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Planning-gain Supplement (Preparations) Bill

One of the concerns raised by the Scottish Executive in their response to the consultation was that implementation of the planning gain supplement might actually restrict rather than encourage the bringing forward of land for affordable housing. They have already commented on that particular point. When we come to Third Reading, I have some wider points to raise about that. I hope that the hon. Gentleman will be kind enough to follow me when I reach that point. It is true to say that the Scottish Executive expressed some reservations. It is not just the devolved Government in Scotland that have expressed reservations about how the PGS might operate north of the border. The Scottish Property Federation, the representative voice of the commercial property industry in Scotland, has also stated its opposition to the introduction of the planning gain supplement in Scotland. In a letter written to me only yesterday, Mr. David Melhuish, the director of the Scottish Property Federation, states:"““The SPF opposes the introduction of the PGS in principle. We perceive PGS to be a tax that has been tried and failed on a number of occasions in the last 40 years and we believe it will add costs, complications and delay to the planning and development process. Neither does the SPF agree that the PGS will achieve the Government’s declared objectives of bringing forward the supply of land for either residential or commercial development.””" The letter also states:"““On behalf of the Scottish Property Federation I write to express our support for your proposed New Clause intended to delay the enactment of the planning gain supplement until a proper evaluation has been made of the relationship of the new tax to the existing Section 75 process in Scotland.””" The letter goes on to point out that the Scottish Executive have not committed to scaling back section 75 agreements in line with the at least indicative commitment from the Treasury in England. Scottish developers are therefore concerned that they could face the double whammy of PGS plus being asked to provide money for unreformed section 75 agreements as well. 4 pm On a related point, Mr. Ken Ross, the chief executive of Elphinstone Property Group, one of Scotland’s major development companies, recently pointed out:"““In Scotland we do not know how PGS will function at all alongside Section 75 agreements—whether for example they will be additional to Section 75 agreements or if we will see section 75s ‘scaled back’ as with section 106 agreements in England.””" Tellingly, Mr. Ross goes on to say:"““Even if we get scaled back Section 75 agreements, we still have the potential for PGS to blunt rather than promote economic development. Instead of a developer agreeing and quickly delivering infrastructure appropriate to a particular development, we will have an uncertain sum paid to the Treasury, who will then recycle the same sum to the Scottish executive, who will in turn recycle an uncertain amount to local authorities—who, after all this process, are left with the task of delivering the infrastructure. This can only add delay, uncertainty and cost to the development process and this will only reduce the prospects for economic growth in Scotland.””"