Supplementary memorandum by HM Treasury
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
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