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Mr. Gummer: It is important that we debate the new clause, not only because of its specific application to Scotland, but because in applying to Scotland it draws out for all of us some of the fundamental problems in the legislation as a whole. My hon. Friend the Member for Rayleigh (Mr. Francois) was right to explain that, because of the awkwardness in the relationship between UK legislation and devolved legislation as the hon. Member for Twickenham (Dr. Cable) pointed outthe Scottish dimension shows up the fundamental awkwardness in the structure of the Bill.
Stewart Hosie: The right hon. Gentleman speaks about the fundamental awkwardness in terms of devolution. Is not the real issue the conflict between central Government, in this case the Treasury, and local government, in this case in Scotland, in that there is a determination and desire on the part of local authorities to advance development in their locales with a funding stream through section 75 planning gain, and there is a conflict between that sometimes good practiceand sometimes less goodand the demand for more tax revenue in the Treasury coming through the planning gain supplement?
Mr. Gummer: I very much agree with that, but I put it to the hon. Gentleman that the problem has become even clearer since the Government have had to handle devolution, the Scottish Parliament and the Scottish Executive. In doing so, they have revealed that the fundamental problem is that they are a centralising Government who do not care about or trust local authorities at all. That is why I ask my hon. Friend the Member for Rayleigh to consider the question of the commitment not just to the 30 per cent. figure, but to the 70 per cent. figure. Of course, this issue is particularly relevant to Scotland, because nothing in the Bill enables us to be sure that any of this money will, in the end, get to Scottish local authorities. Nor do we understand, as the hon. Member for Twickenham said, what will happen in reality to a section 106, or section 75, agreement. Is this to be a new-found version of the withering away of the state? Is the provision just going to disappear? I can see nothing in the Bill to suggest that it will, which means that this fundamental contrast and conflict will remain.
In Scotland, as in the United Kingdom as a whole, we have to get back to first principles. This planning gain supplement is of course nonsense. We have tried it at least three times beforeprobably fourand it has not worked. The only way in which the Government can justify its working in Scotland or in England is to say, If we have a very small tax, nobody will notice, so the reasons why it never worked before will cease to exist. As my right hon. Friend the Member for Wokingham (Mr. Redwood) says, that might be true; however, the inevitable answer is that the one way to ensure that nobody will notice is to have no tax at all. However, that cannot happen if the Government will not let us in on the secret of how much this tax will be.
I realise that it is very difficult to talk in these terms about what is a preparatory Bill for a planning gain supplement. However, in most preparations, we have some idea of what we are preparing for. If we are preparing for a birthday and we decide to make arrangements for the partysuch as getting the
balloons and having the cake madewe normally have a budget: we work out how much the birthday will cost and how we will raise the money. However, this is preparation without a budget, except for a sum that is related not to the birthday party, but to the preparations themselves. That sum will be yet more money for the Government to spend on the subject about which they are most expert: the failed computer system. It will doubtless be more money for the information technology companies, which they can spend showing the Government that they cannot do what they want them to do.
I and the people of Scotland want to know how much money we are talking about. What would 70 per cent. of that sum be, and how do we know that it will really go to the local authorities? What, therefore, would 30 per cent. of that sum be, and how do we know that the Scottish Executive will use it in the way that the United Kingdom Government say that they will use such money in England and Wales? None of that information has come our way. We cannot even work out the equation by analogy, because the Government have not told us about the 30 per cent. that they will get into the Treasury anyway. That is why the new clause tabled by my hon. Friend the Member for Rayleigh makes specific reference to a joint evaluation by Her Majestys Treasury and the Scottish Executive. I want to know about that. I want to know what the Treasury intends to do not only with the money that goes to Scotlandthat is obviously a matter for discussion between the Treasury and the Scottish Executivebut with the money that goes to England.
It used to be said that such money will be used for regional projects. The hon. Member for Milton Keynes, South-West (Dr. Starkey) is absolutely right to say that we need to consider whether some of these schemes need money that is outwith local authorities, but she will agree that we would all be a bit worried if money raised in Milton Keynes was given to fund a proposed extension to a project in Liverpool, for example. That would be very difficult to justify, but when the Government talk of regions, that is what could happen. It could happen in Scotland too.
The issue is important for the credibility of the system. The Minister will have some fair wordsor even some nasty wordsabout it, but the truth is that most people are frightened of development. They would prefer it not to take place. One of the ways to get people to accept development is to suggest a direct connection between development and an improvement in their lives and the area in which they live. If we are to have a system in which 30 per cent. is removed and given to the Scottish Executive or the Government without any reference to what it will be used for, it will be more difficult to get people to accept that development.
Dr. Starkey: May I point out to the right hon. Gentleman that some people are keen on development because their area has a shortage of affordable housing? I invite him not to generalise and say that everybody is opposed to development.
Mr. Gummer:
The hon. Lady may have misheard me, but I said that most people disliked development. I declare an interest, in that I write on these subjects for
Planning and Estates Gazette and that has been my profession since I was 22, so I have a long history of trying to understand planning and development issues. My experience is that the vast majority of people are suspiciousthe French word is méfiantof development proposals. That is generally true and in such circumstances one needs to make them feel that a development is proposed not just for the aggrandisement of the local council or the advantage of the developer, but that local people will gain something from it. That means some local injection of money, rather than the funds being spread about. That is especially true in Scotlandas the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) pointed outwhich has a sad history of a centralising tendency. There is not quite the willingness to allow local authorities to make some of the decisions that one would hope that they might.
We should wait to find out the facts before the provisions of the Bill take effect. The House is being asked to sign a blank cheque and the effect will be worse in Scotland. The Government are suggesting to the people of Scotland, and to the people of England and Wales, a process that is utterly alien to parliamentary democracy. The Government are asking for the right to spend peoples money on something that they will not delineate, at a cost that they will not quantify and subject to a tax that they will not specify. The proposal will produce a sum that the Government will not name, that will be divided on a basis of which they are not certain and that will be spent in a way that they will not restrict. That is what the Government are asking people to vote for. That is an intolerable proposal.
The only thing that is certain in the Bill is the bill for the preparation for something that may never happen. That makes this a very peculiar Bill. It is a mark of the seriousness of the state of governance of this country that we have got this far and most of the press have not noticed that peculiarity. If we are not careful, we will go on having such Bills, because they are very convenient for the Government. They do not have to tell anybody in Scotland anything about the issue. We have not been told how much will be raised in Scotland or how it will be divided. Nor have we been told whether the Treasury will get its hands on it. That is the most important thing for the discussion between the Treasury and the Scottish Executive. There is, of course, a significant financial subsidy for Scotland that comes from the rest of the British taxpayers. Does the Treasury have it in mind that, if the Scottish Executive get this money, it might revisit the Barnett formula? Might it have a look and see whether it could ante off this money?
If I were a Scottish Member of Parliament, I would want to know that. I have to tell Scottish Members of Parliament that the daily conversation on the lips of my constituents is about whether it is reasonable for them to ante up the money in circumstances in which they have no control over its spending. I would not be at all surprised if there were a little gleam in the Treasurys mind that perhaps this is one of the ways in which it can right that wrong. If so, the Treasury should come clean. We want to know about it. But, then, it has not come clean on anything else.
I am going to vote for the new clause if it is pressed to a Division, as I hope it will be, not just because I am a believer in devolution and I support the idea that Scotland should know where it is, but because I think that, if we allow this matter to get away from us on this occasion, we will also allow a whole lot in the Bill in general to get away from us. We are allowing the Government to come to the House with a Bill that contains nothing. It is as empty as the ten-minute Bill that I moved earlier. Aficionados will know that when one moves a ten-minute Bill, it has only a title and a long title. Between the First and the Second Readings, one puts in the bit about which one has spoken. The amazing thing about the Government is that their Bill has only a title and, in effect, a long title, and they have not bothered to put the bit in between.
The Financial Secretary to the Treasury (John Healey): Has the right hon. Gentleman looked at the Bill and is he aware that it is a paving Bill? The matters that he is discussing would be matters for the substantive legislation that would have to follow if we made a decision to press ahead with a planning gain supplement.
Mr. Gummer: That is exactly the point that I am making: this is a paving Bill in which the size of the pavement is not adumbrated. It is a paving Bill that tells us nothing about the cost of the possible proposals. It is a paving Bill that gives us no detail
Mr. Deputy Speaker (Sir Michael Lord): Order. The right hon. Gentleman must speak directly to the new clause. The Third Reading debate will come a little later.
Mr. Gummer: I beg your pardon, Mr. Deputy Speaker. I was led astray by the Financial Secretary, who seemed not to understand what was the fault of the Bill, which is not that it is a paving Bill, but that it is paving Bill that does not even have the substance of a paving Bill. The new clause would mean that the Bill would have no effect at all until we knew enough about it to make an informed decisioneven about paving. Even those of us who are asked to be paviours deserve to know how much, how long, with whom and on what basis. That is all we ask and it would be reasonable for the Government to tell us.
Mr. Redwood: The Governments proposal needs to be checked and I support my hon. Friend the Member for Rayleigh (Mr. Francois) in suggesting that there is a need for much more study and consideration in Scotland before it could possibly progress. I wish to talk about the effects mentioned in his new clause, which could be quite serious and difficult for Scotland. I was pleased that he drew attention to the evidence of the Scottish Property Federation, which clearly believes that, if the measure went through, it would reduce the supply of development and development land in Scotland at a time when people feel that there needs to be more housing built in Scotland and when the great cities of Edinburgh, Glasgow and elsewhere may need more development opportunities for additional office, commercial or retail space. It would be a great pity if the House allowed something to go through in preparation for a tax that would make that position worse rather than better.
We are invited by the Government to believe that there are a number of people in Scotland currently sitting on land that might be suitable for development or buildings in the big cities that might be suitable for extension or demolition and replacement with better and bigger buildings who are not currently bringing those development opportunities through to the market but who, if a tax were imposed, would suddenly say, Oh good. I can now pay a tax on my development, so I must rush off to the local planning authority to put in my planning application. I know that there are some very altruistic people in Scotland, but I think that that is just a little incredible.
Dr. Starkey: Does not the right hon. Gentleman accept that there are some similarities between Scotland and the rest of the United Kingdom? For example, the Select Committee was told that there was ample evidence of land that had not been brought forward for development because of a lack of infrastructure. Given that the PGS is meant to fund the infrastructure, it would be perfectly possible for it to lead to sites that are not being developed at present being developed.
Mr. Redwood: It is perfectly possible for developers and councils to get together and organise such developments through section 75 agreements in Scotland and section 106 agreements in England. I do not understand how introducing an additional tax into the system would make the situation better; it must make it worse.
Dr. Starkey: Will the right hon. Gentleman give way?
Mr. Redwood: If I can finish my point, I will of course give the hon. Lady a chance to rescue her rather bad argument.
A section 75 agreement in Scotland is the natural way to achieve such development. Let us say that the tax is set at 30 per cent., which is the figure that I have heard bandied about. If 70 per cent. of that went back to the local authoritythat would be 21 per cent.the deal might be much less good than one that was achieved after negotiating a section 75 agreement, under which every pound would go into a piece of infrastructure that would clearly facilitate the development.
Dr. Starkey: I simply draw the right hon. Gentlemans attention to the fact that the evidence that I cited came from the south-east county leaders. I believe that they are dominated by councillors of his party. They are worried that there are sites in the south-east that cannot be unlocked simply through section 106. They are quite keen on the PGS because it would raise much more money.
Mr. Redwood:
I do not happen to agree with them and I do not think that the tax would work like that. It would obviously reduce the flow of development proposals and development land, especially because I assume that my party would repeal it quite early on in the term of the next Conservative Government, which, I am pleased to say, looks rather closer in the light of
recent opinion polls. That would mean that people naturally would wait until the unnecessary legislation had been repealed, after which they would reach a sensible agreement with the local authority whereby money would not be wasted, or leak out of the local area, under an especially cumbersome mechanism that the Government had invented.
A lot of Labour Back BenchersI only wish that they were here todayare very worried about the proposals. I believe that the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), who has a lot of experience in this area, is a strong critic of the proposal, and I think that his opinions are mirrored by many Scottish Members, just a few of whom are in the Chamber. They are worried for good reason; their local authorities tell them that the tax would reduce their opportunities to take section 75 money, in the case of Scottish authorities, or section 106 money, in the case of English authorities, and thus reduce their ability to direct and control the element of the gain that a developer was prepared to share through a sensibly negotiated agreement.
I hope that the Government will think again. Rather like my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), I think that we are not only considering a Bill that has virtually nothing in it, but wasting our time doubly, given that I suspect that the Government will think again and realise that many of their Back Benchers are correct that the imposition of such a tax into a complex system that proceeds by agreement at present would be far from helpful, but unhelpful.
There is only one other possibility: the Government are being very Machiavellian and wish to hang out the spectre of a tax in the hope that that will get some of the people who have land with development potential to rush to their local authority before the tax is introduced so that they can pocket the gain before the taxman does. I understand how that might work, but I doubt that the Minister would be honest enough to say today that that is the Governments wicked plan. After watching Ministers and hearing their conversations with their Back Benchers, I fear that the Government do not even have a wicked plan. On this occasion, they have blundered into something that Labour Governments always do. They realise from historical researchhistory is not the strong subject of this Administrationthat all the previous efforts have gone wrong, so they have come up with the silly idea that if there were a lower rate of tax, it might somehow not be so damaging. Such a tax might not be quite as damaging, but all tax is damaging in this situation. I wish to spare the people of Scotland from the proposal, so I have pleasure in recommending new clause 1 to the House.
Mr. Mark Field: I shall not detain the House long as all the important points have been made, not least by my hon. Friend the Member for Rayleigh (Mr. Francois) in speaking to the new clause.
Inevitably, much suspicion surrounds any section 106 agreement in England or section 75 agreement in Scotland; I guess that the provisions are similar. Local residents are concerned that, under current arrangements, such agreements effectively are little more than a bribe that developers pay to the local
authority. At least if the money goes to the local authority, one can rely on the fact that certain improvements will be made in the locality. If the money30 per cent. or rather moreis now to go to the Scottish Executive, local residents will be even more concerned. It is clear that the focus needs to be on local benefits as far as possible, and it cannot make any sense that there will now be a middle man in the form of the Scottish Executive.
The hon. Member for Twickenham (Dr. Cable) pointed out that the Mayor of London may see this measure as a precedent. He is already looking to expand his planning powers through the Greater London Authority Bill that is going through Parliament.
I agree with the points made by my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) and my right hon. Friend the Member for Wokingham (Mr. Redwood) about the potential unintended consequences of the proposal. Inevitably, if there is to be another layer of tax, the reaction of any sensible, commercially minded developer will be simply to sit on his or her hands. That is how things have worked in the past.
I accept the concerns expressed by the hon. Member for Milton Keynes, South-West (Dr. Starkey). One of the biggest concerns of us all, particularly those of us in relatively built-up constituencies, is the demand for more social or affordable housing. The reality in London, after six years of the Mayor of Londons policy that there should be at least 50 per cent. social housing in large-scale developments, is precisely as I have pointed out: developers have decided to sit on their hands rather than go ahead with new developments and have watched as the value of their sites has risen yet higher. It has been the very worst news for the most vulnerable in our society, particularly in built-up areas. I think that we all appreciate that as our societies become ever more polarised between the extremely rich and the extremely badly offI am sure that that applies in the constituency of the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) and in Glasgow constituenciesthat is potentially something of a disaster.
What the Government are proposing is a total mess. I fear that our new clause will alleviate matters only to a very small degree, but I hope that we will be able to vote on the matter, and that in this debate and on Third Reading we will be able to make a very strong case against this absurd proposal. It will be very bad for Scotland and for England. I am only sorry that, as a number of my colleagues have pointed out, there are not more Scottish Members present. One hopes that they would have been able to put the case even more robustly and defend their own interests.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): As one of those Scottish Members, I add my weight to the desire to vote on the new clause in an attempt to bring matters back to a more local level, at least by having more negotiation.
Local government is best placed to see the impact on the local community of any development that it decides on, and section 75 agreements, rather than a centrally collected tax, are the best way of deciding how that impact is to be ameliorated and paid for at the time of the planning application.
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