I want briefly to refer to the clause stand part notice tabled by my noble friend Lord Young of Cookham and I for a probing purpose. Clause 126 has the effect of retaining the community infrastructure levy in London and Wales, but I will not talk about Wales. We are leaving Wales out of it for these purposes. The clause retains the community infrastructure levy in London, alongside the introduction of the infrastructure levy. I understand that that is essentially because the mayoral CIL has been used for the provision of Crossrail and is expected to do so for years to come.
However, it has raised in our minds a question to ask my noble friend the Minister about whether the community infrastructure levy, which of course does not provide for affordable housing, can live alongside the infrastructure levy for a number of years. The technical consultation, which is to be concluded on 9 June, does not explain how the respective contributions are to be assessed in a combined fashion because they apply to different parameters of the development. That leads to the assumption that with a 10-year transition we are looking at many places across the country with a combination of community infrastructure levy obligations that have arisen in relation to developments over a number of years and past developments, alongside the introduction of the infrastructure levy. The technical consultation, to my reading, does not help us understand how these two things are going to be meshed together. Of course, many noble Lords tabled their amendments in this group before the technical consultation was published. It answers some of the questions, but not all of them, and I think this is one question that it does not quite answer.
Another question occurred to me while reading the technical consultation in relation to affordable housing. It does not yet provide certainty about whether contributions under the infrastructure levy may be regarded as an improvement on the situation where developers are able to negotiate or renegotiate their liabilities under Section 106. Developers are not engaging in negotiations simply because they can and therefore they do and local authorities do not give way simply because they ask for it. Circumstances change.
I am always burned by the fact of the October 2008 crash. In the space, literally, of weeks, the economic viability of many large-scale development projects changed dramatically. If you look at any system, including this system, and it cannot meet the test of what you would do under those circumstances, I am afraid it does not help. Renegotiation of the contributions is one solution. It might be said that if the market price and the gross development value of a large site crash in the way they did in October 2008, the infrastructure levy crashes as well. The problem then is: how is the affordable housing going to be funded? How is the other infrastructure to be funded?
I do not have answers to all these things, but my noble friend and I will perhaps have an opportunity in the next group to talk a bit more substantively about the infrastructure levy and what we might do about it, but that does not answer the question. If affordable housing presently often suffers by being a residual after other Section 106 obligations have been met, and if under the infrastructure levy it becomes, in effect, a right to require and it is elevated above other requirements, there will be a great deal of difficulty in local communities about the fact that there are many other obligations that the infrastructure levy has to meet that may not be able to be met if the gross development value comes down or if, for example, the affordable housing right to require and the tenures that have to be provided lead to a much higher cumulative discount needing to be paid. We have to have some flexibility built into the system, and the risk at the moment is that that is not presently available in the way that we have understood it in the past. We can strengthen local authorities, and in the next group I hope we can talk about how that might be possible.