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Planning-gain Supplement (Preparations) Bill

The Government have been making it up as they go along, which is why the proposal has been delayed so often and why there have been so many multiple consultation documents. The hon. Gentleman has not made a very strong point. The third reason why we oppose the Bill—and the PGS, which it helps to facilitate—is the threat that it would pose to the creation of affordable housing. That point was largely overlooked in the partial regulatory impact assessment, which is mentioned in the explanatory notes, and was issued alongside the pre-Budget report of 2005. The Government have been understandably coy about explaining the level at which the PGS will bite. Page 3 of the Treasury technical consultation document states that the PGS will be levied at a ““modest”” rate across the United Kingdom. Unfortunately, it does not say quite how modest that rate will be, so it is difficult to calculate the exact effect at this stage. Nothing in the Bill or the explanatory notes answers that important question. Nevertheless, by working from first principles we can deduce at least some of the effects that the measures might have. It is true that developers often make considerable profit margins, particularly on greenfield housing schemes where there are no significant land clearance costs, so up to a point the PGS could theoretically be absorbed within the developer’s profit margin. However, it is not always that simple. In many urban areas, many of the most obvious brownfield sites are already, in effect, long gone. That means that developers may have to look at less easy sites such as old gasworks or factory sites, many of which have significant clearance costs, often for good reasons of health and safety, before construction work can begin.