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The Government have made a serious effort to mitigate the full red-bloodedness of the Barker proposals. First, section 106 will not be dethroned, although it is somewhat diminished. That is important, because we depend on section 106 for half of the affordable houses that are built in Britain. We may not be pleased about that, but if we did not have section 106 even fewer houses would be built. Anything that undermines the provision, therefore, is fatal to the cause of affordable housing, as local authorities and developers have gradually developed a great deal of expertise or case law on it. If section 106 were abolished, we would learn to love it. It is a particularly British characteristic to learn to love institutions on their demise. Section 106 is useful, but it must be developed. [ Interruption. ] I did not catch that sedentary intervention from the hon. Member for
Sheffield, Attercliffe (Mr. Betts), but I do not think that we will learn to love the Government on their demise, if that is what it was about.
Many small schemes escape the net of section 106, so we should remedy that. The Government have tried to mitigate the proposals by trying to hypothecate 70 per cent. of the yield to local authority areas. I do not wish to be Jesuitical, but a local authority area is a vague concept. Is it in the area of a local authority? Broadly speaking, my local authority is in the Yorkshire and Humberside area. I accept that some infrastructures are adjacent or close to a local authority on which they depend heavily. If a housing estate is built at the southern end of Craven, the infrastructure in Bradford is important. A significant number of Bradford pupils go to school in my constituency, as the biggest comprehensive in North Yorkshire is in south Craven. A major housing development at the Keighley end of Bradford has implications for education across the border in the North Yorkshire education area. I would therefore not want to impose hermetically sealed borders to restrict the use of the money, as that would not make sense. But it would be entirely different if the money from a development in Bentham, at the top left-hand corner of my constituency, where one can practically smell the Irish sea, found its way down to Bradford. The sense of indignation would be considerable. Much depends on a practical, common-sense view—not that it is easy to envisage developments in Bentham that are likely to yield, whichever way the money is taken, the sort of cash that would make a huge difference to Bradford.
The Government need to be more precise. We on the Conservative Benches are rather sensitive to the notion of the region. The Minister’s constituency is in the Leeds city region. In that context, I can see that people might well perceive some advantage in sharing the products of development, however they are realised, to make that work more.
There are huge questions to be addressed. Milton Keynes gives us a limited amount of information. There is a single landlord in Milton Keynes. It is difficult to extrapolate from that example to a more generally applicable case. There is a huge difference between development on brownfield and greenfield sites—and there is a huge range of brownfield sites, not just a single example—and between a small scale project and a major project, as the right hon. Member for Greenwich and Woolwich said.
The point at which the tax takes effect is important. How differentiated will the tax be? We need some idea of the rates and the differentials, and at what point the uplift is realised. How will the Government’s 30 per cent. be used? As the right hon. Gentleman said, developers will get busy minimising the tax. Finding ways of not paying the tax will not be a cottage industry—it will be a metropolitan industry. Tax avoidance is a perfectly legitimate and honourable activity. I have just received a significant bill from the Treasury, which is due on 31 January. I am actively engaged in finding out whether there are any nooks and corners of tax avoidance that I have not yet managed to identify. I regret to say that I have failed, and the cheque will be on its way at the last possible moment consistent with not being fined.
These issues are crucial. The tax is not radical. It is a whimper, not a bang, of a tax. The problem is that the inconvenience that the whimper will cause is out of all proportion to the benefit that the tax might yield. That is the heart of the problem. The tax will not pay for Crossrail. The south-east is the region where the tax has its greatest value, as it were. Given the differential yield that it is likely to raise regionally, will the Government build into it revenue support grant formula assumptions about the level of tax yield and therefore use it as a form of redistribution, particularly as the idea of the return of the business rate seems to be a lost aspiration, as far as the hon. Member for Sheffield, Attercliffe and I are concerned?
The proposed tax is not a “with one bound Jack was free” sort of tax, and it will not be flush with money. If anyone has fantasies that it will take the strain off council tax and eventually bail us all out of the council tax dilemmas, the sooner they return to reality, the sadder but wiser they will be. The tax will certainly not get the Government off the hook of the non-return of the business rate. In other words, it is thin gruel.
Finally, there is the question of the timing. I understand that the intention was to introduce the tax in April 2008. Even that could be difficult to achieve, which moves us towards the more political dates to which the minds of those in the House are inescapably drawn. That is why a little part of me says that the tax may never come into existence.
On the option mentioned by the spokesman for the Liberal Democrats, the hon. Member for Twickenham (Dr. Cable), the land value tax, I am aware that there is a significant volume of academic opinion that is strongly supportive. Both Sam Brittan and Martin Wolf of the Financial Times have spoken in favour of it. If one wants to push people into development, one chooses that mechanism. The mechanism has been used in some cities in the United States, which provide examples of what can happen. However, the sociology of the United States is very different from the sociology of the United Kingdom, and the political disadvantages would be significant.
I know that we always choose widows and orphans when we want to make a particularly heart-rending point, but I return to the example of a widow who has lived in the same house all her life. She may be asset rich, but she is cash poor. There is a paddock in which her grandchildren play and in which her children used to play, but it has been incorporated in the development line of the local district council. The site valuer comes along and says, “That land must be pushed into development,” which is the last thing that she wants to do. I can imagine the political flak that that would generate.
The council tax martyrs will look like rank beginners compared with the ladies who are afflicted by the site development tax. That is not what we are discussing today, but it is difficult to know what we are discussing today on the basis of the Bill. I look forward to the surrealism of the Committee stage and urge the Government at least to make this passage of fantasy as brief as possible.
5.36 pm
Mr. Bob Blizzard (Waveney) (Lab): It is a pleasure to follow the right hon. Member for Skipton and Ripon (Mr. Curry). When I first heard him speak, he was a Minister and he was addressing a local government conference. He prefaced that speech by saying that he thought that he was the only person who understood the intricacies of both the common agricultural policy subsidy system and standard spending assessments. He certainly did understand both, and he has shown us his knowledge this evening.
In the early ’90s, as a councillor in the constituency that I now represent, I was chair of the local plan panel. The task of that august body was to formulate the land use plan for Waveney district. It seemed to me that that was probably the most important function that councillors discharged, so when I became council leader in 1991, I continued to chair the local plan panel.
The panel was setting out the future shape and development of our area for the 10 years from the date when the plan was published—it took us several years to formulate the plan. Our biggest task was to decide which large tracts of land to allocate to accommodate new houses. The figure for the number of new houses, which seemed rather high, was handed down to us by central Government, who were Conservative at the time. To listen to Conservative Members today, one would think that previous Tory Governments never did such a thing as hand down the number of houses to be built. As the right hon. Member for Skipton and Ripon has said, it is the responsibility of every Government to ensure an adequate supply of housing, which is why this Government launched the Barker review.
It did not take me and other councillors on that plan panel in the early ’90s long to realise that our decisions were turning the owners of the ordinary agricultural fields that we decided to allocate into very rich people or making them ever richer. The low-value agricultural land was turned into highly valuable sites as we raised our hands in committee to allocate them—it has been said today that such decisions can multiply the value of land by a factor of 250 or 300. Back then, it seemed wrong to me that the communities that we represented got nothing out of that increase, especially in view of the huge sums involved. I cheekily asked the planning officers whether we could invite the owners of suitable fields to bid for the allocations, because we had plenty of fields to choose from—of course, the answer was no.
Through development briefs, which were facilitated by section 106 agreements, we required the developers to provide open space and play areas to contribute to community facilities and to provide some affordable housing. However, I felt that that was a meagre return compared with the huge uplift in the value of the land and the lucrative prices that the houses fetched once they were built. Nothing that can be achieved through section 106 agreements addressed the fundamental transport infrastructure weakness in our town. Therefore, when Kate Barker proposed the planning gain supplement in her review of the housing market and its economics, I instinctively thought that she was right and that my instincts all those years ago had been right.
Throughout the years when I sat on planning committees, we tried to make the best use of section 106 agreements, but they involved protracted and complex negotiations. Planning officers often told us that what we wanted was outside the scope of a 106 or that it was not linked closely enough to the development, even though the community wanted it desperately. Sometimes the developers refused and went to appeal, or they called our bluff and we had to give in.
I acknowledge that there have been improvements in the operation of section 106 agreements since 1997 but, as noted in the recent DCLG publication, “Changes to Planning Obligations”, they have several key problems and deficiencies. We have already heard about the variations in application by different local authorities, the lack of certainty for developers, the lack of transparency, the delays, and the inevitable accusations, particularly from the public, of the buying and selling of planning permission.
I welcome the concept of the planning gain supplement and will follow its development with interest. Yes, some things have failed in the past, but the world moves on. We must be fair to communities which need to gain from development. Many people do not want large new housing developments. Some of them are nimbys who live on the edge of town and cherish their views and their closeness to the open countryside but forget that when their homes were built they took away other people’s views and sense of space. Others make a much more valid objection to large housing developments when they say, rightly, that the constant expansion of a town places more pressure on the community’s basic infrastructure, particularly transport.
Nowhere is that better illustrated than in the town of Lowestoft, which I live in and represent. Our town is cut in two by a river. It is not a real river; it is more an inlet that was cut through from Oulton broad to the sea in Victorian times. There is only one bridge in the town over that waterway, which we call Lake Loathing. It is a lift-up or bascule bridge to let the ships into the inner harbour of our port. The only other way of getting across the waterway is by the bridge at Oulton broad about 2 miles down the road. In Victorian times, the bascule bridge was sufficient to serve the town, but it has expanded somewhat since then, and the bridge has become a bit like the constriction between the two bulbs of an hourglass, which continue to grow while the constriction remains the same.
We live daily with our notorious bascule bridge, which for many years has been the cause of gridlock, especially when it opens up to let boats through and brings the traffic to a halt. We have long held the aspiration and hope that our salvation would come from something that we call the third crossing—another bridge across the waterway to relieve the strain on the bascule bridge. We have never been able to achieve that through section 106 agreements, and I do not think that we will able to do so in future. To understand what it is like living in the town—a lovely town, but with that problem—one need only imagine London with half its bridges taken away, which would make it quite difficult to get around.
The bridge is part of the A12 trunk road system but it is difficult to get Government money for it. It was a preferred route in the early 1990s but the previous Government abandoned it. Since 1997, we have got a southern relief road to it from the south and a northern spine road that will connect to it in the north, but we still do not have the bridge. Our problem is that it is not on the way to anywhere—it is simply in the middle of Lowestoft.
The Government recently established an urban regeneration company called 1st East to regenerate the town. My hon. Friend the Minister for Housing and Planning is familiar with it and we thank her for her good sense in agreeing to setting it up. It commissioned a recent study, which showed that, if we are to regenerate our town, the third crossing is essential.
The subject is relevant to the PGS debate because the situation has got worse over several decades as the town expanded. As that has happened, more money has gone to landowners but none of the money or the development gain has gone into what our town needs most—the third crossing. If only a few hundred pounds had been put into a kitty for every house that had been built in Lowestoft in the past couple of decades, we would have a great pot of money, which could contribute to what we need.
The reason that I am prepared to run with PGS, give it a go and see what happens is that it could make a huge difference to the future of the development of Lowestoft. Many more homes have come on stream, and further development will take place as a result of the urban regeneration company. All that development could make a huge contribution to our third crossing through a PGS. That would not fund the whole project—we would still need to approach the Department for Transport—but it would make the benefit-cost ratio figure look better and increase the likelihood of funding. I therefore say, “Bring it on”, because the community, not only those who happen to own the land, can gain from it.
It has been said that PGS could stifle development. Clearly, there is a limit to what such a supplement could raise, but there is still room for it. On the plan panel, we allocated one of the pieces of land back because we believed that we could get an important road out of it. We all believed that we would get a dual carriageway but, when the plan was presented, it was for a single carriageway. By then, I was a Member of Parliament and had left the local plan panel behind. I told the developer that I believed that we were going to get a dual carriageway. He replied, “You could have got the dual carriageway. It would have meant that the landowner got less money but ultimately the county council asked me for only a single carriageway.” It is clear that more scope exists for getting something out of development.
The details need to be worked out for another Bill but I am heartened by the consultations that we have held so far. The 2005 consultation paper stated that the PGS is aimed at financing infrastructure, and that we are considering dedicating money to local communities and
“maintaining the link with local delivery”.
It was encouraging that the summary of the consultation responses stated:
“The principle of capturing a portion of the land value uplift created by the planning process, in order to help finance additional infrastructure, received broad acceptance by those consulted.”
There appears to be consensus on that in the Chamber.
The Department for Communities and Local Government’s most recent communication refers to
“a fairer way of getting developers to contribute to the costs they impose on the transport network”.
Finally, there is a reference in the document to
“the unique circumstances of providing road network”
infrastructure. We certainly have a unique situation in Lowestoft. Nobody else has such a bridge in the middle of their town. Nothing else has succeeded in producing the bridge for us, so let us give the planning gain supplement a chance.
5.50 pm
Anne Main (St. Albans) (Con): It is a pleasure to follow the hon. Member for Waveney (Mr. Blizzard), particularly given his optimistic and trusting nature. The developer was trusted to deliver a dual carriageway but delivered only a single carriageway. I would urge caution and say that, old cynic that I am, I do not trust anyone to give me anything, not even the Government.
We need to test some of the rather vague proposals. In response to one of the Select Committee’s recommendations, the Government said that they believed that
“overall the PGS proposals will raise additional revenues over and above the current planning obligations system”,
but there is no proof whatever that that will occur. I do not take their assertion on trust. I am not prepared just to give the PGS a go and see what happens. That would be a recipe for disaster for many of our communities. We have heard about good and bad section 106 practices—indeed, we just heard about some particularly bad section 106 negotiations. However, I do not argue that we should not get tougher in negotiations or that we should throw those negotiations out of the window.
Having been the chair of a planning committee, I would argue that the one positive thing about section 106 agreements, in all their imperfect forms, is that they are directly linked to discussions and communications with the community that is suffering the harm of the development. If planning committees play hardball with developers, they can make the system work. Much of the time I find myself nodding in complete agreement with the right hon. Member for Greenwich and Woolwich (Mr. Raynsford)—the system can be made to work really well.
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