§ Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Heath.]
§ 4.2 p.m.
§ Mr. Howard Johnson (Brighton, Kemp-town)
I wish to raise the question of the evils of development charges under the Town and Country Planning Act, 1947. The curious thing to me is that the former Minister of Town and Country Planning, the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) and the present Minister of Housing and Local Government both seem to be agreed that development charges are a deterrent to building development.
In a debate in the House on 13th June, 1950, the right hon. Member for Bishop Auckland said that development charges were a deterrent to building development. He spoilt it by saying that at that time he did not mind deterrents to the building programme. The present Minister of Housing and Local Government said at Manchester, on 19th April, that the development charge was one of the major obstacles to real development today and that he hoped to have some proposals ready for the next Session of Parliament. That would mean more than a year's delay, and, meanwhile, we must press on undeterred and undismayed. It is on that point that I wish to have some guidance from the House.
How can persons anxious and willing to build their own homes on their own land get on with the job, undeterred and undismayed, if they have no money with which to pay a development charge? I do not know whether this is a problem which I feel in particular, or whether it is one which is met by all hon. Members in their correspondence each week. But the fact is that since my local daily and evening Press published the fact that I proposed lo raise the subject on this Adjournment I have had 73 letters from persons living in the coastal belt of Sussex, particularly at Brighton and Hove, who complain that they cannot build their own homes because they cannot afford to pay a development charge ranging between £250 and £375.
It may be that this is a problem peculiar to Brighton in that we have a 863 particularly enterprising and energetic housing committee who are anxious to co-operate with the Minister to the fullest extent in granting, in all cases of need, licences for private building. I cannot think that it is, and that is why I feel it right to raise this matter today.
One can divide land into roughly three categories. There is what is known as Section 80 certificate land which may be developed free of development charge because by 1st July, 1948, the fortunate owner of that land had, either through foresight or luck, had his plans approved under the building byelaws and the town planning requirements. He is now able to build free of development charge. The result is that the price paid for that land which has the benefit of a Section 80 certificate is absolutely sky high. There is a scarcity of land, and scarcity prices are charged for it.
That is another inherent evil, in that the district valuer is now able to assess development charges on adjoining land which does not have the Section 80 certificate by comparison with the prices obtained for land which has a certificate. There is a double evil for the person who wishes to build on that land because he has to pay a high price, and the person ho wants to build on adjoining land has to pay a higher development charge by reason of the snowball effect of the scarcity value.
Then there is the near ripe land in connection with which the position is complicated. It really means that there is a ration of land for the registered builder. The Minister, in his wisdom, has made one concession—the single plot owner concession. A person who owns a single plot of land may develop it without paying a development charge. That is a very proper concession. But even in connection with that the most ridiculous fantasies arise.
I have had a case in Saltdean of two spinsters who 17 years ago purchased a plot of land on which to build a bungalow for themselves. Owing to financial considerations and the advent of war they were unable to build. Now their financial circumstances have improved and they are anxious to build on that single plot, but they cannot have the single plot owner concession. Instead, they have to pay a 864 development charge because they are joint owners. That is an extravagance which cannot be permitted. It is an absurd fantasy that two elderly spinsters who own a plot of land jointly cannot build free of development charge because they are joint owners. That is typical of the anomalies which arise daily under the Town and Country Planning Act.
Another case in my constituency is in connection with the Tudor Close Hotel, Rottingdean, about which I have had a voluminous correspondence with the Parliamentary Secretary. The position was that the hotel had not been successful as an hotel for some years. The owners desired to convert it into flats containing 30 units of accommodation. I mention that, because some were to be flats and some maisonettes. The fact remains that conversion was envisaged to give accommodation to 30 families.
The owners met with tremendous cooperation from the county borough council of Brighton, and with equal co-operation from the Ministry of Works, in connection with the large items that were required in materials for this development, but, lo and behold, they were assessed to development charge of £10,000. After negotiations, the district valuer reduced it to £8,000, so that, in order to alter the interior walls, put in extra bathrooms, kitchen ovens and the like to make separate flat units, and before they could start knocking down a single wall they were expected to pay a development charge of £8,000.
Next month, in my constituency, another hotel, which is equally wellknown—the Ocean Hotel, Saltdean—which was requisitioned and occupied by the National Fire Service for many years, comes up for sale by auction. I hesitate even to attempt to guess, having regard to its size, at what figure the development charge will be assessed if the new owners wish to convert it into a large number of separate flats. In point of fact, unless there is an increase of wisdom in the next few months, they will not be able to carry out the work, because the development charge will be absolutely penal in its incidence.
In Brighton, and I cite Brighton because I only have official figures from Brighton, the borough surveyor tells me that, up to 30th June of this year, his 865 authority had issued 197 private building licences, and that, up to date, 39 of those licences had been returned. He has written to me to give his considered opinion that the majority of those 39 private building licences have been returned because the persons who wished to build under those licences cannot afford, in addition to paying for the land and the cost of building, to pay a development charge varying from £250 to £400.
I fully appreciate that, in a debate of this nature, I cannot suggest legislation to remedy these defects, but, because I am anxious to do all I can in a humble way to co-operate with the Minister of Housing and Local Government and his Parliamentary Secretary, and because I yield to no one in my admiration of the magnificent work they are doing in connection with the housing drive, I should like to suggest two possible methods which do not require legislation, but which would immediately help the small man who wants to build for his own occupation a bungalow or a house.
Under Section 12 (2, f) of the Act of 1947, the Minister has power to make regulations which will vary the classes of uses which are to be exempted from development charge, and, in exactly the same way under Section 69 (2, b) the Minister has power to make regulations to exempt classes of uses from development charge, and, indeed, there have been at least two such orders made in 1950, which have permitted development of different types and classes without development charge.
I am now suggesting that the Minister should, by regulations, exempt from development charge the building of a house for an owner-occupier, provided that the house does not exceed a prime cost of £2,500. The Minister could, by regulation, permit such building to take place provided the size of the building and its prime cost were in accordance with the regulations. I submit that to do that by Ministerial regulation would be a tremendous alleviation for the very many persons who are anxious and willing and able to build their own homes on land which they can purchase at a reasonable price, and would exempt them from the development charge. If the Minister will do that at the earliest possible date, he will be helping many tens of thousands 866 of people who wish to build their own homes, and he will be adding to the tremendously good work he has already done in connection with the housing drive.
My main object in raising this matter this afternoon is to call attention to some of the injustices, inequalities and anomalies which have arisen in the levying of a development charge under this Act, and to suggest those two methods whereby there can be some alleviation of the hardship caused to prospective house-owners. I sincerely hope that when the Parliamentary Secretary comes to reply he will at least be able to tell the House that the two methods I have suggested will receive his and his right hon. Friend's immediate consideration, and that they may well merit action at a very early date.
§ 4.17 p.m.
§ Mr. Anthony Marlowe (Hove)
My hon. Friend the Member for Brighton, Kemptown (Mr. H. Johnson) has done a great service to the House by raising this extremely pressing matter this afternoon, a matter which I believe all of us have brought to our notice very regularly in our correspondence and interviews with our constituents. It is one which I think the Ministry ought to deal with as soon as possible.
All of us have had to submit to the Minister cases of people anxious and able to build who are only deterred from doing so by this development charge. I have recently had dozens of cases in my constituency, and I have in mind the particular instance of a man who bought a little plot for about £280, or even less, with a 40-foot frontage. He has his building licence and is ready to go ahead, and he could have a house in which to live within three or four months. But he is deterred from proceeding in the matter because he would have to pay a development charge of £384, which is about 130 per cent. of the cost of the land he has acquired. Because he cannot afford to pay that money, the bungalow will never be built.
There is another case, which I sent to the Minister, of a man who has a site which was developed before the war when the main services were put in, but on which building was held up by the war. Some 30 or 40 houses would be built on that site this year if this 867 development charge were not in the way. I hope that the Parliamentary Secretary will have a favourable answer to give to this matter. He must know, as we all do, that this was a piece of Socialist legislation. It is unbecoming of a Conservative Government to maintain this legislation, and I hope we can be informed as early as possible that this crippling charge will be abolished, and that by so doing building will be further encouraged.
§ 4.19 p.m.
§ The Parliamentary Secretary to the Ministry of Housing and 'Local Government (Mr. Ernest Marples)
I am sure that the House is grateful to my hon. Friend the Member for Brighton, Kemp-town (Mr. H. Johnson) and to my hon. and learned Friend the Member for Hove (Mr. Marlowe) for speaking on this very important subject of the development charge. I congratulate my hon. Friend on making his remarks very skilfully so that he kept within the bounds of order by not mentioning legislation, and I shall try to do the same. He also avoided some of the worst and most hideous planner's jargon which is now the fashion, and, again, I will try to follow his good example.
He raised a number of points and I want to agree at the outset that there are many hardships, amounting to almost an injustice, in the levying of the development charge. I do not dispute that. We start on the basis that the Government accept that as a fact. He mentioned several cases of certificates which caused anomalies in the case of the person owning an adjoining plot of land. One of the greatest causes of hardship and a burning sense of injustice among people is when a next door neighbour has an advantage which they themselves do not possess.
My hon. Friend mentioned a case of near-ripe land where two spinsters owned a single plot of land and could not develop it. He said that the change of user was a tremendous charge in that particular case. I do not know the details of the case but I must declare an interest, because I slightly changed the user of a small plot next door to my house and I had long wrangles for many months about how much I should have to pay on change of user. I assure my hon. 868 Friend that I have great sympathy with the spinsters in that respect, and I still have a feeling that I was dealt with hardly.
But would it not be a good idea if we looked at the Town and Country Planning Act in perspective and as a whole? It is an enormous piece of legislation with many Sections and so many pages that it is almost baffling to look through it. But as a whole it has been an invaluable Measure. Its structure has been accepted and welcomed because 50 million people living in an extremely small island must make some provision for agricultural land and mineral rights, and future living conditions in some of our crowded industrial centres must be safeguarded by learning the lessons of the past and applying them to development in the future.
This Act, like the curate's egg, is bad in parts; and the worst parts are the financial provisions and the development charge in particular. But, as my hon. and learned Friend the Member for Hove (Mr. Marlowe) said, this Government took over a going concern when it came into office in this piece of legislation which was on the Statute Book. My right hon. Friend has to administer the law as it stands or improve it by altering regulations, or by amending legislation, which is not in order for us to discuss in this debate.
No doubt this provision has proved repulsive to many people. Even when comparatively wealthy people have paid a small amount of money they have objected violently to the principle of paying this development charge if the person next door has not had to pay. We realise that that is one of the reasons why that part of the Act is so hated. And when the Act was brought before the House as a Bill its financial provisions were not discussed as fully as they might have been.
What are we trying to do? What are our intentions? That is the first question that is asked. It is our intention that we shall remedy the weakness without sacrificing the advantage of the Act or saddling the nation with an unending bill of charges. We want to preserve those sections of the Act which are good and to eliminate those sections which the British people as a whole detest and are not really prepared to accept.
869 The second question which may be asked is whether we are really trying to do this or whether what I am saying is merely a Ministerial announcement to try to fob people off. The answer is that we are desperately keen to remedy the injustice to which my hon. Friend the Member for Brighton, Kemptown has referred. The Minister has worked on this without flagging to preserve the good and to amend the bad parts. We have sat almost with wet towels round our heads going into the various solutions which are possible.
The third question to be asked is whether it is difficult to correct these injustices and hardships. The answer is that it is extremely easy to see where the Act is not working, but it is extremely difficult to find a solution which is the perfect solution. Indeed, I believe that it will be impossible to find a perfect solution but we are not unhopeful that we will find at all events a solution which will be better than the present position.
There is unanimity in agreeing that it is bad, but no two professional bodies agree as to the remedies that should be applied. Recently, surveyors and lawyers met to try to achieve a degree of unanimity. I do not quite know whether the meeting broke up in disorder, but at any rate no unanimity was reached. That was a gathering of great experience. a very impressive gathering of intellect and respectability, and yet they were not able to arrive at an agreed solution.
The next question with which I should like to deal is, what progress have we made and how far have we got? We have examined every possibility, we have listed them and their advantages and disadvantages. We are almost dizzy with looking at the various permutations and combinations which are possible. My hon. Friend asked if we would look at Section 12 (2, a) of the Act, under which regulations can be made by the Minister that vary the class of user. He also asked us to look at Section 69 (2, b), which is to exempt certain classes. I can not only promise my hon. Friend that it will receive consideration but that it has already received consideration. Again, I do not want him to think that I am fobbing him off.
The main burden of the public's complaint against development charge is under three heads, which I should like 870 to list. The first is that it adds to the cost of development. In theory, the developer should be able to buy land at existing use value, in which case his combined outlay on the land and the charge would not exceed what he would otherwise have had to pay for the land alone. In practice, this rarely happens unless compulsory powers are used. There is a wide gulf which has not been bridged between theory and practice.
The second objection is that it is a tax on development. Once again, in theory the charge is supposed to be part of the purchase price of land. In practice, the charge is used as a tax levied over and above the full cost of the land, and developers, especially private house-builders, cannot understand why they should pay the State before they can carry out development which is in the public interest.
In the course of the discussion of the Town and Country Planning Act, I had a case raised during the Committee stage in which some of my colleagues and myself, in those happy days when I was not in my present position, were proposing to erect a large block of flats in the West End of London. We asked the Minister what would happen if the freeholder gave us a ground lease and insisted that we should pay the development charge. The then Minister dismissed the point by saying that it was purely hypothetical, that it would never arise and that if it did a compulsory purchase order could be provided by the Central Land Board. But it did arise, and they would not apply a compulsory purchase order. In every respect the Minister of the day was wrong in dealing with that case. The charge, is, in fact, a tax on development.
The third objection is that the method of assessment is arbitrary. This criticism is made because people fail to understand the basis of development charge and are baffled by the wide variation of charges levied on say a three-bedroom house, not realising that it is the result of variations in land values. I can understand their feelings, because it is an artificial type of assessment and there is no right of appeal.
The criticisms that my hon. Friend has made are good ones. We recognise them and we shall do our best to overcome them. It is a difficult and complicated 871 question, and although I cannot discuss legislation, if I could I should only have to say that the Parliamentary time-table was so choked with business that it would obviously not be possible to introduce any Measure until the next Session; but I must not speak about that because it is out of order.
I cannot say when an announcement will be made, but when it is made I can promise my hon. Friend that it will not be 872 a half-baked scheme, because my right hon. Friend has a very fertile mind, great industry and astonishing perseverance. We shall try to retain the advantages and mitigate the disadvantages of the present Act. In other words, we must not throw the baby out with the bath water.
§ Question put, and agreed to.
§ Adjourned accordingly at Twenty-nine Minutes to Five o'Clock.