Clause 207 — CIL regulations: general

Part of Orders of the Day – in the House of Commons at 6:45 pm on 24th November 2008.

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Photo of Jacqui Lait Jacqui Lait Shadow Minister, Communities and Local Government 6:45 pm, 24th November 2008

I acknowledge that we did not discuss this issue in Committee. However, the amendment goes to the heart of our disagreement with the Government on the community infrastructure levy. The Minister will remember that we tabled many amendments in Committee. In fact, we objected to this aspect of the Bill from Second Reading onwards. My hon. Friend Mr. Pickles—he was delighted to receive the Minister's praise about his local development framework, although he says that it is not working in the way set out—and I made the accusation that CIL was akin to ship money, because it was taxation without parliamentary approval.

We have been suspicious all along about CIL because of the original references within the Bill to land values, and we will be able to thank the Government for accepting our recommendations and removing all references to land values should we reach that stage. However, the initial references to land value essentially meant that there was a taxation element to the community infrastructure levy. There was also a reluctance, to put it politely, on the part of the Government to repeal the Planning-gain Supplement (Preparations) Act 2007, which if it remains on the statute book will allow CIL to be set up to fail, which was always at the back of my mind with this policy. The Government have sort of conceded on that, and there is an agreement in one of the amendments that the Treasury may repeal the 2007 Act. The House might like to note that I have tabled an amendment that it must repeal it. Until the references to CIL as a tax are out of the Bill, no one will believe that it is anything other than another form of taxation.

Our problem with the Government's disagreement with the Lords on Lord Jenkin's amendment is that it reinstates the argument that CIL is a tax. One of the difficulties that we have had throughout our discussions on CIL is the sheer lack of information about what it would be, how it would constituted, what form it would take, and who would be the charging authority—the Secretary of State or someone else. Again, just in case we do not get to that bit, I acknowledge that the Government have removed references to the Secretary of State as the charging authority. The wording now relates only to local authorities, which is what we argued for all along.

The Government are denying the House of Lords the ability to consider and, if it wishes, to vote on the regulations on CIL. Although the House of Lords graphically said that CIL had moved from skeletal in its detail to anorexic, we still know little about it and it is not clear whether it is a tax or a levy collected by a local authority. We disagree with the Government because we wish to make it as clear as possible that CIL is a levy. It is not, and should not be, a tax.

Part of the debate in the Lords was about the fact that there is no clear precedent on what financial matters can and cannot be discussed there—other than, of course, the well-known exception of the Budget. Lord Jenkin cited the fact that both Houses have discussed national insurance, council tax, business rates, the business improvement district levy, the climate change levy, and other charges. One or two of those are collected centrally. The community infrastructure levy is allegedly not going to be collected centrally; it is going to be collected by local authorities. The crucial difference is that the money raised from the levy is not going into the Consolidated Fund. Therefore, it is not taxation; it is a levy agreed between a developer and a local authority. It is appropriate that the Lords, who are—dare I admit it?—much more expert than we are in many areas, should consider the regulations.

CIL is still not clear; there is much work still to be done between the Government, industry and the professions involved in development. It is crucial that the regulations be examined in great detail when they come before the Houses of Parliament. It is absolutely correct that the House of Lords should be invited—indeed, should expect—to scrutinise the regulations, which will benefit from its scrutiny. If the Government are not prepared to concede that their lordships have a real role in ensuring that CIL is as workable as possible, I will have to return to my original suspicion—that the Government regard CIL as another form of taxation, that the planning gain supplement has not gone away, that what the Government have said so far is merely warm words, and that the development industry is facing another tax in these difficult times when they are not able to do much, if anything, in the way of development.

If and when better times return, the industry will face another tax, and the implication of another tax is that it will take even longer to build the houses and development needed to get this country going, so that it can meet the challenges of the 21st century in very different circumstances. I therefore support the Lords in their amendment, and will be voting against the Government.

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