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Tuesday, 24 October, 2000, 16:52 GMT
Business taxes set for reform
Gordon Brown, Chancellor of the Exchequer
Entrepreneurs are set for tax rewards under a reform package to be revealed next month, Chancellor Gordon Brown has said in an appeal for corporate chiefs to invest in deprived areas.

The government's pre-Budget report, set for 8 November, is to place capital gains and small business taxes under review, Mr Brown said on Tuesday.

The government, he said, was keen to show it was "prepared to reward enterprise ... to show that the entrepreneurial culture is open to all".

The pre-Budget report, a preview of measures proposed for inclusion in next year's Budget, will propose "how investment and venture capital can raise the rate of business creation and growth", the chancellor said.

Bank scrutiny

Mr Brown was speaking at the launch of a report by economic and social affairs experts proposing tax incentives plus a range of other measures to encourage investment in the UK's most deprived areas.

Task force members
Ronald Cohen, venture capitalist (chairman)
David Harrington, head of PPP Healthcare Medical Trust
Ian Hargreaves, journalist
Philip Hulme, chairman, Computacenter
Geraldine Peacock, head of Guide Dogs for the Blind
Tom Singh, managing director, New Look

The report, by the Social Investment Task Force, said that despite sustained economic growth, poverty in the UK has become more concentrated and inequality more marked.

"Some of our poorest areas have become no-go areas for investment," the report said.

Five times as many businesses are being created in St Albans, Hertfordshire than in South Tyneside, the task force found.

Yet poor areas contain a core of entrepreneurs, who lack the support, in terms of finance and skills, available in richer areas.

Encouraging investment

The task force, headed by investment expert Ronald Cohen, said tax concessions costing the government about 50m would encourage about 1bn in private investment in poor areas.

Ian Hargreaves, member of the Social Investment Task Force
Ian Hargreaves, task force member

Banks, whose policy of demanding collateral for loans discourages enterprise in poorer communities, should be required to open up their loan books to show how they are helping entrepreneurs in depressed areas, the report said.

The task force also recommended reforms to charity laws to encourage investment in deprived communities.

Economic outcasts

Mr Brown, endorsing the report, reaffirmed the government's commitment to full employment.

"The story of economic improvement is not a story of improvement for everybody," he said. "There are still too many people left out of British success.

"This is the time to say to every corporate leader in our country, take a look at investing in our high unemployment areas. They offer business new choice, new recruits and new markets."

The report comes two weeks after the government announced it would spend 800m over the next three years on a Neighbourhood Renewal Fund designed to improve housing, raise school standards, reduce crime and improve health.

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See also:

10 Oct 00 | UK Politics
Boost for inner cities
09 Oct 00 | UK Politics
Brown 'listening' ahead of budget
02 Oct 00 | Conservatives
Hague promises inner-city revival
02 Oct 00 | UK
Living for the city
30 Jun 00 | UK
Rogers: Put cities first
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