The government is considering lowering VAT on repairs and renovations as an incentive to ensure that more Victorian terraced houses in rundown areas are repaired rather than demolished. Professor Anne Power, a member of Lord Rogers' urban task force, said that ministers wanted to change the current tax system. "The ODPM is very frustrated," she said, "the biggest single difference the government could make would be to cut the VAT rate in regeneration areas." Power has recommended to the government that VAT be reduced to 5% in the nine areas covered by the Housing Martket Renewal Initiative. The Treasury has previously blocked calls to reduce VAT to 0% on repairs or to equalise the rate for repairs and new build, claiming that European laws prevent it from introducing either option. But the government has conceded that under European laws it can cut VAT to 5%. (The Guardian)