HC Deb 22 November 1954 vol 533 cc976-86

Lords Amendment: In page 43, line 24, at end insert new Clause "A": (1) If, in the case of a compulsory acquisition to which this Part of this Act applies, the appropriate authority is satisfied that the relevant land or some part thereof does not constitute or form part of the claim area of any established claim, but that a claim or claims in respect of one or more interests in that land, or, as the case may be, in that part thereof, would have been established if made, there shall be issued by or on behalf of the Treasury a certificate specifying—

  1. (a) whether or not, in the opinion of the person signing the certificate, section thirty-three of this Act would have applied to the compulsory acquisition if the claim or claims aforesaid had been established; and
  2. (b) if so, what in that person's opinion, after giving the person entitled to the relevant interest an opportunity to present his case, would have been the amount of the additional compensation calculated by reference to the unexpended balance of established development value of that land or that part thereof which would have been payable under that section in respect of the acquisition of the relevant interest.
(2) Where an amount has been specified as aforesaid, that amount shall be added to the compensation payable in respect of the acquisition of the relevant interest apart from the provisions of this section: Provided that if, after taking into account all the circumstances the appropriate authority is of opinion that it is not just and reasonable that the whole of that amount should be so added or, as the case may be, that any amount should be so added, the said authority may direct that such lesser amount as he may specify shall be so added or, as the case may be, that no addition to the compensation aforesaid shall be made. (3) In this section, the expression "the appropriate authority" means—
  1. (a) where the compulsory acquisition of the relevant interest by the acquiring authority requires authorisation by a single other authority, that other authority; or
  2. (b) where the acquiring authority is a government department and the compulsory acquisition does not require the authorisation of any other authority, the acquiring authority; or
  3. (c) in any other case, the Treasury or such other authority as the Treasury may in any case or class of cases direct.

Commander Galbraith

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

The purpose of the new Clause is to implement the undertaking given on Report to enable acquiring authorities to make additional payments for development value which existed in 1947, but was not the subject of a claim on the £300 million fund. The Clause requires that the appropriate authority, which, in accordance with subsection (3, a), will generally be the Minister confirming the compulsory purchase order, shall be satisfied that a claim would have been established, if made.

If the appropriate authority is so satisfied, a certificate is to be issued on behalf of the Treasury stating whether Clause 33 of the Bill would have applied and specifying the amount of the unexpended balance which would have been payable. Under subsection (1, b) the person acting on behalf of the Treasury, who, as the House knows, will normally be the district valuer, is, before issuing the certificate, to give the owner of the interest being acquired an opportunity of presenting his case.

Subsection (2) provides for additional payment by the acquiring authority up to the amount specified in the certificate. It lays down that payment of the specified amount is to be made unless the appropriate authority thinks it is just and reasonable not to do so. It puts the onus heavily on the appropriate authority of justifying a refusal to pay.

In the Government's view it is necessary that the confirming Minister shall have a final if limited discretion, as the Clause provides, on the point whether a payment should be made and of what amount, within the maximum. If the Clause conferred an absolute right to a payment there would be no means of avoiding payment in cases in which it would plainly be inappropriate.

Mr. D. Johnston

We all know the circumstances in England which gave rise to the Amendments which have been made in the English Bill. This is a parallel provision in the Scottish Bill. I hope I shall not be thought unsympathetic if I repeat the old tag that hard cases make bad law. We are introducing an exception to the general principle laid down, to which the previous Government and the present Government have rigidly adhered, that a time limit should be set for claims. Not only in this case but in many others a time limit is provided for claims. Indeed, it is part of our common law.

Here a departure has been made and is open to certain objections. The first objection is that the House is being asked to vote public money of an unknown and unknowable amount to be issued and paid entirely at the discretion of the Minister. That is contrary to the whole practice of the House. Our purpose is to control the spending of public money and, if we think proper, to refuse to make payment of it.

The second objection is that no legal right is given to the person who has failed to make a claim and to whom the door is now apparently open. I say "apparently," because it may be slammed at any time by one of the numerous persons who have to be satisfied before a claim is paid.

Look at the procedure. The appropriate authority, which, in most cases, means the Minister, has to be satisfied that there is no established claim, in many cases a matter of some difficulty. He has to be satisfied that a good claim could have been made. In nine cases out of ten that will be a question partly of fact and partly of law, and is a difficult decision for any Minister. Having overcome that initial difficulty, the tenant is handed over to the Treasury, which has to be satisfied that Clause 33 would have applied. It is a pure question of law; why is it sent to the Treasury, which has not been given or been in a position to give a certificate that Clause 33 applies. The Treasury has to determine what, in its opinion, is the amount of compensation that ought to be paid.

We are told that within this Clause "the Treasury" will mean the district valuer; why should the words "district valuer" not be inserted rather than "the Treasury"? These provisions suggest that the Treasury is to be judge in its own cause; it is to be both judge and defendant. We fear that in this matter the Treasury is not being as generous as it might or is paying the appropriate amount.

Having got past the appropriate authority and the Treasury, the applicant must approach the appropriate authority again, in most cases the Minister, who is instructed by the Bill to consider all the circumstances. What is meant by "all the circumstances"? Is it a relevant circumstance that the claimant never used the 1947 Act, or that he knew that he had no claim?

12.45 a.m.

Is it relevant circumstance that he was advised that he had no claim, or that he was simply negligent in making a claim? We want to understand what is meant by "relevant circumstances." Is it relevant for the Minister to consider whether or not legal advice was offered to the possible claimant? Is it relevant to consider the quality of that legal advice? Is it relevant to consider if he was wrongly advised that he had no claim and now has a claim? We do want information on these points.

Having got through that net the claimant has then to persuade the Minister to decide whether or not the claim is just and reasonable in all the circumstances. I suggest that that is leaving wide and difficult discretion to the Minister. What will happen is that the Minister will be inundated with applications by persons who omitted to make claims because they thought they had none, or had been advised that they had none. If the Minister refuses the claim as unjust and unreasonable the claimant will go to his Member of Parliament, by whom pressure will be brought on the Minister asking for the claim to be reconsidered.

The result of that will depend on the strength and character of the Minister, who has nothing in the Clause to guide him on what circumstances should lead him to admit a claim and what circumstances should lead him to deny a claim. In the payment of public money that is most objectionable. This may go on for many years, because there is no limitation on the time in which just and equitable claims can be put forward. It may be put forward next year, but it may be 25 years' hence. If there is to be a departure from the principle of finality of claim, and I see reasons for it, it is unfortunate that the time limit was not wiped out and the whole question of claims reopened, and the non-claimant have the same right as the claimant who has now got an established claim.

Mr. Thornton-Kemsley

The hon. and learned Gentleman the Member for Paisley (Mr. Johnston) has, naturally, taken exception to the general principle of reopening claims. One doubts very much whether he or his party would want to press it to the point of opposing this Amendment because of the hard cases which have arisen, particularly the tragic case which arose south of the Border which has led to the Amendments being inserted in another place. We asked in Committee that claims should be reopened. It is unfortunate that we were not granted that at that time, because if we had been much injustice and hardship would have been avoided.

I agree that the discretion which rests with the Minister is not altogether desirable, but I think I can see a reason for it, and I would like to hear from my right hon. and gallant Friend why it is wanted. Is it to deal with the cases of individuals who have bought land at existing use values and who ought not to receive more than existing use value in exchange? Or is there more to it than that? That is a question which I hope my right hon. and gallant Friend will answer in replying to the questions by the hon. and learned Member for Paisley (Mr. D. Johnston) about the Ministerial discretion.

The hon. and learned Member complained that the claimant, the person adversely affected, has no legal right to the payment. That is true. What I complain about is that he has no appeal. He has no right to go to anyone and say, "Why am I to be excluded? Why is this Ministerial discretion to be exercised against me? Why can I get nothing? "Is there to be some kind of means test, or is it to be done purely on the narrow question of a man who is paid existing use value? These are the things about which one wants to know. And may we know also why no appeal is allowed in cases of this kind?

Mr. Lawson

When the English Bill was going through Committee, the Minister in charge dealt with precisely this point. He was under strong pressure to open up claims of this character, but resisted it. One of the points he made was that a tremendous effort had been made to make known to everybody concerned exactly what the position was, and we were entitled to assume that he meant that there was no justification at that late stage for anyone who had omitted to establish a claim.

The Minister in charge of the English Bill raised even more serious objections. He argued that to adopt such a proposal, or to reopen claims in that fashion, would make the whole business unworkable. He spoke of the immense difficulties of finding, as the years went on, what would have been the development value in 1947 and 1948, and he ended by telling the Committee that this would mean valuations as we went along. He said that that would destroy the whole basis of the Bill.

I have to agree with the right hon. Gentleman that in admitting that claim and in introducing the Amendment, there is an admission that the Bill eventually will be quite unworkable. Simply because of the Pilgrim case, an injustice has come to light, but as the years pass injustices of a similar kind, arising in many different ways, will come to light. Public authorities will find it impossible not to give in again to public clamour on those injustices or feelings that injustices have been caused.

Take, for example, the two-tier price system which has been brought into existence. It will not matter very much whether the price that a man paid for a piece of land was arrived at in this way or not. Remember what is happening; that the private owner of land is to be permitted to sell his land at the highest price he can get for it. He is permitted to sell it at market value, and we know how elastic market value is. Where a private sale is concerned, the question of compulsory purchase conditions does not apply. A man selling land on a private market basis can get as much as he can for it, and if he is a good business man he can get a very high price indeed.

A person who buys land that may have an established claim attached to it, buys it at a price greatly in excess of the existing use value plus the established claim or the balance of the established claim, yet he may be compelled to sell it compulsorily. Again, under the law as it is drawn up here, the price he would be paid and the price which should be paid legally could be very much less than the price he paid for his land. We would have the same outcry as we have in this particular case.

What is actually happening is that this is the first admission that this two-price system cannot be maintained, and that the position which the hon. Member for North Angus and Mearns (Mr. Thornton-Kemsley) described is the position towards which we find ourselves moving where, in fact, the public authorities are compelled to pay not this restricted price but the market price and nothing but the market price.

While I recognise that my right hon. Friend does not intend to divide the House on this, I should like to add that I would willingly see it divided because I feel that this in itself is a glaring admission of the absurdity of this particular Bill, and I should like to see it demonstrated in that sense.

Mr. Ross

I think we should have some more lucid explanation of how this particular new Clause will work. The Government are going out of their way to try to cover hard cases, but we have only heard of one hard case and that was in England. [Interruption.] I do not know whether this Bill refers to Northern Ireland, but perhaps that is the reason for the private conversation that is going on at the end of the Chamber.

In Scotland, we have no evidence at all of any such cases, and when the hon. Member for North Angus and Mearns (Mr. Thornton-Kemsley) raised this particular point at one of the first sittings of the Committee, he got a dusty answer from the right hon. and gallant Gentleman. We want to get a reason for the change of mind, and we want to be assured that the thing is really practicable.

As I see it is, first of all the person who is making the claim that he forgot for some reason or another has got to satisfy the appropriate authority. Thereafter, someone appointed by the Treasury has to give two opinions, an opinion on the compensation Clause of this Bill and then an opinion on what the amount would be. That is bad enough and sufficiently complicated and will no doubt lead to all sorts of difficulties, disagreements and objections, which are not met in any way by any part of the Bill.

But worst of the lot comes this final provision, because in subsection (2)—and this to my mind is an extraordinary piece of legislation—we find this: Provided that if, after taking into account all the circumstances the appropriate authority is of opinion… How is that legal tangle to be unravelled? How are we going to know whether all the circumstances have been taken into consideration, because we must presume that the person whose case is decided is going to get a report of all the circumstances, the opinion that has been formed, and what has led to the conclusion of whether the acceptance of this thing is just and reasonable.

It is asking a lot that we should allow this to go through with this tepid explanation. I would ask the Minister to look again at this, because if we must pass this let us have as decent a piece of legislation as possible. If we are going to bring justice to hard cases, then surely we are entitled to give a form of appeal, otherwise the people who are going to be judged—it is not a case of judgment; it is a case of opinions all along the line—are going to feel very much aggrieved if somebody gives an opinion and then there is no appeal at all when their case is turned down. If the Government asks us to accept this state of affairs, then at least I think the Joint Under-Secretary or the Lord Advocate should give us a more lucid explanation.

1.0 a.m.

Commander Galbraith

I think that the point which the House has to keep in mind is the reason which led to the framing of this Clause; it is, to me, a case of hardship to which reference is being made, and the Amendment is designed to meet specific hardship. The hon. Member for Motherwell (Mr. Lawson) said that this omission meant that the Bill would be unworkable; he said that an injustice had come to light. But the injustice was not created by this Bill; it resulted, as I said earlier tonight, from the operation of the original Act. It is hardship of the type which has become known as the Pilgrim case which we are anxious to avoid.

Two hon. Members have said that there should be a right of appeal, but I would put it to the House that where discretion is to be exercised it is not possible to have a right of appeal. One hon. Member spoke about an imaginary figure having to be discovered, but I submit that we are concerned with a valuation by the district valuer who has to ascertain whether a claim would have lain if notification had been given of a claim. The problem, some hon. Members seem to think, is one of very great difficulty, but I suggest that it is just the sort of difficulty which has come to light in the working of the 1947 Act.

Mr. Lawson

Surely the 1947 Act had only one price system, whereas the new Bill introduces two price systems—the market price and the restricted value price? That is the whole basis of this Bill.

Mr. Thornton-Kemsley

As a valuer I say that where we are dealing with "Part V" claims under the 1947 Act, we are dealing in 1947 values; the values which we knew in 1948 and 1949; but what we are concerned with now is the fastening on the country of a system which, in 1965, 1975, and even in 1995, if the Bill goes on for that long, is not dealing with "Part V" claims, but with property compulsorily acquired, and——

Mr. Deputy-Speaker

The hon. Member seems to be making remarks which could very well form a speech. The hon. Member on the other side of the House was in possession of the Floor.

Mr. Thornton-Kemsley

With very great respect, I am simply pointing out that it has been said that here there is no difference from operations under the 1947 Act and I am saying that there is a great difference by reason of the time factor in relation to which these claims are based.

Commander Galbraith

It may not be so difficult to refer back to the year 1947 as my hon. Friend seems to think. The whole point is to give a certain amount of room where there have been cases, such as the Pilgrim case, of very great hardship. That is the whole object of the Clause.

It was asked what view the Minister would take. Obviously, he would have to consider all the circumstances, because it is hardship which we are trying to cure. That is the object of the exercise. Therefore, he would have to consider whether or not any real hardship had been suffered. It might well be that no claim had been lodged and no hardship had been suffered. Therefore, the Minister must have discretion to apply such tests as are relevant to the case.

Mr. D. Johnston

Could the right hon. and gallant Gentleman tell us what is meant by "hardship"? Is it a hardship if a millionaire has omitted to make a claim? Is it a hardship if a small man has omitted to make a claim? Is it a hardship if the claimant is a millionaire? Is it a hardship if the claimant is a poor man? What makes a hardship?

Commander Galbraith

It is a hardship in the opinion of the "appropriate" authority as defined in subsection (3). That is the guide.

Mr. Woodburn

I must put it to the right hon. and gallant Gentleman that this proposed new Clause is either a bit of window-dressing or it means something. I very much doubt whether it does mean anything, because there are so many "ifs" and "ands" in it, and by the time we get round it all I do not suppose the applicant will be able to get past all the "ifs" and "ands," unless he has got a lot of lawyers to help him.

But perhaps it does mean something. It appears to me that it is founded on a wrong premise, because it is founded on the premise that if somebody has grossly overcharged a buyer for his land, the seller is not to restore the overcharge but the community is going to be asked to do so. In other words, we could have supported this Clause if it was intended to recover stolen property, so to speak, but this is a new idea that when somebody fleeces somebody else the community is to compensate that person.

There has been a sad case, but this sad case is being made the excuse or reason for the introduction of an open door to all sorts of claims, and I doubt whether the Minister can give us the slightest idea of what the cost will be. I ask him if he can tell us what is going to be the cost of this to the community.

Moreover, this is not finished. A number of people, including farmers, have coal seams under their ground which have been proved since the claims were closed for coal seams. If this principle is going to be introduced for this kind of property which we have been discussing, I do not see that the Government have any logical ground for refusing to admit late claims for coal seams and other things which are proved, under farms and other ground. When I speak of coal, let me point out that that was not nationalised by the Labour Government. It was nationalised by a Government before the war.

It seems to me that the Minister has not justified this proposal. I think this is a result of yielding to a lot of pressure which has been exerted in order to use the excuse of a tragedy to burst open the doors and allow claims to fall upon the community in all sorts of guises. I think that the matter is so tied up that it may be quite safe, but, on the other hand, as the Minister says, it is open to discretion. When it is open to discretion, it may be open to wangling, because there are no definite rules attached to the matter at all. It is just a question of what somebody thinks, and what somebody might arrange to think. There might be all sorts of claims coming in which ought not to be admitted.

I am certain that none of the legal or technical advisers advised the Government about this Clause. This is a case of pandering to political agitation and putting into a complicated Bill something which has no justification either in law or in fact, or in ordinary business procedure. I do not think the Minister has made out a case.

As has been pointed out, the logical thing would be for us to register our disagreement with this Clause in the Lobby, but since that has already been done in the case of the English Bill—[HON. MEMBERS: "No."] It was not? [HON. MEMBERS: "No."] It would be the logical thing to do. We think that this is a wangle and that the Government are opening a door which might be very difficult for them to close, not only in this case but in many other cases as well.