PLANNING PERMISSION CHARGES BILL (Hansard, 25 June 1974)

§ Sir Anthony Meyer (Flint, West)

I beg to move, That leave be given to bring in a Bill to empower local authorities to levy charges with respect to the grant of planning permission for development. Successive housing Ministers have grappled vainly with the problems arising when land which is not being intensively used is to be exploited for housing or some other form of building development. The problems arise from a single cause, that the decision to make a change in the use of the land immediately increases its value many times. As I say, they arise from one cause, but they take two forms.

One set of problems relates to the huge windfall profits which an individual may make if somehow he can get planning permission to develop a piece of land which hitherto has been used for farming or as an open space. In most cases he has done nothing much by way of hard work to earn this colossal bonus.

The other set of problems arise when it is not the private individual but the public authority which is to develop a piece of land in private ownership. The question arises, on what basis is the owner of the land to be compensated? Is it to be acquired at its existing use value, in which case the public authority gets a bargain at the owner's expense, or is the owner to receive the value of the land as development land, in which case he is getting something valuable for very little effort'?

Housing Ministers, hand-in-glove with Chancellors of the Exchequer, have grappled with these problems by such devices as land levies, betterment levies and land commissions without achieving notable success either in securing a plentiful supply of building land at reasonable prices or in satisfying any of the parties concerned, least of all the general public, that the present system is fair.

I seek by this Bill to inject into the system an element of logical calculation and to remove from the system the arbitrary, windfall element. The purpose of the Bill is to enable planning authorities 1209 to make a charge for the grant of planning permission which results in a profitable change of use.

My proposal is very different in kind from that put forward by my right hon. Friend the Member for Crosby (Mr. Graham Page) in the original version of his Local Revenue Bill. Whereas my right hon. Friend proposed a fixed charge to cover the administrative costs of planning departments, I propose a charge directly related to the expected increase in value resulting from the grant of planning permission. In other words, planning permission would be sold like any other valuable commodity.

This charge, which would replace all existing charges on land transactions, would go to the local authority and provide it with an additional source of revenue. One side effect would be to strengthen the hands of local authorities in their dealings with developers who fail to carry through their obligations in relation to the completion of roadways, verges, etc., which is a matter vexing a great many of my constituents on new housing estates in Mold and elsewhere.

The principal purpose of the Bill is to provide a more manifestly fair basis either for the individual to pay over part of his gains to the community or for the community to reimburse the individual. I believe that it would go a long way towards removing the temptation to corruption or, perhaps more important, the popular tendency to impute corruption to a planning authority which has it in its gift to confer immensely valuable planning permissions to fortunate individuals if, instead of getting this right for nothing, the individual had to pay for it at the rate of, say, 50 per cent. of the 1210 expected increase in value. There would have to be provision for deferred payment, since there would be a delay before the recipient of planning permission could begin to derive cash benefit from it.

Time does not permit me to explain how the same system in reverse would provide a basis on which the local authority could reach agreement with an individual whose land it acquired for development.

What is crucial is the ratio between the expected value of the development and the charge to be made for planning permission—in other words, the sale price of the planning permission. I have used the figure of 50 per cent. by way of illustration, and I should expect that to be about right. A higher figure might diminish the supply of building land. A lower figure would not eliminate the arbitrariness which is so unacceptable a feature of the existing system.

I do not flatter myself that I have found an answer to problems which have baffled many Ministers, but I suggest that to introduce a concept of a fair price for a valuable asset would make these problems easier to tackle.