HC Deb 25 May 1950 vol 475 cc2372-82

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Sparks.]

9.59 p.m.

Sir John Mellor (Sutton Coldfield)

I want to refer to Form L.39 which was issued by the Central Land Board, but first I must refer to another Form, S.1, which was issued to owners of freehold and leasehold interests in land who wished to claim that their land had depreciated in value as a result of the provisions of the Town and Country Planning Act, 1947. This Form S.1 was issued to enable them to make a claim on the £300 million which in due course is to be administered under a Treasury scheme. The claims had to be lodged on Form S.1 not later than 30th June last year. This form contained 28 questions, the answers to the last three of which, however, were stated in the form to be optional.

It being Ten o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Royle.]

Sir J. Mellor

Question No. 27, one of the last three questions, was very important. It demanded an estimate of the restricted value of the land and also of the unrestricted value, the difference between the two being supposed to represent the development value of which the owner had been deprived. It was made quite clear in the instructions at the commencement of Form S.1 that claimants need not answer the last three questions. It was also made clear, however, that if claimants wished to obtain from the Central Land Board a contribution to the cost which they incurred in obtaining professional advice, then the answers to the last three questions must be completed and the form be signed by the professional advisers of the claimants.

Many people preferred instead to leave the last three questions unanswered. They then contemplated that the matter would be dealt with by the district valuer. If they were dissatisfied in due course with his assessment, they had, of course, the right to go to arbitration. I have had a letter from a very eminent surveyor in Birmingham, who in referring to the election of very many people to leave the last three questions unanswered said this: I think there were two main reasons for this. Firstly, that there was (and in fact still is) a great deal of uncertainty as to the true restricted values of property. Secondly, the time allowed for submitting these claims. In many cases it was quite impossible to obtain professional advice and to give full consideration to figures. During the period when these claims were being prepared, my office was regularly open until 10 o'clock at night, and in some instances members of the staff were even staying after midnight. The work involved in inspecting hundreds of properties was enormous, and I am sorry to say that in a number of cases we had to tell property owners that we were so busy that we could not deal with their claims. At the end of last year and the beginning of this year the form about which I am now complaining was issued by the Central Land Board to, I think, over 100,000 claimants. This Form L.39 contained the following—I will read only the more essential part: The Board are advised, on the information before them, that your property is already so developed that the right to carry out any further kind of development cannot add one-tenth to the restricted value, and that you do not therefore qualify for a payment in respect of any loss in the value of your interest resulting from the provisions of the Act. If, however, you wish to press your claim the Board will require to know:—

  1. (1) the kind of development for which you think the property has a value which would add more than one-tenth to the restricted value, and
  2. (2) the additional value you think it would have for that purpose.
Accordingly the Board hereby give you notice under Regulation 5 of the Claims for Depreciation of Land Values Regulations, 1948 … to send this information to the Board not later than. … Regulation 10 of these Regulations provides that the right to receive a payment is conditional upon due and punctual compliance with the Provisions of Regulation 5. If you do not give the required information to the Board by the date specified your claim will automatically lapse. It will be observed that the two questions asked in that form are virtually identical with that contained in question 27 of S.1, namely, the inquiry as to what is the estimate of the claimant of the restricted value of the unrestricted value of the land which, I would remind the House, was one of the optional questions. If claimants had known that they were going to be required to answer such questions they would undoubtedly have endeavoured to obtain professional advice and got their advisers to complete the last three questions in S.1. Then they would have had the advantage of obtaining a contribution from the Central Land Board to the cost of obtaining that professional advice.

They are now in this difficulty; it is too late for them to re-submit S.1 under which they could make that claim for contribution towards the fees because S.1 could not be submitted after 30th June, 1949. Either they have to answer the questions without professional advice—and obviously it is extremely difficult for any layman to answer such a question on his own—or obtain professional advice and pay for it themselves. They are thus being robbed of the option which was given in Form S.1.

Therefore, I feel the Government should be prepared to re-open the question at least in the sense of undertaking to give anyone who does furnish the information required under L.39 the contribution they would have obtained towards their professional expenses had they completed the last three questions in S.1.

On 18th April I asked the following Question of the Minister of Town and Country Planning: How many Forms L.39 have been sent to owners of property by the Central Land Board; how many have been withdrawn; why they were sent; and why withdrawn? He replied: One hundred thousand and eighty-three, of which less than 300, sent in error, were withdrawn. The forms were sent to owners of single dwelling-houses to ascertain whether their claims to compensation were admissible."—[OFFICIAL REPORT. 18th April. 1950; Vol. 474, c. 1–2.] I wrote to the Minister of Town and Country Planning to tell him I had evidence at my disposal to show that his statement that less than 300 of these forms were withdrawn was clearly inaccurate and a gross understatement. His answer to that letter is only material on this point—no doubt the Parliamentary Secretary has it—in that he sticks to his statement that under 300 had been withdrawn.

From the same surveyor whom I have already quoted I received this passage in a letter: Immediately we received the forms L.39 we found that 37 of the 75 received were not in respect of single dwelling-houses. In accordance with the Press notice issued by the Central Land Board on 24th January we therefore returned them to the Central Land Board, and in each case they obtained this reply: With reference to your letter, dated … it is regretted that Form L.39 was sent in error in respect of the property mentioned above. The claim will now be re-assessed. Another very eminent surveyor also sent me a letter on this point: We find that from this office we have returned 60 such forms, and we have letters agreeing to their being withdrawn. So it will be seen that from two firms alone I have obtained information that altogether 97 forms were returned by them and their withdrawal was accepted by the Central Land Board. It is, therefore, quite clear that the figure given by the Minister must have been a very gross understatement. I will see what the Parliamentary Secretary has to say. In a very large number of cases these forms have been objected to by claimants, and in every case I know in which objection was lodged the Central Land Board has withdrawn the form and said that the claim would proceed to be assessed in the ordinary manner.

I say that this Form L.39 should never have been issued at all because it denied to those people who received it the option which was inherent in Form S.1. If Form L.39 is to be persisted in all people who reply to it with the benefit of professional advice should certainly receive the due contribution in respect of the expenses which they have thereby incurred, and anyone who has already incurred such expense should be compensated for it.

10.12 p.m.

Mr. Derek Walker-Smith (Hertford)

I am grateful for the opportunity to reinforce briefly what has been so ably expressed by my hon. Friend. He has done a considerable service in ventilating this matter because amongst people concerned with these things the issue of Form L.39 has undoubtedly created a good deal of resentment and surprise. There are two reasons for that. The first is because it has created an appearance of administrative muddle. The second is because it has given the impression that the Central Land Board are trying to get for themselves the best of both worlds and to impose on claimants the worst of both worlds. My hon. Friend has explained how this comes about in relation to the Form S.1 on which claims on the fund were made.

There is no doubt that a large number of claimants forwent the advantage of having a contribution to their professional fees in respect of valuation because they chose to leave out the optional part of the form, that is to say, they chose not to put any precise valuation upon their estimate of development value. They did that, as my hon. Friend explained, either because of difficulties as to time or because in all the uncertainties of the situation it was felt to be an advantage to put the ball in the district valuer's court, as it were, and impose upon him the obligation of making the first valuation.

Having taken that course in good faith and on assumption based on the notes attached to Form S.1, the receipt of the Form L.39 has seemed to many people an act of bad faith and to some of them also an act that was bad in law. I have no doubt so far as the legal position is concerned, that the demands of Form L.39 are perfectly legal within the framework of the Depreciation of Land Values Regulations. I say no more as to that. But so far as the other point is concerned, whether or not the Central Land Board have acted reasonably, which is a question for this House—not merely whether they have acted lawfully but whether they have acted reasonably, fairly and with propriety—I would say this.

I understand, and the Parliamentary Secretary will confirm whether or not this is so, that the intention of the Form L.39 was to compel an evaluation or abandonment of the claim in the case of those dwelling-houses where it appeared to the Board prima facie to be probable that it might be excluded under the de minimis provisions of Section 63 of the 1947 Act. Presumably that was the intention with a view to saving administrative labour and expense in the making by the Inland Revenue of valuations of claims in respect of dwelling-houses which they felt had been put in as what are sometimes called protective claims, that is to say, as an insurance in case a claim might arise out of the Act.

Where that surmise is correct, and the claims would be eliminated on the de minimis principle, there would be, in any event, no right of contribution for professional fees; and so, if the issue of Form L.39 had been strictly confined to those cases where protective claims had been put in in respect of dwelling-houses, perhaps my hon. Friend and the various people concerned with this matter would have had no ground for complaint. But what happened, of course, was that these Forms L.39 were broadcast on a far wider basis than that which I have described or than was justified. I understand that the principle which has been followed is that they have been withdrawn in cases other than dwelling-houses, and presumably the Parliamentary Secretary will admit that there is some foundation for the argument that they should never have been issued at all in those cases. I think the Parliamentary Secretary should take the opportunity of telling the House how this happened, because he will appreciate that it gives an impression of muddle and unnecessary labour and expense, arouses irritation, and is one of the things which is liable to give town planning, for which he is partially responsible, a bad name in the country.

May I draw the Parliamentary Secretary's attention to one point of difficulty which still remains even after the withdrawal of these Forms L.39? As I understand it, they are left in operation and not withdrawn in cases of dwelling-houses where the real claim for loss of development value is not based on a loss of development value by structural extension, but a loss of development value by way of change of use. For example, one loss of development value is the changing of a house into offices. I give the Parliamentary Secretary an obvious example where this applies. In a small country town, indeed in many towns, it is not uncommon to have houses in the High Street, for example, over shops. Those houses have an obvious development value for conversion into offices.

I could cite a recent case where development charge in a country town in one such instance was assessed at £250. In those cases where loss of development value is based on change of use, if Form L.39 is served and not withdrawn it means that the owners have to make the first essay in valuation, and that necessarily involves professional fees by way of surveyors. For these they have no rights of contribution if they did not fill in the optional part of the Form S.1. I submit that in those cases the use of Form L.39 is unjustified, albeit a dwelling-house is the subject of the form, and I hope that the Parliamentary Secretary will be able to tell the House that he is prepared to give further attention to that aspect of the case.

10.20 p.m.

The Parliamentary Secretary to the Ministry of Town and Country Planning (Mr. Lindgren)

I am grateful to the hon. Baronet the Member for Sutton Coldfield (Sir J. Mellor) for providing an opportunity for me to clear up what is obviously a misconception, particularly as he and such a knowledgeable person in town planning matters as the hon. Member for Hertford (Mr. Walker-Smith) appear to be confused.

First, I will give the history of the matter. The Form S.1 to which the hon. Baronet referred is for making claims on £300 million for loss of development value. Twelve months were allowed in which those claims should be made. It was a surprise to me, having some knowledge and background of town planning, when I went to my present Ministry and found that 500,000 of these claims were made in the last week. To my simple mind, it was obvious that that was not just an accident. I am still trying to find the real reason why professional men advising clients kept back 500,000 claims until the last week.

Mr. Walker-Smith

I can give the Parliamentary Secretary the answer to that. They were grossly overworked by the demands made upon them.

Mr. Lindgren

That is not the answer because, being an office worker, I know that one completes a job and then forwards it to the office to which it should go. All these claims were kept until the last week, when they were handed in to the various regional offices of the Central Land Board. Obviously, that caused a strain on the administrative machine. I do not infer that it was the intention of the professional people to break the machinery of the Central Land Board, but it caused a strain.

The Press, to whom we were grateful, had pointed out over a period the rights of people in the matter of claims. There were such graphic headlines in the Press as, "£300 million going begging." Naturally, property owners thought, "If it is going begging, why should not I have a dip in the pool?" Therefore, when the claims came in it was obvious that many of them—a large proportion of them—had been made in the hope that if there was anything going, the claimants would get something, but they did not expect anything. They were obviously ruled out under Section 63. I am not au fait with the Latin phrase which means that in small matters the law does not take account. If those people employed professional men, they ought to have been advised that under Section 63 they had no claim.

Some administrative machinery had to be set up to deal with these claims which it was obvious did not qualify. Therefore, it was decided by the Central Land Board that people should be given the option of justifying their claims, to clear away some of the small claims which had been made and avoid cluttering up the machine. Those were claims for single houses where it was fairly clear to those in the office that there was no opportunity for more than a 10 per cent. increase in value. They went to the district valuer and were vetted by him. A Press statement was made that Form L.39 was used only in the case of claims for single houses.

But in offices of a large administration there are bound to be slight misconceptions about office instructions. As an office worker myself, I know that I have interpreted circulars from head office in a different manner from some of my colleagues in other Regional Offices. In some of the district offices they said, "There are two semi-detached houses here. Obviously, even with those two together in the same ownership, there cannot be an increase of 10 per cent. in value"; and forms were sent out to cases other than those which were single houses in certain areas. In order to keep faith, the Central Land Board felt, quite rightly, having made the Press statement, that where the forms had been sent out to other than single owners, they should be withdrawn.

To deal with the point raised by the hon. Baronet, my right hon. Friend was quite correct in the light of the information before him when he answered the hon. Baronet's Question. The Regional Offices did not start to send out these forms until the middle of March. The hon. Baronet put down his Question on 28th March, but it was not answered until 18th April. The hon. Gentleman knows the procedure in getting information for the answers to Questions. We obtained the information but, through a fault of our own, for which we accept responsibility, we did not check to find out the absolutely latest figures on the day the Minister answered the Question. At the time the information came from the Central Land Board, the figure of 300 was correct, but it related to 1st April, whereas the Question was answered on 18th April. The figures today are between 1,500 and 2,000 forms recalled out of the 102,000 issued.

Mr. R. S. Hudson (Southport)

There seem to have been an awful lot of mistakes.

Mr. Lindgren

If the right hon. Gentleman knew more about the matter, he would not have made that interjection.

Mr. Hudson

I know much more about administration than the hon. Gentleman.

Mr. Lindgren

I will give way to the right hon. Gentleman if he wishes to rise.

Let me now deal with the major factor. The substantial point raised by the hon. Baronet and by his hon. Friend the Member for Hertford is that these people have lost the opportunity of recovering professional costs. Well, they have not. The arrangement was made at the time of the discussions in regard to the issue of Form L.39 that, where professional advice had been sought and submitted in considering a claim, the costs were also admitted subject to the claim being proved. Even in the case of Form S.1 provision was made for professional costs only if the claim was substantiated. So also in the case of Form L.39 if a claim is made with professional assistance and is substantiated, these costs are met—I ought perhaps to be more careful—in accordance with the agreed scale of charge laid down in regard to these professional services. Where anybody seeks professional assistance in relation to a substantiated claim, they can get their costs.

Mr. Walker-Smith

This is the first time that has been publicly announced.

Mr. Lindgren

I cannot say "publicly." I am informed that all the professional organisations know of it and that the arrangements were made with them when discussions took place in regard to the issue of Form L.39. The hon. and learned Gentleman is quite right that we should not have issued the form unless we were satisfied of its legality and that it was within the knowledge of the professional organisations.

The other point raised by the hon. Member for Hertford concerns the loss of development value in the cases of single houses where there is a possibility of change of use. There is not only the question of change of use, but a requirement of planning permission before change of use can come about, and if, in fact, a single property owner feels that there is the possibility of change of use and that he has a claim in regard to it— not a fictitious claim, but a real one—it is not unreasonable to ask him to sub stantiate his claim. It has been said that 102,000 forms were issued——

The Question having been proposed at Ten o'Clock and the Debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Half-past Ten o'Clock.