Product Manufacturers Urge Government To Abandon Planning Gain Supplement

The Construction Products Association has written to the Chancellor ahead of the Pre-Budget Report stressing the need to avoid any further increase in the fiscal burden on business either through new taxes or increases in existing ones.

In particular the Association has urged the Chancellor not to introduce the highly controversial Planning Gain Supplement.

Michael Ankers, Chief Executive of the Construction Products Association said: "Product manufacturers and suppliers are particularly alarmed that the Government has chosen to extend the Planning Gain Supplement 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 which can be compared to the housing sector and it is wholly inappropriate to impose an additional tax burden in this way on firms investing in the development of new business capacity, especially at a time when international competition has never been greater. This anomaly is particularly stark in respect of the quarrying industry. Whereas in residential development the home-builder will normally obtain the return on their investment in less than two years, the quarrying industry recovers its investment over thirty years or even longer.

He added: "As an alternative to the imposition of the Planning Gain Supplement on such planning approvals, we propose that local authorities should be entitled to retain the first five years of business rate receipts on the resultant development. This would provide councils with a clear source of additional funding to support the infrastructure needed for development in a fair and non-discretionary way, and in a way that preserves incentives to develop in a variety of circumstances."

(CL)