HC Deb 19 October 1954 vol 531 cc1121-6
The Lord Advocate

I beg to move, in page 22, line 32, to leave out from "an," to the end of line 7, on page 23, and to insert: original unexpended balance of established development value, then, subject to the next following subsection, the land shall be taken to have that balance at any time after the commencement of this Act except in so far as that balance is by virtue of any provision of this Act to be treated as having been reduced or extinguished immediately before that time. (2) Where any land taken as a whole has an original unexpended balance of established development value, but, at any time after the commencement of this Act, an act is done or an event occurs in relation to any area consisting of, or including part only of, that land in consequence of which, by virtue of any provision of this Act, an amount would fall to be deducted from the original unexpended balance of that part of that land for the purpose of determining the unexpended balance thereof at any subsequent time, then, without prejudice to the operation of the preceding subsection with respect to any part of the land taken separately, the land taken as a whole shall be treated as not having any such balance at that subsequent time. (3) Where compensation under this Part of this Act becomes payable in respect of the depreciation of the value of an interest in land by a planning decision, then, for the purpose of determining whether that land or any part thereof has an unexpended balance of established development value at any subsequent time, the amount of the compensation shall be deducted from the original unexpended balance of established development value of that land and the orginal balance of that land or that part thereof shall be treated as having been reduced or extinguished accordingly immediately before that subsequent time.

Mr. Deputy-Speaker

It may be for the convenience of the House if we take, together with this Amendment, the Amendments in page 23, line 11, line 23, and line 36; in page 25, line 11, and in page 30, line 13.

The Lord Advocate

These Amendments arise from a defect in Clauses 19 and 36, which results in an incorrect balance being paid in certain cases. These cases are cases where part of the land being compulsorily acquired has got a different compensation history from other parts of it.

Perhaps the easiest way of focusing the matter is for me to explain what the present position under the Bill as it stands is. Put very briefly, the defect in Clause 19 as it stands is that the Clause does not provide for the scaling down of the unexpended balance applicable to an area as a whole where part only of the land with the balance is affected by the event giving rise to the compensation payment. The result is that in certain circumstances, as the Bill stands, there may be over-payment.

This group of Amendments is designed to overcome that difficulty, and these Amendments will secure that the unexpended balance by reference to which compensation falls to be assessed itself will reflect at any subsequent time any reduction in the balance attached to part only of the area which had the original unexpended balance attached to it.

To achieve that result it is necessary to abandon the concept that land which no longer has a uniform compensation history because acts or events have affected part of it can continue to have an unexpended balance as a whole. We have to give up that concept or modify that concept. The Amendment provides that where for compensation purposes it has been necessary, because of some act or some event, to divide the land into a series of parts for the purpose of determining the unexpended balance attached to it each part is taken to have an unexpended balance at any subsequent time. The original area taken as a whole is to cease to be regarded as having a balance, and it is split among the parts. The total amount payable, if, for example, the original area were to be acquired by a public authority, would thus be directly ascertainable by reference to the aggregate of these individual balances.

We thus avoid the error which would result from the Clauses as they originally stood and achieve a result which I am satisfied the House will consider is an equitable result in relation to the various parties interested in the land as a whole. I agree the matter is technical and largely accounting, and, perhaps, not very clear, but I have done my best to explain the purpose and effect of this group of Amendments.

Mr. Bence

I find this very difficult indeed to understand. While the Lord Advocate was giving his exposition, I was visualising a piece of land of, perhaps, from three to four acres and which is not developed yet. I take it that the valuation is the valuation of the whole piece. Only one part of the land is suitable for economic building. If the piece is parcelled up, am I to understand, from what the right hon. and learned Gentleman has just said, that the valuation of the whole piece would be so treated that the valuation for the part of the land that is uneconomical for building, because, say, so much underpinning would be required, would be added to that of the part of the land that is good for building upon?

If that is so, then I think that it is very unjust. Of this piece of land there are, perhaps, two acres that can be built on out of three acres. There is a value of between £700 and £800 of unexpended balance on the whole area. If a part only of the land is to be developed, is it to be said that the whole £800 can be shifted from the whole of the area to one small part of it, leaving the other part with no unexpended balance at all?

I do not understand the technicalities of these things, but it is not sufficient for me for the Lord Advocate to say that this Amendment will prevent overpayment when a public authority acquires a piece of land, because in this circumstance the securing of a piece of the land and not all of it would still involve the value of the whole area, because its whole value is to be shifted on to the part of the land good for building. That would seem to me to involve overpaying. I should be glad if the Lord Advocate would explain to me exactly what he means when he says that the land is to be divided up. Is the valuation to be a varying valuation on each piece, or will it be equally divided, or will someone decide that the different pieces of the land shall have a different valuation?

The Lord Advocate

I quite agree that this matter is highly technical, but we are not in this group of Amendments or in this group of Clauses considering the allocation of the value of the land where part of it is suitable for, say, a factory and another part, because of drainage or some other reason, is of a little value. We are not concerned with that. What these Amendments are concerned with is the unexpended balance in respect of a certain area of land which owing to its history has not been treated as one unit throughout, but part of it has received certain treatment and part of it has received another treatment in the way of acquisition or something of that kind.

Our purpose is to try to secure that each of the parts gets a fair share of the unexhausted balance and that there is not a payment made to each which together would amount to more than the unexpended balance of the whole. That is the purpose of this Amendment, to avoid that which would be a result of the Clause as it stands. I think the hon. Member can disabuse his mind altogether that it is any question of taking away value from a piece of an area, which is of value, and giving it to a useless area. It is not that at all.

Mr. Willis

I have been trying hard to follow this matter, and, like my hon. Friends, I find it extremely difficult. I wonder whether, when a Minister explains such a case as this to the House, it would be possible for him to give us some example of the type of thing he means. It would assist us in the intense intellectual effort required to understand this legal verbiage. It may be all right so far as it assists the right hon. and learned Gentleman's constituents, whom I have the honour myself to represent, but from the layman's point of view this is extremely difficult.

As I understand the right hon. and learned Gentleman, what he is trying to do is to prevent the exploitation of a local authority by unscrupulous landowners who, through having received different amounts of compensation, or different amounts of development value, in respect of different pieces of a portion of land, may try to manipulate things to get a total larger than they should. Is that what these Amendments set out to do?

8.0 p.m.

Miss Herbison

My hon. Friend the Member for Edinburgh, East (Mr. Willis) has asked for definite information from the Lord Advocate. I thought it might be easier not only for hon. Members on this side of the House but for the one hon. Member on the Government back benches to understand the position if the right hon. and learned Gentleman gave specific examples of what is contained in this Amendment. It seems to me—and I am sorry I have to go back to this again—that time and time again when dealing with this matter for the English and Welsh hon. Members, the then Attorney-General gave specific examples which greatly helped. My hon. Friend in a most courteous way asked for specific examples, and it is just to bad and is treating the House with the greatest discourtesy for the Lord Advocate to remain glued to the Front Bench.

The Lord Advocate

I will endeavour to give an example in the hope that it will make the matter clear. The difficulty of examples is that one has got to state so many facts that it is sometimes much more involved than if one explains what is the effect of the Clause. That is the reason I did not seek to use an example in the present case, but let me give an example of what this group of Amendments is supposed to achieve.

Suppose a piece of land had an unexpended balance of £1,000 spread evenly throughout the area. A quarter of that piece of land is built on, another quarter is sold, and a third quarter is refused planning permission. Each is given £250, and on that footing any deduction is made, for the quarter, from its £250. If that example makes it a little clearer then it is worth giving it, but, as I said, the whole purpose of this Amendment is to avoid any overpayment that there might otherwise be and to secure that the aggregate of the balances for parts of the unit, some of which may have nothing to expend, and which have been treated differently, shall not in future exceed the amount of the unexpended balance for the total area.

Amendment agreed to.

Further Amendments made: In page 23, line 11, leave out from "forty-eight," to end of line 15, and insert: being land which has an original unexpended balance of established development value, then, for the purpose of determining whether that land or any part thereof has an unexpended balance of established development value at any subsequent time. In line 23, leave out from "the," to end of line 26, and insert: original unexpended balance of established development value of that land and the original balance of that land or that part thereof shall be treated as having been reduced or extinguished accordingly immediately before that subsequent time. In line 36, leave out from beginning, to "unexpended," in line 45, and insert: (4) Where an act or event has occurred in relation to any land in consequence of which any of the provisions of this Act requires an amount to be deducted from the original unexpended balance of established development value of that land or any part thereof, there shall be attributed to the various parts of that land so much of that amount as might reasonably be expected to have been attributed thereto if the authority determining the amount had been required to apportion it between those parts in accordance with the same principles as applied to its determination; and where two or more such acts or events have occurred in relation to the same land, those provisions shall apply cumulatively, and the requisite deduction from the original.—[The Lord Advocate.]