Planning levy clears first hurdle despite MP protests

The government’s controversial planning gain supplement has cleared its first parliamentary hurdle despite fierce criticism from MPs of all parties.

Last night, the House of Commons, backed by a majority of 291 votes to 182, passed the legislation which paves the way for the introduction of the development levy.

During the debate, MPs from all parties criticised the levy, which is designed to secure extra funding to deliver infrastructure.

Nick Raynsford, former housing and planning minister, said that he was sceptical about whether the government’s proposals would work. “I have serious doubts about the wisdom of what my right honorary friends are embarking on and even greater doubts about the likelihood of PGS delivering the benefits that they describe.”

He added: “The history of post-war Britain is littered with the wrecks of abortive attempts to achieve that objective, first in the 1940s, then in the 1960s and again in the 1970s. On each occasion, the measure designed to capture for the community some of the gain accruing from the development process was repealed after experiences that could not remotely be described as successful.”

Shadow paymaster general Mark Francois said: “Overall, the bill looks more and more like yet another Labour stealth tax, this time on development and affordable housing, rather than a genuine attempt to finance infrastructure in development areas.”

Vincent Cable, Liberal Democrat shadow treasury spokesman, also criticised the PGS. Financial secretary John Healy and planning minister Yvette Cooper, however, defended the levy as the best available mechanism for generating the extra revenue needed to pay for the infrastructure to support housing development.

Healy said that the legislation would enable the government to carry out the work needed to prepare the ground for the introduction of the PGS, but added that the government had not yet made its final decision on whether to introduce the tax.