Memorandum by National Grid plc (PGS 45)
We were interested to see that the ODPM Committee
is about to begin taking oral evidence on the recent consultation
to introduce a Planning Gain Supplement. For infrastructure companies
such as National Grid, the proposed levy could cause major problems
which in turn would have a serious impact on the company's ability
to support one of the main objectives of the proposal: to support
and develop local infrastructure.
In relation to your focus on the factors which
should be taken into account in determining the rate of the supplement,
it may be that the Government would be prepared to consider a
zero-rate for critical infrastructure developments (such as laying
new gas pipelines) as well as for other infrastructure investment
(such as extending wireless networks). However, given that our
assessment is that the proposal will cost National Grid several
million pounds (possibly hundreds of millions depending on the
level at which it is set), our argument is that all such developments
should be exempt from the levy on the grounds that it will reduce
our ability to deliver high-quality services both nationally and
locally. A zero-rate band (as opposed to an exemption) would not
be an ideal solution because it would still involve the company
in significant administration costs, including those relating
to valuations. It is possible (as highlighted in our submission
to the consultation) that the cost of the levy that arises from
the development of our gas and electricity networks can be passed
on to the consumer (which is the case with other costs legitimately
and efficiently incurred in the development of our networks).
This would not be welcomed by the Government at a time when energy
prices continue to rise.
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