Labour to 'tax' home improvements

Home owners wishing to improve their properties face a sharp hike in fees levied on planning applications. From next month, Labour's latest "stealth tax" will add £70 million to the nationwide costs of securing approval for extensions and building renovations.

Proposals slipped out by Deputy Premier John Prescott's department signal that fees for planning applications will rise by an average of 39 per cent, equivalent to over 30 times the rate of inflation. Fees for a residential extension will rise by over 20 per cent. And the maximum charge for a new building will rise by 355 per cent, up from £11,000 to £50,000.

But Conservatives have warned that the small print of the Government's plans reveals that Whitehall grants to local councils for planning are to be cut back once the fees have risen - highlighting how this is actually a stealth tax to be passed on to planning applicants.

Caroline Spelman, President of Greenwich Conservatives and Shadow Secretary of State for Local & Devolved Government, protested: "Soaring fees won't mean more money for local councils. What John Prescott is giving councils with one hand, he is snatching back with another, leaving firms and local residents to foot the bill. This is a tax on new homes, residential extensions and small local builders."

She added: "After 66 tax rises, Mr Blair is now planning to punish hardworking families who have invested in home improvements."

This is not the first time planning fees have increased under Labour. Figures revealed in response to Conservative questioning show that the money taken in planning fees has already risen by £77 million - from £110 million in 1996-97 to £187 million in 2003-04.



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