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Non-technical summary
Section 1: a new economic model
The great new town pitfall is to attempt in architecture what
should be done in economics. Elevated walkways, fountains
and parks can do little to eliminate hardship and inequality.
Better economics can. But how can a city challenge
systems set at a national level?
This submission set outs:
What the new economic model should be
How it will work within the existing national system
How it can deliver a new town relieving pressure in existing urban hubs
How it could be applied more widely to ease that pressure at source
A liberally endowed new school will be the first element of the urban plan,
supported by the economic model that forms the central proposition of this
submission. Employment and schools are the prime reasons people relocate.
The finished city will have several schools, but other public services like a new
railway station or light urban transit system create similar added value effects.
The new economic model will apply across the citys public services and will
also reduce the tax burden on employers, to drive higher wages without higher
payroll costs, create more employment and enable people to get things done.
The canal
The glass church will shimmer over a created lake. The canal will provide for the
towns water needs, a space for poetry, rowing, sailing, cycling, all sorts of
recreational and ecological benefits and transportation of the cast glass blocks.
Level changes are opportunities for hydro-electric generation and mains services
benefit from water-cooling. Subject to location, the canal can offer solutions to
flooding for a wider hinterland, or help launch the ambitious North-South Grid
proposed (by others) to relieve water stress in the Southeast.
The pods
A light urban transit system with electric pods quietly zipping around on slender
elevated guideways provides a low energy transport system: personal like a taxi,
less expensive than buses and producing zero emissions locally. It may sound
like science fiction but is proven technology piloted at Heathrow and achieving
the highest availability of all transport there. It will be a city of bridges in the air.
Ref: 99865444
[rev A]
Main submission
Section 1: a new economic model
Section 2: landmark projects for a visionary urban plan
Section 3: principles for the urban plan
Section 4: location
Section 5: delivery, popularity and viability
Additional employment - not through outside investment but selfgenerated locally in things we all want to see happen but which do not
seem economically viable at present.
1.1
1.2
It would be a lost opportunity to build a city but let it go the way of those we
already have, with hardship and inequality rising in proportion as the city grows.
Proposals for land value taxation have not fared well in England, diverted by
Garden tax headlines or concerns for the widow in the 4-bed house, that is,
older people who are asset-rich but income-poor. Worked up LVT proposals
have tended to set an unambitious target to replace NNDR and CT and
therefore proposed a low rate Andy Wightman proposes 1.85% of annual
rental value. That is because they are trying to minimise stress on the key
political measure of residential winners and losers.
3. In special circumstance where land is assembled but not released as freehold
then a leasehold approach can deliver similar results. Instead of collecting the
economic rent through taxation it is collected more directly by auctioning leases
and collecting an annual ground rent.
Unimproved land value lease purchase and annual ground rent paid to
the Trust in perpetuity.
Built-in compensation
Households suffering negative effects of development, such as loss of a nice
view or noise from a new train link will see a reduced valuation and reduced
ground rent providing built-in compensation. Likewise an economic downturn
might see a general reduction in values that would act like a tax rebate.
Letchworth
Letchworth is still owned collectively holding most of the commercial buildings in
trust and leasing them to shopkeepers. Assets are 127m and leasehold
income 7m a year. That is a significant 11% boost on top of normal local
authority revenue, but it collects little of the economic rent of residential
properties whose value far exceeds the shops.
In Letchworth it would be much higher. Local government expenditure is
102.2bn (budget England 2013-14) = 1900 per capita (Englands population
53m). Pro rata for Letchworths 33,000 population = 62.7m. (9x)
Affordable homes
Cost to households will be less than they would pay in rent or mortgage
payments plus CT as it will not include a speculative element on the land value
or interest payments to mortgage suppliers on the land element. A mortgage
may be taken out to acquire the building which would be like a shared equity
mortgage with the capital requirement up front lower as the is not acquired. This
will make houses in the town generally relatively affordable. A proportion, up to
35%, may be retained by the Trust and managed by a Housing Association to
supply a social rental market.
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A fourth possibility is that firms retain the credit as profit. In this case superprofits will attract other businesses into the area willing to compete down prices
and this will also deliver more employment locally and benefit local people as
lower prices and cost of living savings.
Self employed will have a fiscal incentive to allocate themselves a wage rather
than accounting all surplus as profit for tax purposes. There may still be
distortions between PAYE and SE (to be considered further) but less than
currently.
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The church
New towns have this spiritual challenge to cultivate depth without history.
Churches create committed communities that give more than they take. 6%
attend services but 25% visit cathedrals each year for their architecture or choral
music. The school can provide choristers.
Descriptions of Britains favourite towns frequently mention views of a striking
ecclesiastical building visible from several vantage points and a church adds
value in its locale even for those who do not attend it.
The worlds first cathedral in glass will be spectacular icon attracting
international renown. Far from the empty mirror plate of the modern high rise it
will be a contemporary gothic structure of arches and spires in luminescent
white sand cast glass on an arcade base in local masonry. Panels, and vault
webs are in opal laminated float glass with arched windows and rose window in
clear glass with geometric ribs in laminated glass.
Glass is surprisingly strongest in compression so well suited to gothic
construction techniques. Cast glass can take a long time to cool but Nazeing
Glass have a slow-moving conveyor based furnace facilitating rolling production.
The cast slabs forming columns and ribs will be in thin slices of 60mm to reduce
cooling times. The Atocha Station Memorial in Madrid proves that it is feasible.
This church leads the way. The town will open its doors to committed
communities of all sorts and the leasehold model automatically helps: planning
uses that generate low rental value like schools and religious buildings will be
virtually exempt. Planning policies will favour such uses benefitting any group
wishing to found new community or religious buildings.
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The canal
The most admired towns invariably feature rivers or water in some form at their
heart and some of the worlds most beautiful cities are canal towns: Venice
obviously but also St Petersburg, Stockholm and less well known: Annecy in
France and Tigre in Argentina. With an area of 430ha and population of 20,000
Bruges is an inspirational reference.
The glass church will shimmer over a created lake. The canal will provide for the
towns water needs, a poetic settings for landmark buildings, rowing, sailing,
cycling, other recreational and ecological benefits and transportation of cast
glass blocks for the church. Level changes are opportunities for hydro-electric
generation and mains services benefit from water-cooling.
Subject to location the canal offers solutions to flooding as at York and Exeter
and in the Netherlands or to relieve water stress (shortage) as in parts of the
Southeast and East Anglia. In the right location it could help launch the
ambitious North-South Grid Canal on to relieve water stress in the Southeast.
(featured by Bloomberg Feb 20th
Paths along the canal can provide a margin between minimum and maximum
water levels to provide capacity to relieve flooding. Where the canal runs
through land subject to flooding ideally it should run on the lower side of
adjacent land, to absorb some run off. In areas not liable to flooding but prone
to water stress, it should run above fields to facilitate irrigation.
The pods
A light urban transit system with driverless electric pods quietly zipping around
on slender elevated guideways provides a low energy transport system for the
town: personal like a taxi, less expensive than buses and zero emissions locally.
It sounds like science fiction but is proven technology piloted at Heathrow and
achieving the highest availability of all transport systems there.
An elevated distribution spine will support spurs to suburban hubs and a
network grid providing higher density of stations into the town centre grid.
Infrastructure is inexpensive but in the higher rise central business district leases
will include a licence or easement for the light transport system to take support
from buildings with obligation for the developers to provide adequate support in
the faade. It may become known as the city of bridges in the air.
The foundry
Planning policy (Section 4) will apply a requirement to use local masonry. A local
foundry will be named or developed to supply the material. Initially it will be a
monopoly supplier owned by the Trust, later if appropriate competition can be
invited and the original foundry privatised or part privatised.
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flexibility for cottage industry start-up to occur from home initially and
then to grow, maximising scope for flexible self-employment.
opportunities for employment for people more locally to where they live
facilitating the walkable town ideal, reducing car use and parking spaces.
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Neighbourly uses
Historically, industrial, chemical and biological operations have been separated
from residential areas by planning restrictions and that would continue. But the
approach has crept, tending to drive out small engineering shops, light industry
and cottage industry activities.
Controlling effluents
It may be prudent to retain some controls on un-neighbourly operations but the
original common law approach may be sufficient: controlling effluents (including
noise) from one persons tenancy onto anothers rather than controlling use.
Built-in compensation
With the different functioning of land values and taxation, those living next to
antisocial uses would be compensated through the tax system and conversely
those like artists seeking lower rents would have options.
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Privacy threshold
Rules against overlooking have become draconian in towns, such that desirable
properties and streets in Kensington and Chelsea and Westminster could not be
built today under present guidelines. External terraces and balconies are being
driven out.
It is an irony of our age that we share more of our lives online while becoming
allergic to being seen by neighbours.
This city will favour balconies, terraces, habitable green roofs and outdoor
amenity spaces of all sorts (within reason). In seeking city centre densities
familiar to Paris, Rome, Venice and Westminster lower thresholds of privacy will
be expected. Balanced by a robust approach to policing nuisance.
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Section 4: location
the location will be selected by a bid process but in the
interest of popularity and efficiency the efficient use of
existing infrastructure it should meet some basic criteria.
This section sets out:
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4. Capacity
As well as proximity, roads and railway lines must have spare capacity.
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8. Local criteria
Brownfield land is ideal if restoration costs are not prohibitive.
Avoid engulfing existing villages or connecting up towns into a conurbation.
Avoid engulfing or adversely affecting Sites of Special Scientific Interest, Nature
Reserves, National or Local Parks, Scheduled Monuments or Heritage Sites.
Preferably within 3.5 miles of a motorway junction but >1mile to minimise noise.
9. Nice to haves
Near a university if available, especially one not already associated with a town
Near an airfield
Hills and level changes provide opportunities.
Existing local industry, employment, power and waste facilities.
Proximity to cultural, heritage, landscape and leisure amenities.
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5.1 Governance
From Trust to Borough Authority. The ultimate aim of the
governance model would be to evolve into a fully
participatory level of government.
The Trust can be modelled on the Letchworth Heritage Foundation (30
governors elect 9 trustees + county councillor). The model has evolved and
designed to be proof against the corporate takeover that threatened in 1961.
There may be benefits in it being an ALMO (Arms Length Management
Organisation) part of government, from the outset.
For the purposes of local taxation the Local Authority remains the Collecting
Authority and the Trust will be the Precepting Authority as provided in the
existing model. Subsequently it should develop into a City or Borough Authority
within the democratic system, when feasible.
A secure governance model can include elements of direct democracy,
representative democracy and appointment.
The economic model provides for significant and diverse local infrastructure
packages to be offered to the electorate each with a business plan built on
projected land values offering real choice and the benefits of growth in
perpetuity to local people. Local democracy will be invigorated and then choices
can be arbitrated through the democratic process.
This will transform local democracy which generally in Britain faces voter apathy
because the majority of local spending is determined at national level and so
local elections have become just a confidence vote on the performance of
Westminster.
The democratic brake currently operating against new house building through
the planning system would be unlocked as residents would get exposure to the
upside of population growth, not just the downside of development in their
backyard. [ref O M Hartwich Bigger Better Faster More]
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Bid model
The illustration location has its merits measured against rational selection criteria
but is intended mainly to show an approach and application of principles to
particular circumstances. Circumstances are always unique and have a major
impact on how the plan should develop. Any location in the Southeast will face
opposition from residents who prefer to see no form of urbanisation, increased
traffic or loss of farmland.
To address this popularity problem it is proposed to launch a public competition
in which the town is built where locals want it and bid for it. The approach works
for: the City of Culture award, Enterprise Zones and grants of letters patent for
City status.
As with those examples, existing local governance structures may be
instrumental in preparing the bid and would provide some of the members for
the Trust once formed.
At local level, an aspect of the approach could derive from the Business
Improvement District model in which local businesses (in this case affected
landowners) would be invited to support the bid. The Enabling Act would
provide that if a majority either by number or by hereditament value vote in
favour then the others are bound by the vote.
Because the model would work equally well in lower demand areas to generate
growth, and because such growth would point the way to reducing pressure on
the Southeast by addressing one of its causes, we believe that the spirit of the
brief would still be met if the strongest bid came from outside the Southeast.
Subject to the fudges endorsement therefore entrants would not be limited to
high demand locations.
Enabling Act
A brief list of elements requiring primary legislation.
Compulsory purchase at agricultural value and exclusion of overage clauses.
Suspend operation of the Leasehold Reform etc Act 1993 right to enfranchise,
individually for single dwellings and collectively for apartment blocks.
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Local banking
A number of financial instruments or specialised products will be required which
would benefit from the existence of a specialist local bank. Germanys regional
banks could be looked at as a model.
Raising finance for CPOs and keeping the debt local?
Future land value rises as collateral for investment through normal channels.
Exploring options for direct Central Government interest free financing.
Potential for waiving of initial CPO if the Trust were an ALMO (Arms Length
Management Organisation) of government and the land asset is on the
Government account offsetting the cash expenditure.
Potential for a local currency
Credit for local SMEs and implications of leasehold model on land as collateral.
Secondary market in fixed rate options for households or firms that want
certainty in the face of variable rate leases
Self build mortgages
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Build/development stages
It is important that each stage is a self sustaining, complete whole. Accordingly
Phases 1 and 2 deliver the essential elements of a self-sufficient and viable small
community ie. a well-endowed small village. School, post office, pub and
village green, including facilities for community engagement supplied by the
School.
Much of the later stages of development can be lead at least in part by the
private sector. Many urban services such as banks, estate agents, cinemas etc
will be delivered by the market on well-tried principles of laissez faire.
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5.3 Popularity
The preceding sections all contribute parts to a package intended to win
acceptance from a local community. Somewhere! We do not underestimate
how difficult that challenge is. We believe the economic model in itself would
achieve wide popularity if fully understood but it is technical and needs to be
seen to be widely appreciated.
However it is supplemented by a comprehensive package:
Economic and governance models putting ownership of community created
value in the hands of local people in perpetuity and eventually giving them
control.
A growth model delivering employment and higher wages.
Exciting landmark projects.
An invited bid so that local people can make their own choice.
Generous CPO: we adopt the 3x multiplier suggestion in the brief although we it
is not intended to be effective on its own. Stuff their mouths with gold was
Bevans vulgar claim for how he persuaded doctors to accept the NHS. An ugly
but memorable phrase, and with an ugly ethic that imputed venal motives to
good people. Will 3x CPO persuade owners to support the process? Or will they
be seen by neighbours as sell outs?
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have been educated into believing in it. Those who cannot see an alternative will
stay away, but the benefits should attract those who have already recognised
they are far from getting onto the ladder and who want to prosper through their
own effort and enterprise.
Artist colonies
Grayson Perry in his 2013 Reith lecture described how in Hoxton, Shoreditch
and elsewhere artists were attracted by low rents and create communes and
they attracted young professionals (also attracted by low rents) eventually
regenerating run-down areas.
Perhaps we should not need to attempt to manufacture this (as with schemes
that claim to pursue regeneration through culture) but the essence is low rents
at the margin. The rest follows organically.
Even so a PR drive to attract artists would be a good thing. Benjamin Brittens
adoption of Aldeburgh put it on the map and started a new culture. Later he
said My music now has its roots in where I live and work Snape Maltings 1967
Basket of goodies
If invited to the second stage we will review the several technologies and new
era proposals that might be incorporated. Appeal to idealism / package of green
measures / direct approach to related organisations.
Income tax and National Insurance totalled 262bn in 201314, the surplus from land value taxation could, at a national
level, be used to lower income tax and national insurance by
20%.
Economic
Boost:
Social Boost:
The estimates present a conservative view of what this new economic model
could achieve. If shortlisted, we would seek to estimate the secondary benefit of
boost in economic activity, tangible social impacts and public service savings
through lower unemployment.
Basing estimates on national figures, the city would use half of the revenue
generated from annual land value capture to pay the Local Authority in place of
Council Tax and NNDR. A portion of the additional income would support
maintenance and improvements to the town and administration of the Trust. The
remaining leasehold income would be used to offset taxes on labour.
The table below shows the income raised from the land as the town grows, and
how it would be spent.
1 Andy Wightman, A Land Value Tax for England, para 53; HM Treasury, Budget 2012, pp7-8
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Annual rental value rises for two reasons, firstly because the Trust releases more
land and secondly because land values increase as infrastructure is completed
and the town grows.
There is a case for infrastructure (schools, hospitals, maintenance) to be funded
from general taxation as usual. However, 10% of the budget is allocated for this
purpose. By the time it becomes a town, more income is generated for public
works and infrastructure than their annual cost, and Tax Credits can be more
generous using remaining funds to increase payments to the Local Authority,
(lowering local taxes in neighbouring towns) or subsidising the development of
public infrastructure, accelerating and improving development and supporting
additional inspiring public works projects.
This leaves 40% of leasehold income, or 22.6m each year. Based on national
figures, this is estimated to fund a rebate of 16% of Income Tax and NIC paid
out by employers.
The table below shows the impact direct taxes on labour have on payroll cost.
Indirect taxes also have an impact, reducing the value of real wages further.
A 16% reduction in IT and NIC would, we estimate, reduce the cost of labour to
employers in the city by 5.7%. This would boost enterprise and increase wages
and employment.
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