Planning applications validated by EDDC for week beginning 5 September

Truss admits Plan A has failed

In another disarmingly frank answer to a question this week, Truss admitted that the U.K. was nowhere near securing a trade deal with Washington. Labour has been digging through the former trade secretary’s words over the past few years and found that she claimed a U.S. trade deal was her No. 1 priority in 2019… set a mid-2021 deadline during the pandemic … and insisted last summer that there was “significant progress” being made.

From Politico newsletter

Liz Truss to cut stamp duty in push for prosperity

Liz Truss will announce radical plans to cut stamp duty in the government’s mini-budget this week in an attempt to drive economic growth, The Times has been told.

Fuel on the fire of house prices – Owl

www.thetimes.co.uk  (Extract)

The prime minister and Kwasi Kwarteng, the chancellor, have been working on the plans for more than a month and will announce them on Friday.

Truss believes that cutting stamp duty will encourage economic growth by allowing more people to move and enabling first-time buyers to get on the property ladder.

Two Whitehall sources said that cuts to stamp duty were the “rabbit” in the mini-budget, which the government is billing as a “growth plan”. The fiscal statement will also include plans to reverse the national insurance rise and freeze corporation tax, two measures that will cost £30 billion a year between them.

Truss is also considering bringing forward plans to cut income tax by 1p in the pound from 2024 to next year, although this is likely to be reserved for a full budget before the end of the year…..

…..Under the present system no stamp duty is paid on the first £125,000 of any property purchase. Between £125,001 and £250,000 stamp duty is levied at 2 per cent, £250,001 and £925,000 5 per cent, £925,001 and £1.5 million 10 per cent and anything above £1.5 million 12 per cent. For first-time buyers the threshold at which stamp duty is paid is £300,000.

During the pandemic the stamp duty threshold was increased temporarily to £500,000 to help to stimulate the property market. Truss has previously said that cutting stamp duty is “critical” to economic growth. As chief secretary to the Treasury she said that the highest rate of stamp duty, which was introduced by George Osborne, was “clogging up” the housing market and leading to fewer transactions….

London council could seize oligarchs’ homes for affordable housing

Homes acquired with “dirty money” in the richest parts of London could be seized and turned into affordable housing under plans to crack down on oligarchs using Belgravia, Knightsbridge and Mayfair “to rinse their money”.

Robert Booth www.theguardian.com 

Labour-controlled Westminster city council is examining the use of compulsory purchase orders in extreme cases where it finds properties are not being used for their stated purpose, as part of a push to “combat the capital’s reputation as the European centre for money laundering”.

The plan faces obstacles including a lack of transparency over property ownership and a shortage of checks on the registration of companies, but the council is threatening to use seized homes to help reduce the waiting list for affordable housing of 4,000 households.

The number of properties in Westminster registered to owners in Jersey and Russia has risen by 300% and 1,200% respectively since 2010.

The council is exploring the use of a compulsory purchase order against a property registered in Seychelles, the owner of which has run up significant council tax arrears.

Russians accused of corruption or of links to the Kremlin have bought property worth nearly £430m in Westminster since 2016 – more than in any other UK area – according to researchers at Transparency International UK (TIUK).

It is believed that property worth about £283m has been purchased in neighbouring Kensington and Chelsea.

Adam Hug has been leader of Westminster council since May, when Labour took control for the first time after 58 years of Conservative rule.

He said: “Westminster’s dirty secret has been known for many years, but those in power looked the other way for too long as money of questionable origin flooded into London and investors took advantage of our relatively lax laws.

“It took the war in Ukraine to refocus attention on oligarch investments and what London has become in terms of a European laundromat for dirty money.”

He said the problem went further than “[Vladimir] Putin and his henchmen”, and that it damages London’s reputation by supporting authoritarianism abroad. Hug added that it “drains the vitality of areas with empty or underused homes”.

The council is mapping properties owned overseas against council tax data to determine whether they are being used for their stated purpose.

Westminster plans to target homes it finds have been acquired with “dirty money” or “money of dubious origin”. The council defines dirty money as that obtained from criminal activity including bribery, theft of state funds and misuse of public office.

Money of dubious origin is money where there is no or limited transparency of how the funds were acquired, often associated with the use of tax havens or elaborate corporate constructions to avoid tax.

Rose Zussman, policy manager at TIUK, said: “It is no secret that kleptocrats and those with money to hide have invested vast sums into the Westminster property market over the years. It is promising to see the council seeking to help expose and recover these illicit assets.”

But she said any funds reclaimed that are linked to corruption should go back to victims in the origin state “to ensure justice is served”.

Hug is also convening a meeting of property owners, experts and officials in the capital to join the “Westminster against dirty money” campaign and is calling on the government to restrict the artificial use of tax havens, and increase funding for the National Crime Agency and HMRC to fight money laundering.

The council wants stronger identity checks when people register companies and the new beneficial property ownership register to be fully implemented.

The register went live last month and overseas entities that already own or lease land or property in the UK must submit their registrable beneficial owners or managing officers by 31 January 2023.

Kwasi Kwarteng refuses to let OBR release forecasts with mini-budget

Kwasi Kwarteng has refused to let a government watchdog assess the economic impact of planned tax cuts expected in a mini-budget on Friday.

The party of “sound money” doesn’t want any inconvenient truths to get in the way. Are the Tories on course to crash the economy? – Owl

Rowena Mason www.theguardian.com 

Mel Stride, the Tory chair of the Treasury select committee, urged Kwarteng to allow independent forecasts for the public finances to be published alongside his mini-budget on Friday. Stride released a strongly worded statement urging more clarity around the effects of the new chancellor’s fiscal interventions.

The chancellor is expected to unveil tax cuts of £30bn to £50bn, according to some estimates, while the government’s intervention to freeze energy prices for consumers and businesses could cost more than £100bn. He is also expected to review his fiscal rules to allow the government to borrow more.

Stride, an ally of the former chancellor and defeated leadership contender Rishi Sunak, said independent forecasts from the Office for Budget Responsibility were necessary to “provide reassurance and confidence to international markets and investors”.

He said: “As a committee, we have in the past reported to the house that we consider it very important that significant changes to taxation are announced in a fiscal event alongside an OBR forecast. These forecasts are a vital indicator of the health of the nation’s finances, and provide reassurance and confidence to international markets and investors.

“There has been a deterioration in our economic outlook since the last OBR forecast in March. There have been significant fiscal interventions since then and we are told there will be further significant interventions including major permanent tax cuts to be announced on Friday. Under these circumstances, it is vital that an independent OBR forecast is provided.”

Richard Hughes, the chair of the OBR, said in a letter to Stride that he had notified Kwarteng when he became chancellor that the OBR was ready to provide a forecast. He said a quick turnaround would mean the forecasts provided “less complete analysis supporting the key judgments, less detailed breakdowns of the key economic, and less contextual and supplementary information than [forecasts] produced in normal times”, but it would give “the most complete and up-to-date picture of the economic and fiscal outlook as possible”.

But a government spokesperson said: “Given the exceptional circumstances our country faces, we have moved at immense speed to provide significant energy bill support for households and businesses, and are acting swiftly to set out further plans to kickstart economic growth later this week. We remain committed to maintaining the usual two forecasts in this fiscal year, as is required.”

It is understood the chancellor plans to hold a full budget later in the year, though the bulk of the measures ministers plan to implement in their first year of the administration are likely to be included in Friday’s event.

As well as the mini-budget on Friday, there is expected to be a statement from Jacob Rees-Mogg, the business secretary, on Wednesday, outlining an energy support package for businesses.

Michelle Donelan, the culture secretary, told broadcasters on Tuesday morning that the government understood why businesses wanted “clarity and assurance”.

She said: “Many companies and public sector organisations will need additional support and that is why we want to work up a tailored package to target that support and make sure that support is really the correct support.”

“I am sick and tired of trickle-down economics. It has never worked” – President Biden

“We’re building an economy from the bottom up and middle out”

Still there are always the delusional zealots who back belief over experience. – Owl

Liz Truss favours trickle down economics but results can be trickle up

Trickle down economics was highly fashionable on the political right in the 1980s, when both Ronald Reagan in the US and Margaret Thatcher championed the idea. It resurfaced in America under both George W Bush and Donald Trump, and it is now undergoing a revival in Britain under the new prime minister, Liz Truss.

Larry Elliott www.theguardian.com 

The theory of trickle down economics is simple. Governments should cut taxes for the better off and for corporations because that is the key to securing faster growth. Entrepreneurs are more likely to start and expand businesses, companies are more inclined to invest and banks will tend to increase lending if they are paying less in tax.

Initially, the beneficiaries are the rich, but gradually everyone gains because as the economy gets bigger well-paid jobs are created for working people. Governments should stop focusing on how the economic pie is distributed and focus on growing the pie instead.

Supporters of trickle down often cite the work of the US economist Arthur Laffer as proof that the theory works. Laffer said tax cuts for the wealthy had a powerful multiplier effect and any revenues lost by governments from reducing tax rates would be more than compensated for by the fruits of higher growth.

Truss is using this argument to justify the £30bn of tax cuts to be announced in Kwasi Kwarteng’s mini budget on Friday, even though Laffer was clear his theory worked best when personal tax rates were prohibitively high, by which he meant between 50% and 100%. At rates below 50%, Laffer found cutting taxes led to bigger rather than smaller budget deficits.

In practice, trickle down did not go according to plan. Reagan and Bush slashed tax on higher earners but inequality soared: between 1979 and 2005 the incomes of the Top 1% of earners tripled while those of the bottom 20% rose by just 6%. It was more a case of trickle up than trickle down.

Moreover, Reagan’s combination of tax cuts for the rich and a big increase in defence spending resulted in a threefold increase in US federal government debt between 1981 and 1989. The US economy grew strongly in the latter years of Reagan’s presidency, but this was a period not just of higher spending on the military but also of cheaper borrowing after the cripplingly high interest rates of the early 1980s.

In a 2015 assessment, the International Monetary Fund rubbished trickle down and said governments should instead focus on policies that would directly help those on low and middle incomes.

“We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the Top 20% results in lower growth – that is, when the rich get richer, benefits do not trickle down,” the IMF said. “This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class.” Joe Biden agrees.

Are the Tories on course to crash the economy?

Broadclyst: Controversial trading estate set to get even busier

An application has been submitted for a new operating centre to move into a village trading estate where residents have long complained about noise and dangerous traffic congestion from HGVs. Swindon-based OPX Logistics Ltd is seeking to keep five vehicles and five trailers at Lodge Trading Estate in Station Rd.

Anita Merritt www.devonlive.com 

The trading estate is already home to haulage company Heaver Brothers Ltd and also international courier delivery company TNT. Vast complaints have been made by locals who say large-vehicle/ heavy traffic volume companies should never have been permitted to operate in the rural residential area.

Narrow roads make it difficult for large vehicles to negotiate its way through. Photographs have often been shared on social media capturing stationary traffic and lorries attempting to pass each other in narrow lanes, which residents say highlights the road is not suitable for HGVs.

OPX Logistics, which has more than 30 years’ experience in the delivery of logistics, is required to advertise public notices to inform people of its plans. Anyone with concerns is is invited to write to the traffic commissioner who is responsible for licensing and regulating operators of heavy goods vehicles (HGVs), public service vehicles (PSVs) and local bus services.

The notice states: “OPX Logistics Ltd of Ignition Park, Faraday Road, Swindon, SN3 5FB is applying to add an operating centre to keep five vehicles and five trailers at Lodge Trading Estate, Station Rd, Broadclyst, Broadclyst Station, Exeter EX5 3BS.

Residents have spoken about their frustration over traffic problems in Broadclyst

Residents have spoken about their frustration over traffic problems in Broadclyst (Image: Broadclyst Station Community)

“Owners or occupiers of land (including buildings) near the operating centre(s) who believe that their use or enjoyment of that land would be affected, should make written representations to the Traffic Commissioner at Hillcrest House, 386 Harehills Lane, Leeds, LS9 6NF, stating their reasons, within 21 days of this notice.

“Representors must at the same time send a copy of their representations to the applicant at the address given at the top of this notice. A Guide to Making Representations is available from the Traffic Commissioner’s office.