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Session 2007 - 08
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General Committee Debates
Planning Bill

Planning Bill

The Committee consisted of the following Members:

Chairmen: Sir John Butterfill, Mr. Eric Illsley
Benyon, Mr. Richard (Newbury) (Con)
Betts, Mr. Clive (Sheffield, Attercliffe) (Lab)
Brake, Tom (Carshalton and Wallington) (LD)
Clark, Paul (Gillingham) (Lab)
Curry, Mr. David (Skipton and Ripon) (Con)
Dhanda, Mr. Parmjit (Parliamentary Under-Secretary of State for Communities and Local Government)
Duddridge, James (Rochford and Southend, East) (Con)
Ellman, Mrs. Louise (Liverpool, Riverside) (Lab/Co-op)
Ennis, Jeff (Barnsley, East and Mexborough) (Lab)
Fitzpatrick, Jim (Parliamentary Under-Secretary of State for Transport)
Healey, John (Minister for Local Government)
Jones, Mr. David (Clwyd, West) (Con)
Lait, Mrs. Jacqui (Beckenham) (Con)
Llwyd, Mr. Elfyn (Meirionnydd Nant Conwy) (PC)
Michael, Alun (Cardiff, South and Penarth) (Lab/Co-op)
Mole, Chris (Ipswich) (Lab)
Neill, Robert (Bromley and Chislehurst) (Con)
Reed, Mr. Jamie (Copeland) (Lab)
Rogerson, Dan (North Cornwall) (LD)
Sheridan, Jim (Paisley and Renfrewshire, North) (Lab)
Watts, Mr. Dave (Lord Commissioner of Her Majesty's Treasury)
Alan Sandall, Committee Clerk
† attended the Committee

Public Bill Committee

Thursday 31 January 2008


[Sir John Butterfill in the Chair]

Planning Bill

Clause 163

The levy
Question proposed [this day], That the clause, as amended, stand part of the Bill.
1 pm
Question again proposed.
Dan Rogerson (North Cornwall) (LD): I welcome you back to the Chair, Sir John. I am sure that the Minister recalls exactly what I was saying when I had to call a halt to my remarks this morning. To recap briefly, I am in favour of the levy in principle, but we need to know far more about how it will work and how it will be negotiated. The document that was handed to us does not fill in a great deal of detail. I appreciate that there is a lot of negotiation and consultation to come, but there is bound to be some dissatisfaction, given that the provision will not be amendable and will instead be subject to the affirmative resolution procedures for secondary legislation.
We must ensure that we are not jeopardising other calls on planning gain, for want of a better phrase. We will return to that issue in our debates on a later clause. I hope that the threat to impose a planning gain supplement will recede into the background as we move towards a satisfactory principle on which the levy could work. We had a discussion earlier, prompted by the right hon. Member for Skipton and Ripon, on whether it is a hypothecated tax. If one wanted to go further, one could call it a tithe—the taking of a percentage of the increase from which developers benefit.
The key to this issue is that we need more detail on the levy. We have the opportunity to debate what little detail there is in subsequent clauses, and I look forward to doing so. I hope that the process by which the levy is framed will be an open one and that everyone will have an opportunity to comment, so that what comes out the other end is workable and does not have unfortunate consequences regarding communities’ aspirations for their future development.
The Minister for Local Government (John Healey): Welcome back to the Chair, Sir John. You missed the wide-ranging debate that we had this morning, before we even got to the clause stand part debate, despite Mr. Illsley’s best intentions to keep us in order. Let me deal with the main points that have arisen. I am grateful to the hon. Member for Beckenham for setting out clearly the Conservative party’s position on community infrastructure. The hon. Member for North Cornwall made it clear that the Liberal Democrats support the provision in principle, and I welcome that. Both hon. Members added their general support to the wide range of bodies that are interested in and support a levy, while being anxious that we should get its design and implementation right. I shall return to that point, because it is the reason why we are tackling the legislation, implementation and introduction of the levy as we are.
The hon. Member for North Cornwall stressed the importance of revenue from the levy being additional. We have consistently stressed the importance of that approach, which reflects the Government’s intentions. He also stressed the importance of sub-regions and referred to his experience in Cornwall. He is right to draw the Committee’s attention to that point, which we will come to.
My hon. Friend the Member for Sheffield, Attercliffe queried why we were making the power one that local planning authorities can, rather than should, choose to take advantage of. He also expressed concern about infrastructure planning. It has been established as Government policy, captured first in PPG12 and now in the draft PPS12, that local planning authorities should look systematically at their infrastructure needs. Whatever the extent of the formal incorporation of a community infrastructure levy process in the local development plan framework, it provides a good basis for ensuring that the preparation process and introduction in those areas that want to take advantage of the powers are right.
Mr. Clive Betts (Sheffield, Attercliffe) (Lab): I thank my hon. Friend for dealing with that issue. What I was trying to get at was that sometimes, local authorities have not used section 106 powers not because of a definite decision, but because they do not get around to it or have not seen its importance, and have not done what their neighbours have often done effectively. My hon. Friend is right in saying that a local authority may choose not to use CIL powers, but will it have to go through a local development framework process of considering whether those powers would be appropriate in view of the development needs of the area, and come to a view that they would not be—if that is the decision that they eventually come to—in a positive way and through a proper process?
John Healey: There will be a proper process for considering the introduction and appropriate charging level of a CIL. Our starting point and intention for when that seems possible and appropriate is to link it into the local development planning process. We are discussing that in detail with the interest groups, because the local development planning process might not be quite flexible or adaptable enough if it were the only route for a CIL. I shall come to that in a moment, and in considering further amendments.
Mr. David Curry (Skipton and Ripon) (Con): There might be a commercial development in part of a city where a supplementary business rate had been agreed. To be effective, there is likely to be a 10-year programme to raise funds for the sort of projects in mind, which are also infrastructure projects. Would such a new development automatically become eligible for the supplementary business rate, its not having existed, perhaps, when the decision was taken?
John Healey: The right hon. Gentleman illustrates why we are approaching the levy’s development as we are. Within the framework set out in the Bill, there will be much detailed examination of how it might work in practice, and we must determine what the regulatory framework should be. That is one question that might be appropriate for that part of the process.
During our discussion this morning, the hon. Member for Beckenham said that the Government seem to be—she may even have said that the Government are—setting up the community infrastructure levy to fail so that they can introduce the planning gain supplement. That is completely ridiculous. Having led the Treasury’s work on the planning gain supplement for at least two years, I am conscious of the concept’s strengths and weaknesses, and of the concerns that exist about that proposal.
I am strongly of the view that the proposal to develop a community infrastructure levy, as we are doing in the Bill, is a better approach. It certainly has sufficiently widespread support to mean that we have a good chance, if we get the details right, of introducing a measure that could make a significant contribution to meeting the costs of some of the infrastructure that we will need in almost all our local areas in the coming years to support housing and economic growth and, therefore, the prospects and prosperity of local people.
Mrs. Jacqui Lait (Beckenham) (Con): I am grateful for that assurance. Does it mean that, in the interest of speedily getting through the remaining stages of the Bill, the Minister will accept all our amendments that refer to land values, and particularly the amendment that asks for repeal of the Planning-gain Supplement (Preparations) Act 2007? If he will accept the spirit of those amendments, I will happily not move them.
John Healey: My starting point with all amendments tabled by the hon. Lady, and her arguments, is not necessarily to say no but to see whether they have any merit. Without wanting to raise expectations or hopes too high, the answer is, “Wait and see”—on some of them, at least.
Mr. Curry: The Minister mentioned housing growth. I believe that I am right in saying that if there were a development of market housing and social housing, the old section 106 agreement would continue to exist in respect of the social housing. After all, that is what has delivered more than 50 per cent. of social housing in this country over the past few years. Presumably, the community infrastructure levy would apply to market housing, and section 106 would apply to social housing, but no properties would be subject to a double imposition. Is that the case?
John Healey: Not precisely. We will get on to social housing and the interplay between section 106 agreements and what may be appropriate and allowable infrastructure to be funded through a community infrastructure levy. Suffice it to say that our intention and policy aim is to continue to have sufficient levels of affordable housing, principally negotiated through section 106 agreements. However, it seems sensible to have a provision—we will discuss it on a later amendment—such that, if we saw instead a drop-off in the levels of investment and affordable social housing that we need in almost every part of the country, we could at least make the contribution to the funding of affordable housing an allowable element for expenditure that may come from the levy revenues.
The point that I was making to the hon. Member for Beckenham was that this is not the planning gain supplement by stealth. The community infrastructure levy is different in principle, in design and in the purposes for which it is being raised.
Mr. Richard Benyon (Newbury) (Con): Further to the point of my hon. Friend the Member for Beckenham, I believe that the hon. Member for North Cornwall referred to the Government’s menacing words about framework legislation for the planning gain supplement remaining on the statute book and being used at some future date. If they are doing something so radically different, what is the point of keeping that measure in the background like a sword of Damocles?
John Healey: We are at risk of pre-empting a debate that we will certainly have on one of the hon. Lady’s amendments, but just so the hon. Gentleman is clear, the legislation for planning gain supplement that is on the statute book is not framework legislation. It would not and could not allow the planning gain supplement to be introduced. It is narrowly drawn paving legislation intended specifically to allow Her Majesty’s Revenue and Customs and other specified authorities the power to spend money in preparation for a possible planning gain supplement.
That is the provision that is on the statute book. It has not been used, no expenditure has been made under its provisions, and when I was the Minister responsible for the Bill in question, I gave an undertaking that such things would not happen unless a policy decision was taken to go ahead with a planning gain supplement. I hope that that is helpful. The hon. Gentleman was talking about its being a framework Bill, rather as one might describe this legislation as being a framework Bill for a community infrastructure levy, but, clearly, it is completely different.
The basis on which we proceed with the proposal for a levy is that the industry has stated that it accepts the case and that it is willing to make additional contributions for infrastructure. It supports the levy, which builds, as many urged us to do, on the existing practice through planning obligations under section 106 agreements.
The question is how best to do that; that is the nature of the discussion that we are having about the Bill’s provisions. Industry has strongly backed that, as members of the Committee heard in the evidence sessions. The framework in the Bill is designed to give us the powers to introduce a levy, the detail and design of which, we propose and have always proposed, will be set out in regulations. The hon. Member for Beckenham described that as cavalier, but I would say that, on the contrary, it is cautious and consultative. The British Property Federation and the Home Builders Federation jointly said that they welcomed the fact that the CIL clauses in the Bill are enabling clauses, because that will provide the necessary flexibility to implement the levy through regulations and guidance as its full details are developed.
1.15 pm
That is precisely what we are doing and what we intend to do, and I want to make it clear to the Committee that regulations to introduce a levy under the provisions in the Bill will be subject, as clause 171 states, to affirmative resolution. Therefore, the House will have the chance to debate and scrutinise the proposals we intend to lay later, and those regulations will be laid only after detailed, continuing discussions with those with a direct interest and others and consultation on the drafts of the regulations.
Finally, with regard to timing, I say to the hon. Member for Beckenham, who urges that the regulations should somehow be done and dusted and available in draft by the time the Bill goes to the Lords, that we have been consistent and clear from the start. I had hoped that publishing the policy document on Thursday would have given her a chance to read it over the weekend, as paragraph 83 of that document makes it clear that we aim formally to consult on draft regulations this autumn with a view to finalising them in spring 2009. Regulations will need to be explicitly approved by the House of Commons before becoming law. I commend the clause to the Committee.
Question put and agree d to.
Clause 163, as amended, ordered to stand part of the Bill.
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