On a point of order, Mr. Speaker. Yesterday, the hon. Member for West Chelmsford (Mr. Burns) raised a point of order and drew attention to the fact that I had withdrawn from yesterday’s Order Paper Question 20, which asked whether any questions had been drafted wholly or in part by a member of the ministerial team, and so on. The implication was that Thurrock had been buckled or sat upon by the ministerial team. I want to place it on record that that does not happen in Thurrock, and that the question will be asked again. I withdrew it for the old-fashioned reason of tactics. If it had stayed on the Order Paper, it would have received a written parliamentary reply, whereas I want an oral reply. The lesson is this: the Conservative Opposition is in a parlous state, the Labour party does not just provide the Government—

Order. The hon. Gentleman has made his point.

Further to that point of order, Mr. Speaker.

It is not a point of order. The matter has nothing to do with the Chair. The hon. Gentleman had a bite of the cherry yesterday, and a return match took place today, so we will call it quits.

I beg to move,

That leave be given to bring in a Bill to remove remaining legislative discrimination against Catholics; to make provision for the independence and freedom of operation of Catholic institutions; and for connected purposes.

In a civilised society there ought to be no reason to introduce this Bill. If we proposed a Bill on the Floor of the House of Commons that would make it illegal for the heir to the throne to marry a Muslim, a Methodist or a Mormon, that would be intolerable in a free society, yet the heir to the throne is still not allowed to marry a member of what is, on any Sunday, the largest worshipping community in this country. That is an insult to the Catholic community because it suggests that, somehow or other, being a Roman Catholic means being less of a citizen than someone belonging to any other religious denomination.

I admit that I feel ashamed that I did not introduce the Bill before, when I was an Anglican. Since becoming a Catholic, I have recognised what the attitude towards this denomination means. For that reason, I am trying to make up for the history. It is not just a question of who the heir to the throne may marry or who the Queen or King may be. It is pretty ridiculous that the king could be a Scientologist, which is manifestly intellectually difficult and religiously rubbish, but cannot be a Catholic, which is intellectually difficult and religiously correct. This is wholly unacceptable, and I do not think that anybody believes otherwise.

One discovers other things in the woodwork when one looks into the matter. For example, it used to be true that no Catholic diocese could have the same name as an Anglican diocese, even though those dioceses had, shall we say, been borrowed. In 1927 that measure was apparently removed, but it turns out that it was not removed. The Act says that naming a Catholic diocese the same as an Anglican diocese is no longer punishable—it is just illegal. That is a peculiarity, and it is also insulting. The Catholics called the diocese—now the archdiocese—of Southwark that name because there was not an Anglican diocese there, so when the Anglicans decided that they wanted a diocese in Southwark, it was perfectly all right for them to call it Southwark, despite the fact that there was a Catholic diocese, so the measure is not there to make matters easier for people. The Catholic diocese of Newcastle, although the cathedral is in Newcastle, has to be called Hexham and Newcastle, even though the centre of the diocese is in Newcastle. The Catholic archdiocese of Liverpool happens to precede the Anglican bishopric of Liverpool. It was perfectly all right for the Church of England to use the same name, but it was not all right the other way round. I do not think that it is terribly important, but it is insulting.

I also considered some of the orders of chivalry. I am rather more interested in these historic matters than some of my supporters, including the hon. Member for Thurrock (Andrew Mackinlay), might be, but it is odd that no Catholic has ever been appointed to the order of the thistle since the middle of the 19th century when—I may have got this wrong—the Marquis of Bute, who later became a Catholic, happened to be appointed to that order. It is particularly odd when one realises that the order was created by King James II, who happened to be a Catholic. This is a peculiarity. There are all sorts of corners of our life that are as they are in discriminatory terms because this central matter remains.

I do not believe that there can be any hon. Member who does not find it odd that the Prime Minister was unable to explain why in 10 years of anti-discriminatory legislation he did not find time to add on the bottom of any one of those Bills “and Catholics”. The Under-Secretary of State for Constitutional Affairs, the hon. Member for Lewisham, East (Bridget Prentice), who is kind enough to be here on the Front Bench, gave a peculiar answer to—in this case—my hon. Friend the Member for Thurrock when she more or less suggested that there was not any real reason to bother about all this, and that really it was not important. It is important—as you, Mr. Speaker, in your persona, as against your public office, know perfectly well—because it says something about Catholics that was not true to start with and is not true today, and ought not to be part of our law. This is not a passing matter; it is very important.

We must go back beyond that and consider what discrimination is about. Discrimination is about saying, “I am better than you are because my views are right and your views are wrong.” It is the opposite of toleration. In Elizabethan England— and before that in Henrician England—the King was divorced not just because he had the hots for Anne Boleyn, but, more importantly, so that he could say that he had a right to it and that it could have a moral justification. He invented that moral justification and he told people that they had to believe that if they were to be citizens.

I hope that some people have thought rather carefully about our present parallel, because we are beginning to be the kind of state that is doing that again. It is saying that one has to hold certain views if one is to be a proper citizen. I want to give one example because I happen to disagree with my Church on it, so it is a good example to use. I think that it is right to remove the discrimination against same-sex couples in relation to adoption, but I also think that we should be tolerant of people who do not agree with that.

Toleration is hard—it is not as easy as some politically correct people believe it to be—and it is very easy to tolerate people with whom one agrees. That is a wonderful kind of toleration. It is the kind—I do not think that I am leaving behind my socialist and Labour supporters when I say this—that we have often seen from perhaps the most illiberal Government that we have had as regards civil liberties. I have always voted to the left of this Government on civil liberties matters, which is very embarrassing for me and for my constituents, who do not quite understand it. I have to explain that this Government are not willing to understand the meaning of liberalism. Liberalism is about accepting the views of people whom one does not like and of people with whom one fundamentally disagrees. That is why I beg this House to recognise that we are going down the same route as Elizabeth and Henry VIII went down, which is to say: “The state knows about these things, and if you disagree about the things that we think matter, then I am afraid that you become a criminal.” That is the reality of such discrimination.

The Bill brings together the two things that matter at this moment: a removal of historical discrimination, which defaces this nation today; and a statement that in future we will be the kind of country that allows people of any denomination to conduct their Churches, institutions, religious houses and what they do according to the faith of their fathers, and not to be told by other people that secular morality supervenes and that they must accept an alien orthodoxy. This is about what Henry started and what Elizabeth did, which was to say that orthodoxy was determined not by the faith of the citizen but by the decision of Parliament and the state. That way lies totalitarianism—a refusal to accept that toleration means realising that people feel passionately about important things and that in a free society they ought to be able to uphold those things. My Bill would get rid of historical discrimination and guard against the insidious future discrimination that arises from political correctness, which is itself a kind of fascism.

Question put and agreed to.

Bill ordered to be brought in by Mr. John Gummer, Andrew Mackinlay, Jim Dobbin, Daniel Kawczynski, Mr. Julian Brazier, Mr. Mark Hoban, Mr. John Hayes, Mr. Edward Leigh and Miss Ann Widdecombe.

Catholics (prevention of Discrimination)

Mr. John Gummer accordingly presented a Bill to remove remaining legislative discrimination against Catholics; to make provision for the independence and freedom of operation of Catholic institutions; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 15 June, and to be printed [Bill 63].

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

The new clause is designed to delay the Bill’s implementation until the proposed operation of the planning-gain supplement in Scotland has been jointly evaluated in a study by the Treasury and the Scottish Executive. Part of the reason behind the new clause is that although the Government have provided some detail about the operation of the proposed planning-gain supplement in England, they have given little detail about its operation in Scotland or, for that matter, in Wales.

Ministers have given at least indicative figures for England showing that when PGS is collected, some 70 per cent. would be returned to the local authority that was asked to accept the development in question, while the remaining 30 per cent. would be redistributed to the region. It is important to note that when I pressed the Financial Secretary about that on Second Reading on 15 January, he conceded that it could mean a different region, so that the 30 per cent. regional component could be spent in another part of the country.

However, we do not even have that amount of assurance about the operation of the planning-gain supplement in Scotland. The Government’s policy is that the funds raised by the PGS will be collected by the Treasury, recycled to the Scottish Executive and redistributed by them in Scotland. There is therefore no guarantee that a community in Scotland that is being asked to accept large-scale development will receive any reciprocal benefit.

I am glad that my hon. Friend is pursuing the matter like a dog with a bone. He is certainly a ferocious Rottweiler. If the people of Aylesbury vale, including many of my constituents, are expected to absorb an additional 1,000 houses a year for each of the next 20 years—many, though not all, are willing to do that—it is cold comfort indeed for them to discover that a substantial proportion of the take of the supplement will be distributed to areas other than theirs. Up with that they are not willing to put!

I agree with my hon. Friend. I return the compliment by saying that he has long been recognised as a Rottweiler on behalf of his constituents. Long may that continue. He is right in that at least part of the money in England will not go back to the relevant locality. It could even go to a different region. However, in Scotland, to which the new clause technically relates, there is no guarantee that any of the money will go back to the locality. For some Scottish constituencies, the position will be even worse.

I have read the Committee proceedings carefully, but I have not yet heard a commitment from the Government about the other 70 per cent. Have they made an absolute commitment not to fiddle around with the local government settlement so as to recover the other 70 per cent. merely by changing the figures, which would not require legislative interference?

My right hon. Friend, with his experience as a former Secretary of State for the Environment, makes an important point. The Government have given us an indicative figure of 70 per cent. However, there is no guarantee of that in the Bill. Moreover, the Government have been somewhat vague about the mechanism’s operation. Those of us who have experienced the changes in the local government funding formula in the past few years know that when they say initially that they will provide 70 per cent., they introduce floors and ceilings or resource equalisation. We would therefore start in theory with 70 per cent., but the Government could perhaps then alter the amount of grant to local authorities in lieu of that. The proposal provides few guarantees in England, let alone Scotland. My right hon. Friend was right to make that point.

The hon. Gentleman knows that the Select Committee on Communities and Local Government was concerned that 70 per cent. should remain in the local area of the development. However, does he accept that there are cases of, for example, a development occurring in one area and requiring the upgrading of a motorway junction in an adjacent area? That is one reason why it is sensible to retain the ability to spend a significant amount of money somewhere that is not in the actual local authority area of the development. The development may require money to be spent on enabling the provision of infrastructure outside the area.

I understand the hon. Lady’s point, which was also made in the Select Committee’s report. Let me make two brief comments. First, there is no guarantee in the Bill, and secondly, the new clause relates to how the arrangements would operate in Scotland, and in Scotland there is not even an indicative 70:30 per cent. split.

My grasp of geography is not good, but even I know that Aylesbury is not in Scotland.

If the hon. Lady’s geography were that bad—

Order. I know a bit about the geography of Scotland, and I know that Aylesbury is not there. We are discussing Scotland and new clause 1.

You are right to call us to order, Mr. Speaker, but it is a pleasure to bring a smile to the hon. Lady’s face.

As I was saying, there is no guarantee that a community in Scotland that is asked to accept a development—perhaps a large-scale housing development—will receive any reciprocal benefit. In theory, a housing development in Glasgow could raise funds that would then be redirected to the Outer Hebrides.

Does my hon. Friend think that the provision will apply to either Scotland or England? I understand that a good many Labour Back Benchers think that it is a very dangerous proposal.

My right hon. Friend has obviously had a peek at my speech. If he allows me to develop my theme, he may hear some echo of what he has said. In fact, he is entirely right, and the same point cropped up in the Committee.

rose—

I see that my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) wishes to detain me, and I am delighted to allow him to do so.

Has my hon. Friend noticed that although we are talking about Scotland, and although when we discuss almost any Bill that does not apply to Scotland Scottish Members of Parliament are present and voting, there is hardly a single Scottish Member present today? [Hon. Members: “There is one.”] If there is one, there is one, but as we are here to protect Scottish Members, is it not amazing that they are not here to help us?

I am not responsible for the diary commitments of Scottish Labour Members of Parliament, who are obviously busy people, notwithstanding the fact that there are plenty of MSPs to do much of their constituency casework for them. Nevertheless, I am glad to know that we are here today to represent Scotland’s interests as best we can.

rose—

I will gladly give way to the one Scottish Labour Back Bencher who is in the Chamber.

I am grateful to the hon. Gentleman, although I suspect that if he were to do his sums, he would discover that the representation of Members from Scotland in the Chamber, in terms of proportion, is greater than that of Members from England or, indeed, Wales. I am also grateful to him for pursuing, in new clause 1, an issue that I first raised on Second Reading. Does he know whether the Scottish Executive have requested the resources that the new tax would give them?

I can confirm that the Labour-Liberal Democrat coalition that runs the Scottish Executive did not ask us to table the new clause, but I can also confirm that their response to the consultation was highly critical. If the hon. Gentleman will be patient for a few moments, I shall illustrate that with a few direct quotations from the document, which I hope will help to satisfy him.

Will my hon. Friend give way briefly?

I will give way for as long as my hon. Friend requires.

I know that my hon. Friend is not a partisan figure and would not wish to subject the Government to great criticism, but given the criticisms that our party faced in relation to the introduction of the community charge in Scotland back in 1989, does he not consider it rather paradoxical that Scotland is the testing ground for a policy that is likely to be highly unpopular for the very reasons that he cited earlier?

We have already heard a number of references to history this afternoon, and my hon. Friend has provided yet another. I genuinely believe that there are concerns in the Labour party in Scotland about how the arrangements might operate in practice, and I tabled the new clause partly to facilitate debate. I shall attempt to set out the detail for my hon. Friend, but his point is well made.

In England, the Government have said that the planning gain supplement will operate in addition to the established system of section 106 agreements. In Scotland, such arrangements are popularly referred to as section 75 agreements, in this case relating to the Town and Country Planning (Scotland) Act 1997. In England, the Government have stated that in return for developers having to pay the planning gain supplement, section 106 agreements will be scaled back—but conversely, they have been less forthcoming about how the system will operate in Scotland. Perhaps via our new clause we can tease more information out of the Minister this afternoon about how the Treasury believes this will operate on the ground north of the border.

The reaction of the Scottish Executive to the proposed implementation of the PGS has, to say the least, been quite critical. In its official response to the original consultation on the proposed planning gain supplement in May 2006, the Scottish Executive—I reiterate that it is Labour-led and has Liberal Democrat support—commented that the new tax was “misconceived”, that it would render otherwise sustainable economic developments “economically unviable”, that it would place extra burdens on the delivery of affordable housing and that it would act as

“a break on development in most areas of the United Kingdom.”

In a particularly telling quote, the Scottish Executive stated:

“We see Section 75 agreements as a key tool in bringing improvements to accompany development at a local level and at the right time. This is, as you know, an area of devolved responsibility and we would be keen to preserve the full flexibility to design our policies on these agreements as we see fit.”

In addition, the Scottish Executive specifically requested an opportunity for greater communication with the Treasury on all of this, as our new clause actually suggests. As the Executive response stated:

“We will be keen to work with your officials in gaining a greater understanding of the full implications of potential costs of this proposal in the devolved context—its practical workability, the costs to be incurred, the effect of differing planning systems and other policies and ensuring the effectiveness of the investment funded throughout the UK.”

In response to the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz), the Scottish Executive did not formally ask us to table the new clause, but in their response to the consultation they certainly asked for much greater clarification, so we have in a sense responded to their request in spirit, if not entirely by the letter.

The hon. Gentleman mentions the Scottish Executive’s response, which contained concerns about the difficulty now, and potential difficulty in future, of providing more affordable housing as land prices may be driven up by the proposals. The hon. Gentleman also referred to section 75 of the Town and Country Planning (Scotland) Act 1997, which states:

“A planning authority may enter into an agreement with a person interested in land”

and that any such agreement

“may contain… incidental and consequential provisions (including financial ones)”—

obviously, in respect of planning gain. What assessment has the hon. Gentleman made of the impact on land available for affordable housing? Is there any further information from the Scottish Executive to flesh out some of the concerns that were set out earlier?

One of the concerns raised by the Scottish Executive in their response to the consultation was that implementation of the planning gain supplement might actually restrict rather than encourage the bringing forward of land for affordable housing. They have already commented on that particular point. When we come to Third Reading, I have some wider points to raise about that. I hope that the hon. Gentleman will be kind enough to follow me when I reach that point. It is true to say that the Scottish Executive expressed some reservations.

It is not just the devolved Government in Scotland that have expressed reservations about how the PGS might operate north of the border. The Scottish Property Federation, the representative voice of the commercial property industry in Scotland, has also stated its opposition to the introduction of the planning gain supplement in Scotland. In a letter written to me only yesterday, Mr. David Melhuish, the director of the Scottish Property Federation, states:

“The SPF opposes the introduction of the PGS in principle. We perceive PGS to be a tax that has been tried and failed on a number of occasions in the last 40 years and we believe it will add costs, complications and delay to the planning and development process. Neither does the SPF agree that the PGS will achieve the Government’s declared objectives of bringing forward the supply of land for either residential or commercial development.”

The letter also states:

“On behalf of the Scottish Property Federation I write to express our support for your proposed New Clause intended to delay the enactment of the planning gain supplement until a proper evaluation has been made of the relationship of the new tax to the existing Section 75 process in Scotland.”

The letter goes on to point out that the Scottish Executive have not committed themselves to scaling back section 75 agreements in line with the at least indicative commitment from the Treasury in England. Scottish developers are therefore concerned that they could face the double whammy of PGS plus being asked to provide money for unreformed section 75 agreements as well.

4 pm

On a related point, Mr. Ken Ross, the chief executive of Elphinstone Property Group, one of Scotland’s major development companies, recently pointed out:

“In Scotland we do not know how PGS will function at all alongside Section 75 agreements—whether for example they will be additional to Section 75 agreements or if we will see section 75s ‘scaled back’ as with section 106 agreements in England.”

Tellingly, Mr. Ross goes on to say:

“Even if we get scaled back Section 75 agreements, we still have the potential for PGS to blunt rather than promote economic development. Instead of a developer agreeing and quickly delivering infrastructure appropriate to a particular development, we will have an uncertain sum paid to the Treasury, who will then recycle the same sum to the Scottish executive, who will in turn recycle an uncertain amount to local authorities—who, after all this process, are left with the task of delivering the infrastructure. This can only add delay, uncertainty and cost to the development process and this will only reduce the prospects for economic growth in Scotland.”

Is my hon. Friend aware that when Ministers are asked why the supply of land will not dry up with the introduction of the tax, as happened before, they answer that the rate will be lower? Does not that show that the tax will still slow up the process somewhat, and that the only rate that would guarantee no slow-up is a zero rate?

My right hon. Friend pushes me on the rate, and perhaps we should push the Minister on that question today. Throughout this process, the Government have not said, unless I have missed it, what the rate of the PGS would be. There is certainly no such commitment in the Bill. Perhaps the Minister will take this opportunity to enlighten us about the level at which the PGS will be levied, so that we can make a more accurate assessment. Thus far, however, there has been a deafening silence from the Treasury on the question that my right hon. Friend has just raised.

It is not only the Scottish Executive and the Scottish Property Federation that have outlined their opposition to the imposition of the planning gain supplement in Scotland. Scottish Labour Back Benchers in this House have also expressed their misgivings about the Government’s proposals. During the debate on the Bill in Committee, the hon. Member for Linlithgow and East Falkirk (Michael Connarty) expressed doubts about how the proposals would operate in practice. He pressed the Minister on how effectively any money raised would be recycled to the area of development in question, and on whether some of it might be diverted along the way—a process that he described as “filtration”. He said that

“if the Scottish Executive were to absorb some of the funds for their projects, the sum that goes to local authorities will be less than that under a simple section 75 agreement. I am concerned about that filtration system.”

I understand that the hon. Gentleman and his colleague, the hon. Member for Livingston (Mr. Devine), asked for a meeting with the Financial Secretary to the Treasury in order to express their concerns about the system and the effect of growth in Edinburgh on the areas of Falkirk and West Lothian. In Committee, the hon. Member for Linlithgow and East Falkirk went on to say that

“those councils would need to provide social services and education for the people who would live in the houses that those areas are going to absorb, because of the pressure on Edinburgh. If there is any question of the designation or use of the money being wrong in terms of the priorities for the local authority, there will be a major problem with the measure being accepted in Scotland.”––[Official Report, Planning-gain Supplement (Preparations) Public Bill Committee, 30 January 2007; c. 42-43.]

It is evident from all this that, in Scotland, it is not clear how the planning gain supplement that the Bill seeks to facilitate will operate in practice. The Scottish Property Federation, the Labour-led Scottish Executive and even Labour Back Benchers in this place—including, it should be noted, the successor to the originator of the West Lothian question—have expressed reservations about how the measure will operate north of the border. In the light of that, our new clause seeks to ensure that the Bill cannot effectively be implemented until the Treasury and the Scottish Executive have worked out between them in detail how it will operate on the ground and, specifically, how the well established Scottish section 75 procedure will be affected as a result.

In the light of all these considerations, I hope that the House will be minded to accept our new clause as an addition to the Bill.

As I said, I am glad to have the opportunity to express some concerns about the preparations that will be authorised by the Bill. I see no objection to trying to introduce a more systematic way of ensuring that the windfall gains from development are used to provide resources and infrastructure for the local communities that must bear the extra costs or consequences of such development. From my experience in Edinburgh, and from observing other authorities in Scotland—no doubt this is also the case in England and Wales—local authorities often do not benefit from the section 75 process as they ought to. Some local authorities are good at negotiating with developers to ensure that they do benefit; others are not. There are certainly arguments for a more systematic approach, and I do not see any problem with trying to introduce such a system. I hope that certain issues can be addressed when the proposed legislation finally comes forward as a substantive Bill.

As I indicated on Second Reading and in my earlier intervention on the hon. Member for Rayleigh (Mr. Francois), I am concerned that we so far have little idea of how the Bill will work in Scotland. In England, and, I think, Wales, most of the sum raised—70 per cent.—would go back to the local authorities concerned. There is no such provision for Scotland; indeed, it has been made absolutely clear that it is intended that the sums should go to the Scottish Executive to spend as it sees fit—not necessarily to support infrastructure in any local authority, but to support any other project that it has in mind. The Scottish Executive may have expressed reservations about the proposal, but I suspect that were it to be given an additional financial windfall, it would not rush to hand it out to local authorities. The experience in my area is that the Scottish Executive has a more centralising approach to the redistribution of funds raised at local level than is the case south of the border.

As Edinburgh has provided some attractive opportunities for development in the past—and will no doubt do so in future—the potential financial take from planning gain supplement tax could be substantial. My concern is therefore that sums might be recycled out of Edinburgh and perhaps spent in the constituency of the hon. Member for Dundee, East (Stewart Hosie), in Aberdeen or even further north, or on something entirely different. But that is not just a concern for a city such as Edinburgh; it was interesting that my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) raised such issues in Committee. Because of the way in which development has spilled out from Edinburgh, I suspect that areas such as his might have even greater potential for planning gain, and for money to be raised from planning gain supplement. Similar concerns have also been expressed in relation to Glasgow, and probably all cities. Inevitably, in cities and the areas around them, there will be more potential for sums to be raised and then centralised at the Scottish Executive level.

If the idea is to ensure that windfall gains to developers are put into place, does the hon. Gentleman accept that it is much more desirable to do that over a period of time through a rate than on a one-off basis? His concerns go to the heart of the matter, as there must be a sense of transparency, which can only be at the most local level. In Edinburgh, as he knows, and in central London, as I know, there is often a desire for section 106 or section 75 expenditure to be dealt with on a ward-by-ward basis, let alone within a particular local authority. What are his views on that matter?

I think that if I were to answer that intervention in detail I would stray from the subject of the new clause. I will try to avoid doing that. The hon. Gentleman gives an example of the wish to break down expenditure on a localised basis. That is perhaps an illustration of why there needs to be a more systematic approach to deal with the matter at a global level, rather than too local a level. There is always an attempt to break down the benefits and to benefit the local community most directly involved, but that does not allow that benefit to be expended on projects which will be required to make a development work properly and which cannot be immediately attributed to local communities. There is a strong case for having some centralised system, but that is a debate for another day, which we can have if a Bill on the substance of this matter is eventually introduced.

As I have said, I am concerned that we do not know how the provisions will work in Scotland. I understand that Ministers have taken the line that the issue is to do with devolution, and it is up to the Scottish Executive to decide how such funds should be allocated if they are raised. I agree with that as a matter of principle, as a strong, consistent supporter of a Scottish Parliament and devolution. However, this proposal deals with a reserved matter: the raising of taxation. Therefore, it seems a little disingenuous to suggest that we can decide to raise the tax at UK level but have no view on how it will be spent at the Scottish level.

We are proposing the measure at UK level. We could have an anomalous situation whereby we passed legislation here that effectively gave a new tax to the Scottish Executive, but the Scottish Parliament was not involved in the discussion about how that tax was going to apply in practice. If the Scottish Parliament is not going to have a discussion on the matter of principle, surely we should have it here, and be satisfied with the details of the proposals in so far as they will apply to Scotland.

It would be extremely helpful to get some indication of how my hon. Friend the Minister sees the provision working in Scotland. I ask him to give us some more indication of the discussions that have taken place with the Executive, and to give some assurances that it is the Government's expectation that if the measure goes further, the financial benefits from the new tax will be allocated to the local authority or authorities most immediately affected by the development, and that the Government, or indeed the Executive, do not intend that such money should be centralised, as the present proposals in the Bill would allow.

The hon. Gentleman is making an interesting case about the community sharing in the benefits. What level of tax would he think represented a fair balance between the developer who is putting in work and effort and taking a risk, and the community, bearing in mind that the developer could put in a lot of effort, be turned down and lose money?

It is difficult to answer that point because, as has been suggested in the debate, the relationship between the section 75 procedure and the sums that will be raised from the planning gain supplement has not been clarified at this stage. An indication has been given of how a relationship may apply between the section 106 procedure in England and the tax raised by developments in England. I cannot answer the question, because I do not know what the consequence of the measure would be for the section 75 procedure that currently operates.

For all those reasons, we need to have clarification of how the measure would apply in Scotland. We cannot simply leave it entirely up to the Scottish Executive to decide and the Scottish Parliament in due course to discuss. We are today taking the first steps in authorising a new tax that would apply in Scotland, as it would in England, but in Scotland we do not know what effect it would have on the ground in terms of particular allocation of resources. We have to have some reassurance on those points, and some more information. I hope that if the Minister cannot provide the detailed answers today, he will at least assure me that the Government intend to make those points clear during the passage of any substantive legislation to take the proposals forward.

I shall speak briefly in support of the new clause that the hon. Member for Rayleigh (Mr. Francois) moved and set out clearly. I moved an amendment in Committee that sought to ensure that 100 per cent. of planning gain supplement proceeds accrued to the local planning authority in order to maintain the principle of local accountability and local benefit, and the Minister argued strongly against it on the grounds that a share of the revenue would be needed for spillovers and surrounding regional projects, but he reassured the Committee that a substantial majority of the revenue would none the less accrue to the local community. That was the basis on which the Government sustained their argument, but we now discover that that argument will not necessarily apply in Scotland. The Government have a little explaining to do as to how they will extricate themselves from that difficult and anomalous situation.

Another question is raised. Devolution is an evolutionary process; it is not fixed, and powers change over time. I am struck by the fact that the Mayor of London has recently acquired planning powers that are not greatly dissimilar to those of the Scottish Executive. I raise the question—and perhaps the Minister can answer it—of whether Mayor Livingstone might seek to invoke the Scottish precedent in arguing that the receipts from the planning gain supplement should go to him, rather than to London local authorities. There might well be a simple legal answer to that, but it is a question that is prompted by this problem and I am sure that the Minister can give a clear answer to it.

The hon. Member for Rayleigh raised a second issue, which he put very well so I do not have a great deal to add to what he said. It is that an anomaly in the devolutionary process is being created because there will be one instrument—the planning gain supplement—which will be a UK-level power, and a partly alternative and partly additional mechanism which is a section 106, or section 75, power, and which is devolved. In introducing the measure, the assumption has been that as planning gain supplement is introduced and expands, the section 106 role will contract; it will be confined to local infrastructure and affordable housing. However, it has never been clearly explained how that contraction will happen, and whether consequential legislation will be needed; it would presumably have to be introduced to limit the role of section 106 powers.

Again, we have an anomaly in terms of Scotland; as the hon. Member for Rayleigh has explained, the Scottish Executive might well take a totally different view and might wish to expand the role of section 75 to have enhanced, rather than reduced, planning gain. If that happens, there will be a clear conflict between United Kingdom and Scottish functions. It is not at all clear that the Government anticipated that problem, or that they have an answer to it. I await the Minister’s reply with interest.

It is important that we debate the new clause, not only because of its specific application to Scotland, but because in applying to Scotland it draws out for all of us some of the fundamental problems in the legislation as a whole. My hon. Friend the Member for Rayleigh (Mr. Francois) was right to explain that, because of the awkwardness in the relationship between UK legislation and devolved legislation— as the hon. Member for Twickenham (Dr. Cable) pointed out—the Scottish dimension shows up the fundamental awkwardness in the structure of the Bill.

The right hon. Gentleman speaks about the fundamental awkwardness in terms of devolution. Is not the real issue the conflict between central Government, in this case the Treasury, and local government, in this case in Scotland, in that there is a determination and desire on the part of local authorities to advance development in their locales with a funding stream through section 75 planning gain, and there is a conflict between that sometimes good practice—and sometimes less good—and the demand for more tax revenue in the Treasury coming through the planning gain supplement?

I very much agree with that, but I put it to the hon. Gentleman that the problem has become even clearer since the Government have had to handle devolution, the Scottish Parliament and the Scottish Executive. In doing so, they have revealed that the fundamental problem is that they are a centralising Government who do not care about or trust local authorities at all. That is why I ask my hon. Friend the Member for Rayleigh to consider the question of the commitment not just to the 30 per cent. figure, but to the 70 per cent. figure. Of course, this issue is particularly relevant to Scotland, because nothing in the Bill enables us to be sure that any of this money will, in the end, get to Scottish local authorities. Nor do we understand, as the hon. Member for Twickenham said, what will happen in reality to a section 106, or section 75, agreement. Is this to be a new-found version of the withering away of the state? Is the provision just going to disappear? I can see nothing in the Bill to suggest that it will, which means that this fundamental contrast and conflict will remain.

In Scotland, as in the United Kingdom as a whole, we have to get back to first principles. This planning gain supplement is of course nonsense. We have tried it at least three times before—probably four—and it has not worked. The only way in which the Government can justify its working in Scotland or in England is to say, “If we have a very small tax, nobody will notice, so the reasons why it never worked before will cease to exist.” As my right hon. Friend the Member for Wokingham (Mr. Redwood) says, that might be true; however, the inevitable answer is that the one way to ensure that nobody will notice is to have no tax at all. However, that cannot happen if the Government will not let us in on the secret of how much this tax will be.

I realise that it is very difficult to talk in these terms about what is a preparatory Bill for a planning gain supplement. However, in most preparations, we have some idea of what we are preparing for. If we are preparing for a birthday and we decide to make arrangements for the party—such as getting the balloons and having the cake made—we normally have a budget: we work out how much the birthday will cost and how we will raise the money. However, this is preparation without a budget, except for a sum that is related not to the “birthday party”, but to the preparations themselves. That sum will be yet more money for the Government to spend on the subject about which they are most expert: the failed computer system. It will doubtless be more money for the information technology companies, which they can spend showing the Government that they cannot do what they want them to do.

I and the people of Scotland want to know how much money we are talking about. What would 70 per cent. of that sum be, and how do we know that it will really go to the local authorities? What, therefore, would 30 per cent. of that sum be, and how do we know that the Scottish Executive will use it in the way that the United Kingdom Government say that they will use such money in England and Wales? None of that information has come our way. We cannot even work out the equation by analogy, because the Government have not told us about the 30 per cent. that they will get into the Treasury anyway. That is why the new clause tabled by my hon. Friend the Member for Rayleigh makes specific reference to a joint evaluation by Her Majesty’s Treasury and the Scottish Executive. I want to know about that. I want to know what the Treasury intends to do not only with the money that goes to Scotland—that is obviously a matter for discussion between the Treasury and the Scottish Executive—but with the money that goes to England.

It used to be said that such money will be used for regional projects. The hon. Member for Milton Keynes, South-West (Dr. Starkey) is absolutely right to say that we need to consider whether some of these schemes need money that is outwith local authorities, but she will agree that we would all be a bit worried if money raised in Milton Keynes was given to fund a proposed extension to a project in Liverpool, for example. That would be very difficult to justify, but when the Government talk of regions, that is what could happen. It could happen in Scotland too.

The issue is important for the credibility of the system. The Minister will have some fair words—or even some nasty words—about it, but the truth is that most people are frightened of development. They would prefer it not to take place. One of the ways to get people to accept development is to suggest a direct connection between development and an improvement in their lives and the area in which they live. If we are to have a system in which 30 per cent. is removed and given to the Scottish Executive or the Government without any reference to what it will be used for, it will be more difficult to get people to accept that development.

May I point out to the right hon. Gentleman that some people are keen on development because their area has a shortage of affordable housing? I invite him not to generalise and say that everybody is opposed to development.

The hon. Lady may have misheard me, but I said that most people disliked development. I declare an interest, in that I write on these subjects for Planning and Estates Gazette and that has been my profession since I was 22, so I have a long history of trying to understand planning and development issues. My experience is that the vast majority of people are suspicious—the French word is “méfiant”—of development proposals. That is generally true and in such circumstances one needs to make them feel that a development is proposed not just for the aggrandisement of the local council or the advantage of the developer, but that local people will gain something from it. That means some local injection of money, rather than the funds being spread about. That is especially true in Scotland—as the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) pointed out—which has a sad history of a centralising tendency. There is not quite the willingness to allow local authorities to make some of the decisions that one would hope that they might.

We should wait to find out the facts before the provisions of the Bill take effect. The House is being asked to sign a blank cheque and the effect will be worse in Scotland. The Government are suggesting to the people of Scotland, and to the people of England and Wales, a process that is utterly alien to parliamentary democracy. The Government are asking for the right to spend people’s money on something that they will not delineate, at a cost that they will not quantify and subject to a tax that they will not specify. The proposal will produce a sum that the Government will not name, that will be divided on a basis of which they are not certain and that will be spent in a way that they will not restrict. That is what the Government are asking people to vote for. That is an intolerable proposal.

The only thing that is certain in the Bill is the bill for the preparation for something that may never happen. That makes this a very peculiar Bill. It is a mark of the seriousness of the state of governance of this country that we have got this far and most of the press have not noticed that peculiarity. If we are not careful, we will go on having such Bills, because they are very convenient for the Government. They do not have to tell anybody in Scotland anything about the issue. We have not been told how much will be raised in Scotland or how it will be divided. Nor have we been told whether the Treasury will get its hands on it. That is the most important thing for the discussion between the Treasury and the Scottish Executive. There is, of course, a significant financial subsidy for Scotland that comes from the rest of the British taxpayers. Does the Treasury have it in mind that, if the Scottish Executive get this money, it might revisit the Barnett formula? Might it have a look and see whether it could ante off this money?

Has the right hon. Gentleman looked at the Bill and is he aware that it is a paving Bill? The matters that he is discussing would be matters for the substantive legislation that would have to follow if we made a decision to press ahead with a planning gain supplement.

That is exactly the point that I am making: this is a paving Bill in which the size of the pavement is not adumbrated. It is a paving Bill that tells us nothing about the cost of the possible proposals. It is a paving Bill that gives us no detail—

Order. The right hon. Gentleman must speak directly to the new clause. The Third Reading debate will come a little later.

I beg your pardon, Mr. Deputy Speaker. I was led astray by the Financial Secretary, who seemed not to understand what was the fault of the Bill, which is not that it is a paving Bill, but that it is paving Bill that does not even have the substance of a paving Bill. The new clause would mean that the Bill would have no effect at all until we knew enough about it to make an informed decision—even about paving. Even those of us who are asked to be paviours deserve to know how much, how long, with whom and on what basis. That is all we ask and it would be reasonable for the Government to tell us.

The Government’s proposal needs to be checked and I support my hon. Friend the Member for Rayleigh (Mr. Francois) in suggesting that there is a need for much more study and consideration in Scotland before it could possibly progress. I wish to talk about the effects mentioned in his new clause, which could be quite serious and difficult for Scotland. I was pleased that he drew attention to the evidence of the Scottish Property Federation, which clearly believes that, if the measure went through, it would reduce the supply of development and development land in Scotland at a time when people feel that there needs to be more housing built in Scotland and when the great cities of Edinburgh, Glasgow and elsewhere may need more development opportunities for additional office, commercial or retail space. It would be a great pity if the House allowed something to go through in preparation for a tax that would make that position worse rather than better.

We are invited by the Government to believe that there are a number of people in Scotland currently sitting on land that might be suitable for development or buildings in the big cities that might be suitable for extension or demolition and replacement with better and bigger buildings who are not currently bringing those development opportunities through to the market but who, if a tax were imposed, would suddenly say, “Oh good. I can now pay a tax on my development, so I must rush off to the local planning authority to put in my planning application.” I know that there are some very altruistic people in Scotland, but I think that that is just a little incredible.

Does not the right hon. Gentleman accept that there are some similarities between Scotland and the rest of the United Kingdom? For example, the Select Committee was told that there was ample evidence of land that had not been brought forward for development because of a lack of infrastructure. Given that the PGS is meant to fund the infrastructure, it would be perfectly possible for it to lead to sites that are not being developed at present being developed.

It is perfectly possible for developers and councils to get together and organise such developments through section 75 agreements in Scotland and section 106 agreements in England. I do not understand how introducing an additional tax into the system would make the situation better; it must make it worse.

Will the right hon. Gentleman give way?

If I can finish my point, I will of course give the hon. Lady a chance to rescue her rather bad argument.

A section 75 agreement in Scotland is the natural way to achieve such development. Let us say that the tax is set at 30 per cent., which is the figure that I have heard bandied about. If 70 per cent. of that went back to the local authority—that would be 21 per cent.—the deal might be much less good than one that was achieved after negotiating a section 75 agreement, under which every pound would go into a piece of infrastructure that would clearly facilitate the development.

I simply draw the right hon. Gentleman’s attention to the fact that the evidence that I cited came from the south-east county leaders. I believe that they are dominated by councillors of his party. They are worried that there are sites in the south-east that cannot be unlocked simply through section 106. They are quite keen on the PGS because it would raise much more money.

I do not happen to agree with them and I do not think that the tax would work like that. It would obviously reduce the flow of development proposals and development land, especially because I assume that my party would repeal it quite early on in the term of the next Conservative Government, which, I am pleased to say, looks rather closer in the light of recent opinion polls. That would mean that people naturally would wait until the unnecessary legislation had been repealed, after which they would reach a sensible agreement with the local authority whereby money would not be wasted, or leak out of the local area, under an especially cumbersome mechanism that the Government had invented.

A lot of Labour Back Benchers—I only wish that they were here today—are very worried about the proposals. I believe that the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), who has a lot of experience in this area, is a strong critic of the proposal, and I think that his opinions are mirrored by many Scottish Members, just a few of whom are in the Chamber. They are worried for good reason; their local authorities tell them that the tax would reduce their opportunities to take section 75 money, in the case of Scottish authorities, or section 106 money, in the case of English authorities, and thus reduce their ability to direct and control the element of the gain that a developer was prepared to share through a sensibly negotiated agreement.

I hope that the Government will think again. Rather like my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), I think that we are not only considering a Bill that has virtually nothing in it, but wasting our time doubly, given that I suspect that the Government will think again and realise that many of their Back Benchers are correct that the imposition of such a tax into a complex system that proceeds by agreement at present would be far from helpful, but unhelpful.

There is only one other possibility: the Government are being very Machiavellian and wish to hang out the spectre of a tax in the hope that that will get some of the people who have land with development potential to rush to their local authority before the tax is introduced so that they can pocket the gain before the taxman does. I understand how that might work, but I doubt that the Minister would be honest enough to say today that that is the Government’s wicked plan. After watching Ministers and hearing their conversations with their Back Benchers, I fear that the Government do not even have a wicked plan. On this occasion, they have blundered into something that Labour Governments always do. They realise from historical research—history is not the strong subject of this Administration—that all the previous efforts have gone wrong, so they have come up with the silly idea that if there were a lower rate of tax, it might somehow not be so damaging. Such a tax might not be quite as damaging, but all tax is damaging in this situation. I wish to spare the people of Scotland from the proposal, so I have pleasure in recommending new clause 1 to the House.

I shall not detain the House long as all the important points have been made, not least by my hon. Friend the Member for Rayleigh (Mr. Francois) in speaking to the new clause.

Inevitably, much suspicion surrounds any section 106 agreement in England or section 75 agreement in Scotland; I guess that the provisions are similar. Local residents are concerned that, under current arrangements, such agreements effectively are little more than a bribe that developers pay to the local authority. At least if the money goes to the local authority, one can rely on the fact that certain improvements will be made in the locality. If the money—30 per cent. or rather more—is now to go to the Scottish Executive, local residents will be even more concerned. It is clear that the focus needs to be on local benefits as far as possible, and it cannot make any sense that there will now be a middle man in the form of the Scottish Executive.

The hon. Member for Twickenham (Dr. Cable) pointed out that the Mayor of London may see this measure as a precedent. He is already looking to expand his planning powers through the Greater London Authority Bill that is going through Parliament.

I agree with the points made by my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) and my right hon. Friend the Member for Wokingham (Mr. Redwood) about the potential unintended consequences of the proposal. Inevitably, if there is to be another layer of tax, the reaction of any sensible, commercially minded developer will be simply to sit on his or her hands. That is how things have worked in the past.

I accept the concerns expressed by the hon. Member for Milton Keynes, South-West (Dr. Starkey). One of the biggest concerns of us all, particularly those of us in relatively built-up constituencies, is the demand for more social or affordable housing. The reality in London, after six years of the Mayor of London’s policy that there should be at least 50 per cent. social housing in large-scale developments, is precisely as I have pointed out: developers have decided to sit on their hands rather than go ahead with new developments and have watched as the value of their sites has risen yet higher. It has been the very worst news for the most vulnerable in our society, particularly in built-up areas. I think that we all appreciate that as our societies become ever more polarised between the extremely rich and the extremely badly off—I am sure that that applies in the constituency of the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) and in Glasgow constituencies—that is potentially something of a disaster.

What the Government are proposing is a total mess. I fear that our new clause will alleviate matters only to a very small degree, but I hope that we will be able to vote on the matter, and that in this debate and on Third Reading we will be able to make a very strong case against this absurd proposal. It will be very bad for Scotland and for England. I am only sorry that, as a number of my colleagues have pointed out, there are not more Scottish Members present. One hopes that they would have been able to put the case even more robustly and defend their own interests.

As one of those Scottish Members, I add my weight to the desire to vote on the new clause in an attempt to bring matters back to a more local level, at least by having more negotiation.

Local government is best placed to see the impact on the local community of any development that it decides on, and section 75 agreements, rather than a centrally collected tax, are the best way of deciding how that impact is to be ameliorated and paid for at the time of the planning application.

We can make an analogy between this proposal and the centralisation of the business rates, which also removed some of the debate about unpopular business developments and whether they would benefit the community. Councils looking at the wider benefits of encouraging business and its growth could see the impact of having new land available for business and office development, but at least in the days when business rates were collected and kept locally there was a straight local benefit that could be perceived. Similarly, the Government should recognise the benefits of section 75 agreements, which allow the local authority to assess its priorities in its own community for dealing with the impact of development.

This short, one-page, three-clause Bill is intended simply to ensure the propriety of Government expenditure and that it is in accordance with Government accounting rules; it does no less and no more than that. Although I understand the interest that all hon. Members feel in the points that they have raised, they are precisely the points that were picked up in the thorough inquiry that the Select Committee on Communities and Local Government conducted on the policy area. They are precisely the points covered in the general consultation that we undertook in December 2005, and in the three further specific technical consultations that we undertook alongside the pre-Budget report in December 2006.

But if the House was unconvinced of the ideas in the Bill for which we are paving the way, it would make sense not to give the Government the powers set out in the paving legislation.

All hon. Members will make up their own mind on the proposals before us, but I urge the hon. Gentleman and others to consider the fact that, this afternoon, we are being asked to make judgments on a paving Bill designed to ensure the regularity and propriety of the Government expenditure that would be necessary if we proceeded to introduce a planning gain supplement. The Bill will ensure that the proper preparations are in place beforehand.

The Minister talks about the regularity and propriety of payments. This is just a paving Bill, but, as I understand it, the intention is that the supplement raised by the Treasury would be filtered back, via the Scottish Executive, to local authorities in Scotland, in one proportion or another. Why have the Scottish Executive been inserted into the loop when, at the moment, the local authorities simply collect their money? Why, under the new regime, do the Government not collect the money and simply pay it directly to the local authorities? Why have the Scottish Executive been inserted into the mechanism?

I am surprised by the hon. Gentleman, who is generally well informed on such issues. The simple answer to his question is devolution. As he will know, as part of the devolution settlement, planning functions and the operation of planning legislation are a matter for Scotland, the Scottish Executive and the Scottish Parliament.

The Minister is an intelligent man, and he has studied the subject for a long time, so will he tell us how likely it is that the tax will be introduced?

We have been pretty consistent about that. Clearly, the results of the three consultations, which close at the end of the month, will help to inform our judgment, but we have said that if we believe that a planning gain supplement is workable and effective, we will announce that we intend to proceed with its introduction.

Planning is a devolved matter, but taxation other than local taxation is a reserved matter. I am quite happy with that, but I thought that the hon. Member for Dundee, East (Stewart Hosie) was not; he appears to have done an about-turn today. Will my hon. Friend the Minister at least give an assurance that the issues raised about the way in which the tax would apply in Scotland will be fully discussed in any Bill that is introduced, and will he assure us that the Government have an open mind on the subject?

My hon. Friend would probably accept that we as a Government generally have an open mind. I can give him the assurance, as I have tried to do already, that the matters about which he is concerned will be discussed, should we introduce any substantive legislation to follow a decision to introduce a planning-gain supplement. However, because of the devolved nature of the planning responsibilities in Scotland as part of the devolution settlement, we do not wish to dictate, and I am sure he is not arguing for the Government in Westminster to dictate, to Scotland how it should use the proceeds of any planning-gain supplement to support infrastructure that could help with development.

The objection surely is that it should not be for the Scottish Executive to dictate to local Scottish councils how to use the money. The Government should not pass such an ill thought-through Bill, which effectively gives that power to the Scottish Executive without allowing local people and locally involved politicians to have their say on those matters, especially when, as several other Members have said, the measure is a blank cheque and we have no idea whether it will apply to 30, 50 or 100 per cent. of the money.

First, I do not accept the hon. Gentleman’s description of this rather simple Bill. Secondly, the devolution and the responsibility and powers to make decisions about planning matters are not dealt with in the Bill. They were settled in the Scotland Act 1998, which set up the Scottish Parliament and gave independence on various matters as part of the devolution settlement. That means that although the tax will be UK wide, there is nevertheless an important interaction with planning obligations and responsibilities for infrastructure and development, which will rightly rest in Scotland and with Scotland. The Scottish Executive and the Scottish Parliament, no doubt in detailed consultation with their local authorities, will make appropriate decisions about how to handle the revenues.

I am grateful to my hon. Friend. He is being generous, and I am sure he appreciates that this is an important matter for my constituency and many others. If we should not decide for the Scottish Executive how it allocates the funding—a principle that I accept—surely there should be some parliamentary discussion of the measure somewhere. If it is not to be discussed in this place, will my hon. Friend consider providing for an order to be agreed by the Scottish Parliament before the measure comes into effect in Scotland? That would allow the Scottish Parliament to discuss the matter, if we cannot discuss it here in detail.

If policy on planning in Scotland is not a matter for me as a UK Minister, clearly the conduct and operation of the Scottish Parliament is even less a matter for me. I know that the Executive and Members of the Scottish Parliament are examining the matter closely and will follow our debates, and I am sure the point that my hon. Friend makes will not be lost and will be considered by them.

The hon. Member for Rayleigh does not do his case much good by misquoting the Scottish Executive. The Scottish Executive did not say that the planning-gain supplement was misconceived. It said that if it was misconceived, it might act as a disincentive. The hon. Gentleman laughs, but the distinction is rather important. I want to make sure that he is clear about that and that that correction is on the record.

New clause 1 would delay the Bill’s coming into effect. That might be the hon. Gentleman’s intention, although he was not explicit about it. The new clause is designed to impede, rather than to improve, its operation. It would make the IT, staffing and preparation of systems that are necessary for any smooth, timely and efficient introduction much more difficult to achieve.

Would it not help the Government enormously if the preparations for IT and the like were held up, given the Government’s history on the purchase of IT? Would not the new clause be of enormous benefit to the Government? Why does not the Minister accept it immediately? He would then not be in the same mess as some of his colleagues in respect of other IT projects.

The right hon. Gentleman’s argument cuts in exactly the opposite direction. The House has been reasonably and rightly critical of some Government IT projects, and the basis of some of the criticism has often been that the projects have been rushed and insufficient time has been allowed for preparation. The purpose of the paving Bill is to allow us to be in a position such that, should we decide to go ahead with the planning-gain supplement, we can begin the proper and necessary preparations from that day. To delay in that way would increase the risks about which the right hon. Gentleman is rightly concerned.

The new clause is also unnecessary because the Government are well aware of the interaction of the planning-gain supplement with devolved policy areas, which for some time we have been examining closely with the Scottish Executive and the devolved authorities, even though it is not a matter for this Bill.

Do the devolved areas to which the Minister refers in the context of the interaction between revenue and devolution apply to Wales, Northern Ireland and London?

The legislation applies to Wales and Northern Ireland, and London is part of England, with regard to which we have said that we will ensure that at least 70 per cent. of any revenues from the planning-gain supplement would be recycled to the local authority area from which they were raised.

The Minister is summing up, but before he sits down will he say whether, as part of this detailed examination that he has just assured the House is under way, the Government have decided at what rate the PGS would be levied were it to be introduced? What will the rate be?

The hon. Gentleman has asked that question a number of times. It would be part and parcel of any decision on whether to go ahead. It is clearly not a decision that we have been able or ready to take, so there is no answer to that question. We have said clearly that it will be levied at a modest rate that will not create disincentives for the sale and development of land but could raise additional revenues that would support the development and infrastructure that is necessary if we want to see the development, particularly of housing, that this country badly needs.

The hon. Gentleman said that I was winding up, but I am actually just warming up, because there are one or two other points with which I should deal.

May I take the Minister back to the discussions with devolved Administrations? He is right that planning legislation is devolved, but the implementation of planning law is a local authority matter. So before he moves on and warms up too much for the hon. Member for Rayleigh (Mr. Francois), will he tell the House how many Scottish local authorities he and his Department have been in discussion with so far in the preparation of this paving Bill?

The operation of planning legislation in Scotland is clearly a matter for local authorities in Scotland. The passing and content of planning legislation is clearly a matter for the Scottish Parliament and Scottish Executive. The hon. Gentleman asked me a specific question, so let me give him a specific answer. I mentioned earlier the consultation that we published on the principle and outline of a possible planning-gain supplement in December 2005. We had 39 responses from Scotland and other devolved areas. They played an important part, as I will show in a moment, in helping us to develop our thinking, and influenced the proposals that we have set out.

Will the Minister give way?

The hon. Gentleman has only fairly recently come into the Chamber, but of course I will give way. He is generally a very regular attender in the Chamber.

The Minister is very kind. I thank him very much.

The possible levy to be applied has already been discussed in Northamptonshire, which the Minister will know is one of the areas that will be heavily affected by the sustainable communities project, with 167,000 new homes by 2031. It is worrying that people are already talking about £40,000 per house as a way of paying for infrastructure. Can the Minister give us some idea of whether it is likely to be that kind of figure? We have to go ahead with infrastructure for sustainable communities and we will need to know what money is available before we come back to the Government to say, “That ain’t enough.”

A planning gain supplement levied at a modest rate that nevertheless raised additional revenue to support infrastructure is precisely the kind of source of additional funds that will be required to support the developments that we need in the hon. Gentleman’s area and in others.

On the wider application of the PGS to devolved Administrations, whether in Scotland, Wales or Northern Ireland, the Government have clearly reiterated several points that are worth setting out to the House. First, we have said that all PGS revenues from a devolved country will be returned in full to that country. Secondly, we have said that the devolved Administrations will have discretion over how PGS revenues from their country will be used to support infrastructure. That is not, as the right hon. Member for Suffolk, Coastal (Mr. Gummer) suggested, a fundamental problem, but a fundamental principle of devolution. Thirdly, we have said that we will undertake detailed further work with the devolved Administrations and with interested parties in those countries to examine the introduction of a planning gain supplement as regards areas of devolved policy such as planning obligation agreements, including section 75 agreements in Scotland and article 40 agreements in Northern Ireland.

The new clause suggests that work with the devolved Administrations on how the PGS would operate across the UK has not yet been done. That is plain wrong—it is already taking place. We are currently undertaking the second round of consultations on the PGS. As I said, we received several important contributions to the first consultation, which have had an important influence on the way in which we have developed proposals since. The views that came to us from Scotland have been decisive in helping us to come to the view that Scotland should keep 100 per cent. of PGS revenues that may be raised there and that Scotland should have full discretion over the use of those revenues for supporting infrastructure in Scotland—commitments that have been welcomed by Scotland’s First Minister. In addition, start notices, which are already a feature of the planning system in Scotland, could play a useful part in any PGS. On planning obligations, our proposal to use a common starting point from the negotiations on affordable housing also draws heavily on the approach that is already in place in Scotland.

It is worth being clear that the Government do not propose, nor could we propose under the devolution settlement, to mandate how devolved policies are conducted. The determination of section 75 planning agreements would rightly remain the preserve of the Scottish Executive and the Scottish Parliament. Nothing in any proposed PGS policy, and certainly nothing in the Bill, would legally require changes to Scotland’s planning policy.

As the PGS would be a national tax applying across the UK, decisions on whether it should be enacted, and if so how, will be the preserve of this Parliament.

The new clause is less about the Bill and more about the underlying policy of the PGS. The only major matter of substance in the Bill relating to Scotland is that Scotland is not specified in it. That is because preparatory expenditure needing new powers under the Bill would not be incurred by the Scottish Executive. The Bill itself will place no additional burdens or requirements on Scotland. Any introduction of a PGS, together with its application across the UK, would be preceded by debate and substantive legislation on the wider policy. That would provide the opportunity to examine in detail any concerns about the design and operation of a PGS.

The Bill is a narrow, specific, paving measure. The new clause would frustrate its purpose and I hope that the hon. Member for Rayleigh will not press it. If he does, I shall have to ask my hon. Friends to oppose it.

I am pleased to be joined on the Front Bench by my hon. Friend the shadow Secretary of State for Scotland, who has returned hot foot from a meeting this morning of the Select Committee on Scottish Affairs in Dundee especially to be here for the winding-up speeches on the new clause. Would that more Labour Back Benchers had turned up for the debate.

The debate has been valuable in that it has allowed us to press the Government on how they believe that the PGS will operate in Scotland. It has also served to highlight the continued tensions between the Treasury in London and the Scottish Executive over the proposed implementation of the PGS north of the border.

I have listened carefully to the Financial Secretary on the matter, but he has not entirely convinced me. Indeed, he has not convinced me at all. I also suspect that he has not convinced the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz), who reasonably asked him for more detail about the proposal’s operation in Scotland. Despite that reasonable plea from the Labour Back Benches, we have been neither told the rate at which the tax would be levied in Scotland or anywhere else in the United Kingdom nor given any further detail about its implementation in Scotland or the proportions between the Scottish Executive and any locality that is asked to accept a development for which money might be earmarked or ring-fenced.

Despite being given a golden opportunity this afternoon, the Financial Secretary has not added much to the sum of human knowledge about the PGS’s operation in Scotland. I am therefore left with the thoughts of Mr. David Melhuish, director of the Scottish Property Federation, who concluded his letter of yesterday with a plea for continued opposition to the PGS and the hope that

“In the Scottish context, the PGS is not taken further without proper evidence-based policy making.”

It is not exactly a secret on a par with the Trident codes that the Government are under considerable pressure in the run-up to the Scottish elections in May. I do not want to be accused of helping the Government out of their predicament. Nevertheless, it occurs to me that, given the weight of opposition to the PGS in Scotland, including from many Labour supporters, it might be sensible for the Government to draw back while they still can and announce their decision to abandon their misguided intention to proceed with the PGS in the United Kingdom, including Scotland.

Having left the Financial Secretary with what I hope will be a genuinely lingering thought, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 1

Preparatory expenditure

I beg to move amendment No. 3, in page 1, line 10 at end add—

‘(4) No expenditure shall be incurred under section 1 earlier than 90 days after the conclusion, on 28th February 2007, of the consultation exercises on the implementation of the Planning-Gain Supplement.’.

The amendment is designed to delay implementation of the Bill for at least 90 days after the consultation exercises on the PGS have ended next week. It has been tabled partly because the Treasury still appears confused about whether it intends to proceed with the PGS at all. Nevertheless, as my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) said earlier, the Treasury is still asking Parliament to authorise expenditure to prepare for a tax that it has not yet decided to introduce. The money could ultimately go to waste if the Government do not intend to proceed.

I want to press the Financial Secretary on a point that my hon. Friend the Member for St. Albans (Anne Main) made in Committee about the purposes to which the Treasury wants to put the money that would be authorised by the Bill and could be spent immediately after Royal Assent, which could theoretically happen as early as next month.

Rumours are circulating in the media that, despite doubts about the PGS, the Treasury still wants the Bill because it would like to begin work on a new IT system, which could be used for alternative planning-related purposes if the PGS collapsed. The new planning permission that the Government recently proposed might be an example. Can the Minister give a firm commitment that the funds being requested by the Bill will be used solely for PGS-related work? I ask that partly because, following the hostile reaction that the proposed PGS has provoked so far, the Treasury appears to have been gradually backing away from its introduction in recent months. We were originally told that the Government planned to introduce the PGS in 2008, and the Treasury issued a consultation document in 2005 on how that might be achieved.

The response to the Government’s consultation was hardly encouraging from their point of view. The Institute of Directors called on the Government to drop their proposals, stating:

“The proposals as currently envisaged are thoroughly bad both in principle and detail... the IoD feels that this additional tax would do nothing to help the housing supply”.

It also said that the tax constituted

“a direct attack on business competitiveness, contrary to the Government's own stated objectives”,

and would

“introduce an added bureaucracy to allocate the money as well as collect it.”

The Royal Town Planning Institute responded to the consultation exercise in a document entitled “Consultation Paper Exposes Folly of New Land Tax”. It said:

“PGS will create a polarity of investment between north and south, it encourages land-banking, creates inflexibility in the market and fails to support infrastructure planning.”

A detailed study of the proposed operation of the PGS was conducted by property experts Knight Frank on behalf of the British Property Federation, the Confederation of British Industry, the Home Builders Federation and the Royal Institution of Chartered Surveyors. Page 4 of its executive summary, produced last September, states:

“It is clear that extensive further research is needed to achieve sufficient public confidence that that PGS would work effectively and meet the required increase in housing output. At present it is not clear that this would be the case.”

Perhaps in the light of that reaction, in the December 2006 pre-Budget report the Treasury confirmed that the proposed introduction of the PGS was to be delayed until 2009.

By the time we reached Second Reading on 15 January, the Financial Secretary, introducing the Bill, had watered down the Government’s commitment still further. He said:

“Just as Kate Barker did, the Government have considered a range of alternatives. We will continue to do so, but at this point the PGS is our lead option.”—[Official Report, 15 January 2007; Vol. 455, c. 569.]

So even the Government are now apparently backing away from their own idea, which has been downgraded from a proposal to the status of only a “lead option”.

To coincide with the delay announced in the pre-Budget report, the Treasury also announced a further three consultation documents on the proposed introduction of the PGS: “Valuing planning gain”, “Paying PGS” and, in co-operation with the Department for Communities and Local Government, “Changes to Planning Obligations”. The three consultations will not close until 28 February—next week—and presumably the Government will want to analyse the responses that it has received before deciding whether to proceed. The original consultation exercise produced some 700 responses, and we can assume that this exercise will produce quite a number as well. There is little point in seeking a wide range of opinions if the Government have already decided to plough on regardless, yet this evening they are still asking the House to vote for approval for preparatory spending before the consultations have even closed.

During the 30 January Committee sitting, at column 11, the Financial Secretary assured me that if the Government did resolve eventually to press ahead with the PGS, they would do so by means of a separate Bill rather than including primary legislation in a Finance Bill. Given that, and on the assumption that there will be a Budget statement in March followed by a Finance Bill in April, the Government need not rush preparation of the necessary clauses so that they are ready less than two months from today. If the Government are now contemplating introducing a separate Bill to allow implementation in 2009 rather than 2008 as originally envisaged, they have further time in which to reflect on what to do, and therefore need not seek the approval of the House to begin spending public funds almost immediately. That is particularly important, as there is no expenditure limit in the Bill. The expenditure could be theoretically be open-ended, particularly if the Treasury continues to dither on whether or not ultimately to proceed with the PGS.

The explanatory notes that accompany the Bill provide an indicative figure of up to £52 million for staffing in the procurement of an associated PGS IT system, but as the notes point out, they do not form a part of the Bill itself, so it is purely an estimate, not a cap. The actual figure could easily exceed the estimate, particularly if there are cost overruns on the associated computer system—a point that we debated in some detail in Committee and in relation to which recent experiences in the Home Office and the NHS are hardly encouraging.

May I draw the hon. Gentleman’s attention to items that he left out of his list of things that are happening, such as the increasing housing crisis and the dire lack of affordable housing, particularly across London and the south-east? That might be related to the fact that the Government wish to have a tax that could fund the infrastructure.

As the hon. Lady well knows, the provision of affordable housing has gone down quite a lot under this Government by comparison with their predecessor. One of the reasons for that is that the Government have failed to provide the resources. I would have thought that the hon. Lady, as Chairman of the Select Committee, already knew that.

As I argued in Committee—[Interruption.] I will give way in a moment. The right hon. Member for Greenwich and Woolwich (Mr. Raynsford) has only just entered the Chamber and I have already said that I will give way to him in a moment. [Interruption.] I said in a moment.

As I argued in Committee, the Bill puts the cart before the horse, so our amendment makes the case for delaying any expenditure in conjunction with the introduction of the planning gain supplement until three months after the latest consultation exercises have closed. The Treasury can then hopefully take those responses properly into account. I will now give way to the right hon. Gentleman, who is a former housing and planning Minister and who is firmly on the record as opposing the whole planning gain supplement concept.

I would not want the hon. Gentleman to mislead the House by implying that there has been a reduction in expenditure on housing under this Government when compared with the record of the previous Government. He will be aware that there has been a very substantial increase in resources and that many of them have been allocated to improving the quality and condition of the existing stock, which was left in a very poor state indeed by the previous Conservative Government, whom the hon. Gentleman supported. I hope that he will recognise that.

Order. Before the hon. Gentleman responds, I remind him that we are not conducting a general debate on housing, but discussing amendment No. 3.