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Mr. Hayes: The hon. Gentleman makes a good point on an important matter, and I have noticed the Minister acknowledging that through his body language. However, there is a more specific issue than just the opportunity costs of the inability to ameliorate local concerns about a specific project. It may be incorrectly assumed that the money is being filtered away, that it is disappearing altogether, or even that it is being used in an underhand manner. That would be untrue, but people who do not understand the system might easily perceive that to be the case. There is the potential not only to lose the ability to assuage people's fears but, worse, to undermine local people's faith in the system.

Matthew Green: The hon. Gentleman makes a good point. The key is not to lose sight of the original concept of planning gain, which is that the community local to the development derives some gain from it. That is how section 106 originated and I am certain that the Government envisage the changes leading broadly to the same end, but local authorities should be encouraged to bear that in mind. That will probably have to be done through guidance, because I do not see another way of dealing with it.

I shall not go into the detail of the Conservative amendments because I suspect that, with hindsight, the hon. Member for Cotswold (Mr. Clifton-Brown) realises that most of them curtail local authorities' ability to decide for themselves what is best for their area, and I am sure that that is not what he intended. That he got the wrong end of the stick probably has a lot to do with the fact that he had only a couple of days, and had to burn the midnight oil. It just shows that we should work reasonable hours, because after working a certain number of hours one does not think straight.

The new clauses offer a potential way forward, but I return to my point that the Government have not chosen a satisfactory means of dealing with the issue. My main concern is that the details of how the system will work will not be dealt with on the Floor on the House or in an extended Committee sitting—they will take the form of a statutory instrument, of which there can be little scrutiny. I struggle to see how the Government, in the circumstances in which they have landed up, could have found a different way of achieving their aims. However, when the next planning Bill is introduced in 10 years' time, I hope that the Government do not spring a similar Bill on us. Of course, the Government will be different by then, and if the Liberal Democrats are in government, we shall strive to avoid doing that.

Sir Sydney Chapman: I am grateful for the opportunity to follow the hon. Member for Ludlow (Matthew Green) and agree with some of his comments. He spoke about the House sitting too late and Members perhaps getting confused. Clearly, his twilight hour is not the other side of 6 o'clock. He has done very well.

I shall try to be brief. It may be helpful, as is conventional, if I begin by declaring some possible interests. As I said in Committee, the more I think about them, the more I believe they are reverse financial

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interests. I do not receive a penny from any organisation outside the House or any part of my profession, but I am a member of the Royal Institute of British Architects and a fellow of the Royal Town Planning Institute, and I pay those bodies not inconsiderable amounts. I found that those sums have been going up so much that I have applied for retired status in both those prestigious professions. I should add that I am an honorary member of the Royal Institution of Chartered Surveyors, an honorary member of the Landscape Institute, an honorary fellow of the Faculty of Building and an honorary fellow of the Association of Building Engineers. If I remember any more, I shall add them later.

I have long criticised aspects of section 106 agreements. In some cases, I believe they border on the corrupt—"You don't get your planning permission unless you give us this amount of money for that particular project"—but they are here to stay, and having listened to the debate so far and thought about these matters quite deeply, I share the worry of my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), who questions whether it is a good thing to have two different mechanisms working in tandem, rather than trying to improve the present regime of section 106 agreements. I put that down as a marker.

As the Minister kindly gave way to me twice on the matter, I shall not dwell on the possibility of local planning authorities, when making their regulations, extending the present area in which section 106 agreements can apply. The Minister rightly said that, in general, section 106 agreements apply to only 1.5 per cent. of the total volume of planning applications throughout the country, but of course, as he also said, they relate to the more significant planning applications. My fear is that, at least in the margins, local planning authorities might find an opportunity under the proposed new regime to extend the area in which permitted planning contributions would apply.

I shall give a rather silly example, for a particular reason. At present, if a development requires a crossover from the highway to the curtilage of the property—say, somebody is building a garage as an extension on his or her house—the local authority might insist that it should carry out the work. Whereas, meeting the proper specification for a crossover, the work could probably be done for £700—I am using a typical example—the council might say that it costs £1,500 or £1,100, making its own profit. It is so easy, under a planning contribution agreement, for the council to set the tariff scale at £1,500.

We are all human beings. I am not criticising local authorities or local planning authorities, but if an authority has the opportunity to charge money, it will seize that opportunity and milk it to its utmost ability. That is not a party political point, but a fact of human nature. It is extremely important that the Secretary of State prescribe the areas in which the new planning contribution can apply. It is a new opportunity for a tax, just as a section 106 agreement is, in effect, a tax. The proposed contribution is a tariff, so it is a tax. I shall not dwell on the matter or call it a stealth tax. There are already section 106 agreements in place. Because it is a tax on some developments, the ability to charge the planning contribution and the amount that can be charged must be carefully prescribed.

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6.15 pm

My hon. Friend the Member for Isle of Wight (Mr. Turner) made a good point when, if I judged him correctly, he said that under section 106 agreements, the applicant—I would say generally, but now always—knew exactly where his financial contribution was going. It would be spent on a specific project in a specific place. Under the proposed planning contribution arrangement, it is obvious—again, this is human nature—that the local planning authority will hold on to the money for as long as it can.

The hon. Member for Ludlow gave the example of a new sports centre on the other side of the borough. For such a project, the local planning authority will have to hold on to the money until it has sufficient to go ahead with what is, by any description, a pretty significant project. If the legislation goes through, and the regulations are issued, we must consider carefully how we can ensure that the local planning authority is required to specify the projects on which the money will be spent.

Mr. David Drew (Stroud) (Lab/Co-op): I thank the hon. Gentleman for giving way and apologise for not being present earlier, as I was serving on a Select Committee. Does he agree that section 106 agreements have been bedevilled by the lack of transparency—in particular, the fact that after a planning application has been agreed, it is often implemented through an individual officer talking to the developer? Communities often feel disempowered when they see that the outcome of the section 106 agreement is not what they expected.

Sir Sydney Chapman: I am glad to tell the hon. Gentleman that I agree entirely. I had some criticisms of section 106 agreements, and the apparent lack of transparency was my main argument for criticising them. That is common ground between us. Unless the regulations are very tightly drawn, the receipts coming from the planning contributions could be even less transparent than the section 106 agreements. I need not pursue the point further.

Mr. Hayes: Not only will the new arrangements be less transparent, but they will be less local, as they will not necessarily be tied to the particular development, and they will arguably be less likely to lead to the development of social housing. That is the view of those in the industry. Will my hon. Friend comment on those aspects?

Sir Sydney Chapman: I cannot disagree with my hon. Friend, but the outcome will depend on the sort of local authority in question. If it is a scattered rural local authority, I think my hon. Friend has cause for concern. I represent a more suburban area, where the metropolis meets the countryside, with all sorts of development. My constituency is much smaller in size than my hon. Friend's. Mine is only about 15 square miles in north London, so there is more sense of community than would be the case 8 miles away or in my hon. Friend's constituency. It is a matter of degree. The Minister confirmed that, if the Bill is enacted, the applicant will be able to choose between a section 106 agreement route or a planning contribution route. We must bear in mind that the system is comprehensive and complicated.

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The hon. Member for Ludlow was a little unfair about the amendments tabled by my hon. Friend the Member for Cotswold. The hon. Gentleman might have been burning the midnight oil, but I imagine that my hon. Friend is with it 24 hours a day. There was a short time to consider the matters, so even if some of the amendments are found to be unnecessary, they have given us the opportunity to raise important points and get assurances from the Minister.

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