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Keith Hill: I assure the hon. Gentleman that there is a right of appeal.

Mr. Clifton-Brown: That is excellent and positive news—we are making great progress.

Amendments (c) and (d) are straightforward. Amendment (c) would amend paragraph (3) (a) of the new clause, which refers to

"a statement of the developments or uses or descriptions of development or use in relation to which they will consider accepting a planning contribution".

My amendment would clarify that by stipulating that they will accept, rather than consider accepting, a planning contribution. The converse of that is in the Government's wording of new clause 1(3) (b), which refers to

"a statement of the matters relating to development or use in relation to which they will not consider accepting a contribution by the prescribed means".

I have simply amended that so that it would refer to a statement of the matters relating to development or use in relation to which they "will not accept" a planning contribution. It would therefore be quite clear what they would or would not accept. I would be grateful for the Minister's observations on the re-wording set out in those amendments.

Amendment (e) is perhaps the most important of the lot. It proposes to insert at the end of line 18:

"but this cannot be wider in scope than the current 'necessity test' as currently applied in the section 106 procedure."

I want to spend a little time on this because, if the Minister's assurances that this provision is not simply to be a tax by another name with an ever-widening scope, he must live up to the spirit of my amendments. I would like to outline the grounds for applying a section 106 agreement, and to ensure that the new procedure will cover the same grounds but no wider ones. If that were the case, we could make progress, and I shall seek assurance from the Minister on that matter.

The following requirements have to be observed in the section 106 procedure: that the planning obligations should deliver

"high quality, sustainable development . . . continue to provide affordable housing . . . help deliver the physical investment needed to secure high and stable economic growth and higher productivity . . . be more transparent to all stakeholders in the planning process . . . provide an effective mechanism for delivering desirable development without causing delays . . . not impose financial burdens on developers which in themselves deter desirable development; and be sufficiently flexible to reflect the circumstances of individual proposed developments."

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I hope that we shall hear from the Minister that those seven key requirements of the section 106 procedure are to be followed when setting the new tariff procedure.

The procedure originally set out in section 106 of the Town and Country Planning Act 1990 involved a necessity test, which stipulated that it was necessary to compensate strictly for the development itself. Case law has widened that definition somewhat, in particular the Tesco case in 1995, which came up with a new de minimis test. That test provided that, if the compensation was in any way related to the development, such action would be in order. However, I do not see anything in the new clauses that would give us the clarity that developers need, and I make a plea to the Minister that, when he introduces the regulations, he should clarify exactly what can be expected from the current section 106 procedure and from the new tariff procedure. That would greatly help developers when they come to negotiate or pay the tariffs.

Mr. Andrew Turner: I am being well educated by hon. Members on both Front Benches in this debate, and I thank them for that. Will my hon. Friend assist me by repeating the words in the necessity test, because I am rather surprised that it could be interpreted as requiring the provision of social housing?

Mr. Clifton-Brown: As my hon. Friend knows, the provision of social housing is dealt with in the former Department of the Environment circular 1/97. That, too, forms part of the section 106 payment. If my hon. Friend will allow me, I will deal with that matter when I reach amendment (g) and, in particular, its reference to paragraph (e). I shall also be asking the Minister some questions on that point.

It is important for developers to have clarity on what is required from this new tariff.

My amendment refers to the statement in the new clause that the charge must be revised at regular intervals. That should include the ability to revise the charge upwards and downwards. We do not know what the economic situation is likely to be in the future. We hope that the rate of this country's performance will continue to grow, but supposing it does not and the economy goes into recession, it would be nonsense to have a system that ratcheted up section 106 or tariff payments just when we were going into recession. We must consider that carefully.

My amendment (f), which is important, deals with the question of benefits in kind. I should like to quote the report on affordable housing that the Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions published in the 2002–03 Session. I think that the Government have an inflated idea of how much section 106 or tariff payments will yield. In paragraph 41, the report states:

"The supply of affordable housing through planning agreements is reliant on the development of profitable private housing. Many submissions argued that there was only a limited amount that could be demanded from developers in planning gain if their developments were to remain viable. There are increasing demands on developers to contribute to a wide range of 'planning gains' including transport infrastructure, social and community facilities and schools."

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We need to know precisely what the Government have in mind when they say that the payment may be made in kind. Should the value be the same as if it was a cash payment, or will it be less? How will affordable housing be provided?

David Wright (Telford) (Lab) rose—

Mr. Clifton-Brown: It may be relevant to refer to some of the problems with affordable housing, and I shall do just that when I have given way to the hon. Gentleman.

David Wright: Does the hon. Gentleman agree with me that one of the major problems is the fact that many local authorities do not carry out comprehensive housing needs and housing market assessments? They fail to translate calculations on the number of new homes that are needed into their planning strategies. They need to do that to make the system work. It is no good laying the blame at the Government's door. Local authorities need to get a grip of the issue.

Mr. Clifton-Brown: I have some sympathy with the hon. Gentleman's comments. Under the present system, before the Bill becomes an Act, the Government lay down numbers in the regional planning guidance, and county councils negotiate with the authorities in their area or the unitary authorities, which are required to build that number of houses. Many authorities up north and, I suspect, in the hon. Gentleman's area do not achieve the numbers that they set out in their own plans: that is, if they have got a development or structure plan. There needs to be a much closer correlation between the numbers set out in the local structure and unitary plans. If those numbers are in the plans, they should be achieved. Some authorities in the south build more than they set out in their plans, which is what we all want to see, because if they build more housing, they will provide more affordable housing.

Matthew Green: Not all local authorities struggle to build the number of houses that they are allocated. Sometimes the allocation is too small. In the South Shropshire authority there is a great need for a larger housing allocation, as has been identified by a housing need survey carried out last year. I am hopeful that the Minister will deal with that problem. I would not want the hon. Member for Cotswold (Mr. Clifton-Brown) to leave the impression that the problem with housing numbers is purely one of local authorities being asked to build too many. The problem can be the other way round.

Mr. Clifton-Brown: If the hon. Gentleman had listened to my reply to the hon. Member for Telford (David Wright), he would have heard me deal with exactly that point. Hansard will bear that out. Sometimes local authorities want to build more than the number of houses specified in the plan, and I see nothing wrong with a plan providing for greater numbers than are set out in the regional planning guidance, provided that it is carefully worded.

I do not want to be sidetracked too much, as there may be other opportunities to discuss this issue. We should not concentrate entirely on numbers, although they are important, and the Bill will change the

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procedure completely: the arrangements will be set out by the regional planning body in the regional spatial strategy and will, I understand, be more or less binding for each authority. Whether authorities will be able to deliver is, of course, another matter. I want to discuss how affordable housing can actually be provided.

Paragraph 52 of the Select Committee report says:

"Contributions towards affordable housing secured through the planning system so far have been modest and the potential is inevitably limited. The Government has unrealistic expectations about the contribution which planning gain can make to meeting the need for affordable housing. Demands on the developers are limited because the scheme has to remain commercial viable. The use of brownfield sites can reduce profitability and there are increasing demands on the developers to pay for a wide range of facilities. The major contribution by planning agreements is to promote mixed tenure development."

We all agree with that, but the report goes on to say:

"However, the value of the contributions from developers through the planning system can be increased. To achieve this, councils need to follow best practice. They also need powers to specify the balance between social rented and intermediate tenure housing on a site by site basis to take forward the conclusions of their housing need assessments."

The question for the Minister, posed by amendment (f), is this. How will he ensure not just that the correct amount of affordable housing is provided through planning obligations, but that enough social rented and intermediate-tenure housing is provided? How will he ensure that the planning authorities can deliver the mixed-tenure estates that I have seen working so well in Manchester? Let me say in passing that the right to buy produces such estates.

Amendment (g) deals with the criteria that must be specified. We need to hear from the Minister precisely what they are. In particular, we need to know how the section 106 and tariff charges will apply to not just residential but commercial developments. The amendment asks the Minister to specify whether there will be a "charge per dwelling" and a

"charge per square metre of all other developments".

We need to know whether there will be a charge in respect of the provision of social housing in the context of commercial developments.

These are not academic questions; they are real questions, which developers are asking at this very moment.

Paragraph (c) of the new subsection (3A) refers to

"the minimum size of development to which the charge will apply".

Paragraph 47 of the Select Committee report tells us:

"Planning Circular 6/98 limits the negotiation of planning gain to housing developments of at least 25 dwellings or one hectare in urban centres and 15 dwellings or 0.5 hectares in London."

Can the Minister confirm that the new regulations will continue those arrangements so that smaller developments are not caught in the net of the new tariff procedures? Many small builders throughout the country will want to know the answer to that question.

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