Growth and Infrastructure Bill

Debate between Lord Deben and Lord Burnett

Monday 28th January 2013 Lords Chamber

[Lord Deben]

My Lords, I hope the Minister listens to the specific concern to make this “in between” clause actually work. However, I hope she will not discuss this issue without facing up to one entirely unspoken problem, which both sides of the House have always had a very clear plot to avoid ever discussing. I find it unacceptable that we should run our supported housing on the basis that we tax people who need a house to pay for other people who need a house. This is entirely a fiscal arrangement that the Treasury has entered into because it does not want us, as a community, to pay the costs of people who need housing and cannot afford it.

So what we do is say that those who are least able to pay more than they have to for their accommodation shall be taxed to pay for others. This is a total scandal. I find this bit and the clause that will follow extremely difficult to support—not because I object to the clause, but because, once again, it hides the plot between Labour, Conservatives and Liberal Democrats never to admit the reality of Section 106. I very often agree with the noble Lord, Lord Best, and I respect him enormously, but to talk about Section 106 agreements being freely entered into is, frankly, nonsense. They are not freely entered into; they are a necessary requirement of getting any kind of development at all.

[Lord Burnett]

My noble friend Lord Deben makes a powerful case. Does he agree that it is sometimes forgotten by people looking at it from the local authority side that if developers or builders make a profit they pay corporation tax, income tax, capital gains tax or whatever the tax is? In addition, they have Section 106 burdens, and likely to be coming down the track—some have adopted it—is the community infrastructure levy. It will paralyse the industry again if we carry on loading it with these burdens.

[Lord Deben]

I repeat what I said in the earlier part of this debate. I declare an interest in the sense that I try to help people do sustainable development. That is what has led me to this deep concern. We talk as though the money that developers pay has no effect on the cost of the housing of the people who pay for it. Successive Governments of both parties have consistently spoken about this total myth. The truth is that prices of homes in this country are greater for first-time buyers than they would be if we did not tax them. It is undoubtedly for a good reason, but they are taxed and other people are not.

We have an intergenerational problem. Because of the way that all this works, people who do have houses have a value which is significant. Of course, many of us in that position mitigate it, because the bank of mum and dad has to make it possible for the next generation to have a home. Many people are not in that position. I want this Government to face up to the fiction, which we have all accepted—I admit to it as a former Minister—that somehow the mechanism we have is reasonable and fair. It is unreasonable and unfair. At this moment, when the pressures on young people are so considerable, we must come away from the idea that it is reasonable to accept the basic concept of the noble Lord, Lord Best, that somehow new houses sold on the market should carry that tax and then increase it because—as my noble friend has pointed out—of the other infrastructure taxes that will take place. Nobody else seems prepared to do it, so it is time for this House to say to the Government and Opposition, “This will not go on”. It is not reasonable that we should not, as a society, bear the cost of affordable housing, but shovel it off—because then it is not on the national accounts—to those who are least able to afford it, thus widening the gap between the haves and the have-nots.