Growth and Infrastructure Bill

Charlie Elphicke Excerpts

Monday 5th November 2012 Commons Chamber

[Hilary Benn]

My hon. Friend, who chairs the Select Committee so ably, is absolutely right. That is another example of how local communities will lose out as a result of this change.

I am genuinely surprised that the Secretary of State has turned out like this, especially given what he said in his speech to the Conservative party conference last month. He explained, in a purple passage, why, alongside the bust of Disraeli and the poster of Winston Churchill, he had a photograph on his wall of Che Guevara smoking a large Havana cigar. He told the delegates:

“It is there to remind me that without constant vigilance, the cigar-chomping Commies will take over. Well, that isn’t going to happen on my watch.”

Well, it has happened—with this Bill. There are a couple of words for what he is doing. It is a concept much loved by communist parties the world over. It is called democratic centralism—telling other people what to think and do. The powers he is asking the House to give him in clause 1 are, frankly, enough to make any self-respecting democratic centralist slap him on the back in gratitude and give him a cigar to chomp on. In no time at all, he has gone from claiming to be the friend of localism to taking a hammer and sickle to local democratic decision making. He fools nobody by trying to describe it as muscular localism. The really puzzling question is whether this is a genuine conversion. The House must ask itself whether the Secretary of State decided of his own volition to dump everything that he previously believed in. I doubt it; I suspect that the truth is rather different.

I think the truth is that the Secretary of State lost control of planning policy during the summer. He told us just a few months ago, “Here’s my shiny new national planning policy framework. It’s fit for a new century”, and he must have been bewildered to read those unattributed briefings suddenly appearing in the newspapers—the criticisms of his shiny new planning system from the Prime Minister and the Chancellor of the Exchequer, and I bet he was particularly irritated by the summonses to attend urgent meetings at 10 Downing street. Whoever was in charge of planning policy over the summer, I do not think it was the Secretary of State.

[Charlie Elphicke (Dover) (Con)]

Does the right hon. Gentleman count it a success that the previous Government had a planning policy which ran to 1,300 pages? Does he not think it is a success that the policy these days is much simpler and accessible to all?

[Hilary Benn]

I made it very clear, I think in my first speech after taking on my new responsibilities last autumn, that everybody is in favour of sensible rationalisation. I have never opposed that, but the Government have to get it right, and the Bill self-evidently does not get it right. I suspect that the Secretary of State’s heart is not really in these changes; maybe the planning Minister’s heart is. I do not know whether the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford, smokes cigars, but a photo of him smoking one ought to go on the Secretary of State’s wall behind him as a reminder of what can happen if he lets down his guard.

--- Later in debate ---

[Charlie Elphicke]

My reading of the clause is that it is directed at projects of a national significance, particularly in the field of energy, which will cut through the problems with getting power stations built. That is important. The lights are likely to go out in 2015, because the previous Government were asleep at the wheel on power station developments, which are needed to keep our lights on.

[Hilary Benn]

I say gently to the hon. Gentleman that we made changes to the system and that one of the groups that we brought into the new national set-up was, indeed, energy. The Government’s provision does not change how decisions are taken—it adds big commercial applications. We await an answer on whether that will include leisure and retail. The hon. Gentleman needs to consider that carefully.

A number of other clauses give rise to concern and will be scrutinised carefully in Committee. Clause 7 seems to propose to scrap the special protection enjoyed by our national parks and areas of outstanding natural beauty, and to allow telecoms companies to install cabinets and masts wherever they want. First, the Secretary of State told us earlier not to worry and that that applies only to broadband, but could he please point to where in clause 7 it says that that is the case? It does not.

--- Later in debate ---

[Charlie Elphicke (Dover) (Con)]

I rise to welcome the Bill and to speak particularly about infrastructure issues, which I hope the Committee will explore when it examines the Bill clause by clause.

The Bill’s long title says that it is

“To make provision in connection”

with “the provision…of infrastructure”. In that context, I particularly welcome clause 7, which deals with the speeding up of broadband infrastructure provision. However, not all infrastructure comes cost-free; much of it is paid for out of public funds. Broadband infrastructure is made great use of by content providers, not all of which contribute to public funds as they perhaps should. Google, a big content provider, had declared earnings for the financial year of £2.5 billion, with a pre-tax profit, estimated on the basis of its global operating margin, of £836.7 million, and a tax charge of just £3.4 million, which is equivalent to an effective tax rate of 0.4%.

Payment for the provision of infrastructure is an important matter, particularly in the case of companies based overseas—big multinationals—which, according to Securities and Exchange Commission filings, have much higher effective tax rates in their home territories: 21% in the case of Google, whose effective tax rate over all its foreign territories is just 3.25%. The same is true of Amazon, which had declared UK earnings for the financial year of £3.9 billion, a pre-tax profit, estimated on the basis of its global operating margins, of £76.9 million, and a tax charge in the UK of £1.9 million—equivalent to an effective tax rate of 2.5%, while back in the States it had a rate of 31.2%. It is very important to tackle the abuse of the tax system and make sure that people pay their fair share to the UK authorities. I welcomed the statements that the Chancellor and Wolfgang Schäuble made about this. When the Committee considers clause 7, I hope that it will focus on how infrastructure can be paid for, because that is an essential issue, particularly when the money comes from taxpayer funds.

I welcome clause 3, which deals with the cost of compulsory purchase inquiries. In Dover we have an office building called Burlington house which is the subject of a compulsory purchase order application that will go forward in due course. There is great concern about the cost of CPOs, and it is important to speed up inquiries and ensure that resisting a CPO is not penalty-free.

Clause 5 relates to section 106 obligations. I hope that the Committee will explore in more detail the question of infrastructure contributions where a business is clamouring for infrastructure to be put in place. For example, the east Kent access extension of the A256 in my constituency cost public funds £87 million, but the contribution from the business that was clamouring for it—Pfizer, which has a plant in Sandwich—was only about £1.6 million. Business is making a very small contribution. We should be rather more robust in saying, “Perhaps you should pay a bit more for the infrastructure you’re clamouring for”, particularly when, once it is built, the company closes down its plant, losing a lot of jobs. Pfizer had declared UK earnings for the financial year of £1.8 billion and a pre-tax profit, estimated on the basis of its global operating margin, of £347 million, and it did not pay a penny in tax in the UK in the previous financial year or the year before that. We should say to large multinationals, “You ought to contribute to the cost of this infrastructure. You shouldn’t play the game of transfer pricing and royalties—you should think of helping to pay for, improve and invest in UK infrastructure, thus helping the UK to grow.”

Clause 5 deals with the important aspect of viability. My own district council in Dover has been very positive in relation to viability by engaging with developers and talking about affordable housing contributions, but I recognise that that is not true of every district council or planning authority. We need to consider the whole issue of viability and how to ensure that there are strong, overarching powers should the need arise.

On the chapter entitled “Economic measures”, I welcome the provision on employer owners, but I hope that the Committee will explore the growth side in terms of open and competitive playing fields and level markets. For example, why should Costa Coffee pay tax while Starbucks, which has declared UK earnings for the financial year of £397 million and made a pre-tax profit, estimated on the basis of its global operating margin, of £59.6 million, paid no tax at all? That is a matter of great concern. I hope that we will examine transfer pricing and the abuse of our tax system to make sure that a fair share of tax is paid in the UK as well.