§ (1) Subject to the provisions of this Section, the foregoing provisions of this Part of this Act shall apply in relation to land compulsorily acquired in pursuance of a notice to treat served after the passing of this Act and before the appointed day as they apply in relation to land compulsorily acquired in pursuance of a notice to treat served after the appointed day; and Subsections (3) and (4) of Section (Compensation for compulsory acquisition of land attracting converted value payments) of this Act shall apply in relation to land acquired by agreement in pursuance of a contract made after the passing of this Act as they apply in relation to land acquired by agreement in pursuance of a contract made after the appointed day.
§ (2) The value of any interest in land which is compulsorily acquired as aforesaid shall be ascertained by reference to prices current immediately before the seventh day of January, nineteen hundred and forty-seven, and for that purpose the interest shall be deemed to have been subsisting on that day subject to all incidents to which it is subject on the date of the notice to treat, and the land shall be deemed to have been on the said seventh day of January in the same state as it is at the date of the service of the notice to treat.
§ (3) Subsections (2) and (3) of Section (Corn. pensation for compulsory acquisition after appointed day) of this Act shall not apply to any interest in land which is compulsorily acquired as aforesaid, but in calculating the value of any such interest it shall be assumed that the land was, at the time of the notice to treat, subject to a permanent restriction prohibiting the carrying out thereon of any development other than development of the classes specified in the Third Schedule to this Act; and for the purposes of this provision, Section ten of this Act and the said Third Schedule shall have effect as if for the references therein to the appointed day there were substituted references to the date of the notice to treat.
§ (4) Nothing in Subsection (2) of this Section shall be construed as affecting the operation of Part VIII of the Requisitioned Land and War Works Act, 1945, in any case to which that Part applies; and where any land the value of an interest in which falls to be ascertained in accordance with the provision of Subsection (3) of this Section is requisitioned land—
- (a) the Third Schedule to this Act, as applied for the purposes of the said Subsection (3), shall have effect as if the references therein to the appointed day there were substituted references to the beginning of the period of requisition instead of references to the date of the notice to treat: and
- (b) Subsection (3) of Section (Compensation for compulsory acquisition of requisitioned land) of this Act shall apply as it applies in relation to the assessment of com-
1312 pensation in accordance with paragraph (a) of Subsection (2) of that Section.—[Mr. Silkin.]
§ Brought up, and read the First time.
§ Mr. Silkin
I beg to move, "That the Clause be read a Second time."
This Clause deals with the case in which land is acquired after the passing of the Act, and before the appointed day, and is in the second category to which the hon. and learned Member for Daventry (Mr. Manningham-Buller) referred, namely, that in respect of which compensation will be based upon prices current on 7th January, 1947. In the earlier general discussion yesterday I said that I had been somewhat impressed by the arguments that the Bill might be simplified if one could eliminate this category, and pay compensation on the basis of the date of the notice to treat in the same way as in the third category. I promised to examine that matter. I have not been able to do so since midnight last night, but I will do so before the next stage, and if there are no technical or other objections, I will see that the three stages are reduced to two.
§ Mr. Thornton-Kemsley (Aberdeen and Kincardine, Western)
I am sure the Committee will be pleased to have the assurance it has just received from the Minister So far, the Minister has carried the Committee, broadly speaking, with him on the proposals that these new Clauses should be added to the Bill. But this Clause, I feel—and I think most of my hon. and right hon. Friends feel the same about it—is one without which the Bill would be much better. It deals only with a comparatively limited class of cases in a very limited space of time. I was very glad to hear the Minister's assurance yesterday that there has been no change of mind about the appointed day. I mentioned yesterday that I had the pleasure of hearing the Minister at the Royal Institution of Chartered Surveyors say he hoped that the appointed day would be very soon after the Royal Assent. After I spoke yesterday, he said very much the same thing. He said he hoped it would be early in 1948. That being the case, it seems we are making provision here for a period, at the utmost, of nine months; because, after all, the Royal Assent will probably be about July, and if the appointed day is to be early 1313 in 1948, nine months seems to be the outside limit. Really, is it worth while to have this very complicated Clause, adding further complications to an already complex situation, for the sake of that nine months or so?
In speaking on these Clauses yesterday, I made some attempt to give examples of the different values which would arise under these different Clauses in comparison with a prewar example, of a three-bedroom house that would have sold for £750 and would sell now for £2,000. A house of that type which, under the existing law, would fetch about £1,200 if compulsorily acquired would, under the Clause that we passed recently, under the terms of notional lease and subject to vacant possession, attract compensation of about 1,500 in round figures. The same house, under the terms of this Clause, would attract compensation at rather less than £850. Of course, to that figure there will fall to be added any small share that there may be of the sum which is to be distributed under Part V of the Bill, but one cannot anticipate that it will be a very large amount. It is certainly very doubtful whether it will bring this sum of £850 up to anything like the valuation of a house under a notional lease which could be offered now with vacant possession. I repeat, that this Clause adds to the complications of an already complex situation without adding to the value of the Bill as a whole. What I should like to see is that in the straightforward case, where a notice to treat is served before the date of the giving of the Royal Assent to this Bill, we should have compensation in respect of compulsory acquisition as at present; where the notice to treat is served after the date of the Royal Assent, we should get right on to the new basis of the market value. I hope my right hon. and hon. Friends will feel inclined to vote against this new Clause, I feel so strongly that this Clause is unnecessary that I should be prepared to go to that length.
§ 4.15 p.m.
§ Mr. W. S. Morrison
I am impressed by what my hon. Friend the Member for West Aberdeen (Mr. Thornton-Kemsley) has said. I always experienced, when I scanned these Clauses for the first time, a feeling of gratitude that the 1939 prices had been abandoned; but that feeling is modified by the complication of the system of compensation which it is proposed 1314 to put into the Bill. The particular case we are considering now, namely, that in which notice to treat is served between the passing of the Act and the appointed day, refers us back to current prices before 7th January of this year. There was this to be said for the 1939 prices, that, although they had their defects, which I have pointed out on several occasions, and which the right hon. Gentleman now handsomely admits, there has grown up a sort of body of law as to what were prices current in March, 1939. But is it really necessary to hark back to January of this year? Does it make all that difference? I wonder. I feel much sympathy with the criticism, which, I feel, is entirely valid, made by my hon. Friend the Member for West Aberdeen, and I should follow his suggestion to divide against this Clause but for the assurance the Minister has given us that he will look into it again, and that, if he can eliminate this complication, he will do so. But I should feel happier in my own mind in not dividing against it, if I could have some description from him of what the difficulties are. We may be able to solve them.
§ Mr. Silkin
Perhaps it would help the Committee if I stated the reasons which prompted us to fix the values prevailing immediately before 7th January, 1947. They were these. One must recognise that, whether this Bill is a good Bill or a bad Bill—I think it is a good one—it must have created a certain amount of uncertainty in the property world. There were a good many misconceptions about it, and values have changed—and, I suppose, will continue to change—somewhat arbitrarily. It was felt that that would continue, possibly, until the appointed day. Therefore, we thought—and I thought there was some substance in this, and certainly agree with it—that we should take the date when the values were relatively firm, without a shadow that this Bill may have cast on values: the values immediately before 7th January, 1947. It was not arbitrary, and I think there was good sense in it. It may be that, to avoid complications, we should pay for simplicity a price which would be unfair and unreasonable.
I do not know how this is going to work. If I were thinking only of how to get property cheaply I should say 1315 straight away, "I accept the hon. Gentleman's suggestion: I withdraw this Clause." But undoubtedly, the probable effect of this Bill was to depreciate values for the time being and this depreciation may continue for a period of uncertainty until the market begins to understand how it is going to work. From that point of view I should have no objection to saying straight away we accepted the suggestion; and we should get property, probably, cheaply. But I want to give it more consideration than has been possible hitherto. However, if hon. Members want to divide on it, one Division more or less does not matter.
§ Sir Hugh Lucas-Tooth (Hendon South)
I think it might be convenient if I were to address the Committee now on one of the Amendments which we have put down to this new Clause.
§ The Deputy-Chairman (Mr. Hubert Beaumont)
It will not be in Order to move or speak on the Amendment now.
§ Sir H. Lucas-Tooth
I appreciate that I cannot move the Amendment now. What I should like to do, with your permission, Mr. Beaumont, is to raise the point which the Amendment itself raises.
§ Question, "That the Clause be read a Second time," put and agreed to.
§ Sir H. Lucas-Tooth
I beg to move, as an Amendment to the proposed Clause, in line 20, to leave out from "aforesaid," to the end of the Subsection.
The words proposed to be left out provide that land compulsorily acquired between the passing of the Act and the appointed day shall be valued as if all development, except the minor developments included in the Third Schedule, were prohibited. Presumably, the intention of including these words is that the owner of the land which is being compulsorily acquired will get the development value of his land by way of compensation, instead of by way of an enhanced price paid by the purchasing authority. When I look at Clause 57 (1), 1 find that, in the case of an ordinary sale —a sale otherwise than by compulsory acquisition—payment for compensation in respect of land sold between the date of 1316 the passing of the Act and the appointed day is made to the owner of the land on the appointed day. In other words, in the case of an ordinary sale, the purchaser pays the vendor the full price of the land, including any development value, and he himself is then entitled to receive the compensation for the loss of the development value, brought about by the passing of this Act, by way of compensation out of the sum of 300 million. There is therefore, a completely different method of treatment as between a sale of land by compulsory acquisition and any other sale of land which may take place throughout this relatively short period. I do not see any reason for treating these two types of sale differently. It may be that there is some special reason, and, if the Government can tell us why they should do this, it may not he necessary to press this Amendment. At the same time, it seems to me that an unnecessary distinction is drawn, and that this is an example of the sort of complication which this Clause involves, and is one of the reasons why we hope that it may be possible to take it completely out of the Bill at a later stage.
§ Mr. Manningham-Buller
I want to add a word on the very important point raised by my -hon. Friend. This point would appear to apply equally to the Clause which has just been under discussion, under which we have compulsory acquisition of requisitioned land by notice to treat being served when this Clause comes into operation. Here, again, is an illustration of the operation of this Clause. It would appear to function so that the owner of the requisitioned land, from whom land is to be compulsorily acquired, will not be entitled to claim from the £300 million fund for the reason that Clause 57 (1) says that the person to claim must be the owner on the appointed day, and this acquisition will take place before the appointed day. Therefore, I would pray in aid the observations which the right hon. Gentleman made during the discussion on the Clause, in answer to a point raised by me regarding compensation on the acquisition of requisitioned land. He clearly indicated then that it was the intention to pay restricted value in the middle case, and that the owner of the requisitioned land would have power to claim against the 300 million fund. I suggest that this is obviously not provided for in the Bill as it stands, and I support 1317 the Amendment and hope that the right hon. Gentleman will accept it.
§ Mr. Silkin
The hon. Member for South Hendon (Sir H. Lucas-Tooth) tried to justify the Amendment on the ground that there were some differences in the way in which acquisition would work out, as between private persons buying land and acquisition by public authorities. Of course, whichever method is taken by private persons, the result will be the same. A private person buying would be aware of the Act, and, if the purchaser were to make a claim under Part V, that would be taken into account in the amount of the claim. In the aggregate, he would pay just the same, whether the arrangement was for the purchaser or the vendor to make the claim.
§ Sir H. Lucas-Tooth
The right hon. Gentleman is making the assumption that, in fact, the compensation payable and the development chargè will be identical. If that were so, it would not matter, but, when a private person is buying, he will have to pay the development charge and meet the compensation. The public authority, under compulsory acquisition, will not get any compensation, but the compensation will be paid to the vendor, arid there may be a substantial difference.
§ Mr. Silkin
I was not assuming that the development charge would be equal to the amount of the compensation. What I was suggesting, and it is a perfectly simple proposition, was that the purchaser is prepared to pay a certain amount, and he will calculate how much compensation he is likely to get and what development charge he is likely to have to pay. He will do this as best he can, and he will arrive at a figure on that assumption. If he is to receive the compensation, the figure he will pay will be one figure, and, on the other hand if the vendor is to receive the compensation, the figure will be another figure. All these things will be worked out freely as between free contracting parties, and, no doubt, they will arrive at a result satisfactory to themselves. I see no reason, whatever individuals may do in buying and selling property, why that should necessarily govern the basis of compulsory purchase A voluntary sale and purchase may be done by private arrangement, and either the vendor or the purchaser claims the compensation. If, indeed, I had accepted the suggestion of the hon. Member for 1318 West Aberdeen (Mr. Thornton-Kemsley), this Amendment would have been quite inappropriate. It arises only because this applies to cases after the Royal Assent has been given to this Bill and before the appointed day. Nobody suggests that, after the appointed day, there should not be paid the restricted value, as if permission were given only for development under the Third Schedule and for no other development. The hon. Gentleman does not suggest that?
§ 4.30 p.m.
§ Sir H. Lucas-Tooth
In that case, only the restricted value would pass between the vendor and the purchaser. For some extraordinary reason the right hon. Gentleman has put private sales in one way, and compulsory sales in another.
§ Mr. Silkin
I do not agree with the hon. Gentleman. Private sales will be carried out in exactly the same way. The purchaser will take into account what is going to happen on the appointed day, especially now that he has been warned that it is not very far off, and he will, presumably, pay a price which has been arrived at after consideration of the fact that, after the appointed day, the development value passes to the State. Therefore, there is going to be no real difference between the two. The hon. Gentleman is now seeking to make a distinction between land bought before the appointed day, and land bought after that date. I thought earlier that hon. Members opposite were going to divide in protest against this complexity of having two different bases. Now it is they themselves who, by this Amendment, are trying to get a different basis of compensation. Is that not right?
§ Mr. Manningham-Buller
The right hon. Gentleman rather invites me to intervene. The Amendment under discussion points out the defects in the proposed new Clause and the disadvantage of having this intervening period during which a different standard of assessment is to be applied. Indeed, the whole force of the Amendment is that this new Clause should be dropped. I should like to draw the right hon. Gentleman's attention w the point which he makes between private and compulsory purchase. On a private purchase taking place, how on earth is the vendor or the purchaser to know the amount of compensation that they are 1319 likely to obtain out of the £300 million fund, when the scheme has never been formulated and may not be formulated at the time that transactory takes place? How can they assess the amount of development charge that may be put on that property?
§ Mr. Silkin
Unless all transactions between private persons are to come to an end on the appointed day—which I do not for a moment believe—and before the Treasury scheme is announced, people will have to make up their minds as to what compensation they are likely to get out of the fund, and will have to make their purchase on some kind of assumption, even, perhaps, as to what the development charge may be, although that would be easier to determine. They will have 'to make some kind of estimate of how much will be recovered out of the £300 million in order to arrive at the purchase price and the selling price of land. That will apply equally before the appointed day as after the appointed day. Therefore, this difficulty does not arise on account of the new Clause. I think I am right in saying that what the Amendment seeks to do is to add one more complexity to the Bill, which hon. Members opposite have submitted, in regard to the acquisition Clause, is already complex enough. On the point made by the hon. Gentleman about Clause 57 (1), the fact is that we have been moving so rapidly that both he and I overlooked the fact that we have already dealt with that very point in an Amendment which I moved yesterday to Clause 84, page 91, line 26. We had foreseen this point, and the Amendment which I then moved was intended to cover it.
§ Amendment negatived.
§ Clause added to the Bill.