My Lords, I am glad to follow the noble Lord, Lord Best, who has rightly commended my noble friend the Minister for the careful way she has responded to some of the points made in Committee on the infrastructure levy, and indeed on some of the further discussions we have had and the responses to the technical consultation on the infrastructure levy. That is rather important to take into account.
I confess that, listening to the noble Baroness, Lady Pinnock, I felt that she was making a speech that would have been relevant at the time the technical consultation was published but not at the point at which the Government had clearly responded to that consultation, brought forward amendments and written to us, as the Minister did on 4 July, about those amendments and other factors.
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I will speak to Amendments 77, 311 and 312, which are in my name. As I go through them, I will explain where they come from. I remind noble Lords of my interest as chair of the Cambridgeshire Development Forum.
In Committee, I shared with many noble Lords considerable reservations about the infrastructure levy in principle, but we should recall that at that point we had recently seen the technical consultation the Government had published. For our purposes, we were effectively assessing that levy as if the technical consultation proposals were being implemented. We have moved on from that and I want to explain, from my point of view, how I made a number of points in response to the technical consultation.
It is very important to the development community, and probably from the public’s point of view, that they are able separately to identify the contributions made by developers related to a site, with integral infrastructure and on-site affordable housing, and how those relate directly to the development itself. Separately, I understand and accept—indeed, I support this—that the Government intend that the community infrastructure levy, which has been discretionary for local authorities, should effectively become mandatory, unless Ministers choose to disapply it, and that this will give additional resources from developer contributions to fund an infrastructure delivery strategy. I have always said that the infrastructure delivery strategy is in itself a significant advantage of the Bill. We do not presently have it and if Schedule 12 were to be done away with, we would lose the infra- structure delivery strategy as well.
Developer contributions should be in two parts: first, like a Section 106 provision, but called in future the delivery agreement; and secondly, through the infrastructure levy, which is like the community infrastructure levy but, unlike the CIL, will include affordable housing. Affordable housing is, in a sense,
at the heart of this debate and there is a serious risk that by shifting it into the infrastructure levy, we may lose the scale of affordable housing provided through Section 106 contributions and on-site delivery. That is the bulk of affordable housing presently provided. We will not necessarily get the infrastructure levy funding the volume of affordable housebuilding we are looking for because, as the noble Baroness, Lady Pinnock, rightly said, there are many other calls on that levy. Some of those may be really quite attractive to councillors when they consider how to use those receipts.
We therefore have to be clear on this, and that is where Amendment 77 comes in. From what I could see in the amendments the Government have tabled, I think the Government intend that the delivery agreement and on-site affordable housing delivery should continue, be substantial and be taken fully into account in meeting the right to require for affordable housing. We need both, not one or the other; that route might achieve the increase in affordable housing we are looking for.
That, essentially, is the bulk of my comments. However, the charging schedule should not only be mandatory; as the noble Baroness, Lady Pinnock, said, there is a problem in that gross development value may not exist in some places. Of course, we cannot magic up land value where it does not exist. We can, however, give local authorities the flexibility to choose whether to have the bird in the hand, as it were, with a sometimes modest charging schedule based on floor space, varied according to the nature of the development—and to have that money upfront—or to have a share of gross development value to fund infrastructure, while recognising that that is less certain and may come after a period of time, and that they may have to fund it. They absolutely have to have that choice.
The noble Baroness, Lady Pinnock, appeared to suggest that they would not have that choice and the technical consultation implied they would not, but the Bill as we have it gives that choice. It includes charging by reference to both floorspace and gross development value. I ask for an assurance from my noble friend that this is deliberate, so that if Ministers choose to make those choices, they can give local authorities the option to go for the bird in the hand or the two in the bush. That would answer one of the central objections that the noble Baroness made to the present Bill.
My final point touches on my Amendments 311 and 312, which I tabled before we had the letter from my noble friend on 4 July. I wanted to see what the Government’s proposals looked like before we brought the Bill into force—but now I think that we are in a position where we know that Ministers are going to make further fundamental design choices about the structure of the infrastructure levy, so change is coming. At this stage, the point is whether the provisions of the Bill allow Ministers to make the kinds of design choices about the infrastructure levy and the delivery agreements in future that make sense to us. Actually, the Bill does allow that—and what my noble friend said in her letter on 4 July was not just about the helpful amendments. It said that she commits
“to consult further on fundamental design choices before publishing draft infrastructure levy regulations”.
So many of the things that I am looking for can be done by the Bill as it is now, and my noble friend is, in effect, committing to further consultation—with us, too—and in due course to laying the regulations before us before the infrastructure levy comes along.
Even in Committee, I do not think we looked at this issue properly. On page 431, in Schedule 12, under general regulations, the Government included a new provision that says that they may make provision treating the community infrastructure levy as if it were the infrastructure levy. All the flexibilities that are required are available in this Bill. We do not know yet what the infrastructure levy and new delivery agreements will look like, but they could incorporate many of the best features of the community infrastructure levy and the best features of Section 106—but they absolutely will require local authorities to have a charging schedule and require those additional developer contributions substantially to increase the availability of affordable housing. On that basis, it would be very remiss on our part at this stage to remove Clause 129 or Schedule 12 rather than giving us the opportunity to have those improvements in the structure of developer contributions. So I am afraid that I shall not support Amendment 68.