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Planning-gain Supplement (Preparations) Bill

I come back to the original point. If the Minister cannot even tell us the rate at which the tax will be implemented, or even confirm that it will be proceeded with, given that it has now been watered down to a lead option, why on earth is the Bill before the House at all? On affordable housing, the Charities Properties Association argued thus in the evidence that it provided to the Select Committee on Communities and Local Government:"““The CPA believes the PGS will have a seriously detrimental impact on the financial position of property-owning charities. ""This includes both charities which have significant land holdings as part of their endowment…and charities which develop their own land in order to fulfil their charitable purposes, for example by providing affordable housing.””" The next reason for Conservative Members’ wariness is that we believe that history is very much on our side in this matter. The explanatory notes indicate that the Bill would come into effect immediately following Royal Assent, presumably some time in spring 2007. However, there have been at least five previous attempts to introduce a similar tax in the past. Socialist Governments, in particular, have tried to do so three times since the second world war. Specifically, we have experienced the development charge, introduced by the Town and Country Planning Act 1947 and repealed in 1952; the betterment levy, in the Land Commission Act 1967, which lasted only three years before repeal in 1970; and the development land tax, which was introduced through the Development Land Tax Act 1976, only to be first reduced, and then repealed in 1985. In most cases, those initiatives failed because of the complexity of the concept, and especially the difficulty that developers and the tax authorities experienced in agreeing the increased land valuation that was to be taxed. PricewaterhouseCoopers explained in a note to their clients on the planning gain supplement:"““It is…likely that the protracted valuation arguments of the Development Land Tax era will be a feature of the PGS.””" The Royal Institution of Chartered Surveyors also highlighted the issue in its memorandum to the Communities and Local Government Committee. It stated:"““The valuation of development sites comprises of making assumptions about different variables, six of which can have a big impact on the opinion of value. A change of around 5 per cent. in each of these variables can result in an overall change in the value of the site of over 25 per cent.””" Mr. Peter Bill, editor of Estates Gazette, summed up the PGS proposals more succinctly in a December 2006 editorial:"““Of course it won’t work; it didn’t work the five times it was tried in the past century and it won’t work now.””" I have criticised the Bill and the Government’s approach, and I shall now say something about our preferred approach. It is important to stress that Conservative Members support the concept that developers should make an adequate contribution to infrastructure in return for being allowed to build. Development such as extra housing can help provide relief to those in housing need but, conversely, it often imposes additional pressures on local communities. For example, it can put pressure on school places, medical infrastructure—especially given the crisis in the national health service—and transport infrastructure. It is important that developers make an adequate contribution to alleviating those pressures in return for being allowed to build so that they do not adversely affect existing residents’ quality of life. In principle, hon. Members of all parties broadly accept that. However, we believe that other options are available for fulfilling that requirement. We are considering them all closely as part of our ongoing policy review and we hope to have more to say about those matters later this year. Suffice it to say for now that, whichever system we prefer to PGS—I stress that it will be another system—it should be simple for local authorities and developers to understand, relatively easy to administer, as PGS evidently is not, and should not affect the construction of affordable housing.