Four questions for HM treasury

So, straight after the summit, Regenerate put them to the Treasury. Here are the answers.

The chancellor talked about giving power to regional centres. How will that affect the private sector?

Regional development agencies are business-led organisations responsible for producing a regional economic strategy that is owned by the whole region. To do this, they must work in consultation with the public, private and voluntary sectors. As a consequence, the private sector is better able to influence the economic direction of the region.

Brown mentioned implementing the recommendations of the Barker review – what’s your message to housebuilders?

We will deliver a full response to the review by the end of the year, with consultations on key recommendations, such as establishing a long-term goal for affordability in the housing market and reforming PPG3, published by the summer. At the same time, we’re expecting the housebuilding industry to do its bit by offering a substantive response to Barker’s recommendations on design, skills, customer satisfaction and innovation.

Transport was mentioned by the chancellor as an area where there is “a long way to go”. What’s the latest thinking on infrastructure levies? And also on development land tax, or planning gain supplement?

The government is taking forward Alistair Darling’s statement on 20 July 2004 to consult on an alternative funding mechanism for Crossrail before next summer, so that those who benefit from Crossrail will be in a position to contribute as fully as possible to meeting its costs. Property owners could benefit substantially from transport and other infrastructure improvements and it is both equitable and efficient for them to contribute towards the costs.

The government is examining a planning gain supplement (PGS) as recommended by Barker. There have been no decisions made on whether to implement such a measure at this point; the Treasury is planning to report its findings by the end of 2005.

Those who benefit from Crossrail will contribute as fully as possible to meeting its costs ...

A PGS would capture a portion of the windfall profits accruing to land going through the development process. In last year’s Budget, the government accepted, in principle, that this would be a fair means of funding infrastructure.

Can you give an indication of how successful tax breaks have been for regeneration in terms of take-up, and tell us what’s been most successful?

To minimise the burdens on businesses and individuals, taxpayers are not asked to give detailed information about tax relief claims on their self-assessment and VAT returns beyond what is required for their tax computations. Therefore, the Inland Revenue and Customs and Excise have limited statistical information on take-up.

The main breaks for regeneration were in the 2001 Budget. This announced a contaminated land tax credit; stamp duties relief for disadvantaged areas; capital allowances for converting flats over shops, also known as flat conversion allowances, and VAT relief on property conversions and house renovations.

The latest estimates of the cost of the contaminated land credit were £75m in 2003/4 and £80m in 2004/5. For disadvantaged area relief, the estimates are £530m of relief given for 2003-04 and £1bn for 2004-05. FCA is a modest scheme, and we do not have any figures for the number of claims for 2003/4. We do not have any information on take-up of VAT relief.

To determine whether these measures have been successful requires evaluation. The ODPM and the Revenue have commissioned an evaluation of these fiscal measures and we hope to have reasonably robust interim findings in late 2005.