New Clause.—(DEVELOPMENT CHARGES.) (Hansard, 30 May 1949)

§ Lieut.-Colonel Elliot
I beg to move, "That the Clause be read a Second time."
The purpose of this new Clause is to inquire of the Minister whether he is now able to make a statement upon this subject. The question of development charges was raised in the concluding stages of our Debates on the Bill in Committee. It was clear that a point of some importance had arisen. The Minister then undertook to look into the question and, if possible, to make a statement. I move this new Clause with the object of obtaining from the Minister, if he is able to make it, the statement which he then thought he would be able to make.

§ Mr. Bevan
I am happy to say that I am now in a position to make to the House the statement which, as the right hon. and gallant Gentleman said, I promised when the matter was discussed in Committee. If hon. Members will cast their minds back, they will recall that this was an extremely complicated matter, as indeed are all these questions of deciding where a development charge alights; It must be borne in mind that here we are dealing with a type of property which has, in fact, attracted a grant from public funds on certain very restricted conditions. These restricted conditions have the effect of keeping down the value of the property to the owner of the property, because, under the terms of the Bill, the rent is fixed where a cottage will be let for the first time and when it is a rented cottage at the present time the addition to the rent is limited by the conditions of the grant. Therefore, it cannot logically be said that a development grant ought to be paid by an owner who has not in fact obtained from the development any addition to the value of his property.
For those reasons, I am informed, it is highly improbable that a development charge would ever alight; certainly it could not alight if the capacity had not been increased by more than 10 per cent. Even if that be the case, steps will be taken by my right hon. Friend the Minister of Town and Country Planning to exempt this class of property from the payment of a development charge. I 1752 think that is the assurance Members of the Standing Committee desired me to give, and I am now very happy to be able to give it.

§ Mr. Derek Walker-Smith (Hertford)
I should like to say a word or two on what the Minister has said, and on the liability to a development charge of cottages or houses improved under an improvement grant. Perhaps it is right to say that, quite apart from the express exemptions that the Minister of Town and Country Planning may see fit to make by way of regulation, it is, at any rate in my view, very improbable that such work would in any event attract the liability to a development charge. If the House will bear with me for a moment, I should like to say what I think the position will be, because this may be a matter of some interest to those who are seeking to take advantage of these provisions when this Bill becomes law.
In the first place, it might well be that these operations would not require an application for planning permission at all; and, as the House will appreciate, if there is no requirement for a planning permission there can be no liability to a development charge. I think it likely that the bulk of these operations would come outside the liability to planning permission, on account of the provisions of Section 12 (2, a) of the Town and Country Planning Act. Even if they do not come within that exemption, they will almost certainly come within the exemption from development charge specified in paragraph 3 of the Third Schedule to that Act. Therefore, in at any rate the vast majority of these cases there can, I think, be little reason for anybody seeking to carry out these works as a result of an improvement grant to have any perturbation as to their position in regard to a development charge. Those few who may be concerned in spite of this will be reassured by what the Minister has now said.

§ Lieut.-Colonel Elliot
I can only speak again with the leave of the House. I am glad that the Minister has found himself able to make this declaration, although, having been a Minister, I have always a slight uneasiness about declarations made by Ministers indicating that another Minister will do something; the other 1753 Minister does not always take the same view, and when I hear that steps will be taken by the Minister of Town and Country Planning to ensure the results which the Minister of Health seeks to bring about, I trust that it will be possible, at any rate in another place, to indicate the kind of steps which the Minister has in mind. It may be that this case will not arise; and in some cases, of course, the amount will be small and will not attract the attention of the Minister of Town and Country Planning. But, as we have already seen, even from the Clauses we have been discussing this afternoon, there may be cases in which the improvement is considerable, and where, although the return is limited, it might yet well be held that a substantial advantage was accruing to the owner of the property.
The difficulty I see is that, like everything else that has been done over the Town and Country Planning Act charges, this will have repercussions upon other properties and in other conditions, which I do not think we can foresee at this moment. If it is to be held that no property is to be liable to a development charge, if the development is hedged about by restrictions which forbid an increased return to be derived from the property, then a new set of circumstances may apply in cases where previously it has been thought that a development charge might be attracted by alterations in the capital value of the property. At any rate, I am sure that cannot be entirely ruled out.
While I welcome this declaration on this occasion, I think it does prove the increasing difficulty into which the development of property is being plunged by the operation of the Town and Country Planning Act and the necessity which will arise for still further declarations to be made by the Minister of Town and Country Planning, and it may well lead to requests for sanction to some of those arrangements from the House. I cannot feel that in every case he will be able merely by administrative action to obviate the difficulties which are arising on every hand. Today, however, an action has been taken which removes this property from the purview of the Ministry of Town and Country Planning, for which the whole House, and we on this side especially, are grateful.

§ Mr. J. H. Hare (Woodbridge)
As I raised this matter in Committee, perhaps I might be permitted to say a few words. First, I am very glad that the Minister has been able to make this announcement. I think he has saved himself what might have been a very considerable difficulty, in that in those cases where a development charge might have been attracted the purpose of this Bill might have been thwarted. On the assurance the Minister has given us, that is not likely to happen. But I do not think that the Minister of Town and Country Planning has made his own task very much easier, because it is quite clear that in these cases there will be exceptions to what has been a general rule, and once one starts privilege, so to speak, amongst certain types of property, I think that the Minister of Town and Country Planning will find that his already complicated Act will become even more complicated. Nevertheless, as far as the Minister of Health is concerned, I can only congratulate him on having saved himself what might have been a great difficulty.

§ Mr. Bevan
With the permission of the House, I want to make it quite clear, in the first place, that I have already consulted my right hon. Friend the Minister of Town and Country Planning on this matter. I did not quite like the right hon. and gallant Gentleman's inference—it was almost an inference—that on this matter I was giving the House of Commons an assurance not on behalf of the Government as a whole. It is on behalf of the Government as a whole; the Minister of Town and Country Planning has already had his attention called to the matter, and has agreed to act in the way I have suggested. In order that I might protect my right hon. Friend from having this regarded as a precedent, I should like to reiterate the grounds upon which this statement is made. The grounds upon which it is made are that, in fact, this type of property ought not to pay a development charge because the conditions under which the grant is made preclude the owner from having an increment of value in his property.

§ Lieut.-Colonel Elliot
An added increment?

§ Mr. Bevan
An increment is an addition.

§ Lieut.-Colonel Elliot
Is it an annual increment, or an added increment?

§ Mr. Bevan
Any increment whatsoever, because as I have already explained—I do not want to repeat myself and I do so only in order that there shall be no misunderstanding of the grounds upon which this property is to be exempted—the owner of the property cannot have an improvement grant without first of all agreeing that the money value of his property shall not be increased. That is the ground upon which the exemption will be given.

§ Lieut.-Colonel Elliot
Perhaps I might speak again with the leave of the House. The money value of his property shall not be increased during the period over which the restricted covenant runs.

§ Mr. Bevan
That is 20 years.

§ Lieut.-Colonel Elliot
Yes.

§ Mr. Bevan
That is the usual period.

§ Lieut.-Colonel Elliot
That is quite true, but it has been contended, and it will be of interest in other connections, that the residual value might remain, which would inure to the benefit of the landlord, and it was on that ground that some Members opposite strongly urged the refusal of grants in certain cases. I only rise to say that this means that when the period has run out, the residual value may inure to the property owner. It is true that, technically speaking, the 20-year period of accountancy exhausts that right, but the Minister will agree that there are many cases, especially buildings of historic interest, where the value is not exhausted in that period. I am glad that in this case the Minister is waiving that; it does bring in a class of property where certain residual values will inure to the property owners after the expiry of the restrictive covenant.

§ Mr. Speaker
As the right hon. and gallant Gentleman has asked twice to speak again by leave of the House, I might point out that as the Bill comes from a Committee upstairs, the Mover of an Amendment can speak more than once without the leave of the House.