BROWN'S BILLION FOR REGENERATION

Finally in response to the urban task force report, the government has decided

to offer some - all be it rather slight - fiscal incentives. This week's

Pre-Budget announcement by Chancellor Gordon Brown included a £1 billion

package of measures over five years designed to hasten regeneration,

including a reduction in VAT on conversions.

Measures announced in yesterday's statement included:

Stamp duty exemption for disadvantaged communities. Stamp duty will be

abolished for all property transactions in Britain's most disadvantaged

communities to stimulate the property market and encourage urban renewal.

Accelerated tax credits for cleaning contaminated land. Property investors

will be able to claim immediate tax relief for the clean-up costs on

contaminated sites, instead of having to wait until land is sold.

100% capital allowances for creating 'flats over shops'. Immediate tax

relief will be available for property owners converting redundant space over

shops into flats for letting.

VAT reform for conversion of properties for residential use. Brown's

package of VAT measures to encourage the creation of additional homes will

include cutting the VAT rate to 5% for residential conversions and removing

the VAT burden on developers renovating and selling houses that have been

empty for at least 10 years.

Brown promised a "radical reform" of tax incentives to help businesses start

up and grow in inner city areas and said that he would 'keep under review'

the case for tax relief for development.

There was also welcome news for churches; the Government is to explore the

scope for reducing VAT on churches with the European Commission as a means

of preserving the national heritage.

Full details of the statement, including supporting departmental press