HC Deb 19 October 1954 vol 531 cc1082-4
Commander Galbraith

I beg to move, in page 45, line 14, at the end, to insert: and paragraph 1 of the Fourth Schedule to the principal Act shall have effect subject to a proviso that the value of any interest, as calculated for the purpose of assessing compensation payable under section twenty of that Act, may be a minus quantity. The 1947 Act used the code of the 1919 Acquisition of Land Act for valuing compensation due on revocation of planning permission. That compensation is the difference between the value of the land with planning permission and the value of the land without planning permission. If the land were burdened with a feu-duty it generally would have a minus value on revocation of planning permission. Let us suppose that we have a piece of land the agricultural value of which was £50. The value with planning permission I assume to be £200. If that planning permission were withdrawn there obviously would be a loss of £150, for which compensation should be paid.

The fact that the land has been feued should really make no difference to that, but if the land were feued, say at £10, the capitalised value of the feu-duty would be £200. Since £200 is the value of the land with planning permission, then that minus the capitalised value of the feu-duty is, of course, nil. If one considers the agricultural value, one has an agricultural value of £50 minus the capitalised value of the feu-duty of £200, which means minus £150. The 1919 Act code would oblige the valuer to regard both values as nil or nominal and therefore no compensation would be payable.

If, however, minus values were taken into account the arithmetic would work out on the following lines. It would be £200 minus £200, giving nil as before, minus minus £150 and since two minuses make a plus the true depreciation is £150, as I pointed out in the beginning when I said that the value of the land for agricultural purposes was £50, that with planning permission it was £200 and that if planning permission was withdrawn there was a loss of £150. We are departing from the 1919 code so that the minus values can be brought into account where loss has been suffered and compensation is due to be paid. The Amendment ensures that minus values are brought into account.

6.0 p.m.

Mr. D. Johnston

I hope that the Members of the Committee understood the argument, which I am sure was ably presented by the Joint Under-Secretary. I confess that I am completely fogged. I thought I had understood the Amendment, but it is clear from the explanations which have been given that I have not.

May I put this to the right hon. and gallant Gentleman? Used agricultural land has an existing use value of £50 and the land, with a development permission, has an existing use value of £200. The land has a feu-duty charge on it of £10 which will capitalise in 20 years at £200. On the hypothesis of the feu-duty the land is split into two. One owner is the owner of the dominium utile and the other is the superior. What claim has the owner of the dominium utile and what is the value of the claim under this Amendment? Secondly, what is the value of the claim of the owner of the superiority under this Amendment? I confess that I knew the answers to these questions before I heard the explanation, but I am quite confused as a result of it. It appears that the answers that I had arrived at are quite wrong if the explanation was right, which I doubt.

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

Mr. D. Johnston

When the Amendment was before the Committee, I asked what I thought were perfectly reasonable questions. I think it is a matter of considerable importance that we should get an explanation. I should have thought the questions I asked were capable of simple explanation. From the hurry that has gone on behind the right hon. and gallant Gentleman to the Box and back again I gather that the answer has now been provided by the Box. Perhaps the right hon. and gallant Gentleman could read it?

Commander Galbraith

I thank the hon. and learned Member for Paisley (Mr. Johnston) for his courtesy. I do not know whether he is aware that there is a later Amendment which may very well affect the situation; no doubt he is aware of that and no doubt that is why he asked the question. The answer is quite obvious. The owner of the dominium utile loses his £150. That is the first gentleman I was asked about, although I am not very good at Latin. The answer is £150 and, under Clause 68, that sum might well be diverted to a superior.

Question put, and agreed to.

Clause, as amended, ordered to stand part of the Bill.