Examination of Witnesses (Questions 300-314)|
12 DECEMBER 2006
Q300 Angela Eagle: This will not
happen until 2008, will it? My understanding is that it is for
the next round.
Mr Kingman: That is correct.
Q301 Angela Eagle: And therefore
we are stuck with this issue at the moment.
Mr Kingman: That is correct but
I think the analysis of the Stern Review, which has to be right,
is that the EU ETS is in a sense the only game in town in terms
of an international trading system that helps us establish a price
for carbon and actually gets the dynamics that Nick described
in his report.
Q302 Angela Eagle: At the moment
the price for carbon permits is fluctuating widely. In a couple
of weeks it has come down from 30 to 8. That is not
driving technology change in the UK. It is just making it cheaper
to purchase a load of possibly German permits, just to use one
example, so that people can carry on as before exceeding emissions.
Mr Kingman: It has been volatile
and it has also not been sufficiently tight, but there is no fundamental
design reason about the scheme why that is necessarily so. What
is needed is to get the allocation of permits right, and we are
confident, as a result of the announcements made recently, that
the Commission is getting a grip on this.
Q303 Angela Eagle: This is a market
mechanism to try to price carbon. What also needs to happen, surely,
is mechanisms which drive technological change for cleaner energy
production. The Budget has some minor measures in that respect.
Are you thinking of tax changes to try to drive investment in
cleaner energy production technology?
Mr Kingman: We always look at
tax changes that might help us meet our objectives. I think we
are pushing on with a number of things in relation to innovation
and environmentally friendly technologies, notably the creation
of the Environmental Technologies Institute.
Q304 Mr Love: The Barker Review of
Land Use Planning: have you made any estimates of the likely improvements
in productivity and competitiveness that will arise if it is implemented?
Mr Kingman: No, we have not. I
do not think it is possibleand Kate did try as part of
her reviewto try and isolate the impact of the planning
regime on productivity. That is very difficult for all sorts of
reasons. It is very clear, and it is clear from the analysis that
others have done, the IMF and so on, that the planning regime
is a relevant issue in the UK and that we need to get this right.
Q305 Mr Love: That is true because
your website states quite clearly that the UK Trade and Investment
Organisation says how important it is for companies looking to
invest in the UK and the OECD makes a comment on it. If it is
that important why has no estimate been made? It seems kind of
strange. To put it mildly, it is probably going to be a quite
a controversial change that we are making so surely we should
have some justification at national level of how important this
Mr Kingman: I think there is ample
justification in both the interim Barker Review and the final
Review itself of why this matters. Isolating the precise impact
on national productivity is simply an analytically undoable exercise.
Q306 Mr Love: You have already stated
that 70% of the take from any introduction of the Planning Gain
Supplement will be hypothecated to local use but it does not specify
that that should be local authorities. Can we take it that that
it will go to the local authority?
Mr Neale: A substantial proportion
will go to local authorities, yes, I think we have said 70%.
Q307 Mr Love: At least 70% and that
will be to the local authority; it will not be for regional or
national projects that happen to happen in their local area?
Mr Neale: That is for the local
authority specifically to invest in the infrastructure needed
to support new development.
Q308 Mr Love: Do you expect the yield
from the Planning Gain Supplement to be greater than that currently
estimated by the property industry, the £3 billion, that
is raised from section 106?
Mr Neale: Yes we do.
Q309 Mr Love: Significantly greater?
Mr Neale: It obviously depends
on the precise rate at which Planning Gain Supplement is set but
we do expect it to be greater.
Q310 Mr Love: There has been quite
a lot of talk about whether there should be a charge for vacant
or derelict brownfield sites as an incentive to get them to bring
those sites back into use and also some talk about providing tax
incentives to encourage the development of brownfield land. Can
you tell us what your thinking is in relation to that?
Mr Neale: We are consulting on
the development of PGS at the moment. We published two consultation
papers with the PBR, but our view at the moment is that the value
of brownfield land is already reflected in the price paid for
Q311 Mr Love: Do you expect changes
that you make will be neutral or will there be an increase in
taxation? How do you expect that to pan out?
Mr Neale: Sorry, what is your
Q312 Mr Love: The suggestion is that
there may be additional taxation to try and bring land back on.
There has also been some talk about reliefs to get land back into
use. Is it overall going to be the combination of taxation and
reliefs or will it be neutral?
Mr Neale: We do not expect that
PGS will adversely affect the incentive to develop land because
it will be a very modest proportion of the uplift created by the
grant of planning permission so there will still be substantial
incentive to bring land, both brownfield and greenfield, to development.
Q313 Chairman: Mridul, you promised
answers to education spending projections.
Ms Brivati: I did and I knew there
was a reason I could not add them up in my head. I am not satisfied
with the numbers I have and rather than give you false numbers
I would prefer to go back and send you a note, if I may.
Q314 Mr Gauke: If we could have before
Ms Brivati: That should be perfectly
Chairman: In answer to questions from
George, Michael, myself, amongst others, you will be sending us
information tonight so that we are prepared for tomorrow, is that
okay? Can I thank you for your evidence session this morning and
I look forward so seeing you again tomorrow.