Planning Bill

I support very strongly what the noble Baroness, Lady Valentine, has said. Since the last war, we have suffered repeated attempts by successive Labour Governments to try to assess and tax the increase in land value as a result of planning permission. My memory goes back to the Land Commission. At that time, the Minister concerned was firmly advised that the provision was impossible and would simply choke off development; and the Land Commission had subsequently to be abolished. Then we had the development land tax. That did not work either. We have had the planning gain supplement, which happily seems to have been withdrawn but remains on the statute book. A later amendment deals with that. The community infrastructure levy is the latest attempt. The great mistake is to regard it as a form of capital gains tax on some extremely difficult-to-assess increase in land value. The evidence I have had from a number of organisations on this issue argues that it is extremely difficult to assess what is the increase in the value attributable to planning permission—a point wisely made by the noble Baroness. In practice, this will become a value—not an increase in value—and then the tax will be based on that. The problem there is that the value may bear absolutely no relation to the increase in infrastructure costs to which this community infrastructure levy is intended to be a contribution. It is no more than a contribution, to give local authorities some extra funds to pay part of the cost of the infrastructure to which a development can give rise. It has been pointed out to me that some of the biggest increases in value may come from retail developments—shopping centres—which may not require infrastructure costs beyond some possible increase in road capacity. Some of the developments that will carry considerable increases in infrastructure requirements may, in fact, pay considerably less. This must be tied to what the local authorities see as their infrastructure needs. An example pointed out to me was that of an expanding town; with a substantial increase in population, it will eventually need an expansion in the crematoria. How will that be tied in to the development costs? It is clearly an infrastructure need occasioned by the development leading to the increase in population. Simply to try to link this to the extremely difficult concept of the increase in value, however, seems fraught with difficulties. I take issue with one point made by my noble friend Lord Caithness. On Amendment No. 444, I shall be agreeing with the Delegated Powers Committee, which made a powerful point on this, and arguing that this is a charge, not a tax. It is a charge, in line with a great many others that have preceded it and on which this House has always had its part to play. My amendment is that both Houses should therefore be involved in the approval of the regulations. I am mildly surprised that my noble friend has added his name to it; no doubt he will explain at some stage. However, that is by the way, and we will come to the argument later. There lies at the heart of the difficulties here, which will be addressed by a number of amendments, the concept that you can somehow tax the increase in value attributable to planning permission. All the advice that I have had suggests that that is in fact a near impossible task. I hope that we will be able in Committee—and, later, on Report—to make some changes to link the charging schedules which local authorities will draw up to their development plans, so that the levy on developments will thereafter bear a close relationship to the infrastructure needs of each local authority. It may be that that is the Government’s intention, but the advice that I have had is that it is not expressed properly in the Bill. We need to change the Bill, and will come to some of these amendments later on. I emphasise that the noble Baroness, Lady Valentine, has put her finger on an extremely important point.