GORDON BROWN will give the long-awaited go-ahead for real-estate investment trusts in his pre-budget report tomorrow. He will announce a commitment to early legislation to enable these “Reits” to come into force by next summer.

But the chancellor will ease some property-industry fears over Treasury plans for a “planning-gain supplement” — a new-style development land tax — under which land owners will be subject to tax on the capital gains they make once planning permission is granted.

But tomorrow will merely be the launch of a lengthy consultation on the issue. Officials say that even if the new tax gets the go-ahead, its introduction could be years away.

Reits, like the planning-gain supplement, were proposed in the review of housing by Kate Barker of the Bank of England’s monetary policy committee in March last year.

The chancellor will announce a simple, tax-exempt company structure for the new trusts, which will promote greater liquidity and access for smaller investors to the commercial-property sector, and boost institutional investment.

The move will be welcomed by the industry, which had been concerned about a delay in their introduction until 2007 or later. It is expected to lead to a big shake-up among quoted property companies.

Treasury sources said the pre-budget report would concentrate on “Chapter Three” issues, named after the section of Treasury documents concerned with raising productivity.

It will include the interim report of a task force under Lord Leitch into Britain’s skills gap. He has described it as the “Achilles’ heel” of the economy, and said Britain needed a “step-change in investment in skills” to compete with China and India.

Economists will focus, however, on Brown’s new forecast for the economy. While conceding that growth will come in this year at barely half his 3% to 3.5% forecast, he will insist that this reflected a series of global factors, “the year the UK came to terms with globalisation”.

These include the doubling of the oil price and slow growth in European markets. Domestically, he will cite the cooling of the housing market and its effect on consumer spending.

Treasury officials also point to big changes in the national accounts statistics, which had the effect of reducing Britain’s growth rate by half a percentage point or more, so Brown’s 3% to 3.5% forecast should properly be judged as if it had been 2.5% to 3%.

But George Osborne, the shadow chancellor, will attack “Brown’s bogus excuses” for getting his growth forecasts wrong. The Conservative party says that Britain was better-placed than other economies to cope with high oil prices, and that the housing market has slowed rather than collapsed. Osborne will say that Britain’s growth rate is the 19th-fastest out of 25 EU member countries.

Brown will signal growth of about 2.5% for next year. “This is not going to be a downbeat report,” said a senior Treasury official.

Brown will also insist that, following recent strong data for the public finances, he is on track to meet his fiscal rules.

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