A policy devised by the Chancellor for a £1bn cut in stamp duty for some of the most deprived areas in the UK is being blocked by the European Commission.
Gordon Brown had pledged to cut stamp duty entirely on all purchases of commercial property and on house purchases up to £150,000 in 2,000 rundown areas across Britain. The move, announced in last November's pre-Budget Report, was designed to encourage buyers to choose homes in cheaper areas, persuade firms to set up and invest in areas blighted by unemployment and give a boost to first-time buyers. A year later the European Commission has yet to approve the plan, claiming it is an illegal form of state aid.
Property market experts say that tax relief on properties up to £150,000 has done little to kick-start deprived areas. Treasury figures show that just 16,000 purchasers have applied for relief from stamp duty out of 500,000 transactions a year.