Budget – Planning and Transport Issues – the details

Budget – Planning and Transport Issues

This note covers the main planning and transport issues arising from today’s budget

Planning reform

Government will:

  • introduce a new presumption in favour of sustainable development, so that the default answer to development is ‘yes’;
  • localise choice about the use of previously developed land, removing nationally imposed targets while retaining existing controls on greenbelt land;
  • pilot a land auction model, starting with public sector land;
  • introduce a number of measures to streamline the planning applications and related consents regimes removing bureaucracy from the system and speeding it up. This will include a 12 month guarantee for the processing of all planning applications, including any appeals;
  • ensure a fast-track planning process for major infrastructure applications through the Major Infrastructure Planning system; and
  • consult on proposals to make it easier to convert commercial premises to residential.

To accelerate the release of public sector land to support homes and jobs, Government will work with local authorities to expedite planning decisions for surplus military land and other public sites suitable for housing, also testing ’build now, pay later’ techniques to quicken delivery. Together with the new presumption in favour of sustainable development, these proposals will potentially allow the Ministry of Defence to realise up to £350 million of estate disposals and enable delivery of up to 20,000 new homes by 2014-15.

Enterprise zones

Government announces the location of ten new urban Enterprise Zones within the following Local Enterprise Partnership (LEP) areas: Birmingham and Solihull; Leeds City Region; Sheffield City Region; Liverpool City Region; Greater Manchester; West of England; Tees Valley; North Eastern; the Black Country; and Derby, Derbyshire, Nottingham and Nottinghamshire. In addition, London will have an Enterprise Zone and be able to choose its site.

The Government will also launch a competitive process for interested LEPs to establish ten more Enterprise Zones.

The Government will make a range of policy tools available to all 21 zones:

  • a 100 per cent business rate discount worth up to £275,000 over a five year period for businesses that move into an Enterprise Zone during the course of this Parliament;
  • all business rates growth within the zone for a period of at least 25 years will be retained and shared by the local authorities in the LEP area to support their economic priorities;
  • Government and local authority help to develop radically simplified planning approaches in the zone; and
  • Government support to ensure superfast broadband is rolled out in the zone. This will be achieved through guaranteeing the most supportive planning environment and, if necessary, public funding.


Government will work with individual LEPs to consider:

  • the scope for introducing enhanced capital allowances to support zones in assisted areas where there is a strong focus on high value manufacturing;
  • the use of Tax Incremental Finance to support the long-term viability of the zone, in tandem with the Local Government Resource Review; and
  • UKTI support on inward investment and trade opportunities.

Government will work with the devolved administrations to explore opportunities for employing the new Enterprise Zone model across the UK.

The Regional Growth Fund was set up to support private sector growth in the areas most dependent on the public sector. The Government will confirm all successful bids shortly and will launch the second round in April 2011.


The Budget provides help for homeowners and new buyers, and supports the capacity of the house-building industry to ensure a more efficient housing market:

  • the Government will help homeowners facing difficulties by extending for a further year temporary changes to the Support for Mortgage Interest (SMI) scheme. The 13-week waiting period and £200,000 limit on eligible mortgage capital will now remain in force for new working age SMI claimants until January 2013;
  • the Government will provide £250 million to support first time buyers to purchase a new-build property. The FirstBuy programme will assist over 10,000 households with equity investments jointly funded with house-builders; and
  • the Government will strengthen demand for residential property by reforming the stamp duty land tax rules applied to bulk purchases. This will reduce a barrier to investment in residential property, promoting private rented housing supply.
  • The Government will announce the outcome of its review of the stamp duty land tax relief for first time buyers in autumn 2011.

Government will make Real Estate Investment Trusts easier to set up and more accessible to investors. This will encourage investment in the private rented sector over the longer term.


In recognition of high current oil prices, fuel duty will be cut by 1 penny per litre from 6pm today. The Government will abolish the fuel duty escalator and replace it with a fair fuel stabiliser. When oil prices are high, as now, fuel duty will increase by inflation only.

In addition, to ease the burden on motorists, the 2011-12 inflation-only increase in fuel duty will be deferred to 1 January 2012. The 2012-13 increase in fuel duty will be implemented on 1 August 2012.

In future years, if the oil price falls below a set trigger price on a sustained basis, the Government will reduce the Supplementary Charge back towards 20 per cent on a staged and affordable basis while prices remain low. Fuel duty will increase by RPI plus 1 penny per litre in each such year. The Government believes that a trigger price of $75 per barrel would be appropriate, and will set a final level and mechanism after seeking the views of oil and gas companies, and motoring groups

The Government has today formally submitted a derogation request to the European Commission for a rural fuel duty rebate pilot scheme. This is intended to deliver a 5 pence per litre duty discount on petrol and diesel across the Inner and Outer Hebrides, the Northern Isles, the islands in the Clyde and the Isles of Scilly

Air Passenger Duty

In the June Budget 2010, the Government undertook to explore changes to the aviation tax system, including switching from a per-passenger to a per-plane duty. The UK’s international obligations in this area include Air Service Agreements with over 150 different countries and the 1944 Chicago Convention. The Government will not introduce a per-plane duty at the present time, given concerns over the legality and feasibility of this approach. The Government will start a programme of intensive work with our international partners to build consensus for a perplane duty in the future.

The Government is launching a consultation on reform of Air Passenger Duty. The Government wants a simple tax system for air transport services which does not hamper growth, which ensures a fair contribution toward the public finances and which will support the reduction of global emissions. The consultation includes plans to extend the tax system to flights taken aboard business jets for the first time. The Government will also freeze Air Passenger Duty rates for 2011-12, with the RPI increase assumed in the forecast deferred to April 2012.

Other transport

Budget announces £200 million of new funding for rail projects and £100 million of funding for local authorities to repair potholes caused by the exceptionally cold winter, funded from within existing budgets. This is in addition to the £100 million announced in February 2011.


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