HC Deb 22 November 1954 vol 533 cc902-8

Lords Amendment: In page 52, line 4, after "if" insert "(i)."

Mr. Deedes

I beg to move, "That this House doth agree with the Lords in the said Amendment."

This and the next nine Amendments are all inter-related and are in large part drafting, but, as examination of the Clause will show, it is a rather involved bit of drafting. Perhaps I should say a general word about what we are trying to do.

There are three fairly substantial changes made to the Clause. The most important of them is the extension of subsection (1) to enable compensation to be claimed by persons who do not now own an interest in the land but did own an interest at the time of the planning decision or order, and subsequently sold it at a date after 18th November, 1952, keeping the claim on the fund. The existence of the planning restriction will have affected the price obtained, and it is, therefore, only fair that the former owner should be able to claim under the Clause. That is, in fact, effected by the next Amendment.

The second change of some consequence is the introduction of a new subsection, subsection (2), on page 52, line 21, which is to enable a mortgagee who has taken an assignment of the Part VI claim as security to claim any compensation to which the mortgagor would have been entitled had he kept the claim. At present, he is disqualified from claiming by the fact that he does not own an interest in the land.

The third main change is the separation of the provisions governing the assessment of the depreciation caused by a revocation or modification order from those having effect in the case of a previous planning decision. Those are the three main changes effected in the Clause by the Amendment. The rest are drafting, consequent upon those changes.

Mr. Sparks

Can I take it that the hon. Gentleman has now moved a series of Amendments, which includes the Amendment in page 52, line 5, which would insert a new sub-paragraph (ii)? I wanted to direct my remarks to that Amendment in particular.

Mr. Deedes

It was not my intention to move all the Amendments, but to give a general survey of them.

Sir L. Ungoed-Thomas

We have no objection to their being moved together.

Mr. Speaker

They cannot be moved together. They must be moved seriatim, but they can be discussed together as they are inter-related, and they may be put to the House together.

Mr. Sparks

It is now proposed to amend Clause 43 to enable the person who was in possession of the claim holding and who disposed of his land after 18th November, 1952, and before the coming into operation of the Bill, to claim compensation for any planning restriction Which there might have been upon his land at the time that he sold it.

In principle that is unworthy of our consideration, because on 18th November, 1952, the Minister and his hon. Friends restored what they said was a free market in land. Any land sold after 18th November, 1952, could then have been sold—and I am sure was sold—at its full market value. I cannot understand why such an owner should come along so many years afterwards and claim compensation for a planning restriction on a piece of land which he has sold to somebody else in the meantime.

When the Amendment was moved in another place, the case made for it was that when that land was sold very little of the development value contained in the claim would have been realised on sale. It was said: … although he may have realised in the sale only a fraction of the unrestricted value of the land."—[OFFICIAL REPORT, House of Lords, 2nd November, 1954; Vol. 189, c. 1050.] That may be so in a few cases, but in a good many cases the whole of the unrestricted value of the land would have been realised.

The right hon. Gentleman is conceding not just the claim of the person who sold the land at only a fraction of the unrestricted value, but the right of compensation to those who realised the full market value of their land. I cannot see the case for that at all. I should like the right hon. Gentleman to explain what connection the claim holding has with the case with which we are now dealing, because before such an owner can claim compensation he must be himself in possession of the claim holding. There may be those who have sold the claim holding to the new purchaser of the land. He may have bought the land and the claim holding as well, but, at the same time, he would have had to pay a value in excess of its immediate use value. That also would have included planning restriction.

I cannot understand why such a person is not entitled to a claim for planning restrictions whereas the other person who sold the land and retained the claim holding is entitled to claim compensation for past planning restriction. There does not seem to be a fair balance between those cases. If it is right that compensation should be paid for planning restrictions upon a piece of land which existed before 18th November, 1952, I should think it fair that all persons, whether or not they were in possession of a claim holding, should be entitled to that compensation.

Another consideration arises. As long as the claim holding is in existence if at any future time a local authority desires to acquire that piece of land, it does not matter through how many hands the land has passed in the meantime, if there is a claim holding upon it the local authority has to pay that claim holding plus the use value and one-seventh. That being so, the claim holding is realised when a local authority wants to acquire that land. If a local authority does not want to acquire that land the claim holding cannot be realised after 18th November, 1952. I do not see the connection between the possession of a claim holding entitling one to compensation for past planning restrictions and the absence of a claim holding denying the individual that right.

It seems that there is no case whatever for making compensation retrospective in cases where land has been sold on and from the date of the opening of the free market in land on 18th November, 1952. In any case, even if there had been no claim holding on the land, if no established claim had been made on the land, the value of the land to the individual was no more than its value on the basis of planning consent. Therefore, the individual could only realise that land after 18th November, 1952, for the value it was to him previously, irrespective of any established claim.

We are giving a bonus to persons who are not really entitled to receive that bonus—a bonus by way of compensation for planning restrictions on the land which they had already sold, and might well have sold for its full market value, to any other purchaser. The new purchaser buys the land with the planning restriction upon it, but he is not entitled to compensation.

9.30 p.m.

That seems to me to be an entire inconsistency, unless there is something more in the case for these Amendments than appears on the surface. I agree that the purposes of the Bill are so obscure, and its intentions so difficult to understand, that it may well be that my analysis is quite wrong. If so, I should like to be corrected, but it seems to me that this is opening the door very wide. It is not merely confined to the individual who sells his land at a fraction of the unrestricted value, but it includes a whole category of people who sold land after 18th November, 1952, and who received the full market price for it, the vendor retaining the claim holding.

I do not see why such persons should be entitled to further compensation for planning restriction if they sold land at the market price. The right hon. Gentleman proposes to give them the right, not only to the market price of the land, but to more for any planning restriction which may have been on it when the sale took place; and to give a title to the claim holding which can be realised when a local authority might at a later date desire to purchase the land.

Mr. Deedes

By leave of the House, I will do my best to give the assurance for which the hon. Member for Acton (Mr. Sparks) has been seeking, although he will appreciate that this is an exceedingly complex part of the Bill

He referred, first, to the separation of the claim from the land, but that is not the only complication which has arisen. The whole Measure bristles with complications, arising from the fact that claims have become separated from the land and many things have been done to the claims. That is probably the most potent source of complication in this legislation. The real answer to the point raised by the hon. Member is that this is not designed so much to satisfy one individual or another, but it is a matter of principle. The purpose is to remedy the obvious injustice of not paying compensation where restriction has caused loss. That is the basic principle.

We are not doing it merely because neither the present owner of the land can claim nor the seller who does not own the land now. The object is that there should be compensation paid, not as between those two individuals, but where a restriction has caused a loss. The hon. Member realised that there is an extremely important principle which must be upheld.

Mr. Sparks

I cannot see what the claim holding has to do with this claim for compensation for planning restriction.

Mr. Deedes

I made the point to the hon. Gentleman that where the claim and the land have become separated, the claim and the claim holding have become separated. I agree that it is not ideal.

Mr. Speaker

If I understood the Parliamentary Secretary aright, the discussion we have had covers the next 10 Amendments, that is to say, down to the Amendment in page 53, line 13, inclusive of the last.

Mr. Deedes

That is correct.

Mr. Speaker

If the House is agreed, I can put them en bloc.

Subsequent Lords Amendments agreed to: In line 5, leave out from "land" to "interest" in line 7, and insert: or (ii) having been entitled to an interest in any qualified land at the date of the decision or order, he sold that interest (otherwise than to a public authority possessing compulsory purchase powers) in pursuance of a contract made after that date and during the period beginning with the eighteenth day of November, nineteen hundred and fifty-two, and ending immediately before the commencement of this Act, and the value of that interest or of another interest which has merged therein or, in the case of an interest extending to other land, the value of that or of that other". In line 21, at end insert: (2) A person who is entitled to the relevant holding as mortgagee shall be entitled to such compensation as aforesaid, notwithstanding that he does not satisfy the conditions set out in paragraphs (i) and (ii) of the preceding subsection, if the mortgagor would have been entitled to such compensation if he had continued to be the holder of the relevant holding. In line 23, after "land" insert: or of an interest in so far as it subsisted in qualified land". In line 24, leave out "or order."

In line 25, leave out "sections twenty-three and twenty-four" and insert "section twenty-three."

In line 29, leave out from "if" to "and" in line 33, and insert: the reference in subsection (1) of the said section twenty-three to Part II of this Act were a reference to this Part of this Act; In line 35, at end, insert: and in the application of subsection (2) of the said section twenty-three in a case to which paragraph (ii) of subsection (1) of this section applies, no account shall be taken of any grant of, or undertaking to grant, planning permission made or given after the making of the contract of sale. In line 38, leave out first "(6)" and insert "(4)".

In line 41, at end, insert: Provided that, in a case to which paragraph (ii) of subsection (1) of this section applies, for the reference in the said section twenty-two to the Minister's giving notice of his findings in respect of the claim for compensation there shall be substituted a reference to the making of the contract of sale. (4) In determining for the purposes of a claim for compensation under this Part of this Act whether, or to what extent, the value of an interest in land was depreciated by such an order as aforesaid—

  1. (a) regard shall be had to any compensation which has become payable to the person entitled to that interest in respect of that order under section twenty-two of the principal Act otherwise than by virtue of the proviso to subsection (1) of that section;
  2. (b) any grant of, or undertaking to grant, planning permission made or given during the period between the making of the order and the time when the Minister gives notice of his findings in respect of that claim, being a grant or undertaking which is in force at the end of that period, shall be taken into account as if it had been in force at the beginning of that period;
  3. (c) Part VII of the principal Act shall be deemed not to have applied after the date when the order was made:
Provided that, in a case to which paragraph (ii) of subsection (1) of this section applies, no account shall be taken of any grant or undertaking made or given after the making of the contract of sale. (5) Where the interest to which the holder of the relevant holding is entitled or, as the case may be, which he sold, is or was an interest in reversion immediately expectant upon the termination of a tenancy granted after the planning decision or order and on or after the eighteenth day of November, nineteen hundred and fifty-two, the preceding provisions of this section shall have effect as if that tenancy had not been granted.