My Lords, I thank my noble friend Lord Lansley for tabling these amendments.
As we have discussed, infrastructure delivery strategies will help local authorities to plan for the vital infrastructure that is needed to support sustainable development in their area. The infrastructure levy is designed to be a more effective and streamlined system than CIL and planning obligations. Unlike CIL, the new levy will be a mandatory charge which all relevant authorities will be required to adopt. This is an important step in reducing the complexities of the existing system and ensuring uniformity. Also, it ensures that all local authorities benefit from the levy receipts for their local area over time. The levy will be designed to be responsive to market conditions, meaning that local authorities get a fairer share of the uplift in land value that often occurs between the grant of planning permission and site completion to fund local infrastructure.
My noble friend Lord Lansley asked what happened if there was a 10% reduction in GDV which resulted in a 40% reduction in developer profit. As the final liability is based on the gross development value, if the sales value falls, the levy liability will also reduce—that happens similarly at the moment anyway.
The infrastructure levy will be able to fund the provision of affordable housing, largely replacing the operation of the Section 106 agreement. At the moment, the Section 106 agreement is what delivers most of the affordable housing and is often hard fought by local authorities. This will be a much more stable way of delivering affordable housing. The new right to require will mean that local authorities can stipulate the affordable housing that they require to be delivered in kind as part of that levy liability.
My noble friend Lord Lansley also asked about regional inequalities. We can only capture the land value uplift that is there. We expect to capture more in high-value greenfield areas, obviously, and this is what happens in the existing system—you cannot do that any other way.
The noble Baroness, Lady Pinnock, also brought in the point about the infrastructure delivery strategy and existing local plans, which is an important issue. We must accept that we are making a big change here. An assessment of infrastructure need will be undertaken alongside the local plan. In the long term, we expect these two parts of the delivery strategy will be brought together, but during transition they may have to be undertaken separately. We are talking about long-term here, and we expect those two plans to be together eventually and as soon as possible.