According to a 2012 study[1], the benefits of inward processing are visible on examination of the sales abroad of products that emerge from the processing and assembling in the EU of imports. For example, out of €160 billion worth of EU motor vehicles exports in 2011, almost 43% (€69 billion) were exports of motor vehicles that were produced under the inward-processing regime i.e. they were essentially cars assembled in Europe from parts and components imported from the rest of the world. This example shows how important can the inward processing procedure be for businesses in the EU.

The essential interests of union producers would not be harmed because the same freedom from tariffs applies to them all.

EU freeports are unusul in that operate within the customs union however the same tariff freedoms, duty exemption, duty deferral and tariff exemption apply.  As the EU definition clearly states

Free zones

Member States may designate parts of the customs territory of the Union as ‘free zones’; these free zones must be communicated to the European Commission.

Free zones’ are enclosed areas within the customs territory of the Union where non-Union goods can be introduced free of import duty, other charges (i.e. taxes) and commercial policy measures.

Such goods may, following the period in the free zones, be released for free circulation (subject to payment of import duty and other charges), or be placed under another special procedure (e.g. inward processing, temporary admission or end-use procedures – under the conditions laid down for these procedures) or re-exported.

Union goods may also be entered into or stored, moved, used, processed or consumed in free zones. Such goods may afterwards be exported or brought into other parts of the customs territory of the Union.

So lets be clear Boris is right only if you define Free Zones as lying outside a customs union.  But this is irrelevant as the EU has designed Freezones to offer exactly the same tarriff free benefits.  The only EU state aid law restrictions is on tax exemptions, Boris seems to have been strongly influenced here by donations from the port of Bristol.

Freeports casan make planning and economic development sense in the right circumstances, globally there are many great successes and huge failures (especially in Africa and India) the economist sums it up

Zones need to be connected to global markets. Improving infrastructure for this purpose has a bigger impact on the success of zones than tax breaks do. This often requires public spending to upgrade roads, railways and ports to handle the extra freight. Lack of such investment has been the downfall of many an SEZ in Africa. Lots of the continent’s new zones will fail for lack of a reliable power supply or because they are too far from a port.

If there was a national plan which prioritised routes for logistics  (which might be created from the extra capcity from HS2 and NP rail) and set down areas for freeports and inland ports it might make sense.  I have presented on this to the National infrastructure commission having worked on SEZs around the world.  I even suggested restoration of the Great Western railway as its backbone (its original intention of linking freight to europe) linking to the new port in Liverpool via the Whitehead tunnel.

There is far less case for non tarrif tax exemptions such as enterprise zones which just shift economioc activity around and have created few jobs.


Is concern about Mechanical Ventilation/closed Windows to Reduce Noise Outdated?

Members of Planning Committees and quite a few planning officers turn their noises up where dealing with a source of very high noise levels (such as a motorway) involves an assumption non closing windows and mechanical ventilation with heat recovery in assessing acceptable noise standards.

To me mind this this is based on out of date mid 20C construction practices and the prejudices they breed.

The concern is out of date because:

  1.  One of the concerns is that residents might open windows and complain about the noide source.  The new Agent of Change principal renders this moot and in any event inspectors are dismissive where residents  can do nothing about a source of noise such as an airport or road
  2. The concern is in summer residents will want to open windows.  With superinsultation and passivhaus becoming more and more common this no longer is a rational approach.
  3. In poor air quality areas it is best to keep the windows closed.

With many sites in urban areas theywill only be viable and able to include affordable housing if an articial set back from noise sources is avoided, so down with the anti- closed window assumption bias.