End in sight for new build's tax advantage

There is currently no VAT on new build, but the tax is levied in full for refurbishment work. Council for the Protection of Rural England assistant director Tony Burton, who is a member of the task force said: "I would be surprised if [the task force] did not recommend something to address the tilting in the wrong way."

He added: "The choice is whether to level the playing field or whether to tilt it the other way."

The task force has been actively considering not only reducing VAT on refurbishment, but also levying a green field tax on some forms of new development.

The task force report is also expected to call for far greater urban densities as a way of rejuvenating inner cities. Burton said: "All the policy compasses are pointing in that direction."

"It will not be revealing too much to say that the task force will have something to say about that."

This week another of the task force members, Professor Anne Power, called for much higher densities in a report that she co-authored for the Joseph Rowntree Foundation on the abandonment of cities.

It says: "A secret of success in creating mixed urban communities is higher density."

It calls for a change to the planning guidelines to ensure that there is an expansion in the number of people housed in cities.

"High density supports services, street life and interchange. Low density encourages the opposite, a sense of emptiness, a lack of informal controls, an inadequate resource base for essential services and a deep sense of insecurity."

Power's report praised Dutch city planners for incorporating social housing in high density developments. "Social housing can be built into new development invisibly, if we copy the Dutch example of quality design and finish."

Deputy Prime Minister John Prescott together with the chairman of task force Lord Rogers visited Holland earlier this year to examine such designs.