Challenges for the chancellor

ePolitix.com Stakeholders outline the issues chancellor Gordon Brown should address in his Budget.

 

CMU Universities Group

A spokesperson for CMU Universities Group said: "If the chancellor does use the Budget to announce that a further tranche of student debt is to be sold, this will represent the capitalisation of a future income stream from today’s graduates and students.

"The government is likely to receive a smaller sum than it would have done if the debt had not been sold. In these circumstances, it is particularly important that students and their universities see an immediate return and a significant investment in higher education.

"In any case, the chancellor's objectives of improving social inclusion and promoting a highly skilled, professional and graduate workforce can only be met by making this the 'higher education for all' Budget by boosting investment in

• higher education teaching where there is a £3.3bn investment gap and where government investment has lagged well behind that in schools and further education and has been over-dependent on the contributions of students through tuition fees. This would support universities whose mission is more focused on teaching and applied research and provide greater equity for their students.

• research capacity and applied research. This would boost the knowledge economy and ensure regional as well as national research capacity for businesses and others.

• the student support finance package for part-time students and for students with caring responsibilities. This would boost access to higher education, especially for part-time students who still have to pay tuition fees upfront and older students with caring responsibilities. It would also boost the chancellor’s objectives of social inclusion because it would particularly assist students who were not qualified or who were unable to go to university as school or college leavers.

• the extension of the statutory education and training age to 18. In the long run this would boost qualification levels and improve the educational life-chances of those who currently leave school at 16 and offer new access to higher education."

 

Stakeholder Response: Construction Products Association

Climate Change Levy

A spokesman said: "We recognise that the UK government is obliged under EU rules to apply a tax on energy usage.

"However, for such a tax to achieve its stated objective it is vital that it is structured to provide the greatest incentive to the business sector to further improve its environmental performance.

"Accordingly, we believe that the Climate Change Levy should be reformed in order to raise its environmental performance, whilst safeguarding UK competitiveness.

"In particular, the current restrictions on the industry sectors eligible to negotiate Climate Change Agreements, which have been a crucial catalyst to delivering the majority of the emissions reductions attributed to the Levy, should be relaxed in order to maximise the number of firms covered by such agreements and to secure further emissions reductions."

Existing Housing Stock

A spokesman said: "Housing accounts for more than a quarter of the UK’s greenhouse gas emissions. Whilst we welcome the planned stamp duty exemption for new zero-carbon homes, significant investment to raise the energy efficiency of existing homes is required if there is to be a substantial reduction in greenhouse gas emissions related to the nation’s homes.

"Responsibility for reducing these emissions rests primarily with individual households, particularly given that three-quarters of the nation’s homes are in private ownership.

"Nevertheless, government has an important role in educating and motivating households to undertake the necessary investment to raise the existing housing stock up towards the standards of energy efficiency already demanded of new homes. In our submission to the Energy Review we have previously set out a package of measures that we believe are essential to tackling the poor energy efficiency of the existing stock. 

"The introduction from this summer of the Home Sellers Packs, which will include an energy rating for all homes put up for sale, will help to raise awareness among owner-occupiers of the benefits of improved energy efficiency at a time of sharply higher energy costs.

"The introduction of highly visible financial incentives would help to crystallise this heightened awareness into action. We propose that households undertaking improvements to their home which are certified as raising its SAP rating by at least 10 points, should be entitled to a temporary three year discount on the council tax, equivalent to their property being dropped by one tax band."

Business Competitiveness

A spokesman said: "We believe that UK business has borne the brunt of the growing tax burden, with Budget measures adding to the complexity and administrative cost of the corporate tax system as well as raising an additional £50bn in extra business taxes since 1997.

"This is happening as our leading trading partners are easing their business tax burden and it has contributed to a sharp fall in UK tax competitiveness; a factor that has contributed to recent decisions by two multi-national construction product manufacturers to cancel planned investments in the UK.

"At a time when business is already facing significant cost increases from higher energy and raw material prices and growing pension liabilities, the government should avoid any further increase in the fiscal burden on business either through new taxes or increases in existing ones."

Planning Gain Supplement

A spokesman said: "Kate Barker’s original proposals for a Planning Gain Supplement (PGS) were intended only for the housing sector. 

"We have significant reservations about the practicality of applying such a tax and believe that PGS should not be introduced in the period shortly before a general election without the support of opposition parties, otherwise developers will hold back on development, causing significant economic disruption.

"Furthermore we are especially concerned that the government has chosen to extend the proposal to other forms of supposed planning-gain that manufacturers and those in the extractive industry obtain from investing in new premises and gaining permission for mineral extraction.

"These are not activities from which a ‘planning-gain’ is obtained in anything like the same way as in the housing sector and it seems wholly inappropriate to impose yet a further burden on UK business at a time when international competition has never been greater.

"The anomaly of the PGS is particularly stark in respect of the quarrying industry.  Whereas in residential development, the home-builder obtains the return on their investment in a relatively short period of time (almost always less than two years from when planning permission is obtained), the quarrying industry recovers its investment over a much longer period (thirty years or even longer).

"In addition, the value of the land depreciates as the mineral is extracted and at the end of the period of extraction, the operator is obliged by the planning conditions imposed to return the land to some use that is of benefit to the community, such as for recreation.

"To impose yet another tax on this industry when it already pays aggregate tax will only serve to make it even less competitive than the industry in other countries. It will also put new developments at a competitive disadvantage to current operations and be particularly onerous to SMEs who do not have the same potential to cope with the cash flow implications in the same way that large multi-nationals can. 

"It is perhaps significant that in the last attempt to tax planning-gain – the Development Land Tax Act of 1976 – minerals were specifically excluded from the provisions."