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We can make an analogy between this proposal and the centralisation of the business rates, which also removed some of the debate about unpopular business developments and whether they would benefit the community. Councils looking at the wider benefits of encouraging business and its growth could see the impact of having new land available for business and office development, but at least in the days when business rates were collected and kept locally there was a straight local benefit that could be perceived. Similarly, the Government should recognise the benefits of section 75 agreements, which allow the local authority to assess its priorities in its own community for dealing with the impact of development.
John Healey: This short, one-page, three-clause Bill is intended simply to ensure the propriety of Government expenditure and that it is in accordance with Government accounting rules; it does no less and no more than that. Although I understand the interest that all hon. Members feel in the points that they have raised, they are precisely the points that were picked up in the thorough inquiry that the Select Committee on Communities and Local Government conducted on the policy area. They are precisely the points covered in the general consultation that we undertook in December 2005, and in the three further specific technical consultations that we undertook alongside the pre-Budget report in December 2006.
None of the points and questions raised by the hon. Member for Rayleigh (Mr. Francois) relates to this paving Bill. He and others asked about the proportion and distribution of funds, and he and my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) asked about the operation of section 75 agreements, alongside a planning gain supplement. The hon. Member for Twickenham (Dr. Cable) was concerned about the contraction of section 106, and the right hon. Members for Suffolk, Coastal (Mr. Gummer) and for Wokingham (Mr. Redwood) were concerned about the rate of the planning gain supplement. There were also questions about the operation of the Barnett formula in respect of any revenues relating to the planning gain supplement. Those are all matters for the substantive legislation that would be required if we decided to proceed with introducing a planning gain supplement; that would be the time properly to examine the concerns that my hon. Friend the Member for Edinburgh, North and Leith urged us to ensure are debated.
Sir Robert Smith: But if the House was unconvinced of the ideas in the Bill for which we are paving the way, it would make sense not to give the Government the powers set out in the paving legislation.
John Healey: All hon. Members will make up their own mind on the proposals before us, but I urge the hon. Gentleman and others to consider the fact that, this afternoon, we are being asked to make judgments on a paving Bill designed to ensure the regularity and propriety of the Government expenditure that would be necessary if we proceeded to introduce a planning gain supplement. The Bill will ensure that the proper preparations are in place beforehand.
Stewart Hosie: The Minister talks about the regularity and propriety of payments. This is just a paving Bill, but, as I understand it, the intention is that the supplement raised by the Treasury would be filtered back, via the Scottish Executive, to local authorities in Scotland, in one proportion or another. Why have the Scottish Executive been inserted into the loop when, at the moment, the local authorities simply collect their money? Why, under the new regime, do the Government not collect the money and simply pay it directly to the local authorities? Why have the Scottish Executive been inserted into the mechanism?
John Healey: I am surprised by the hon. Gentleman, who is generally well informed on such issues. The simple answer to his question is devolution. As he will know, as part of the devolution settlement, planning functions and the operation of planning legislation are a matter for Scotland, the Scottish Executive and the Scottish Parliament.
Mr. Redwood: The Minister is an intelligent man, and he has studied the subject for a long time, so will he tell us how likely it is that the tax will be introduced?
John Healey: We have been pretty consistent about that. Clearly, the results of the three consultations, which close at the end of the month, will help to inform our judgment, but we have said that if we believe that a planning gain supplement is workable and effective, we will announce that we intend to proceed with its introduction.
Mark Lazarowicz: Planning is a devolved matter, but taxation other than local taxation is a reserved matter. I am quite happy with that, but I thought that the hon. Member for Dundee, East (Stewart Hosie) was not; he appears to have done an about-turn today. Will my hon. Friend the Minister at least give an assurance that the issues raised about the way in which the tax would apply in Scotland will be fully discussed in any Bill that is introduced, and will he assure us that the Government have an open mind on the subject?
John Healey: My hon. Friend would probably accept that we as a Government generally have an open mind. I can give him the assurance, as I have tried to do already, that the matters about which he is concerned will be discussed, should we introduce any substantive legislation to follow a decision to introduce a planning-gain supplement. However, because of the devolved nature of the planning responsibilities in Scotland as part of the devolution settlement, we do not wish to dictate, and I am sure he is not arguing for the Government in Westminster to dictate, to Scotland how it should use the proceeds of any planning-gain supplement to support infrastructure that could help with development.
Mr. Mark Field:
The objection surely is that it should not be for the Scottish Executive to dictate to local Scottish councils how to use the money. The Government should not pass such an ill thought-through Bill, which effectively gives that power to the Scottish Executive without allowing local people and locally involved politicians to have their say on those matters, especially when, as several other Members
have said, the measure is a blank cheque and we have no idea whether it will apply to 30, 50 or 100 per cent. of the money.
John Healey: First, I do not accept the hon. Gentlemans description of this rather simple Bill. Secondly, the devolution and the responsibility and powers to make decisions about planning matters are not dealt with in the Bill. They were settled in the Scotland Act 1998, which set up the Scottish Parliament and gave independence on various matters as part of the devolution settlement. That means that although the tax will be UK wide, there is nevertheless an important interaction with planning obligations and responsibilities for infrastructure and development, which will rightly rest in Scotland and with Scotland. The Scottish Executive and the Scottish Parliament, no doubt in detailed consultation with their local authorities, will make appropriate decisions about how to handle the revenues.
Mark Lazarowicz: I am grateful to my hon. Friend. He is being generous, and I am sure he appreciates that this is an important matter for my constituency and many others. If we should not decide for the Scottish Executive how it allocates the fundinga principle that I acceptsurely there should be some parliamentary discussion of the measure somewhere. If it is not to be discussed in this place, will my hon. Friend consider providing for an order to be agreed by the Scottish Parliament before the measure comes into effect in Scotland? That would allow the Scottish Parliament to discuss the matter, if we cannot discuss it here in detail.
John Healey: If policy on planning in Scotland is not a matter for me as a UK Minister, clearly the conduct and operation of the Scottish Parliament is even less a matter for me. I know that the Executive and Members of the Scottish Parliament are examining the matter closely and will follow our debates, and I am sure the point that my hon. Friend makes will not be lost and will be considered by them.
The hon. Member for Rayleigh does not do his case much good by misquoting the Scottish Executive. The Scottish Executive did not say that the planning-gain supplement was misconceived. It said that if it was misconceived, it might act as a disincentive. The hon. Gentleman laughs, but the distinction is rather important. I want to make sure that he is clear about that and that that correction is on the record.
New clause 1 would delay the Bills coming into effect. That might be the hon. Gentlemans intention, although he was not explicit about it. The new clause is designed to impede, rather than to improve, its operation. It would make the IT, staffing and preparation of systems that are necessary for any smooth, timely and efficient introduction much more difficult to achieve.
Mr. Gummer: Would it not help the Government enormously if the preparations for IT and the like were held up, given the Governments history on the purchase of IT? Would not the new clause be of enormous benefit to the Government? Why does not the Minister accept it immediately? He would then not be in the same mess as some of his colleagues in respect of other IT projects.
John Healey: The right hon. Gentlemans argument cuts in exactly the opposite direction. The House has been reasonably and rightly critical of some Government IT projects, and the basis of some of the criticism has often been that the projects have been rushed and insufficient time has been allowed for preparation. The purpose of the paving Bill is to allow us to be in a position such that, should we decide to go ahead with the planning-gain supplement, we can begin the proper and necessary preparations from that day. To delay in that way would increase the risks about which the right hon. Gentleman is rightly concerned.
The new clause is also unnecessary because the Government are well aware of the interaction of the planning-gain supplement with devolved policy areas, which for some time we have been examining closely with the Scottish Executive and the devolved authorities, even though it is not a matter for this Bill.
Dr. Cable: Do the devolved areas to which the Minister refers in the context of the interaction between revenue and devolution apply to Wales, Northern Ireland and London?
John Healey: The legislation applies to Wales and Northern Ireland, and London is part of England, with regard to which we have said that we will ensure that at least 70 per cent. of any revenues from the planning-gain supplement would be recycled to the local authority area from which they were raised.
Mr. Francois: The Minister is summing up, but before he sits down will he say whether, as part of this detailed examination that he has just assured the House is under way, the Government have decided at what rate the PGS would be levied were it to be introduced? What will the rate be?
John Healey: The hon. Gentleman has asked that question a number of times. It would be part and parcel of any decision on whether to go ahead. It is clearly not a decision that we have been able or ready to take, so there is no answer to that question. We have said clearly that it will be levied at a modest rate that will not create disincentives for the sale and development of land but could raise additional revenues that would support the development and infrastructure that is necessary if we want to see the development, particularly of housing, that this country badly needs.
The hon. Gentleman said that I was winding up, but I am actually just warming up, because there are one or two other points with which I should deal.
Stewart Hosie: May I take the Minister back to the discussions with devolved Administrations? He is right that planning legislation is devolved, but the implementation of planning law is a local authority matter. So before he moves on and warms up too much for the hon. Member for Rayleigh (Mr. Francois), will he tell the House how many Scottish local authorities he and his Department have been in discussion with so far in the preparation of this paving Bill?
John Healey:
The operation of planning legislation in Scotland is clearly a matter for local authorities in Scotland. The passing and content of planning legislation is clearly a matter for the Scottish
Parliament and Scottish Executive. The hon. Gentleman asked me a specific question, so let me give him a specific answer. I mentioned earlier the consultation that we published on the principle and outline of a possible planning-gain supplement in December 2005. We had 39 responses from Scotland and other devolved areas. They played an important part, as I will show in a moment, in helping us to develop our thinking, and influenced the proposals that we have set out.
Mr. Brian Binley (Northampton, South) (Con): Will the Minister give way?
John Healey: The hon. Gentleman has only fairly recently come into the Chamber, but of course I will give way. He is generally a very regular attender in the Chamber.
Mr. Binley: The Minister is very kind. I thank him very much.
The possible levy to be applied has already been discussed in Northamptonshire, which the Minister will know is one of the areas that will be heavily affected by the sustainable communities project, with 167,000 new homes by 2031. It is worrying that people are already talking about £40,000 per house as a way of paying for infrastructure. Can the Minister give us some idea of whether it is likely to be that kind of figure? We have to go ahead with infrastructure for sustainable communities and we will need to know what money is available before we come back to the Government to say, That aint enough.
John Healey: A planning gain supplement levied at a modest rate that nevertheless raised additional revenue to support infrastructure is precisely the kind of source of additional funds that will be required to support the developments that we need in the hon. Gentlemans area and in others.
On the wider application of the PGS to devolved Administrations, whether in Scotland, Wales or Northern Ireland, the Government have clearly reiterated several points that are worth setting out to the House. First, we have said that all PGS revenues from a devolved country will be returned in full to that country. Secondly, we have said that the devolved Administrations will have discretion over how PGS revenues from their country will be used to support infrastructure. That is not, as the right hon. Member for Suffolk, Coastal (Mr. Gummer) suggested, a fundamental problem, but a fundamental principle of devolution. Thirdly, we have said that we will undertake detailed further work with the devolved Administrations and with interested parties in those countries to examine the introduction of a planning gain supplement as regards areas of devolved policy such as planning obligation agreements, including section 75 agreements in Scotland and article 40 agreements in Northern Ireland.
The new clause suggests that work with the devolved Administrations on how the PGS would operate across the UK has not yet been done. That is plain wrongit is already taking place. We are currently undertaking the second round of consultations on the PGS. As I
said, we received several important contributions to the first consultation, which have had an important influence on the way in which we have developed proposals since. The views that came to us from Scotland have been decisive in helping us to come to the view that Scotland should keep 100 per cent. of PGS revenues that may be raised there and that Scotland should have full discretion over the use of those revenues for supporting infrastructure in Scotlandcommitments that have been welcomed by Scotlands First Minister. In addition, start notices, which are already a feature of the planning system in Scotland, could play a useful part in any PGS. On planning obligations, our proposal to use a common starting point from the negotiations on affordable housing also draws heavily on the approach that is already in place in Scotland.
It is worth being clear that the Government do not propose, nor could we propose under the devolution settlement, to mandate how devolved policies are conducted. The determination of section 75 planning agreements would rightly remain the preserve of the Scottish Executive and the Scottish Parliament. Nothing in any proposed PGS policy, and certainly nothing in the Bill, would legally require changes to Scotlands planning policy.
As the PGS would be a national tax applying across the UK, decisions on whether it should be enacted, and if so how, will be the preserve of this Parliament.
The new clause is less about the Bill and more about the underlying policy of the PGS. The only major matter of substance in the Bill relating to Scotland is that Scotland is not specified in it. That is because preparatory expenditure needing new powers under the Bill would not be incurred by the Scottish Executive. The Bill itself will place no additional burdens or requirements on Scotland. Any introduction of a PGS, together with its application across the UK, would be preceded by debate and substantive legislation on the wider policy. That would provide the opportunity to examine in detail any concerns about the design and operation of a PGS.
The Bill is a narrow, specific, paving measure. The new clause would frustrate its purpose and I hope that the hon. Member for Rayleigh will not press it. If he does, I shall have to ask my hon. Friends to oppose it.
Mr. Francois: I am pleased to be joined on the Front Bench by my hon. Friend the shadow Secretary of State for Scotland, who has returned hot foot from a meeting this morning of the Select Committee on Scottish Affairs in Dundee especially to be here for the winding-up speeches on the new clause. Would that more Labour Back Benchers had turned up for the debate.
The debate has been valuable in that it has allowed us to press the Government on how they believe that the PGS will operate in Scotland. It has also served to highlight the continued tensions between the Treasury in London and the Scottish Executive over the proposed implementation of the PGS north of the border.
I have listened carefully to the Financial Secretary on the matter, but he has not entirely convinced me. Indeed, he has not convinced me at all. I also suspect
that he has not convinced the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz), who reasonably asked him for more detail about the proposals operation in Scotland. Despite that reasonable plea from the Labour Back Benches, we have been neither told the rate at which the tax would be levied in Scotland or anywhere else in the United Kingdom nor given any further detail about its implementation in Scotland or the proportions between the Scottish Executive and any locality that is asked to accept a development for which money might be earmarked or ring-fenced.
Despite being given a golden opportunity this afternoon, the Financial Secretary has not added much to the sum of human knowledge about the PGSs operation in Scotland. I am therefore left with the thoughts of Mr. David Melhuish, director of the Scottish Property Federation, who concluded his letter of yesterday with a plea for continued opposition to the PGS and the hope that
In the Scottish context, the PGS is not taken further without proper evidence-based policy making.
It is not exactly a secret on a par with the Trident codes that the Government are under considerable pressure in the run-up to the Scottish elections in May. I do not want to be accused of helping the Government out of their predicament. Nevertheless, it occurs to me that, given the weight of opposition to the PGS in Scotland, including from many Labour supporters, it might be sensible for the Government to draw back while they still can and announce their decision to abandon their misguided intention to proceed with the PGS in the United Kingdom, including Scotland.
Having left the Financial Secretary with what I hope will be a genuinely lingering thought, I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
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