Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence

Supplementary memorandum by HM Treasury (TYP 61A)

  1.  Confirmation that the first 10 years of grant support for the London Underground set out by Secretary of State Byers are firmly committed for the entire 10 year period or whether they will be reassessed at the time of each comprehensive spending review? (With reference to Q714.)

  2.  Whether the Treasury intends to allow local authorities to borrow money, secured against anticipated future revenues from local road charging schemes, to improve public transport prior to introducing the schemes? (With reference to Q720.)

  3.  To provide the Committee with details of any PFI or PPP contracts that have not included a Public Interest Termination clause. (With reference to Q738.) We would also be grateful for the Treasury's understanding of why such a clause is not required in the London Underground PPP and whether it disputes the comments of Ernst & Young.

  The DTLR will respond to the above points in a separate note to the Sub-committee.

  4,  To indicate whether it is appropriate to include social cost benefits within a public Sector Comparator and whether the inclusion of social cost benefits in the public sector comparator is within or outwith Treasury Taskforce Guidance? (With reference to Q744.)

  A Public Sector Comparator (PSC) is one option considered in an exercise in cost-effectiveness that compares the costs of alternatives for delivery of a given "output". An output specification may include elements that count as social costs or social benefits.

  The market does not explicitly value passenger waiting and travelling time, yet they do have a social value, and may reasonably be included in an output specification. Therefore it is consistent with Treasury Taskforce Guidance to include social costs and/or benefit in the PSC.

  5.  Details of the cost of both cycling and walking tax incentives. (With reference to Q759.)

  The cost of the 20p per mile authorised mileage rate payable for cycle use for business trips is negligible. There are no direct tax incentives for people to walk for business trips, although fuel duty is an incentive for employers to encourage their employees not to use cars unnecessarily.

  6.  Details concerning, and evidence of, the effectiveness of measures to promote the urban renaissance, particularly in relation to changes to VAT for greenfield and brownfield building and stamp duty. (With reference to Q768.)

  The Government has introduced a range of measures in response to the recommendations of Lord Rogers' Urban Task Force, including tax relief for cleaning up contaminated land, enhanced capital allowances for creating for flats over shops, a range of VAT reliefs to encourage the conversion and renovation of existing properties, and exemption from stamp duty for all transactions up to £150,000 in the UK's most disadvantaged areas. The stamp duty exemption helps to reduce the cost to business of investing in disadvantaged areas, and so helps to boost enterprise and employment. The Government intends to raise the limit or abolish stamp duty for non-residential transfers in these areas, subject to state aid clearance. The overall package of tax measures is worth £1 billion over five years. Further details are set out in various Budget and Pre-Budget Report documents (for example pages 129-131 of the November 2001 Pre-Budget Report).

27 March 2002

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