Planning Gain Supplement will be a disaster

1.38.08pm UTC (GMT +0000) Tue 31st Jan 2006

Speaking today at the British Property Federation, Vince Cable MP, Liberal Democrat Shadow Chancellor, will today outline his opposition to the Planning Gain Supplement. He will say: "The Planning Gain Supplement (PGS) will be a catastrophe if introduced in its proposed form. It is likely to deter development, will involve many complex valuation issues and will not be to the exclusive benefit of the local community.

"The PGS attempts to deter landowners from controlling its supply and to provide adequate benefits to the community when planning permission is granted. The sad fact is it will fail on both.

"Similar taxes have failed three times in the last century. If the Chancellor gets this one wrong, he is likely to slow down new house building and the development of much needed affordable housing."

On Liberal Democrat plans, which are being developed through the Liberal Democrat Tax Commission reporting in the Autumn 2006, Vince Cable will go on to say: "It is already Liberal Democrat policy to localise business rates while at the same time allowing local councils to move to a system of site value rating. This would deter hoarding of land while the equalisation of VAT across brownfield and greenfield sites would encourage more building on brown-field sites.

On Stamp Duty, Vince Cable will add: "For too long the 'slab' system of stamp duty has provided an incentive to avoid paying the full amount liable. This is seen by the bunching of just below tax thresholds. A progressive tax structure would avoid these anomalies and make the system fairer."