---

Planning-gain Supplement (Preparations) Bill

Having tried to be helpful to hon. Members in as precise terms as possible, I regret that I must make it clear that the Government have not yet taken that decision. If we decide to go ahead with the planning gain supplement, it will be set at a modest level that will generate extra funds but not hold back or discourage the release of land for development. It would be set at a level that would help us to avoid some of the problems that have been created in what some have seen as predecessor experiments in the field. I hope that the hon. Gentleman accepts that the steps that we have taken over the past two years—the considered analysis of, and discussion and consultation on, not only the principle of a planning gain supplement but its details—demonstrate that the Treasury is leading a prudent policy making process. We are taking such steps in our consideration of any possible rate. It is that same careful approach that leads me to introduce this short Bill. If, after the present round of consultation, we make the judgment that the planning gain supplement continues to be a workable and effective way of capturing the windfall uplift in land value and helping to finance the infrastructure to support development, we will proceed towards introduction. However, this measure is simply a paving Bill that authorises the three parties to incur preparatory expenditure, although the burden of building the administrative systems and, ultimately, of managing the planning gain supplement would fall on Her Majesty’s Revenue and Customs. HMRC’s expenditure prior to introduction would include spending on new information technology for the PGS, as well as on the adaptation of its existing systems. The expenditure would also go towards designing the necessary business systems to administer the levy and putting in place appropriately skilled staff to manage it, and it would equip the Valuation Office Agency and the Valuation and Lands Agency in Northern Ireland with the necessary facilities to help to administer the PGS, including staffing, training, accommodation and IT equipment. Clearly, those administrative functions would have to be based on further substantive legislation, and they would have to be properly tested and put in place prior to the implementation of the planning gain supplement, which we have said will not take place before 2009. Expenditure incurred by the Secretary of State prior to introduction could include spending on adaptation of Government IT, such as that used to monitor the planning system, which I understand is known as the planning portal and is administered by the Department for Communities and Local Government.