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Mr. Mark Field (Cities of London and Westminster) (Con): Is it not rather hamfisted to legislate for arrangements in London as a whole, apart from the rest of the country, rather than applying different restrictions to inner London or other parts of the built-up south-east?

Mr. Clifton-Brown: Indeed. Each local authority will need to set a different tariff, and flexibility will be needed

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within it. But the regulations do not yet make it clear whether that will be possible, or whether just a single tariff will be applied in a local authority area. If that proves so, it could lead to some very worrying results. In many authorities throughout the country, particularly the bigger ones, part of the authority is experiencing economic growth and another part is either stagnant or declining. Whatever tariff level is set, it will be too high for one part or too low for the other. My hon. Friend the Member for Cities of London and Westminster (Mr. Field) therefore makes a very good point.

David Wright: I am trying to be helpful to the hon. Gentleman, but I am now somewhat confused by the amendment. He has just suggested that we would need to examine the issue on the basis of each local authority, and that some flexibility would be needed. However, his amendment specifies in great detail what is required and asks the Secretary of State to set that out. I cannot understand where he is coming from in this regard.

Mr. Clifton-Brown: My hon. Friend the Member for Cities of London and Westminster was asking about a more general point.

David Wright: I am trying to be helpful.

Mr. Clifton-Brown: The hon. Gentleman is being very helpful. As I understood it, my hon. Friend's question was a general one that did not relate to this particular amendment. He will doubtless say if that is not the case, and if so I shall answer the alternative question that he may put to me.

Proposed new paragraph (d), in amendment (g), deals with different charges for greenfield and brownfield land. It is essential that this issue be dealt with if we are to encourage the development of brownfield land. Paragraph 39 of the consultation paper states:

I ask the Minister simply to confirm whether that would be possible.

The percentage of affordable housing is an issue that I have already dealt with in some depth, so I turn to an interesting matter that the Minister let slip today, although I was already aware of it: the question whether these charges will include a retail prices index escalator. I have never heard of an RPI escalator being applied to what is, in effect, a development tax. Let us suppose that, as I said, the economy was not growing but was in recession, and yet an RPI escalator was applied to the charges. Suddenly, there would be little if anything in the way of larger developments. That could produce an absolutely nonsensical situation.

Mr. Mark Field: Surely it is rather idiotic to have any form of RPI escalator. At a given time, the RPI could be quite different from the rate of inflation in the world of development. As my hon. Friend rightly pointed out, the property market could be booming while the RPI is fairly static—indeed, one might argue that that happened in London and the south-east in recent

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years; likewise, the two could move in opposite directions. Either way, we are talking about the use of a somewhat artificial option to try to ensure that a correct market is put in place. I shall be interested to hear what my hon. Friend has to say about the use of this RPI system, instead of a system that takes account of changes in regional property markets, or in the market in the country as a whole.

Mr. Clifton-Brown: My hon. Friend makes a very good point indeed. Such charges ought to be adjusted through the annual report system, and thence through the development plan system.

Keith Hill: Before the hon. Gentleman moves on, I should be fascinated to hear his response to the intervention of the hon. Member for Cities of London and Westminster (Mr. Field). If I am not mistaken, the hon. Member for Cotswold (Mr. Clifton-Brown) said that the suggestion made was a very good idea. Let us be entirely precise. The RPI is probably running at some 2.5 per cent., yet house prices in London and the south-east are probably growing at a rate of 11 per cent. Is the hon. Gentleman suggesting, on the Opposition's behalf, that if such a system is to be applied, it probably ought to be based on the rate of housing price growth, rather than on that of retail price growth?

5.30 pm

Mr. Clifton-Brown: I am grateful to the Minister for muddying the waters still further. Personally, I do not think there ought to be an escalator at all. There is not one in the current section 106 procedure and the regulations provide a perfectly adequate mechanism for revising the charges upwards and downwards through the annual report, which is translated into the development plan and is subject to community involvement and discussion with developers. That seems to be the proper and fair way of dealing with the matter, rather than having an automatic escalator. If inflation went up—it may well do as a consequence of the Government's tax proposals—and the RPI escalator was in operation, no developers might come forward, to the significant detriment of this country.

Mr. Mark Field: The Minister misunderstood my point. Ten years ago, the property market was moving quickly downwards and RPI inflation stood at 7 or 8 per cent. I am sure that the Minister will point out that that was under a Conservative Government. Nevertheless, my hon. Friend will agree that using an escalator at that time would have had a catastrophic effect on any new development proposals, as the tariff would have made them entirely uneconomic.

Mr. Clifton-Brown: My hon. Friend is right to point to the fact that when economic circumstances are unstable and inflation is likely to be high, we are probably heading towards recession, which could put us in a difficult economic situation. At such a time, property development needs a boost, not the other way round. The RPI escalator could hasten a recession, rather than being a sensible measure to alleviate one. The Minister will need to examine the proposal carefully.

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Amendments (h) and (i) are probing amendments to see what the Government mean by removing the clauses concerned. Amendment (j) states:

The House will be aware that the mechanism will work by negotiation—subject to community involvement and negotiation with developers—after which the local plan will be made. Under the Bill, the Secretary of State has reserved huge powers to himself to cause the plans to be amended. It would be reprehensible if, having gone through all that community involvement and negotiation with developers—that is likely to take some considerable time and to delay plans considerably—the Secretary of State said that the charge was too high or too low and that it should be set at a different level. That flies in the face of local democracy. I hope that the Minister will give us some reassurance on that point.

Matthew Green: I am intrigued. I should be inclined to agree to limit the Secretary of State's powers to rule against what is decided locally, but why is the hon. Gentleman referring only to the charge being set too low? Why is he keen to leave the power to rule with the Secretary of State if the charge is set too high? If he wanted to leave it up to local people, surely he would favour removing the Secretary of State's powers in both directions.

Mr. Clifton-Brown: The hon. Gentleman does try to distort the facts. If he had listened carefully, he would have heard me refer to the charge being set either too high or too low. The amendment has been drafted in this way because I am concerned that the Minister is more likely to ask local authorities to alter the plans if the charge is too low. If the charge is too high—for example, with regard to the Mayor's aspirations that there should be 50 per cent. provision of affordable housing in the larger housing developments—no developer will come forward.

That is a good incentive for local planning authorities not to set these charges too high.

Amendment (k) says that

I am concerned that, by intervening through regulations or the annual plan, the local planning authority or the Secretary of State may arbitrarily raise or lower the charges. I want any changes to be subject to the proper plan-making procedure.

Amendment (l) is important. This Government have loaded all sorts of responsibilities, obligations, powers and duties on to local authorities without fully funding them through the revenue support grant. We will find that there is an enormous amount of up-front work for local authorities in producing local plans and formulae, although the process may be quicker in the future, and I do not know whether it will be. I repeat that some authorities will find it difficult to cope with the Bill, particularly if they are short of planning officers. The Minister has told me informally that his Department will provide advice and consultancy. Perhaps he will clarify that, so that local authorities throughout the land

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can be assured of what physical help, in the form of manpower, or financial help, in the revenue support grant, they will be given to deal with the expensive setting-up operation.

New clause 2 deals with the regulations that will decide how payments are to be made. Amendment (a) is simple: it says that once planning permission has been granted and remains in force, and any condition relating to planning contribution has been agreed with the applicant, the contribution may not be altered. That seems to me perfectly straightforward. It would be monstrously wrong if the developer had got his planning permission and agreed the tariff with the local authority, that tariff was still in force, and it was then altered by periodic revision. The local authority should have a bite of the cherry when the application is being negotiated, and once the tariff has been agreed, it should be a binding obligation on both the Secretary of State and the local authority. Any property contract would have a similar effect.

Amendment (b) is interesting: it would ensure that the maximum amount for the tariff would not be higher than if the case were an application made under the section 106 procedure. I should like to hear from the Minister how he thinks the levels of the new tariffs will compare with the payments under section 106. Will they be higher, because the developer may have greater certainty and speed—although I do not think that he will—or will they be lower, to encourage the applicant to opt for the new tariff procedure? Given that the Government and local authorities will put a great deal of work into the new tariff proposals, I hope that they will be lower, so that developers will, as a norm, opt for the tariff payments. It will be interesting to hear what the Minister has to say.

Amendment (c) deals with whether adjustments to contributions may be made upwards or downwards, and the RPI escalator. Paragraph 39 of the consultation paper says that different charges could apply to different types of land in a local authority area, namely greenfield and brownfield land.

Amendment (d) would ensure that—

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