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New Clause 2

Planning-gain Supplement (Preparations) Bill – in a Public Bill Committee at 4:45 pm on 30th January 2007.

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Expiration of Act

‘This Act ceases to have effect on 1st May 2008 unless the Treasury has announced before that date its intention to introduce legislation to impose the tax referred to in section 1(1).’.—[Mr. Francois.]

Brought up, and read the First time.

Photo of Mark Francois Mark Francois Shadow Paymaster General

I beg to move, That the clause be read a Second time.

The new clause seeks to introduce a sunset provision into the Bill to time-limit its provisions if the Government do not resolve to go ahead with the introduction of the planning gain supplement by spring 2008. I reiterate that we are opposed in principle to its introduction, but given that the Budget statement now usually takes place in March, this provision would give the Government several chances to confirm their intention to go ahead with the PGS before the sunset clause would come into operation, effectively cutting off the expenditure permitted by the Bill.

Although the Government could in theory make a decision and provide an accompanying statement whenever the House is sitting, the window of opportunity provided by our proposal would mean in practice that they would use Budget 2007, pre-Budget report 2007 and Budget 2008 to clarify their intentions on the planning gain supplement before the sunset clause kicked in. After that time, if the Treasury was still undecided on whether or not to go ahead, the opportunity to spend money allowed for under this paving Bill would be lost.

Given that the Treasury has already been discussing the possibility of introducing the planning gain supplement for three years, it does not seem unreasonable to seek to put a backstop on the decision process, lest the Treasury go round in circles for even longer.

Photo of Simon Burns Simon Burns Opposition Whip (Commons)

The new clause is eminently sensible, but, as its co-sponsor, I wonder whether we missed something. My hon. Friend talks about going round in circles and he mentioned the Budget and the other pressures on the Chancellor. However, he has forgotten that the current Chancellor will not be Chancellor in May 2008, by any stretch of the imagination. Should we not have been a little more generous in our time scale, to take into account the change of circumstances and the fact that a new Chancellor will probably be going round in circles trying to fix the mess that he inherits?

Photo of Mark Francois Mark Francois Shadow Paymaster General

My hon. Friend tempts me to summarise the Chancellor of the Exchequer’s record, but I shall not indulge in doing so, lest you rule me out of order, Mr. Hood. I could say that the massive amount of borrowing that the Chancellor has incurred  is not particularly impressive for a start. Nevertheless, my hon. Friend’s concern for the Chancellor is touching, and I am pleased that he has him constantly in his thoughts, as indeed we all do. Our thoughts may be somewhat different however.

I was seeking to argue that it does not seem unreasonable to put a backstop on the decision process, as we intend to do with our new clause. I hope that that seems reasonable and that the Committee will give a fair wind to our new clause as a result. We cannot allow the Government to go round and round in circles for ever.

Photo of John Healey John Healey The Financial Secretary to the Treasury 5:00 pm, 30th January 2007

Again, I have some recognition of the concerns that lie behind the new clause. The hon. Member for Rayleigh said that his main concern was that no time limit or sunset point on the authorisation of expenditure is set in the Bill. My response, however, is similar to that on the previous new clause: in practice, I do not believe that a case can be made for it.

The Bill is not a blank cheque. I make it clear that, if the decision is taken not to introduce a planning gain supplement, no further expenditure will occur under the Bill. The Government do not spend significant sums on programmes unless we are sure that we want to proceed—the PGS is no different—and to do so would not be in our interests, nor in the wider national interest.

If we want to introduce a planning gain supplement within a reasonable time—it cannot be introduced before 2009, because we are committed to providing sufficient time for the markets to adapt to a prospective planning gain supplement—the decision to proceed must be taken in good time, depending on a satisfactory analysis of the consultation that we are undertaking.

Photo of Anne Main Anne Main Conservative, St Albans

May I take the Minister back a little? He said that the Government do not spend money on things that may not go ahead. Would he throw home information packs into the mix? He should remember how much that cost and how much training was involved, but it fell apart and it is now being introduced in a completely different form.

Photo of John Healey John Healey The Financial Secretary to the Treasury

The hon. Lady cites an example of something that is going ahead. The forms have been modified in response to representations. I repeat that it is not in our interests to spend significant resources on things that we do not intend to proceed with. That is precisely the approach that we will take with the planning gain supplement. The decision will need to be taken before beginning the detailed design work on the IT systems that would be authorised under the Bill.

My priority is to make the right decision about a workable planning gain supplement, rather than constraining that decision by statute. On that basis, I hope that the hon. Member for Rayleigh will not press the new clause to a Division. If he does, I shall ask my hon. Friends to resist.

Photo of Mark Francois Mark Francois Shadow Paymaster General

I sense at this hour that we are moving towards the sunset of our deliberations. I know that  that will be a great disappointment to Labour Members. However, I shall make a few quick points in response to the Minister.

My hon. Friend the Member for St. Albans made an apposite point, as she has done a number of times. She gave the example of HIPs: a lot of money was spent preparing for them, but it was spent mostly by people training to become HIPs inspectors. Private individuals lost money, rather than the taxpayer. That was not well handled by the Government, and it does not set an exciting precedent for what may follow the Bill.

It is important to reiterate the matter of timing. The Government have issued four consultation documents on the process—they have talked about it a great deal—and the current consultation will end on 28 February. They know that there is much opposition to the proposals. At some point, the Government have to take a definitive decision—one way or the other. As an American friend who fishes says, they either have to fish or cut bait. I hope that the industry will not have to wait much longer before the Government’s intentions become clear. I hope that they will back away from this errant and mistaken tax.

I should like to thank you, Mr. Hood, as we draw to a conclusion, for the good-humoured way in which you have chaired our proceedings. You kept us ticking  along nicely. In a spirit of equally good humour, I give a parting shot to the Minister. It might be said that this is a bad paving Bill, that it is bad paving. I think it represents crazy paving—and I can tell the Minister that, by squeezing in that remark, I have won a bet. I thank you, Mr. Hood, for your services to the Committee. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Question proposed, That the Chairman do report the Bill to the House.

Photo of John Healey John Healey The Financial Secretary to the Treasury

On a point of order, Mr. Hood. I much appreciate, as do other hon. Members, the way in which you have chaired our proceedings. You helped us to give full scrutiny to this short Bill, but in a way that did not constrain hon. Members from expressing their natural concerns. We have usefully re-examined many of the issues that were touched upon on Second Reading. I am glad that we heard contributions from both sides of the Committee—that is always important. I am also glad that we have been able to complete our proper scrutiny well within the time allowed by the programme motion. I look forward to continued debate on the issues connected with the Bill and beyond.

Question put and agreed to.

Bill to be reported, without amendment.

Committee rose at six minutes past Five o’clock.