§ Order for Second Reading read.
§ 3.39 p.m.
The Joint Under-Secretary of State for Scotland (Commander T. D. Galbraith)
I beg to move, "That the Bill be now read a Second time."
This Bill is the second and final instalment of legislation to give effect to the proposals for amending the financial provisions of the 1947 Act which were announced in the White Paper which the Government laid before Parliament in November, 1952. It may well be that hon. Members are familiar with those proposals; nevertheless, it may be helpful if I state briefly what they were and the extent to which they have hitherto been dealt with.
The White Paper was concerned mainly with three things. The first was to abolish development charge and to remove the obligation on the Government to pay out the £300 million fund compensation in respect of the claims for loss of development value arising out of the provisions of the 1947 Act. The second was the substitution for payment out of the £300 million fund of a new system of compensation to be based on the claims that have been established against that fund. In future, compensation for loss of development value will be payable only when planning permission is refused, when development is restricted or when land is compulsorily acquired. The third aim was to pay compensation to holders of established claims, within the limit of those claims, where loss has been suffered as a result of the 1947 Act, that is, through their having paid development charge or having sold the land at less than its full value, or where the land was brought under planning restrictions.
Effect has been given to the first of these three things by the Act that we passed last year, a United Kingdom Measure which came into law on 20th May last. With the passing of that Act, we said good-bye to development charge and were relieved of the payment of some £300 million with interest to owners many of whom had no intention of ever developing their land.
1239 This Bill deals with other proposals in the White Paper, but before I deal with the Bill, I should like to say how very much my right hon. Friend regrets that the Bill is as complex as it is. I can assure the House that if he could have found means of making it simpler he would have done so, because that would have been for the benefit of all of us here, but unfortunately it was not found to be possible.
I want to make it clear that the Bill is strictly a financial Measure. It neither alters nor amends the provisions of the 1947 Act which deal with day-to-day planning control, development plans, or acquisition and disposal of land for planning purposes. I hope the House will not take that to mean that those provisions are perfect, because experience has shown that amendments would be desirable, but if we were to deal with them in this Bill it would lead to most hopeless confusion. Therefore, my right hon. Friend decided to defer them to another occasion.
Under the Bill, development value is not generally recognised for purposes of compensation for public acquisition or where loss has been suffered due to planning restrictions, unless a claim has been established against the £300 million fund under the 1947 Act. It has been suggested in certain quarters that those conditions will result in hardship. I can see no reason to believe that is likely. There is, so far as I can discover, no evidence to show that large numbers of claims could have been made under the 1947 Act that were not, for one reason or another, made. The House will remember that very wide publicity was given to the rights of owners to make claims. Large numbers of claims were made in Scotland, and only a fraction of them threw up development value. In these circumstances, I want to make it clear that I can hold out no hope of the door being opened to fresh claims.
One of the main criticisms of the Bill has been that there is no provision for collecting for the benefit of the State betterment accruing from community activities. The Government are satisfied that the scheme they are putting forward in the Bill can be operated economically and to the national and public advantage without any such provision. After 1240 all, development charge was a most ingenious scheme for collecting betterment, but our experience has shown that the system was anything but happy in practice, and in consequence the Government have deliberately decided to leave betterment alone.
Now I propose to give as well as I can, an explanation of the main provisions of the Bill. I want first to take Parts I and V together, because they deal with the past. The purpose of Part I is to bring those who are affected by the operation of the financial provisions of the 1947 Act into line with those who are not, so that they can start afresh on the same footing—that is, as far as that is possible.
The main types of cases for which something requires to be done have been grouped in Clauses 4 to 9 as Cases A to D. These are cases where either financial loss has been suffered as the result of the operation of the financial provisions of the 1947 Act or would be suffered following their repeal if special provisions were not made. The White Paper explained that the Government's proposal was to use the established claims as the basis of payments for such losses.
Case A is that in which the development charge has been incurred by the claim holder, and it provides that the charge shall be repaid up to the amount of the established claim or to the charge if that is less. Case B is that where land has changed hands either on public acquisition or privately at a price wholly or partly excluding development value. It provides that the claim holder who has parted with his land in such circumstances shall be paid the amount by which the sum he received fell short of the existing use value plus the value of the claim.
There are other types of cases which are merely variations of Case B, and so the Bill empowers the Central Land Board to make payments in cases of that sort; hon. Members will have seen that Clauses 10 and 12 deal with provisions for payments to be made in several other types of case, including that where a person has acquired the land, but not the claim, at a price in excess of existing use value, and has paid development charge, or has had land acquired from him by a public authority.
1241 Cases C and D are special cases where the claim has become separated from the land either as a result of land being gifted or of the claim having been sold apart from the land. I am glad to say that, so far as we know, there are not many of these cases in Scotland.
Payments under Part I will be determined and paid by the Central Land Board on an application being made to it, and there are provisions in Clause 14 for any disputes either as to the amount or destination of the claim to be referred to arbitration. Payments under Part I carry interest at the rate of 3½ per cent, as from 1st July, 1948, until the date of payment or until 30th June, 1955, whichever is earlier, and that, hon. Members will remember, is in keeping with the promise made in the White Paper and also with the 1947 Act.
The financial principles for dealing with cases under Part V—these are cases where restrictions have been imposed in the past—will be the same as those which are applicable to future cases, which are dealt with in Parts II and IV, and I shall speak of them in a moment or two. Part V payments, it should be observed, being planning compensation payments, are payable by the Secretary of State and carry interest calculated in the same way as in Part I.
Part II deals with payments to be made in respect of future planning restrictions. Under the 1947 Act claims were a kind of personal property which could be bought or sold apart from the land. That separation of the claim from the land is no longer to be possible. Claims in the future will attach to the land and will enure for the benefit of anyone who for the time being is interested in the land, whether or not he was ever a claim-holder.
What we have now is a measure of development values which sets a ceiling for compensation when the land is affected by an act or an event which, under this Bill, is an occasion for compensation, and the term—I am sorry to inflict this on the House—the "unexpended balance of established development value" is given to the new measure of compensation. Let me explain what it is. It is what is left of the development value represented by the established claims after all payments previously due have been made.
I could explain it, but I do not know that I could explain it any more clearly than I have already done.
To the unexpended balance there has to be added, for the purpose of Part II, a supplement of one-seventh, which is approximately interest at 3½ per cent, for seven years, less Income Tax. I want to impress on the House, if I may, that that compensation will be paid from State funds, and local planning authorities will thus retain the freedom which they enjoyed under the 1947 Act to plan without fear of having to foot the bill. The power which is given to the Secretary of State to review decisions of the planning authorities in compensation cases gave rise to fears, which were expressed during the Second Reading of the 1953 Act, that planning would be thwarted because the Treasury would be reluctant to pay compensation. In that connection, I should like to repeat to the House the pledge which was given by my right hon. Friend the Minister of Housing and Local Government when he made his Second Reading speech on the English Bill. There is no intentionthat decisions about the right use of land should be governed by the cost of compensation."—(OFFICIAL REPORT, 15th March, 1954: Vol. 525, c. 49.]My right hon. Friend has no intention of using his review powers to scrutinise closely, from the financial point of view, decisions of planning authorities which give rise to compensation claims.
There is, of course, no doubt at all that there will be cases—there have been in the past—where the Secretary of State will not agree, or has not agreed, with the decisions of the planning authority, but there will not be many such cases where the merits have not already been examined by the Secretary of State as planning Minister on appeal—that is, before there is any application to him for compensation. I think it is an earnest of the Government's intention that it is laid down in Clause 66 (10) that the Government are prepared to find £2 million for compensation payments in Scotland within a period of five years.
The White Paper foreshadowed that compensation was to be excluded for 1243 planning restrictions imposed in the interests of good neighbourliness, and it cited the 1932 Act as a precedent for that. The Clause in this Bill—Clause 23— follows that Act closely, and I do not think anyone could possibly challenge the proposed code which is laid down as being harsh. Certainly since the publication of the Bill there has been no violent criticism, and the planning authorities consider that it is rational and workable.
Clause 24 is complementary to Clause 23. The principle underlying Clause 24 is simply this, that a landowner must be content with some profitable development of his land and will not necessarily be compensated for not being able to carry out the most profitable development.
Part III of the Bill is probably one of the most important parts because it regulates the future price to be paid by public authorities for the acquisition of land, and it falls to be read with Part IV of the 1947 Act, which it amends and which laid down that the price which public authorities would pay for land was to be the existing use value. Part III supplements that by prescribing the extent to which there is to be compensation for development value in land. It is, as indicated in the White Paper, an integral part of the Government's solution that the unexpended balance of established development value must represent the upper limit for such compensation, and it is provided in Clause 36 that, in addition to the existing use value at the time of the purchase, the price is to include any unexpended balance plus the one-seventh supplement for interest.
The provisions of Part III have been criticised as being likely to increase the cost of land to the local authorities. That was examined, at the request of the local authority associations, by a working party which was composed of representatives of the local authority associations, officers of the Department of Health, and representatives of the Central Land Board and the Valuation Office. That working party had samples submitted to it by the authorities, and the results of its inquiries showed that in general the local authorities would benefit under the new proposals.
§ Mr. John Rankin (Glasgow, Tradeston)
The right hon. and gallant Gentleman does not mean to suggest, does he, 1244 that local authorities are satisfied about the Bill in general?
The local authorities have expressed great satisfaction about a great many parts of the Bill, as the hon. Member will learn as I proceed with my speech. In fact, I have never known the local authorities to be so satisfied with so many parts of a Bill in which I was interested.
Unless the hon. Member wants to put a serious point, he had better allow me to continue, in case I lose the thread.
§ Mr. Rankin
I should not have been on my feet had that not been the case. Did Glasgow, in particular, inform him that it regarded the Bill as unworkable?
I hope not, and I hope they will find it very much to their liking. In fact, I have had expressions of opinion from authorities in Glasgow, connected with the Corporation of that City, who are delighted with certain proposals in the Bill.
There are safeguards in the Bill for dealing with cases where, on the strength of a planning permission, an owner has made a start to improvements, or a person-has bought land for development at the ordinary market price, and before he has been able to develop the land it has been compulsorily acquired.
Before leaving Part III, I want to explain in more detail the reasons for Clause 42 on which, I am sorry to say, I have learned that there has been considerable misconception. Indeed, my right hon. Friend is somewhat grieved that his good intentions have been so sadly misconstrued. The purpose of the Clause is to remove the formula in the present Housing Act which, whatever its merits may have been when it was first introduced, is now obsolete and inequitable.
What Clause 42 does is to say that unfit houses shall no longer be valued as cleared sites available for redevelopment but shall be valued on the same basis as ordinary properties—that is, on the state which they are in at the time at which they are purchased. Under the formula which we are repealing, owners stood to gain something which the open market would never have allowed—that 1245 is, relief from the cost of demolition, since the formula required the unreal assumption to be made that this had already been carried out. Perhaps if I may give a short example to the House it will show more clearly what Clause 42 does.
Let us suppose that a site was valued at £300 cleared but there was a building on it, the cost of the demolition of which would be £200. Under the old formula, the local authority would have had to pay to the owner of the land £300 and then would have had to demolish the building at a further cost of £200. So the total outlay on the part of the local authority would have been £500. Under the new provisions of this Bill, the local authority will pay to the landlord the difference between the site value of £300 and the cost of the demolition of the building, which was £200; that is to say, it will pay £100. Instead, therefore, of the total outlay of the local authority being £500, it is £300, £100 of which is paid to the landlord and the other £200 being the cost of clearing the site.
§ Mr. A. Woodburn (Clackmannan and East Stirlingshire)
The right hon. and gallant Gentleman seems to assume that the valuer would place no value on the building standing on that ground. Are we to take it as right that the building will not be valued at anything at all?
That depends on whether there is any value in the building or not; there may well be value in the building. The whole point is this: where there is a miserable old building, the cost of demolition will fall on the owner and not on the local authority acquiring it.
§ Mr. Thomas Fraser (Hamilton)
We are concerned about this Clause because of its application to the earlier Clauses of the Housing (Repairs and Rents) (Scotland) Bill which is at present before Parliament. That Bill provides for the local authorities taking over unfit houses. Am I right in assuming that it is the intention of the Government, in this Clause, that the local authority in taking over a tenement block for which it would pay £300, would then find itself involved in another £200 expenditure on demolition, and that the valuer, in placing a value on this property, would still say £300 and disregard entirely the prospect of the local authority patching 1246 up these houses and keeping them in occupation for another 15 years? Is it not very likely, unless safeguarding words are put into the Clause, that the valuer will feel obliged to recognise that these houses are to be occupied for another 10 or 15 years and pay compensation to the owner of the property accordingly?
I do not think that there can be much value in a house of that nature when we think of the liabilities connected with it. The idea is that this should apply in the acquisition of property of the kind about which the hon. Gentleman has spoken.
It must be obvious that the principle of cleared site value, under the present legislation, is an obstacle to slum clearance, and its abolition by Clause 42 will be a boon to the local housing authorities, and particularly to the people of Scotland Who reside in the cities. I can tell the hon. Member for Tradeston (Mr. Rankin) that the local authority associations have warmly welcomed this provision.
There will be more to follow. Part IV of the Bill deals with the revocation or modification of planning permission after the Bill comes into operation. That is something for the future. Again, we anticipate that those oases will be very rare in Scotland. In fact, on making inquiries today, I ascertained that in the last seven years there have been only two such cases in Scotland, although another may be on the way.
This Part of the Bill provides that compensation which will be payable by a local planning authority in such cases is to include compensation for loss of development value. Where there is an unexpended balance attached to the land, the Secretary of State may give the local planning authority a contribution towards the compensation it has paid. That compensation will be equal to the amount of the compensation which he would have paid had the restriction resulting from the revocation been imposed by the authority in the first place.
I was speaking earlier about Part V of the Bill which relates to something that has happened in the past. I would say in relation to Part V, in reference to past 1247 revocations and modifications of planning permissions that the provisions are on the same lines as those which I have already described in Part IV.
There are provisions in Part VI of the Bill which call for considerable explanation. I should first like to say a word or two on Clause 64. We believe that Clause to contain a workable and equitable solution of the old problem of the compensation which is to be payable by a public authority on the redemption of feu-duties and other similar ground burdens. The problem here arises because the interests of superiors or of creditors in ground annuals cannot be acquired compulsorily by the ordinary process of serving a notice to treat.
The acquiring authority can, however, after it has acquired the feuar's interest and has taken a schedule title to the land under the Lands Clauses Act, 1845, require the superior to agree to the redemption of the right to receive the feu-duty or other ground burden. It is well known to hon. Members from Scotland that a superior's main security for his feu-duty is the building and land comprising the feu, and that the personal obligation on the feuar may be worth very little indeed.
In the case of slum property, the security of the building is more or less valueless. It is more of a liability than an asset to the feuar and something with which we would readily part if he could find a purchaser. On the open market, accordingly, the value of a feu-duty secured over a slum property would be little or nothing. When, however, a local authority acquires the property, its personal obligation to pay feu-duty becomes a gilt-edged asset to the superior, and that is because the local authority is a perpetual corporation with very substantial assets and it has acquired the land to hold for some specific statutory purpose. The superior can, therefore, urge—and I believe with success— that, despite the conditions of the buildings on the feu, he is entitled to compensation based on the number of years purchase of the feu-duty which is appropriate to a perpetuity.
The solution that we propose in this Bill in effect prescribes rules to be observed by an arbiter when the question of redemption of feu-duty comes before 1248 him. These rules mean that the superior will be treated along with his vassal within the compensation ceiling for the land under Part III of the Bill; that is to say, the compensation ceiling is the existing-use value plus any unexpended balance of established claim plus interest supplement. We are satisfied that this proposed solution is equitable, and I can again tell the hon. Member for Tradeston that it is warmly welcomed by the local authority associations.
Has the right hon. and gallant Gentleman worked out an example which he can give us by way of illustration?
I have not worked out an example, but I think that the position is clear. The sum of money which has to satisfy all the claims in respect of the land is that sum which is represented by the existing-use value plus any unexpended balance of established claim on the £300 million plus the interest supplement, which represents 3½ per cent, for seven years less Income Tax. That is the very highest to which they can go. It seems to me that this is again a great boon to the local authorities which are dealing with these matters. Let me remind the right hon. Gentleman that, as I am sure he knows, this problem has been one of the terrific troubles of local authorities in trying to redevelop their areas.
Another important Clause is Clause 68, which deals with feued land where planning permission has been refused. I will give an example. There may be a case where planning permission has been refused for the erection of a bungalow on feued land because the land is to form part of a green belt. Thereupon, compensation would be payable to the feuar under Part II of the Bill. But the feuar under contract with the superior would have to continue to pay his feu-duty although he cannot develop the land.
On the other hand, the superior, while he was entitled to receive the feu duty, would not have any security for it other than the personal obligation of the feuar. That matter can generally be adjusted if the compensation can be diverted from the feuar to the superior and the feu duty proportionately scaled down. Here we are following closely the precedent set by Section 55 (4, b) of the 1947 Act.
1249 Clauses 55 and 56 provide for a new scheme of Exchequer grants. The details of these will be contained in regulations, as they are at present. Broadly, we propose that a 50 per cent, grant should be substituted for the present graded system with all its complications. This change is also welcomed by the Scottish local authority associations.
Clause 57 provides that in certain cases the local authorities will have to refund either to the Central Land Board or to the Secretary of State compensation payments in respect of past and future transactions when the land is acquired by the local authorities. This may seem strange at first sight but it is absolutely fair, since in these cases the local authorities will have paid only the existing use value for the land and no development charge, or a reduced price because of the effect of planning restrictions, for which the Secretary of State will have had to pay compensation. In effect, the local authorities are being asked to reimburse the central authorities for payments they have made on their behalf.
Clause 59 applies the Bill to minerals. This is a very complicated matter indeed and is also to be dealt with in regulations, following the precedent of the 1947 Act. These regulations will require an affirmative Resolution.
§ Mr. A. C. Manuel (Central Ayrshire)
The hon. and gallant Gentleman mentioned that in acquiring land local authorities would pay the present use value. I have in mind certain local authorities which have been developing housing areas of their own. They have brought their housing right up to agricultural land and have taken over parts of farms. The adjacent farmland is needed for still further housing development. Would its use value be its agricultural use value for the crops at present being obtained off the land, or would its use value be recognised, because of the social services provided by the local authority, as a housing use value and, therefore, have a higher price?
That is a question I should not like to answer. It is for the valuer to decide the present use value of the land. If services have been put into the land, I should have 1250 thought that its present use value would be higher than its agricultural value. If, on the other hand, it is agricultural land, I should have thought its present use value would be the agricultural value. But that is a detailed matter, which the valuers must work out for themselves in each case,
I have tried, to the best of my ability, to explain the main provisions of this very complex Bill. Briefly, however, the Bill provides for a new system of compensation for loss of development value Ito take the place of that which was formerly provided in the 1947 Act. The Government's view is that this new system of compensation provides a reasonable solution to the compensation problem. If this new system of compensation is taken with the provisions of Clauses 42 and 64, which greatly facilitate slum clearance and redevelopment, and if those are taken in conjunction with the Housing Repairs and Rents Bill, which is at present before the House, and the Government's policy for new housing, I believe that we have a code which, if pursued with reason and vigour, should give us in Scotland better housing conditions than we have ever had before.
§ 4.15 p.m.
§ Mr. Douglas Johnston (Paisley)
I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof:this House declines to give a second reading to a Bill which throws the cost of compensation for loss of betterment in land values on the community and fails to safeguard the public interest by providing for the recovery of betterment created by public and industrial developments by leaving these to be appropriated as unearned increment by landowners; and which further militates against essential planning by local authorities.The Joint Under-Secretary of State has very properly said that this is a complex Bill. Its complexity was pointed by the fact that he found it necessary to read most of his speech. I make no complaint about that. It is further pointed by the fact that there has been so much misunderstanding in local authority and planning circles as to the meaning of Clause 42.
Speaking for myself, and possibly for most Members of the House, I would say that this is probably the most complex Bill which the House has considered in recent years. I do not know how other hon. Members have approached it. I 1251 approached it hopefully, by reading first the White Paper of 1952. That seemed to promise an interesting and not too difficult Bill. It was full of criticisms of the financial provisions of the 1947 Act, and it promised an easy solution.
It is clear from the fact that 18 months or almost two years have elapsed since the appearance of the White Paper, that the Government have found the solution much more difficult than they thought when the White Paper was presented. When one looks at the Financial and Explanatory Memorandum to the Bill, it is clear that the Bill is difficult. Having read the Explanatory Memorandum several times and failed to understand it, I hastened to the Bill itself in the hope that it would afford clarification. I am afraid, however, that it did not. I rapidly got bogged down with the 74 Clauses and 10 Schedules and came to the conclusion that it was a difficult Bill.
I suppose that most hon. Members became rapidly involved in the new vocabulary of claims—"established claim," "claim area," "claim holding," "area of a claim holding," "benefit of an established claim" and "value of a claim holding." I notice that the Joint Undersecretary apologised for one of these phrases. He should have apologised for all of them, because they are all complex and are all inter-related and difficult to follow. Trying to relate them is trying to understand a complex family tree that goes back for several generations and is not always legitimate.
My first complaint, therefore, is the complexity and difficulty of the Bill. I have found no one who even pretends to understand all its implications. I have read the various planning journals which are published, and from what I have seen it appears that none of those who specialise in planning pretends to do more than understand the general objects and outline of the Bill. They confess that they are quite unable to understand or apprehend all its implications.
It is most unfortunate that the House should be asked to contemplate, consider and pass into law a complex Bill like this at this late stage of the Session. We are now in the middle of May, and if the Bill goes to the Scottish Grand Committee it will be competing in time with our Estimates. This is not a Bill which can be 1252 hurried or rushed through. I am glad that the Lord Advocate is present to hear me say that if, unfortunately, the House gives a Second Reading to the Bill, we will of necessity require his constant attendance during the Committee stage so that he may explain the Clauses. On reading the OFFICIAL REPORT of the Standing Committee on the English Bill, I notice that the Attorney-General has been unable to explain certain provisions of the first few Clauses. I hope that the Lord Advocate will do rather better.
Having made that preliminary, but nevertheless heartfelt, complaint about the intricacies and complexities of the Bill and the lateness of its introduction, I will deal with what I regard as fundamental objections to the Bill itself.
The first fundamental objection is that the Bill again marries the divorced partnership, compensation and planning. The House will remember that the 1932 Act provided that local authorities should have certain wide planning power, and then went on to provide that payment of compensation for loss resulting from the exercise of that planning power should be paid by the local authorities. The result was that there was no long-term planning and, indeed, very little short-term planning, because every time the local authority had to plan, it had to ascertain what the cost was. The result was that it simply did not plan. One can see the result of that by passing along any main road. One sees ribbon development, all the result of the failure of the 1932 Act. One sees what was once valuable agricultural land being consumed by housing, all the result of the 1932 Act.
The 1947 Act divorced planning from compensation. It provided a fund of £300 million out of which all compensation was to be paid for loss of development value, and it put upon the local authorities and the Secretary of State the power and the duty to plan, and they could plan without having to think of the day-to-day cost.
In the provisions of the Bill we have now gone back to what has been described by the Minister in the proceedings on the English Bill as "pay-as-you-go." The result will inevitably be this. The local authority will plan, and the plan will then be sent to the Secretary of State. The Secretary of State will have to look at it with two separate eyes. He 1253 will have to look at it in his capacity as a planner, but he will also have to look at it at the same time in his capacity as a payer. He will have to say to himself. "Can we afford at this time the compensation which will result from this planning?" Inevitably, however much he tries to avoid it—I have listened to the assurances of the right hon. and gallant Gentleman today—he will undoubtedly be influenced by the fact that as soon as he approves of a development plan and compensation becomes payable, he will have to pay. I have no doubt whatever that the result which was seen to flow from the 1932 Act will flow from this Bill as well.
It must be remembered that the Barlow Committee, the Uthwatt Committee and even the Coalition White Paper of 1944 recognised that if one married planning with compensation one got this result. The result will be short-term planning and short-term compensation— a saving for today and very heavy payments tomorrow. I notice that the right hon. and gallant Gentleman shakes his head, and I have no doubt that it is his intention that it should not be so, but there is nothing in the Bill to differentiate the position from that under the 1932 Act, except that -under the 1932 Act the local authority had to pay but here the Secretary of State has to pay. However, the Secretary of State has two capacities; he appears in the capacity of payer and in the capacity of compensator, as the local authority was in 1932. I fear—I am not alone in my fears; most of those who are interested in planning concur in it—that planning will virtually disappear except for short-term planning. That is my first objection.
My second objection is that, as a result of what is described by some persons as the "two-tier" compensation proposals which result from Part III of the Bill, the sum of the compensation will be uncertain and in future the tendency will be for it to rise. That will occur in this way. As the right hon. and gallant Gentleman has said, compensation on compulsory acquisition by a local authority is payable on existing use value and the benefit of the unexpired portion of the established claim. That is in the case of a local authority. A private speculator or other person who desires to develop land has to pay on market value.
1254 There will be two objections to the two-tier system. The first objection will come from the owner of land. He will say that it is quite improper that, when land which he owns is compulsorily acquired, the local authority should pay him only the 1947 existing use value plus, while when he sells an adjoining piece of land to a private individual he is able to charge the full market value. On the other hand, the private individual will feel aggrieved because he has to pay for the adjoining piece of land at market value while the local authority is able to obtain its land at existing use value plus.
This is very interesting. Will the hon. and learned Gentleman explain why the gentleman who can acquire the land at the market value should feel aggrieved because the local authority can get its land, for public purposes, at a lower price? I cannot see it. I do not follow the argument at all.
§ Mr. Johnston
It follows from human nature. There is nothing more irritating to a person than to discover that he has to pay more for the same thing than his next-door neighbour has.
This is not in the sense of a next-door neighbour. It is not another person in the same class or situation. It is a public authority. It is something altogether different.
§ Mr. Johnston
The right hon. and gallant Gentleman may be able to convince Mr. A, who wishes to buy land in order to build a house, that he is in a different position from the public authority which is buying the adjoining plot, but my view is that, human nature being what it is, the private buyer, Mr. A, will complain most bitterly. The result will be an agitation, and the result of the agitation will be, not that the private individual will be able to acquire his land at the same price as the public authority, but that the public authority price will be forced up to something near the market value. That has happened in not dissimilar circumstances in the past.
We made provision in certain compensation Acts for compensation to be payable for war damage and things like that, and we provided that the compensation should be paid on the basis of 1939 values. Then people found that, after the 1255 war, 1939 values were no longer comparable to the prices which they had to pay or which others were paying; so we were forced to amend that Act, and the basis came to be that of the 1946 or 1947 value. I am quite satisfied in my own mind that that will occur in this case, and I am not alone in that view, because it has been expressed by others.
In passing, may I say that I have a little difficulty in understanding how the Government can reconcile their repeated cry that they want a property-owning democracy with the fact that they are making it so difficult for democracy to own anything? To take the case of a private developer who wants to build his own house, he will now have to pay the market value of the land, whereas previously he might have acquired it at the lower existing-use price plus the development charge.
I turn now to my third objection, which is to the compensation proposals. Betterment, or rather development, is no longer a charge upon the landowner, and the result is that there is now no fund from which to compensate the Government— or the Crown, as it is properly—for the sum which they will have to pay out on development being resumed. I think we are all agreed that the value of land increases largely because of the efforts and growth of the community, and it has been recognised for a number of years that some attempt should be made by the community to obtain a return for that betterment which has been created. I will not trouble the House with the history of the various attempts which have been made, but the 1947 Act did make a courageous attempt to obtain that betterment. That has been thrown away.
I recognise that there was much criticism of the development charge, much of it, I think, manufactured, much of it arising from the fact that it was not properly understood or was regarded as a tax, and much of it arising from the fact that the compulsory acquisition powers were not exercised sufficiently. That arose from a decision of the courts which was not set right until a later repeal. The result of the repeal of that Act and of the present Bill will be that the community will be called upon to pay compensation for the betterment which it has itself created.
1256 What creates the value of land is a community coming upon the land and building roads, providing drains and so on. The result of this Bill will be that the additional value of the land which has accrued because of the work of the community will have to be paid for by the community. The person who gets off scot-free is the landowner, and not only does he get off scot-free, but he is able to obtain an increased price for his land. I suggest that that is totally wrong and unjust.
There are many other reasons why this Bill should be condemned. I think that Parts I and V, with which the right hon. and gallant Gentleman opened and which deal with compensation for the past, are difficult and will require, if this Bill receives a Second Reading, the closest scrutiny. But there is one part of the Bill which I can commend, and that is the Clause in which an attempt has been made to deal with the very difficult question of feu duty. While I would make certain criticisms of Clause 64, I think it is on the right lines; but Clause 68 will certainly require not only close scrutiny but a vast amount of amendment, because it opens the way to a great many purely fictitious and bogus claims. For these reasons, amongst others, I suggest to the House that this complex and somewhat absurd Bill should not be given a Second Reading today.
§ 4.37 p.m.
§ Mr. C. N. Thornton-Kemsley (North Angus and Mearns)
It is not, perhaps, surprising that there should be some hesitancy on the part of the back benchers on the other side of the House to second the Amendment which has been moved by the hon. and learned Gentleman the Member for Paisley (Mr. Johnston). They were half-hearted about it, but is it really to be wondered at, when the whole of the case made by the hon. and learned Gentleman, after spending a long time saying how complicated the Bill was, was that it failed to set up any scheme for the collection of betterment from individuals whose land was to be acquired or who were to be prevented from developing it in one way or another? That attitude is hardly worthy of a party which 1257 claims to look forward, and it is quite outmoded by the present state of taxation.
Before I come to my main argument, may I first say a word or two on the point made by the hon. and learned Gentleman about compensation? First of all, the occasions on which compensation will be payable under this Measure will certainly not be numerous. Secondly, when that compensation is payable, it will not be paid on market value, but will be paid on a basis which will, in almost every case, be very much less than the normal market value of the land.
Thirdly—and this is really the important point—on the question of the community collecting betterment for work done by the community, I am sure that the hon. and learned Gentleman would not claim—I do not think anybody would now claim—that there ought to be a separate fund like the Road Fund into which the proceeds of the taxation of land in one form or another, or of the rating of land, ought to be paid, and out of which the State should recoup betterment and pay compensation for restrictions placed on the right to use land. That certainly was not proposed in 1947. There were no proposals then that the proceeds of development charge should be kept separate and that £300 million should be taken out of the sum which would accumulate in that way.
§ . Jean Mann (Coatbridge and Airdrie)
Did not the hon. Gentleman agree with the Uthwatt Report and did he not agree with the 1947 Act?
§ Mr. Thornton-Kemsley
I agreed with the planning provisions of the 1947 Act but not with the financial provisions, as I think the hon. Lady will remember. I shall have a word to say later about the Uthwatt Report.
With taxation as it is today, every form of land development, of changing the use of land and of securing the betterment of land, is taxed in a very direct way. In many cases the work that is put into the land by the developer, the planning and even the betterment that he may recoup from the work of the public, with development creeping up to the marches of his land and thus increasing its value, in due course comes back into the public coffers. Therefore, I invite the hon. and learned Member for Paisley to think about that point. I am certain that it is true.
1258 I incurred the displeasure of some of my hon. Friends and of members of the hon. and learned Member's profession in Scotland when I asked the Prime Minister the other day whether it would not have been better if we had had one United Kingdom Measure instead of having two separate Town and Country Planning Bills, each of 73 or 74 Clauses and some 10 Schedules and each doing exactly the same thing. My request was rejected, understandably—
§ Mr. Johnston
I should have supported the hon. Member if he had made it a condition of his request that the Bill be drafted as a Scottish Measure with an English application Clause.
§ Mr. Thornton-Kemsley
I spent some time trying to see how it could be done and I reckoned that by the addition of six Clauses dealing specifically with the Scottish position and with a rather longer interpretation Clause, we could have got two Bills into one. In that way we should have saved a great deal of time by not having two Standing Committees, with all the officials involved, sitting concurrently on the same problem. I should be the first to agree that where separate principles are involved we should have separate Scottish legislation, but here the principle is exactly the same.
§ Mr. Thornton-Kemsley
I shall speak about the principle in a moment. It might be said that we had two separate Bills in 1947 and therefore, since the main purpose of this legislation is to unscramble the financial provisions of the 1947 Act, it is right that we should have two separate Bills now in 1954. I remind the House, however, that in 1947 the two Committees did not sit concurrently. The English and Welsh Bill went through all its Committee stages in Standing Committee D, then there was a pause and the Scottish Bill went to the Scottish Grand Committee. The effect was that those of us on both sides of the House who were keen about planning had the opportunity of shaping legislation on the Committee stage of the English and Welsh Bill.
Now the English Committee is sitting already. Decisions are being made on these matters of principle, which I believe we shall find it impossible to upset in the Scottish Grand Committee because it will 1259 be said, "This has been settled in the English Committee." I do not think that that is a good thing for the people whom we have been sent here to represent.
§ Mr. Thomas Steele (Dunbartonshire, West)
Is it not the case that with one Bill the Minister said in the English Committee that certain things could not be done, but on the Scottish Bill the Scottish Ministers said that the same things could be done, and as a result much better provisions were made for Scotland?
§ Mr. Thornton-Kemsley
Yes, but the Bill dealing with Scottish long leases, to which I believe the hon. Member is referring, contained matters of principle which were different, owing largely to the difference in the circumstances relating to feus in Scotland, and so on.
In general, I welcome the Bill and I know that I am speaking for a great many of my hon. Friends here.
§ Dr. H. Morgan (Warrington)
The hon. Member for North Angus (Mr. Thornton-Kemsley) should tell us how many of his hon. Friends are sitting around him.
§ Mr. Thornton-Kemsley
I want to speak mainly about matters which I and many of my hon. Friends consider could be improved if the Bill were amended. The Joint Under-Secretary of State for Scotland referred to the first point when he opened this debate and spoke of what has been called "good neighbourliness." I suppose that one of the fundamental problems of planning the right use of land is to decide the extent to which limitations may be placed upon land use without payment of compensation to those owners who are adversely affected.
The hon. Lady the Member for Coat-bridge and Airdrie (Mrs. Mann) reminded me of the Uthwatt Committee. Mr. Justice Uthwatt's Committee, reporting in 1942, said—and I paraphrase the Report very roughly but I think accurately—that ownership of land does not carry an unqualified right of user and that the restrictions placed on what the Uthwatt Committee, for the first time, called "the duties of neighbourliness" may be imposed without liability 1260 to pay compensation. The White Paper of November, 1952, which preceded the introduction of the 1953 Act, endorsed that policy.
I invite the attention of the House to Clause 23 of the Bill, which I submit imposes restrictions upon the use of land which go far beyond the duties of neighbourliness, whilst excluding compensation. I should like to give one or two examples of the kind of thing that I mean. First, as I read Clause 23, it will be possible to impose a density zoning upon land which, whilst preserving an outward semblance of an open space round an area, would make the economic development of that land impossible. Let us suppose that a planning authority desired to have a green belt round a new town. If the land is to be prevented from development altogether, compensation is payable, but if, relying on the restrictions in Clause 23, the planning authority said it would allow, say, one house to 10 acres, it would preserve the semblance of a green belt yet avoid the responsibility for having to pay compensation.
Another example is that restrictions upon the dimensions of buildings would make it possible for the planning authority in a built-up area to limit the ratio of floor area to site coverage so as to make the erection of commercial buildings on certain sites quite uneconomic. A third example is that a planning authority could impose conditions regarding the number of square feet in underground car parks in a large store or office building, requiring the provision of car parks far in excess of the need of those buildings, and requiring the developers to provide far more parking space than would ever be needed by the people making use of the buildings about to be erected. Conditions of that kind could be imposed without payment of compensation, if I read the Clause aright, and would make developments of that kind quite uneconomic.
I do not deny the reasonableness of the denial of compensation for restrictions imposed in the interests of good neighbourliness. What I think we must do in Committee is resist its application in some of the cases which at present are laid down in Clause 23. I could not help being slightly amused when my right hon. and gallant Friend the Joint Undersecretary claimed it as a virtue of 1261 Clause 23 that no objections had been received from local authorities. Of course, local authorities will not object, as the Clause is in their favour. The toads under the harrow are landlords, who will have their rights denied them without payment of compensation. This is a matter which I am sure we shall need to look at closely in Committee.
I turn to Clause 24, dealing with comparable development. This is another Clause which my right hon. and gallant Friend expounded with great clarity. It seems to me that the Clause makes a most extraordinary provision. I shall exaggerate purposely to show how extraordinary and unfair I think it is. It provides that if a development is refused for one purpose, no compensation is payable if permission is given for development in another way. That is the principle. I will give two examples to show how absurd that can be.
The first example will be moderately sensible. Suppose that on the outskirts of a small market town there is a piece of land which at present is fanned. The farmer who owns it may be approached by an agricultural machinery company which, because of the position of the land on the main road, wants to set up a repair workshop, which would be noticed by people passing and widely used by farmers using the market town. The farmer applies for planning permission and is refused permission for a repair workshop, but no compensation is paid because it is said that he may sell the land for building houses. That may be all right, but he does not wish to sell for the purpose of building houses.
Let me take what I admit is an absurd example—but only by looking at absurd examples can we see what this Clause means. Supposing there is a quarry in the Highlands which is in use and stonemasons are working there. The company puts in plans and asks for planning permission to build a stonemasons' workshop at the edge of the quarry. Permission is refused, but the company is told the land can be used for the erection of a garage, a cinema, or something like that. That, in effect, is what the Clause says. There may not be the slightest demand for a garage or cinema there, but because the planning authority gives permission for some other use, it can refuse permission for the workshop.
1262 We shall have to look at this Clause again because, through the almost incomprehensible nature of its drafting, it can mean two things. I have had arguments about Clause 24 with very learned solicitors, surveyors and others. Some have argued hotly that it means one thing and some have argued, equally hotly, that it means another thing. I am sure that we should not only change its drafting, but also change its intent.
I come back to the argument I advanced at the outset about cases in which compensation is paid. I think I have already shown that it will not be paid in very many cases and it will be at less than market value. The cases in which compensation will be payable under the Bill are, first, where land is compulsorily acquired and, secondly, where there is a refusal of planning permission, or where there is a grant of planning permission and subsequent revocation or modification.
As my right hon. and gallant Friend told us, compensation is to be, first, its existing use value, plus the interest supplement, plus the unexpended portion of the established development value. I need hardly remind the House that the development values, in terms of the 1947 Act, had to be assessed in relation to prices obtaining before 7th January, 1947. As the hon. and learned Member for Paisley made quite clear, these values, pegged back to dates in the past, become more and more unreal, more and more indefensible. As he rightly pointed out, it is not a good basis to go back far into the past and look at values in relation to a distant time. There are strong arguments against the perpetuation, for all time, of the basis of values as they were in 1947.
I have convinced myself that it is justified in the conditions of the Bill, first, because the basis is the existing use value of the land plus the unexpended portion of the development value and it is not all fixed in relation to 1947. Secondly, those values have already been fixed and agreed with district valuers and, administratively, it is very handy to be able to turn them up to see what they are. But if we are to do that and take a man's land from him against his will—acquire it compulsorily for some public purpose—we must be quite certain that if any part of the price is fixed in relation to prices obtaining in 1947 there shall be some automatic 1263 adjustment so that the prices can be adjusted in accordance with the value of money.
Let me give some facts to explain what I mean. Putting the value of the £ in 1947 at 100, the internal purchasing power of the £ had fallen to 90 in 1949, it was 81 in 1951 and 76 in 1952. I urge upon my right hon. Friend that an authoritative body—I suggest that the Lord Chancellor might well be the chair man—should pronounce from time to time what is the internal purchasing power of the £ in relation to a figure of 100 at 1947, and that adjustment up or down—it may be down—
§ Mr. Thornton-Kemsley
Certainly it can. It is done already. If the hon. Gentleman will go into the Library and look up the relevant Blue Books, he will find authoritative figures of the internal purchasing power of the £. I have those figures, and they are authoritative. What I want to see is an official commission making pronouncements in relation to the figure of 1947 so that there shall be no argument about the matter.
§ Mr. William Ross (Kilmarnock)
The hon. Member says that it has been done. Is he trying to tell me that the Government already pay out postponed payments related back to original values? If so, I can appreciate his point very well. I should like to know whether the hon. Gentleman is limiting his proposal to what is now before the House or whether he is going to suggest the same thing about post-war credits?
§ Mr. Thornton-Kemsley
It would be out of order for me to carry my suggestion as far outside the purposes of the Bill as that, but I do not make these suggestions without having thoroughly considered all their implications. However, I know that I should not be allowed to say how far I would go in the application of this principle.
So far as the Bill is concerned, I have most thoroughly considered all the implications of my suggestion, and I still stand firmly by the contention that it is 1264 the only fair way of dealing with the matter. If the value of land is being fixed at its value in 1947, and if a man is to be paid in relation to 1947 prices for his land which is being taken, some adjustment should, when that occasion arises, be made up or down—it might be down —so that the coins in which he is paid bear the same relation to other things as they did at the time in relation to which the value was fixed.
I believe that if something like that could be done it would go some way to meet the objections, first, that owners whose land is compulsorily been taken from them are being paid at the moment at less than full market value; and secondly, that the value based on prices ruling in 1947 may be far from accurate 10, 20, 30, or even 40 years on. Without some such provision, I am certain that the 1947 prices provisions in the Bill will be found sooner or later to be unworkable. If that is to be the case, it is just as well that we should face that fact now.
I turn to the question of the reopening of claims. I say here and now that I was deeply disappointed—I go further, and say I was shocked—that my right hon. and gallant Friend should have said so emphatically that there is no hope of the door being opened for fresh claims. I will tell the House why I feel so unhappy about that. Claims under Part V of the 1947 Act will, in future, when this Bill is carried into law, entirely change their character. From being identified, as they have been hitherto, with the interests of some particular individual claimant, they will become part of the established basis of compensation enuring for the benefit of all persons interested at that time in the land concerned.
I submit that, in fairness, it must be desirable in these circumstances that all land which has a development value in terms of the 1947 Act should come within the ambit of the scheme and not be ruled out simply because the persons interested in the land at that time, that is to say, in 1947 or 1948, happened for one reason or another not to make a claim. I do not suggest that the reopening of all claims should be allowed because I fully realise that that would give rise to great administrative difficulties. I do say, however, that there are certain cases—just a few cases, one could say— 1265 in respect of which reconsideration ought to be allowed. I do not say that that should be allowed at once, as that would involve all sorts of claims which will never have to be taken into consideration because the land will never be acquired. These cases should be reconsidered at the time when a claim falls to be made.
I will give just two examples. The first is a claim in respect of which there was more than one interest in the land and only one of those actually made a claim. In the case of a feu or lease with an unexpired term of, say, 30 years, the freeholder, the landowner, the superior, has made a claim in respect of his portion but the lessee has been negligent and failed to make a claim, although I admit he was repeatedly urged to do so by the then Chairman of the Central Land Board and the then Minister and Secretary of State. There was no excuse for him, but for one reason or other he failed to make a claim. Now that land enures not for the benefit of one individual but for all holders of the land; it runs with the land. I say that in that case the claim should be reopened so that some addition may be made in respect of that claim if it is felt to be justified to make up for the failure of an individual to make a claim at the time.
I turn to the second category. A great many cases were ruled out under the de minimis provisions of Section 60 of the 1947 Act. I do not suggest that all de minimis claims should be reopened. To allow that would give rise to great difficulty, certainly great administrative difficulty, but where someone who was ruled out under the de minimis provisions of Section 60 of the 1947 Act had subsequently to pay a development charge, in respect of which there were no such de minimis provisions, his case should certainly be looked at again. Impartial examination of such cases at the appropriate time would not open a very wide door and would underline the Government's intention to deal fairly with the many unforeseeable cases likely to arise in the process of unscrambling the 1947 financial provisions.
I have spoken for a long time, during which I have deliberately confined myself to three or four matters of principle. I hope it will not be thought, because of that, that we on this side of the House think that the Bill is bad; we do not. We think the Bill is good, but we should 1266 like it to be better. It is inevitable, in the case of a Bill of the length and complexity of this one, that there should be differences of opinion about this or that Clause, even among friends. I am sure that the Committee stage of the Bill will be very important indeed. Because of the complexity of the Bill and because inevitably it will take private individuals, more than local authorities, a long time to absorb all its implications, I hope that we may have adequate time between this Second Reading debate and the Committee stage. I urge the Government to ensure that we shall have sufficient time to consider the Bill carefully before we discuss it in Committee.
§ 5.10 p.m.
§ Mr. A. C. Manuel (Central Ayrshire)
I do not wish to follow the hon. Member for North Angus and Mearns (Mr. Thornton-Kemsley) on all the points he has endeavoured to make. We can always look to him with confidence to put the case for Scottish land-owning interests in any debates on any Bill which is before the House. I was astonished at his remarks about Clause 23 of this Bill. We all agree that the local authority should be in charge of planning measures and realise that it is most necessary that the local authority should control nuisances which might he created very easily by reason of a private landlord, for a profit motive, hiring out a roadside site or destroying the amenities in a residential area by providing ground where an obnoxious trade could be carried on.
As the hon. Gentleman knows, there are ample powers of appeal to the Secretary of State if a private person is of opinion that a local authority is not treating him justly and I would plead with the hon. Member to leave well alone in that respect. I agree with that provision in the Bill.
I am concerned about the application of the provisions of the Bill to local authority development. The remarks of the Joint Under-Secretary of State for Scotland about Clause 42 caused me some anxiety. From what he said one might think that the right hon. and gallant Gentleman was referring only to unfit houses which were actually now uninhabited. I am referring to the cleared site value provisions. We know there are possibly hundreds of thousands of 1267 houses in Scotland which are unfit for human habitation but which are presently inhabited. This Clause deals with these unfit houses and we know that under the provisions of the Housing (Repairs and Rents) Bill (Scotland), the local authorities will be required to submit schemes to the Secretary of State within 12 months, indicating the unfit properties which they will take over.
I should like a clear answer from the Government about the actual position. We were told by the Joint Under-Secretary of State that there would be an actual saving to the local authorities and that they would be protected from financial loss arising from demolition costs in connection with these unfit buildings which they had acquired. But the Government know very well that under Clause 1 of the Repairs and Rents Bill the majority of these houses will need to be patched up and kept in being for another 15 years.
We know that the period of 15 years is quite unreal and that many of these houses will be inhabited for far longer than that. In Glasgow, there are about 90,000 of these houses and after the next 15 years many of them will still be occupied. Under this new Bill the local authorities are being asked to acquire these unfit properties. The district valuer will put a price on the dwellings.
Although these houses will be occupied for the next 15 years; although a rent is being paid for them at present and will be continued to be paid for the next 15 years—because the houses are being patched up—the district valuer will take no cognisance at all of the amount of rent paid over the next 15 years whether it is paid to the local authority or to the private landlord. He will assess the building merely as being in a bad state and as being worth practically nothing. The main commitment of the local authority will arise from the capitalising and buying out of any ground burden.
I am concerned that local authorities are dubious about the provisions of the Bill regarding the acquiring of land for future development. We were told that the local authority would pay existing use value. I should like the Lord Advocate to explain what that means so far as the price medium is concerned. By reason of their housing activities local authorities have extended their roads, 1268 sewers, water mains, electricity services, and street lighting around the verges of their townships. They have done so by taking over agricultural land which, until 1947, they acquired at very high prices from private landlords.
I am not saying that I agree entirely with the provisions of the 1947 Act, where the local authorities still pay approximately the same price. But there was the great distinction that under the 1947 Act it was recognised that any betterment value should not accrue to the private landlord, and that the local authority paid a development charge to the central fund. The Joint Undersecretary of State knows certain Ayrshire burghs as well as I do. He knows of instances where a portion of farmland has been taken over and built upon and that negotiations are now being conducted by the local authority to acquire the rest of the farm. That has happened in many burghs and the services have been brought up to the verge of the agricultural land now in private ownership. But the rates paid by the agricultural owner are negligible. Until the local authority acquired it, the land was regarded purely as agricultural land, and appropriate rates were paid.
I do not know why the hon. Gentleman should hammer the point so hard. He agrees that the land is used for agricultural purposes at the present time. The sum to be paid is existing use value, which is agricultural value, and that is the answer.
§ Mr. Manuel
I am delighted to hear that. I can hardly believe it. We have never had anything like that before. In effect, what the right hon. and gallant Gentleman is telling me is that a farm is derated to one-eighth of its value on the valuation roll. When it is acquired the local authority will run the usual rule of thumb over it and multiply that figure of one-eighth by 20 or even 21, and I take it that that total is all that the local authority will pay. Why, we shall get enough land for a £10 note to do all the building we want to do.
This is a most astounding proposition. I warmly welcome the admission of the Joint Under-Secretary. I have been reading the Bill and I did not get that impression and I should like the Lord Advocate to say whether he agrees with the right hon. and gallant Gentleman.
Following the statement by the Joint Under-Secretary, about the land being acquired at its agricultural value, may I say that he knows that land cannot be compulsorily acquired if it is used for agriculture. Therefore, the price to the local authority will be the price that the owner of the agricultural land wants. It will not be subject to arbitration.
§ Deputy-Speaker (Sir Charles MacAndrew)
This is a Second Reading debate. The point will be answered in due course. This is not a Committee stage.
§ Mr. Manuel
In that assurance was the Lord Advocate saying that the proposition I put about the rates being paid in the local authority area—that the derated value was the actual value which the district valuer would assess—was correct? Did his affirmative answer include that, or is he taking the full value of the valuation roll before derating? If he is, my argument is still correct and the local authorities will still be fleeced, as they will always be when they acquire land up to which they have brought services. I hope that that point will be cleared up.
As I read the Bill I am afraid that full scarcity value will still be paid. I appreciate that certain aspects of the changes in respect of development charges needed amendment. I should like the Lord Advocate to say just what action will be taken by the Government about the repayment of development charges which have already been paid by private individuals. I do not think that the Government can approach this problem and treat different people in different ways. Where development charge has been paid we must try to get some sort of equality.
I should like a further piece of information. After the Bill becomes an Act will there be an intimation that there will be a certain date before which claims must be lodged, or is it to be taken that nothing will be conceded after some date in the past? In other respects the Government have gone much too far. 1270 In many respects they are putting back the clock. I hope that in Committee we shall have ample opportunity to amend the Bill. We must examine it very carefully so far as it will protect the local authorities.
I hope that we can have a clear indication from the local authorities about any changes which they would like to be made in this Measure which is most complicated. I am certain that on reflection the House will agree with my hon. and learned Friend that it was inopportune to bring forward this legislation at this time when the Scottish Grand Committee is cluttered up with such a large amount of business. I hope that, fully recognising that fact, ample time will be allowed in Committee so that we can fully probe the implications of the Bill and try to make amendments so that the people of Scotland may get the full benefit of the work which we do there.
§ 5.26 p.m.
§ Mr. W. G. Bennett (Glasgow, Woodside)
As a back bencher I want to assure the Government that this Measure has the full support of the average Member on this side of the House
§ Mr. Bennett
The Bill will go a long way towards getting us out of the chaotic conditions which the country suffered as a result of the Town and Country Planning Act, 1947. The very essence of the poverty—
§ Mr. Bennett
The very poverty of the representations against the Measure have been shown by the hon. and learned Gentleman the Member for Paisley (Mr. D. Johnston). He went a long way to try to prove that the private builder will be embarrassed by having conditions imposed upon him which are much more onerous than the local authority will have to bear when it builds houses.
The hon. and learned Gentleman is concerned that the private builder will be 1271 asked to pay the market value whereas the local authority will pay the present use value. The hon. Member for Central Ayrshire (Mr. Manuel) asked a number of questions about the present use value. The term explains itself. It is the present use value—the use to which the land is put. If it is producing potatoes, that is the use value. If the tonnage is 10 tons to the acre, that is the value. If it is producing nothing, then that is the value. It is very simple.
The ordinary builder, the man who is willing to build houses either for sale or letting, will compel the owner of land to sell at a fair price. The hon. and learned Member for Paisley need not worry himself. The private builder and the community will be able to look after their own interests by the use of the law of supply and demand. If the private owner of land asks an extortionate price of the private builder who proposes to use the land, then the local authority will come in and get the land at a very much lower price.
Obviously, the owner of the land, if it be agricultural land, or any other land, will ensure that he sells at perhaps a slightly higher price than he might get from the local authority, but not at a price which would prevent the builder acquiring the land for building purposes. The worries which have been expressed here today about looking after the interests of the private builder who supplies houses either for sale or for letting are fictitious. They ought never to be put forward by any hon. Member on either side.
I am not at all worried about the case of the master builder who wants to build a workshop and is refused permission and then sees someone else come along, apply for permission to erect a cinema and is allowed to do so. I do not think we ought to look at this matter from the point of view of the exceptional case. The Bill contains many Clauses which will be fully argued and perhaps amended in Committee, but it is a first-class Measure and I commend it to the House.
§ 5.31 p.m.
§ Mr. E. G. Willis (Edinburgh, East)
Let me assure the hon. Member for Woodside (Mr. W. G. Bennett) that we on this side of the House are not so much 1272 concerned with personal interests, but with the interests of the community. This Bill excludes the interests of the community.
I was very interested in the speech of the hon. Member for North Angus and Mearns (Mr. Thoniton-Kemsley), who was so solicitous for the landowner. He is the spendthrift Member of the House of Commons when it comes to dealing with these owners. I remember that in 1947 he devoted a great deal of time on the Town and Country Planning (Scotland) Bill to arguing that the compensation terms offered were too small. Now he is arguing the same thing from a different point of view. He is consistently on the side of the landowner.
One thing about the 1947 Act was that, while it did not offer the solution that I would have desired, namely, the nationalisation of the land, it tried to collect for the community the betterment values arising out of the efforts of the community. But in this Measure the Government are deliberately throwing this overboard, and putting the clock back because they are giving a better guarantee to the landowner. The landowner is now to be compensated for losing the development value. I say that that is quite wrong, and I cannot understand this tenderness for the landowner.
In Part IV of the Bill provision is made for compensation payable in full for any depreciation in the value of an interest in land caused by an order revoking or modifying a planning permission, irrespective of whether there is an unexpended balance or not. That is an example of the tenderness shown to the landlord. I know of no other business in which a gambler is compensated by the community if he produces a commodity which the State decides should not be produced in the interests of the community. But the land speculator can gamble, and if he loses in his gamble he is to be compensated.
The owner has got the land and he is not making a gamble. He was assured by the planning authority that he could go on with his development, but then the planning authority changed its mind. The owner may have spent money on the development or may have paid an additional sum for the land than he otherwise would have 1273 paid. That is not speculation and it is not a gamble. It is acting on the decision of a duly constituted body.
§ Mr. Willis
What the right hon. and gallant Gentleman is saying to the landowner is what the White Paper says about this subject:One result of the changes so far outlined is that there would be a free market in land, in the sense that anyone would be able to offer land for sale at whatever price he thinks appropriate without the fear that his action might result in compulsory acquisition.In other words, the land speculator is set free to speculate. I say that if he speculates and loses he should bear the loss. If the right hon. and gallant Gentleman were in business he would do that.
Any other type of business man who speculates suffers his own loss. He does not come to this House and ask for compensation unless, of course, there happens to be a Government with a Tory majority and he is part of a sufficiently large pressure group to be able to influence the Government to introduce legislation to protect him. But if he is not in that position he bears his own losses.
Why should we show this tenderness to the landowner? Surely if the community creates a value the community should get that value, not the landowner. That is what is wrong with this Bill. The 1947 Act tried to set out to accomplish that. It endeavoured to recover for the community those values which the efforts of the community created. But from the right hon. and gallant Gentleman we have had a new doctrine today. The Government do not consider that to be necessary any more than they consider it necessary to protect the community but only to protect a section of the community. Is that the position of the Government? That seemed to be what was outlined by the right hon. and gallant Gentleman in his opening speech this afternoon.
§ Mr. Willis
I shall also read it, because it might be useful to me as I travel round Scotland addressing meetings. And we might have another by-election.
§ Mr. Willis
My hon. Friend the Member for Central Ayrshire (Mr. Manuel) raised a very substantial point on Clause 42 which dealt with the repeal of the provision of the Housing (Scotland) Act, 1950. My hon. Friend gave us an example of a slum dwelling site of which the worth was £300 or £400 and for which the local authority would under the 1950 Act pay £300 or £400 compensation. My hon. Friend has told us that as a result of the repeal of that Act the local authority would now be able to deduct the cost of pulling this building down and thereby reducing, its costs by £100.
As my hon. Friend pointed out, this will not happen under the Housing Repairs and Rents (Scotland) Bill. The right hon. and gallant Gentleman seems to think it will, but we on this side of the House say that it will not. In fact, about the only property that will be kept in a decent state of repair as a result of that Bill is the slum property, the property that ought to be pulled down.
The right hon. and gallant Gentleman will surely admit that some of this will be kept because no local authority can pull down all the slum property at short notice. Therefore, that property will have a value and the local authority will not be able to deduct the demolition charges. I take it, also, that the owner of that particular property will also be compensated for the balance of any established development value for the land to which he is entitled. Is that so?
I have said at least ten times that the ceiling for compulsory purchase by public authorities is the present use value plus the unexpended value of the claim plus the supplement in regard to the interest.
§ Mr. Willis
That means to say that instead of paying site value, the authority will now pay the value of the property plus this unexpended part of the development value of that property, which is higher than what has been paid previously. The right hon. and gallant Gentleman should look at this again. Certainly, on this side of fine House we shall have to consider it carefully.
1275 I agree with the hon. Gentleman the Member for North Angus and Mearns on one point, that we ought to have a long time to discuss this Bill. Yet the Government have left us only two months in which to discuss thoroughly 95 pages of highly technical legal jargon. The hon. Gentleman suggested that this simplified the procedure, but at least up to 1947 we had only one Act whereas since we have had the 1953 Act and the 1954 Act.
This will be a paradise for the legal fraternity and they will enjoy themselves immensely in trying to work out what all this means. The Government are to be condemned for introducing the Bill so late in the Session. It ought to have been introduced before Christmas, before the Housing Repairs and Rents (Scotland) Bill, because then we might have been able to consider the latter Bill in the light of Clause 42 of this Bill.
This is a bad Bill in which I think the Government are trying to go backwards and by which they are acting unfairly to the community. For all those reasons, I hope that we shall divide against its Second Reading at the end of the debate.
§ 5.42 p.m.
§ . Jean Mann (Coatbridge and Airdrie)
I am glad to have the opportunity of following some hon. Members opposite, particularly the hon. Member for North Angus and Mearns (Mr. Thornton-Kemsley) who, like myself, is a vice-president of the Town and Country Planning Association. However, I am rather surprised at his point of view on how we shall achieve planning under this Bill, because I fear that it will not do so but will rather obstruct planning. As for his references to Clause 23, I think that the compensation proposed in some cases may be rather large and that restrictions are necessary.
I recall receiving a letter from a man living in one of the congested areas of Glasgow, who knew that I was urging people to open their windows as a first precaution against tuberculosis. I do not retract from that in any way. This poor man wrote to say that he could not do that because of the offensive fumes which filled the house every time the window was opened. Is that a suitable type of property for compensation when our medical officers go around listing the 1276 offensive industries? Such properties should be transferred without compensation.
I do not want to dwell on things that may be more adequately considered during the Committee stage. It is the principle of the Bill which sells planning down the river. No wonder there is such a lot of technical jargon in the Bill, such a lot of legal phrases that we cannot understand. We heard the Joint Undersecretary of State say that his right hop. Friend had tried to get something in simple language. Are we to understand that it is not possible to re-write this Bill in simple language? Perhaps it is not desirable because, if it were written in the language in which, say, Agatha Christie would write it, we would know what we were being exposed to, robbery with violence.
This Bill is dropping the advance made from the time of the Barlow Report, from which stemmed the Uthwatt Report, which was to replace all that we had been robbed of in the past. But let me go back a bit. The central areas of Glasgow, were given by a Lord Provost in the 17th century whose name, I believe, was Campbell. He gave as a gift to some of the bailies, the area from the Tolbooth right along to Blythswood for a consideration called a wanworth. That, also, was rather obscure in case the ordinary public tumbled to what was happening. If anyone asks what a wanworth is, it was the term used in that century for "the feeding of ae hen for ae year"—that is, for the feeding of a hen for a year.
I believe that even today, while the congregation of a church in Blythswood is worshipping, someone is drawing an increment from the land on which that church was built. We all know of the millions of pounds that have gone into the hands of landlords while they slept or while they were perhaps gambling— if I want to be vicious—on the Riviera. The money was mounting up all the time, the value was being added to their bankbooks and that of a generation after them.
A time came when we said that this must cease. A war was finishing and, even before it finished, when we saw Glasgow expanding, some of us a little more far-sighted than the others—I include the hon. Gentleman the Member 1277 for North Angus and Mearns—saw that at some time there would require to be an exit. This would have to be done not by building new dormitory towns for the people, but by the building of self-contained towns which would accommodate not only people, but industry, shops, schools and all the other public and social services. And by such a development we would be creating a new town and, therefore, recreating new values. That was all done as a result of the Barlow Report.
Then came the Uthwatt Committee to decide how we should apportion this value. It is well known to the right hon. and gallant Gentleman, as well as to ex-councillors on both sides of the House, what Glasgow had to pay when wanting an extension. Do they remember? Two hon. Members from the other side were on the Housing Committee. We were told that the price of one area in Glasgow was £112 per acre. It belonged to the Duke of Montrose and was agricultural land. I went to the assessment office to find out what the Duke was paying. He was derated for agricultural purposes, and was paying 5s. an acre. He asked £112. I agree that it was given to him willingly because it was about the cheapest piece of land we could get in Glasgow, and £112 per acre was regarded as cheap.
May I remind hon. Gentlemen opposite that when we were trying to acquire that dreadful, sore spot in the centre of Glasgow from Frederick Street to High Street, which included Rotten Row, Dean Street and Balmano Brae, we remitted it to the arbiter. After waiting for months we were told by the arbiter that the area would cost us £14,000 an acre. Have we not reached a stage when these huge, fantastic sums for compensation should make us seek a better solution? Where could we look better than to the places where we are redeveloping on a large scale?
I would remind the hon. Lady that she did not object to paying £112 per acre to the representative of the Duke of Montrose because she knew that the money was required to pay to the Chancellor of the Exchequer.
§ Sir W. Darling
We must get these facts correct. The hon. Lady has suggested that the Duke was paying Surtax. Was not the money a capital payment? There is no question of Income Tax or Surtax in that case.
§ Mrs. Mann
That makes me think that next year I will propose the hon. Member for Edinburgh, South (Sir W. Darling) as president.
The Commission was set up, and years were spent in discussion. Conferences were held in the country. Ultimately it was agreed that the problems were inseparable. "Twin problems" we called them. Indeed, we used to call them the "com" and "bet" twins, meaning compensation and betterment. That was when we got the recommendation for a betterment charge by the Uthwatt Committee.
Today the betterment charge is being scrapped, and that is completely selling planning down the river. We are told that for down value payments the Chancellor will compensate a local authority if it has to compensate, say, the owner of a factory whose change of development is downward. He will increase the compensation to the local authority from 20 per cent, to 50 per cent. Even so, it may still prevent the local authority from urging that the factory shall close down. If it does, and if it goes say from the middle of Glasgow to Glasgow new town in Cumbernauld, that land should have a betterment value.
Curious anomalies will arise from this Bill. The absence of any provision for collecting part of the betterment must, in the long run, limit the funds available for compensation to those who lose. The result is that much less money will be available for real planning. I thought it ludicrous to hear the Joint Undersecretary of State say that the Government were prepared to find £2 million for compensation. That is utterly inadequate, and even if we found £2 million we ought 1279 to be prepared to find an equivalent £2 million for betterment. What do we do, for instance, with the old-age pensioners? Why should I drag them into this? The Chancellor said that they were just part of a big insurance fund, and as the insurance scheme had to be reviewed this year he was postponing any payment to the old-age pensioners until the review took place, and any increase to them might be wrapped up with an additional contributory payment into the scheme by the workers.
When we deal with the land, we should say, "Here are landowners. Some are gaining and some are losing." It is a question of the value of the land. It should be a simple proposition to assess whether land is increasing in value or is losing. In the Uthwatt Report, with reference to floating value, we see what the Joint Under-Secretary has failed to see. It is obvious in the Minister's reply to my hon. Friend the Member for Central Ayrshire (Mr. Manuel) that he did not see the point which was aptly illustrated in the Uthwatt Report in regard to floating values. As the community develops outwards, the further areas on the perimeter increase in value. That is where some of the increased betterment can be found.
We have before us in this Bill what we have had in other Bills, the Treasury taking over liability. It will protect the landowner from having to pay betterment fees, just as in the Rent Bill the local authorities have to take over the slums after the landlords, the owners of the slums, have lifted rent from them for perhaps 100 years. In the Bill, instead of our collecting betterment from those whose land is improving, the Treasury is to take over liability for compensation. Who is the Treasury? It is all of us. The electors, the ratepayers, will have to finance it, and he whose land increases in value will get away with the spoil.
§ 6.0 p.m.
§ Mr. A. Woodburn (Clackmannan and East Stirlingshire)
Because the Government have introduced a tremendous amount of legislation this Session, a great many important Measures are being crowded through the House. There is really not sufficient time for people either to digest the Measures or to discuss them properly. They are nearly 1280 all Measures of a destructive character. Their aim is to destroy something which the Labour Government did and to break down improvements for the community. The Government hope to rush them through before a General Election puts a stop to their destructive progress. We are suffering from a kind of rake's progress.
This Bill comes into that category. I agree that it is a machinery Bill, but it is associated with the destruction of a reform, which in various forms, has been introduced time and time again, to try to secure for the public something belonging to the public. On every occasion when some machinery has been devised to do that and a Tory Government have come back, they have automatically revoked and destroyed it.
I was interested to look back to the 1909 Budget in which Mr. Lloyd George tried to introduce this. There are people here who can remember the campaign that ran through the country when, by an increment tax, he tried to secure for the community some of this betterment value. He quoted the parish of Plumstead, of which I hope some hon. Gentleman opposite may be appointed to the custodianship, because I think that is one of the places where one can get some of the plums that take one outside the House.
§ Mr. Woodburn
Northstead, is it? I am quite willing that it should be Plum-stead.
In any case agricultural land there was worth £3 an acre. Mr. Lloyd George said that in 1845 250 acres costing £750 had a capital value of £15,000. When Woolwich Arsenal came into being, 5,000 houses had to be built and the income from the land was £14,250— almost 100 per cent, of the capital value. It had then already earned £1 million in ground rent. After 20 years the land and houses reverted to the landowner— land worth £15,000 at the beginning was worth £2 million.
§ Mr. W. G. Bennett
Would the right hon. Gentleman tell the House what we would pay for that under the Bill?
§ Mr. Woodburn
I would not like to frighten the hon. Gentleman by mentioning a figure, but he would be lucky to get for £20 million ground that was then worth £2 million.
No, it is all built up, of course.
Mr. Lloyd George's proposal was an attempt to recover about 20 per cent, of increment which the landlord had made no effort at all to earn. Mr. Lloyd George hoped to get 20 per cent, of that for the nation. He then laid down the principle that governs the minds of all my hon. Friends today; it should be the increment on the value accruing to land from the enterprise of the community. We have no desire to deprive a man of the fruits of his own efforts, but he should not be able to appropriate the value accruing from the labours of the community. It has been assumed that all the value accrues from the community; the value may accrue from private enterprise but have nothing to do with the landowner at all. The building of a factory may increase the value of ground adjoining. We are talking about the general principle that a person shall not reap where he has not sown.
Our first complaint refers not to the Bill's sins of commission but to those of omission. In other words, it is the landlord's charter. It enables him to win both ways. If his land is bought compulsorily, he is paid by the community compensation in the form of development value to the standard laid down in the 1947 Act. If the land is not acquired compulsorily, and he goes into the free market, he sells at full value and pockets 100 per cent, of the increment. In other words, where there is paying to be done, it is the community that pays; where there is reaping, it is the landlord who reaps.
The development charge has been abolished, and of course it is to that principle that we really object. This Bill does not include any measures to deal with that problem. The development charge, which was instituted by the 1947 Act, though theoretically absolutely defensible and just, in practice came up against two fundamental objections. It was never understood and was never regarded by the public as just.
The people who were having to pay it did not regard it as a just tax. They felt that it was an imposition. That was because the people selling the land did not sell it at existing-use value but added 1282 the development charge before the Central Land Board came along. In most cases the person who bought the land not only paid the existing-use value but the market value. Then the Central Land Board came and he had to pay the development value all over again.
That aroused considerable resentment, because it looked like senseless taxation; it made the buyer pay twice for the same thing, and I quite agree was a deterrent to many developments. People had no inducement to sell their land at all. Because people were to get nothing from it there was difficulty at times in persuading them to allow the land to be developed. When I was administering this law, I always felt that a great deal of the disadvantage would have been avoided if the seller had paid the tax, and once he had got the money for the land the development value would have been a deduction from his price and not an addition to the cost to the purchaser.
What we object to most is that the Bill is once more handing back to the landlords the power to collect increments which they have done nothing to create. On that ground we shall certainly register our protest in the House itself. There will be some compensation, of course, for those people who paid development value twice. I should like the Lord Advocate to tell us whether that repayment of development charge which is to be made to those who paid more than the existing-use value will apply even in the case of some local authorities and hospital boards which may not have purchased the land compulsorily.
When they bought they may have paid not only the existing-use value but the development value. I know that, according to the law, none of them should have done that. They were not supposed to buy land at that price, but they came across great difficulty, and I am sure that some of them did that. For example, although hospital boards could have acquired certain houses and land compulsorily, they often felt that the transaction appeared so unfair to the community that, wanting to foster the good will of the community, they refused to purchase compulsorily. I am sure that in some cases they eventually paid more than the existing-use value. Will these hospital boards, local authorities and public bodies receive their part of the development value.
1283 In the future, local authorities will face another problem of a similar character. There will be a gradually widening gap between the existing-use value as it is now and the changing value of money in the free market for land. I understand that Sir Malcolm Trustram Eve said that he could imagine two identical pieces of land next to each other, the value of each of which might differ by as much as £50 to £250, depending on whether the local authority buys compulsorily or whether the land is sold in the free market. That will cause great irritation in the community, and local authorities do not want to be unpopular by doing things which appear to be unfair.
I question whether this part of the Bill is going to work. Will local authorities be able to work this Bill if it puts them in a position of appearing to be unjust as between one member of the community and another? How can we force them to acquire compulsorily if they feel that they are being unjust to a citizen in so doing? It is not really an injustice, but it appears to be so, because the Government have set the other land free to go to the highest bidder. We say that by instituting this free market for land they are destroying the possibility of the part of the Bill relating to the other land working as well.
The English County Councils Association has said so. It has drawn attention tothe invidious position of having to choose between perpetuating a manifest injustice to an individual or carrying out, regardless of the consequences for that individual, their undoubted right to acquire land which is needed in the public interest.Local authorities will not want to acquire land when the procedure appears to be mean and arbitrary.
Under the 1947 Act all land could pass at existing-use value, and although the Act broke down to some extent because of the misunderstanding about it, my information is that in recent times the people began to understand it and the Act was working remarkably well up till last year. The balance between development value and betterment was working out quite reasonably. The Government have divorced the betterment value from the development charge. In other words, the Government have thrown away the automatic income that went to pay for 1284 the development, and it means that the development now is going to be paid for out of State funds.
At first sight, that seems very generous, but when the Government start to pay money out, as we all know, they look at it very carefully; and when a local authority is going to do any development for which the Government are going to pay, it would appear that the local authority will have a very definite brake put upon its improvements and developments. If the Government are going to examine every penny that is paid by local authorities for development, as I understand it, the local authority will have to look very carefully into how it is going to develop.
That may be right, but how often will the Government say, "You cannot develop because we are not going to pay the money"? I should like to know what guarantee there is on the planning side, which the Government say is not going to be interfered with, that there will not be any stinginess on the part of the Government which will put a throttle on development altogether. We think it is a great mistake to throw away the automatic income which existed when the development charge was in operation.
We condemn this Bill because it has made no attempt to put anything in its place. If the development charge was wrong, it could have been put right, but just to surrender the whole of the development value to the landlord with-out any check whatsoever seems to us preposterous and another gift to a section of the people who back the party opposite. To set land free to be sold to speculators and bidders is an entire surrender of their duty to look after the public interest.
This Bill ought to include some method of recovering the betterment for the community, or at least some part of it. It is said that if 100 per cent, of the betterment is asked for, a deterrent will be imposed upon development. There is a joke about that, because while 100 per cent, of the betterment was required, it all depended on what was the estimate of the betterment. If the Central Land Board estimated the betterment at only 50 per cent, of what it ought to have been, the charge was 100 per cent, of 50 per cent., and the landlord still retained some benefit even then. The Central Land 1285 Board exercised a great deal of common sense in that respect.
Regulations were introduced to lay down this definite principle that the figure should be 100 per cent, of the betterment value, and that was a firm declaration. But who settled what the betterment value was? That was obviously a pure guess by the Central Land Board, which had to use its good sense to see that it was fair to all parties. Sometimes it would be 100 per cent, of 80 per cent., and sometimes it would be 100 per cent, of 50 per cent. It simply meant that there was a discretion on the part of the Central Land Board to do what was right both by the person buying the land and the person selling the land. That could have worked perfectly well, and if it had begun to be understood, justice would have been done to everyone.
We feel strongly that the Government have made no attempt to tackle this problem. They have certainly said to their friends the landlords, "Here boys, take it. We are back again. Lloyd George has been thrown over. Everybody who has tried to deal with this problem has been thrown over." We have led the armies up the hill. When the Tories came in they led the armies down again. The landlords are back where they were before 1909. This Bill has thrown away the automatic income that should have arisen. The Bill has surrendered to the landlords the field of general betterment, although we are told that the Government have to some extent protected the local authorities.
I am not quite sure about Clause 42. It is quite true that paragraph (a) deals with houses acquired by local authorities to execute work to render them fit for human habitation. That does not necessarily mean that a house which is going to be taken over to be rendered fit for human habitation will be of no value. The Secretary of State for Scotland, on the Housing Bill, stated that houses which were of no value would be pulled down. It was those houses which had to be occupied and for which presumably rents had to be paid, that were going to be involved in repair and reconstruction. Is the land valuer going to value these houses at nil? That is what we are not satisfied about.
We are not certain that the price to be paid under this Bill might not be more 1286 than the cleared-site value by the time houses are put up. The cost of demolition may not be deducted; the cost of the old slums may be added. Also involved in the matter is compulsory purchase in clearance areas. Is compulsory purchase in a clearance area automatically to be deemed to be of no value? We should like the Lord Advocate to clear up these questions.
The Bill makes it easier for developers to develop, because they do not have to go through so many formalities, but it also makes it easier for landlords to hold developers up to ransom. That is why we object to that part of the Bill. No attempt has been made to assist local authorities to recover development expenditure by allowing them to buy adjoining land which is likely to attract betterment. When a local authority develops an estate or an area the land nearby automatically begins to attract betterment, and if a local authority creates a vast amount of development value it should be able to buy sufficient of the land to recover the betterment value, by feuing, leasing or letting, as time goes on. That is one of the means whereby some of the evils of the Bill might have been avoided.
What guarantee does the Bill offer that good agricultural land will not be sold to the highest bidder? It is quite true that the Secretary of State has planning authority, but he will be placed in a dilemma if someone offers a farmer a huge sum of money for agricultural land, say, in Musselburgh, which is probably the finest land in Britain. When I was Secretary of State I had to prohibit any development there because of the value of the land.
§ Mr. Woodburn
The hon. Member is quite wrong. Mining development was going to take place in East Lothian and rob practically the whole of that area of its best land, and it was going to encroach on Musselburgh. When that problem arises again, and a great financial interest is prepared to put down a tremendous amount of money or offer a great bribe to a farmer, he may be prepared even to go out of business and sacrifice the land. What will be the position of the Secretary of State in that case? What 1287 protection does the Bill offer against the bargaining away of our best agricultural land?
This is a complex Bill. None of my hon. Friends nor I pretend to be able to deal with it in the short time at our disposal today. After we register our vote against it, a further Bill is to be dealt with tonight. Seldom can a more complex piece of machinery have been put before the House. As my hon. Friends have pointed out, it has been introduced in the midst of a great deal of other work, which makes it almost impossible for the Opposition, or even hon. Members on the Government side, to examine it properly. We expect the Lord Advocate, with his usual clarity, to explain all its Clauses and their various implications as he goes along.
§ Mr. Woodburn
But even then we regard it as being an undue burden upon him at this time in the Session. There is no great hurry for the Bill. The Government should leave it for another six months, to allow local authorities to examine it, give the House time to digest it, and the lawyers time to understand it. I have talked to some eminent legal authorities about it, and not one has said that he understands it. The same thing has been said by my hon. Friends; it has been said in another place, and the Attorney-General has practically admitted his inability to understand its English equivalent.
I should not be surprised to hear the Lord Advocate make a similar confession, although he may be quite unique and say that he does understand it. That will be extremely interesting. In that case we hope that he will be able to convince us that he does. It will be even more miraculous if he helps us to understand it. I call upon him now to say that he is the unique person who understands the Bill, and will explain it to us, outlining all its repercussions. If he can do so we may reconsider our position, but unless he gives us some explanation of the way in which betterment is to be acquired for the community and local authorities are to be protected, we shall register our vote against the Bill.
§ 6.26 p.m.
§ The Lord Advocate (Mr. J. L. Clyde)
I do not propose to put forward the view —which would admittedly be quite unique—that this is a simple and easily intelligible Bill, which the meanest intelligence could grasp. I am quite prepared to admit that it is complicated and intricate, but the reason is that the subject matter with which it deals is both intricate and complicated. I shall develop that point a little later on.
Notwithstanding its admitted difficulties, the House has heard a series of able speeches indicating a quite definite appreciation of the main structure of the Bill. It is all very well for a right hon. Member speaking at the Dispatch Box, or an hon. Member in some other part of the House, to grumble at the intricacy and complication of the Bill, but the gilt is taken off the gingerbread a little when he follows up that complaint by a clear indication that he appreciates what it is about.
That comment has occurred to me more than once as I have listened to speeches from hon. Members on both sides of the House. The amount of lucidity expressed in the speeches which have already been made makes me all the more doubtful about my ability adequately to wind up the debate. I shall do what I can to deal with the various points that have been raised, many of which may well have to be considered again in Committee. I am dealing with them today in the hope that I may be able to clear away some of the difficulties, thereby reducing the discussion that will necessarily have to take place on the next stage.
The main complaint, which was made by the hon. and learned Member for Paisley (Mr. D. Johnston), repeated by the right hon. Member for East Stirlingshire (Mr. Woodburn), and also reflected in the speech of the hon. Member for Coatbridge and Airdrie (Mrs. Mann) was that the Bill was destructive. The right hon. Member for East Stirlingshire actually used that word. The hon. and learned Member for Paisley said that it took us back to the 1932 position, and the hon. Member for Coatbridge and Airdrie said that it "sold planning down the river," whatever that attractive-sounding phrase may mean. I want to deal with that criticism at once, because 1289 it is based upon a failure to appreciate what the Bill seeks to do.
The Bill does not alter or modify planning; its purpose lies in a much narrower sphere. It seeks to complete the solution of the problem created by the breakdown of the development charge provisions in the Town and Country Planning Act, 1947.
The right hon. Gentleman the Member for East Stirlingshire agreed that the provisions of the 1947 Act in regard to development charge constituted a deterrent to development. What we have tried to do is first of all to enable the planning authorities to go on carrying out planning and development without fear of undue cost; and at the same time, now that the development charge has been abolished, as it recently was, to wind up its consequences as fairly as possible. So the purpose and ambit of the Bill is primarily a financial one. It is not concerned with planning in itself. It does not sell planning down the river, because it does not deal with planning. It does not destroy the provisions for planning, because it leaves the whole of the planning provisions set out in the 1947 Act still intact.
The difficulty we have had to face in regard to development charge and the difficulty the Bill seeks to solve is this. Development value under the 1947 Act was taken out of land in Scotland and transferred to the State. That is one of the consequences of the 1947 Act. The State, under that Act, substituted for that value which was taken out of land a right on the part of the people who owned that land to a share in the £300 million fund and left that right as a personal right. That is the situation with which we are faced, and it is that situation with which we have endeavoured to cope.
I merely want to stress what Was said much more clearly and ably by my right hon. and gallant Friend the Joint Undersecretary of State, who moved the Second Reading. The broad effect of the Bill is as follows. Where compensation was due out of that £300 million fund before the commencement of the Act which the Bill will ultimately become, then under the Bill we shall pay the claimant the actual loss he suffered up to the amount of his claim, and thereafter all other claims will pass with the land and will cease to be personal claims. In 1290 cases arising after the commencement of the operation of the Bill, the unexhausted balance of the claim not paid out for any particular piece of land will be available to compensate the person who owns the land for the time being when development of the land is actually prevented by a local authority. That claim for compensation will arise only when the development is actually prevented.