ABSTRACT
Historically, in British planning debate, the discussion of the impacts of development has been closely linked to the question of betterment. Both the granting of planning permission and the subsequent implementation of a development project produce benefits and costs. In the case of benefits, the most obvious and direct is the increase in the value of the land where planning permission is granted for a higher value use. Since the abolition of the Development Land Tax in 1985, there has existed no overt legal mechanism by which the state extracts specifically the increase in value of land caused by the granting of planning permission in a situation where planning policy limits land supply. As many commentators have pointed out (Davies, 1984; Rowan-Robinson and Lloyd, 1988), the making of an application for planning permission is akin to pulling the lever of a onearmed bandit. A grant of permission will normally increase the value of the land, provided there is a demand for the proposed use. A refusal will mean that the applicant has lost both the costs of making the application and the potential increase in value.
