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Keith Hill: It will be open to the local planning authority to define the purposes for which the charge will be imposed. If it were the desire of the local planning authority, that could include an element for affordable

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housing. Indeed, part of the terms of the charge could be that that element of affordable housing could be provided by means of either a financial contribution or an in-kind provision on site. It goes without saying that it will remain open for local planning authorities to attach the usual conditions on affordable housing to planning permission.

Mr. Curry: If a developer develops a site of a certain size, the rules require a mix of market and affordable housing. Will the proposals remove that requirement and leave planning authorities the discretion to use some of their funds for affordable housing? It is a structural aspect of the system at the moment that the building of market housing triggers the construction of affordable housing.

4.45 pm

Keith Hill: The right hon. Gentleman raises an issue of serious concern to which I shall refer later. Let me give him an assurance that no part of the arrangement should impede the extent to which current provisions for affordable housing would be part and parcel of the system for planning permission and developments relating to section 106 negotiations and the proposed charge. The arrangement will simply facilitate the process and make it more transparent and predictable. I propose to deal with that matter in more detail toward the end of my remarks.

Mr. Hayes rose—

Sir Paul Beresford rose—

Keith Hill: I see that two further Conservative Members are anxious to intervene. I shall take their interventions on the House's understanding that I will then move on.

Mr. Hayes: The Minister is showing his customary courtesy and generosity. I want to pin him down on what would happen to local authorities if they did not use the money in the way in which he and local people would wish, which was made clear in the earlier description that we heard. In reply to my hon. Friend the Member for Isle of Wight (Mr. Turner), the Minister said that local authorities would need to make their plans clear and that annual reports would be written on what they had done. However, I understand that there are no sticks—no real sanctions or powers—to oblige authorities to do what they say that they will, in detail or substance.

Keith Hill: The hon. Gentleman needs to understand and frame the new provisions in the general context of the far more open and engaged process in the planning sphere that we anticipate as a result of the Bill. We welcome his presence on the extended Office of the Deputy Prime Minister Conservative Front-Bench team. I do not know whether he is billed as a shadow Secretary of State in that team because there seem to be quite a lot of them. As he has come to these issues only recently, there is no reason why he should know that, as a result of the measure, every local authority will be required to produce a statement of community involvement. It is the Government's desire to ensure

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that there is maximum community involvement and front-loaded engagement with any planning development or set of planning developments under the measure.

The hon. Gentleman's anxieties about the possible non-use—I shall not say misuse—of funds arising from the arrangement need to be set in a local, political and electoral context. If the moneys were not used for the purposes for which they were intended, we would all anticipate a strenuous local response, which would exert great local control on the situation. Having said that, we shall have to give serious consideration to the possibility of giving the Secretary of State a reserve power in such circumstances, but that is a matter for consideration and consultation after which we may come forward with firmer proposals.

Sir Paul Beresford: Bearing in mind the Government's reaction to the pooling of capital receipts and redistribution, if there is a local authority, or a group of local authorities, where there has been considerable development, and if this tariff or betterment tax turns into a windfall tax, how sure can the House be, particularly in the light of the Minister's previous answer, that it will not be reflected in either redistribution or reflected directly in the grant to those local authorities in the ongoing years?

Keith Hill: That is a good try on the part of the hon. Gentleman, but there are no intentions along those lines.

I was saying that planning authorities will need to set out their planning contributions policy in a document. New clause 2 allows the Secretary of State to set out the procedure for preparing and publishing the local planning authority's policy on planning contributions. Where the local planning authority fails to prepare such a document, the Secretary of State will have powers to intervene.

The ability to enforce any obligation to pay a contribution will be important. Subsection (6) of new clause 2 provides for that. A person who has derived title to the land after a commitment to make a planning contribution has been entered into will be bound by the terms of the contribution. That reflects the provision contained in section 106. There is also the attaching of a condition to a planning permission requiring payment of the planning contribution prior to the commencement of the development. The enforcement provisions may also apply to Crown land where a planning contribution has been agreed in respect of Crown land.

Subsection (7) of new clause 2 enables regulations to require the planning authority to spend receipts from planning contributions made by the prescribed means—the amount set by the planning authority—on the matters set out in its planning contributions policy, set out in the development plan document or other document. This provides the transparency that Opposition Members have been correctly concerned about so that everyone—in particular those paying the contribution—will know how the contributions will be used. The regulations will set out the mechanism for setting out the terms of the planning contribution in writing.

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Provisions can be made for the modification or discharge of a planning contribution. It is intended that such provisions will be similar to those contained in sections 106A and 106B of the Town and Country Planning Act 1990. Subsection (8) of new clause 2 enables the Secretary of State to make different provisions for different areas or descriptions of local authorities and also to exclude particular areas or descriptions of local authorities. That power might be used where, for example, a smaller local authority was exempted from having to set prescribed means in its planning contributions policy because it rarely negotiates planning obligations under the existing system.

New clause 3 applies the planning contribution provisions to Wales. It confers on the National Assembly for Wales the same powers in relation to the planning contribution as the Secretary of State has for England and it substitutes the local development plan for the development plan document as the document in which planning contributions should appear, unless another document is prescribed.

Mr. Clifton-Brown: New clause 3 is breaking new ground. In effect, it gives the Welsh Assembly a large tax-raising power. What assurances can the Minister give us that, in devolving this amount of power to the Welsh Assembly, we will not suddenly find that obligations in Wales become much more onerous for developers than obligations in the rest of the United Kingdom, thereby stifling economic growth in Wales?

Keith Hill: I think that the hon. Gentleman went a limited way to salvaging his position by his last observation, but I am rather shocked by his intervention. Why should we expect that the Welsh will abuse the system? That is an outrageous suggestion. We have no reason to believe that the Welsh Assembly will behave in anything other than an entirely proper manner. Amendments Nos. 21 and 22 provide that regulations made under the planning contribution provisions will be subject to the affirmative resolution procedure. That means that the House will have the opportunity to see the regulations before they are made.

Amendments Nos. 23 and 24 provide for the repeal of sections 106, 106A and 106B of the Town and Country Planning Act 1990.

I come now to our reasons for introducing the proposals now. Planning Bills are few and far between, so we are taking the legislative opportunity that the Bill represents to reform an area of planning policy that stakeholders from all sides agree needs reform. Introducing the amendments now does not preclude a full discussion on how our reforms might work, nor close off debate on the matters raised in the consultation document. I assure the House that we are listening carefully to the interested parties. Already, we have consulted face to face with hundreds of people drawn from local authorities across the country, a diverse range of businesses and their representatives, and those who are interested in the provision of affordable housing, which is the single biggest use of planning obligations. We are encouraging everyone to respond to the consultation and we will proceed by means of

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deliberation and discussion throughout. We will ensure that we put as much information as possible before Parliament as it considers our proposals.

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