Clause 61 - Compliance with planning obligations

Finance Bill – in a Public Bill Committee at 9:30 am on 10th June 2003.

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Photo of Adam Price Adam Price Plaid Cymru, Carmarthen East and Dinefwr 9:30 am, 10th June 2003

I beg to move amendment No. 278, in

clause 61, page 42, line 11, at end insert—

'Local Health Boards established under section 16BA of the NHS Act.'.

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

With this it will be convenient to discuss the following:

Amendment No. 82, in

clause 61, page 42, line 25, at end insert 'National Park Authorities'.

Amendment No. 279, in

clause 66, page 46, line 7, at end insert—

'Local Health Boards established under section 16BA of the NHS Act.'.

Photo of Adam Price Adam Price Plaid Cymru, Carmarthen East and Dinefwr 9:45 am, 10th June 2003

These are fairly straightforward probing amendments that will cause fewer theological disputes in Committee. Clause 61 provides for an exemption to stamp duty land tax where a land transaction has been conducted in order to comply with a planning obligation provided that the purchaser is one of a number of public authorities listed in paragraph (3). The amendments seek to probe why the list does not include the newly constituted local health boards, which were established under the Health (Wales) Act 2003, and the national park authorities in England and Wales. I am confident that the Chief Secretary will confirm that local health bodies are included under the aegis of the National Assembly for Wales. Provided that such a confirmation is available, I should like to concentrate on the national park authorities.

The clause is centred on so-called section 106 agreements by which developers agree to provide certain public goods—affordable housing, public amenities and recreational and community facilities—in return for the granting of a planning consent. Developers have long viewed the costs associated with those types of agreements as a kind of informal planning tax—hence the proposal to avoid double taxation by exempting the planning gain aspect of a development from the new stamp duty land tax where the purchaser is a public authority.

Most of the bodies listed under the heading ''local government'' are planning authorities. By and large, the local planning authority benefits from a section 106 arrangement because it provides the planning consent in return for the agreement. Under the Environment Act 1995, all national park authorities in England and Wales are the principal planning authorities for their areas. The Brecon Beacons national park is in my constituency, and the hon. Member for Torridge and West Devon has a national park in his constituency. Why are the national park authorities the only local planning authorities to be omitted from the list? I suspect that the answer is that the local authorities in those areas are still eligible under the clause to benefit from section 106 agreements. The national park authority could essentially negotiate a section 106 deal with a developer—if a local school were to be developed off-site, the local education authority would be the beneficiary.

There may be situations in which it would be permissible and desirable for the national park authority to be the beneficiary. The national park authorities have developed a more expansive role under the terms of the 1995 Act because local human

settlements play a more important part in their interpretation of sustainable development. For example, the provision of a public open space, a visitor centre or an educational centre directly related to the national park would probably fall under the remit of the national park authority. In those circumstances, it would be reasonable to allow the national park authorities the same tax treatment as other public authorities in similar circumstances.

The amendment is drafted as a probing amendment. If it were properly drafted, it would also refer to the broads authority and to the Scottish national parks authorities, which under the terms of the National Parks (Scotland) Act 2000 also exercise planning functions. I always look forward to the Chief Secretary's remarks and am particularly interested to hear his comments on this matter.

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

I am grateful to the hon. Member for East Carmarthen and Dinefwr (Adam Price) for raising the matter. I am afraid that I do not know whether there is a lacuna. If there is, the law must be changed. I cannot remember a section 106 agreement being entered into by Dartmoor national park, or any national park. I presume that that is because their agents—West Devon borough council or whichever district council is involved—do that on their behalf. That said, there could be other agreements, to which the hon. Gentleman referred, that should be covered by the exemption. The national parks should enjoy the same tax treatment as other local authorities. I, too, look forward to hearing the Chief Secretary's comments on this important set of amendments.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

This is an important set of amendments. I find the arguments in favour of them compelling. Clause 61 provides for relief when developers are required under a planning obligation to transfer land to one of a list of prescribed public bodies. That prevents a public body from being liable for tax on any consideration given—a cost that would normally be passed back to the developer. There is a power for the Treasury to add to the list of public bodies by statutory order.

Clause 66 provides a general exemption from stamp duty land tax when the land is transferred between public bodies under statutory reorganisation. It gives the Treasury a power to exempt by statutory order other land transfers made under statutory authority when either the purchaser or the vendor is a public body.

Amendments Nos. 278 and 279 are intended to add Welsh local health boards to the list of public bodies in each clause. I accept both amendments, which reflect the changes in the organisation of health provision in Wales. The timing meant that we were not able accurately to reflect those changes in the list in clauses 61 and 66. The delegation of health provision in Wales to local health boards since 1 April is mentioned in the amendment. It seems logical that the boards should enjoy the same relief under the clause as would have been enjoyed had the delegation not taken place.

I pay tribute to the work of the national park authorities. They seem to do a good job. Every Committee member has had, at some time, an

opportunity to enjoy the fruits of that work—sometimes literally—and would want to see it furthered. The national park authorities are generally the sole planning authority for the area under their jurisdiction, making them important players in any development. The examples of the school and visitors centre given by the hon. Member for East Carmarthen and Dinefwr are good. The more I have thought about the matter, the clearer it became that the amendment should be accepted in principle. At the moment, it is technically defective, but we will work on that and bring the change forward in due course and before implementation.

Photo of Adam Price Adam Price Plaid Cymru, Carmarthen East and Dinefwr

I am grateful to the Chief Secretary and I look forward to seeing the amendment technically spruced up on Report. I am also grateful for what he said about the local health boards. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

The list in subsection (3) does not appear to cover Wolverhampton city council, or Sheffield city council. Will the Chief Secretary confirm whether that is a lacuna, or am I misreading the list?

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I would have thought that any provision that did not cover Wolverhampton city council was defective, so I shall certainly take steps to ensure that there is no defect. I am pleased to be able to share with my hon. Friend the fact that for such purposes city councils are district councils. I hope that that is of some comfort and that Wolverhampton is restored to its rightful place. There is no lacuna, and my hon. Friend has done the Committee a favour in drawing attention to that possible ambiguity.

Question put and agreed to.

Clause 61 ordered to stand part of the Bill.

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

On a point of order, Mr. McWilliam. I presume that you want us to discuss clause 62 and schedule 7 separately.

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

If the hon. Gentleman looks at his selection list, he will see that schedule 7 has been selected separately, and we shall discuss it in due course.

Clause 62 ordered to stand part of the Bill.