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The Budget: good for small business, bad for the planet

Chancellor Gordon Brown's final Budget before the general election drew mixed reactions last week - bouquets from RIBA president Marco Goldschmied for boosting urban regeneration and small businesses, but brickbats from engineers and the Construction Products Association, which said it was a budget of 'missed opportunities' which shunned green measures.

Goldschmied told the AJ he was happy with Brown's 'very helpful' moves - applicable to many institute members - to aid small businesses with turnovers of less than £600,000. They may now get a simplified VAT payments scheme, while those with turnovers of less than £100,000 will get a simpler and lower flat rate to be implemented after consultation next year.

Goldschmied also commended the six tax relief measures Brown announced which were geared to helping boost urban regeneration, although he doubted whether they would be enough to raise brownfield development to 60 per cent.

In measures worth £1 billion over the next five years, Brown said he wanted to 'release the untapped potential of the cities' by allowing 'deprived areas' - an as yet undefined term but thought to cover about 10 per cent of inner cities - to be newly zero-rated for stamp duty. The chancellor also said last Wednesday that there will be 150 per cent tax relief for developers which clean up contaminated land sites, 100 per cent tax relief for converting space over shops for residential use 'to revitalise our high streets', and that VAT payable on converting properties to residential use will be cut from 17.5 per cent to 5 per cent.

'We might have expected the chancellor to reduce or abolish VAT on refurbishments, ' said Goldschmied. 'It is important to remove all disincentives to building on brownfield sites - this is crucial if we are to create genuine communities in our urban environments and improve the quality of life and opportunities for everyone.'

Toward that end, the institute is to publish specific policies on education, health and housing to raise the issue of urban regeneration in a push later this month before the expected May 3 election. Goldschmied is presenting the election policies to arts minister Alan Howarth, who will be visiting Portland Place on March 29.

Construction Products Association chief executive Michael Ankers attacked the Budget for failing to support the industry, bar some concessions in fuel duty and excise duty cuts and an indication that Brown will look to reduce the aggregates tax burden on more environmentally friendly operators.He added that it was 'particularly curious' that Brown did not bow to strong criticism from the Environmental Audit Committee last week and widen the range of energy-saving construction products eligible for a lower rate of VAT .

Institution of Civil Engineers president Joe Dwyer echoed the view, declaring that energy provisions in the Budget were 'not sufficient', especially given prime minister Tony Blair's highprofile speech on climate change only last week.

'Unless we take a holistic and measured approach, the UK will miss the targets set to reduce carbon emissions, ' he said.

The CPA's Ankers was also 'saddened' that Brown 'failed to recognise the enormous incentives to urban regeneration that would result from reducing VAT to 5 per cent on repair and maintenance on all domestic property'.

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