HC Deb 11 November 1955 vol 545 cc2195-206

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Oakshott.]

2.32 p.m.

Captain J. A. L. Duncan (South Angus)

On 1st November I asked a Question about compensation in the event of town councils acquiring by compulsory purchase certain lands in connection with the development of their towns. As I did not get an entirely satisfactory answer from the Joint Under-Secretary of State for Scotland, I gave notice that I would raise the matter on the Adjournment. I am grateful for this early opportunity to raise it. I do so in no spirit of hostility to the Scottish Office, the Government or the Joint Under-Secretary of State, but mainly because I think the time has now arrived when it should be raised in its narrower facets, as I intend to raise it, and also in its wider implications.

Perhaps we were at fault last year in missing the point. In his answer, my hon. Friend referred to the Town and Country Planning Act, 1954. Perhaps we should have spotted it when we were discussing that Measure. However, when the Bill was going through Parliament I do not think that more than about three hon. Members in any part of the House understood it in the least. The language was almost incomprehensive. I plead that as an excuse for not having raised the point at that time.

What has brought it urgently to my attention is a communication from my constituency arising out of a public local inquiry under the Town and Country Planning Act before the Arbroath development plan was approved. The main point that I wish to raise can most briefly be stated by reading a letter from a firm of law agents appearing on behalf of certain objectors: In one or two cases there is no reason why the industrial concerns should not be sited elsewhere, from a business point of view, but we find that the existing premises are to be taken over by the town council at a price to be fixed by the district valuer, and that an alternative site … on an industrial estate may be taken over by the industrialists at the current market value.

The letter goes on: We asked the district valuer what the valuation basis would be for both types of transactions, i.e., the acquisition of the present ground by the town council, and the selling price of the industrial estate sites by the town council to our clients. The district valuer has replied as follows: 'The basis of compensation for compulsory acquisition is normally the existing use value plus so much of any unexpended balance of established development value as is appropriate to the interest being acquired.' That sentence may explain somewhat the layman's difficulty in following the 1954 Act. 'Disposals of land by local authorities to private persons are on basis of current market value.' This would appear to be grossly inequitable. Why is it inequitable? As I understand it, the basis for compulsory purchase is the 1947 value, and that was laid down in the 1947 Act. The 1954 Act only gives a certain amount extra where there is an unexpended balance of development value. Of course, that extra value does not apply in every case. The further we get away from 1947 the harder it becomes to assess the development value in terms of the 1947 Act, and whereas under the 1947 Act it was clear because the value was there, since the Pilgrim case and the 1954 Act district valuers now have to state what, in their view, the development value would have been in 1947 had a claim been made. This is getting much more difficult to ascertain fairly as the years go by.

Mr. Speaker

I am listening with interest to the hon. and gallant Gentleman, but it seems to me—I may be wrong; I hope I am—that the remedy for his complaint involves legislation. If that is the case, then it is, of course, out of order on the Adjournment to pursue the topic.

Captain Duncan

I am sorry, Mr. Speaker. Perhaps I should have explained that the object of my raising the matter is to disclose the failings in the present law, but to accept the Joint Under-Secretary's statement in answer to me last week that the time was not yet ripe for legislation. What I am leading up to is that there should be an inquiry now, that a committee should be set up to watch the matter in case legislation is required later on. That was in my supplementary question on 1st November. Therefore, I hope I may be allowed to develop my case on those lines.

The difficulties facing valuers are, consequently, getting more difficult as time goes on. Apart altogether from shifts in value which could have been foreseen at the time, there has been a steady rise in land values. It is partly due to the general prosperity of the country, the smaller amount of land available in our steadily developing economy and also to inflation. The real value of land has tended to increase, but the monetary value has got further and further away.

The effect of this on town councils may be two-fold. In this increasing disparity between the purchase value and the current market value a town council may profiteer at the expense of the industrialist, shopkeeper or private person, or planning may be affected. Town councils beginning more and more to realise the unfairness of the present law may alter their plans to the detriment of new plans for the town.

On those two grounds it is very advisable that the Government should consider the present law. I especially want to stress that, although we passed the Town and Country Planning (Scotland) Act, 1954, only last year, the time is now ripe for the Government again to look at this matter and to set up a Committee of some kind, a Departmental committee or an inter-Departmental committee—because England and Wales are equally affected with Scotland—so that the matter can be reconsidered and the injustice remedied and opportunity given to town councils to develop their towns to the best advantage making the best use of the land available to them, instead of being hampered by the unfairness which exists under the present law.

Mr. Speaker

I am afraid, with the greatest desire in the world to assist the hon. and gallant Gentleman the Member for South Angus (Captain Duncan) and any other hon. Member who wishes to raise a question on the Adjournment, that I am bound by the rules of order. I do not think that it escapes the prohibition against discussing matters requiring legislation merely to advise the setting up of a Committee to see whether such alteration in the law is necessary. The real gist of the matter is that the complaint of the hon. and gallant Member for South Angus cannot be remedied otherwise than by legislation. That is the position as I understand it, and I hope that the Joint Under-Secretary of State for Scotland will correct me if I am wrong. That being so, whether that legislation is as a result of inquiry, or merely by the action of the Government on inquiry, is irrelevant. A complaint of an hon. Member to be discussable on the Adjournment must be some matter of administration under the present law and not involving an alteration of the law.

Captain Duncan

I had completed my speech and was on the point of sitting down. I am grateful to you, Mr. Speaker, for having given me so much rope, and I hope that I have not hanged myself to such an extent that my hon. Friend will not be able to reply. I hope, Mr. Speaker, that you will allow my hon. Friend to reply to what I have said as far as he can, because I believe that that for which I have asked can be done by administration. It may need an alteration of the law. I am not expert enough to decide. You, Mr. Speaker, probably understand the Town and Country Planning (Scotland) Act, 1954, but quite frankly in the Scottish Grand Committee and in the House very few people did. If what I have asked can be achieved by administrative means—that we arrange that the current market value be taken in both cases—that would satisfy me, but I think that something must be done in some way.

Mr. Robert Edwards (Bilston)

Is it not permissible in an Adjournment debate for an hon. Member to call attention to hardships, without asking for legislation? I thought that that was the purpose of the Adjournment.

Mr. Speaker

The rule is that on the Motion for the Adjournment an hon. Member may call attention to any grievance which is within Ministerial responsibility. He may not discuss a complaint the cure of which is fresh legislation. That is the rule, and it seemed to me when listening to the hon. and gallant Member for South Angus that he was complaining about a definition in the Town and Country Planning (Scotland) Act, 1954, and suggesting that it was very obscure. But I think that even clarification of the law would involve legislation, and so the discussion is out of order. I very much regret that.

2.45 p.m.

Mr. T. L. Iremonger (Ilford, North)

I hope it will not be too unacceptable to my hon. and gallant Friend the Member for South Angus (Captain Duncan) and to the Joint Under-Secretary who is to reply that a Sassenach should intervene in a question which has so far been confined to Scotland, but my hon. and gallant Friend was very right in saying that it involved principles which went very much wider than the narrow point of his speech. My hon. and gallant Friend has done a very great service to the House and to the country as a whole in raising this question, especially in view of its wider implications.

I should very much deplore any suggestion that legislative action should be taken. I think that there is a very great deal in what my hon. and gallant Friend advocated, the setting up of a committee to examine what might be done, but I think that the terms of reference of any such committee should be to exclude any action which would involve legislation. It might, indeed, examine whether it would be possible to make purely financial and administrative arrangements which would solve some of the problems to which I want to draw attention.

We have to recognise that the present system of compensation for property compulsorily acquired is about as well in conformity with present standards as the Press Gang would be acceptable as a method of recruiting for the Royal Navy. I should therefore like somewhat to extend the argument which my hon. and gallant Friend has put forward and to point out that this principle applies to a very wide range of problems which are causing the deepest anxiety to many of my hon. Friends on both sides of the House.

I should first like to press the extreme urgency and importance of this question, especially in view of the fact that we are now over the brow of the hill in solving our housing problems and we are about to embark upon slum clearance and substituting new property for slum property. That will involve taking over people's property on a very large scale and an enormous number of people will be faced with the injustice of the present system, which I believe can be solved by administrative and financial means.

Mr. Speaker

I think that the hon. Member must satisfy me that that could be remedied without legislation.

Mr. Iremonger

Perhaps I might ask your guidance, Mr. Speaker. Would you be prepared to guide me as to how far I might draw attention to the kinds of injustice and the short-comings of the present system, so that you may determine whether they call for legislation?

Mr. Speaker

I will have to listen to what is said. If the hon. Member can show me that the grievance of which he complains can be remedied without legislation, then, of course, the House would be delighted to listen to him. But, to judge from the speech of the hon. and gallant Member for South Angus, the complaint seems to be about the terms which are statutorily imposed for compensation for land compulsorily acquired, and that is my difficulty. If an alteration in the law is needed to remedy the matter, then the discussion is out of order on the Adjournment. There are other occasions for doing it, but not now. I think that I should ask the Joint Under-Secretary, who is to reply to the debate, whether it is a question involving legislation.

The Joint Under-Secretary of State for Scotland (Mr. J. Nixon Browne)

Mr. Speaker, the answer is "Yes," Sir.

Mr. Speaker

If so, it is out of order on the Adjournment. I greatly regret it.

Mr. Iremonger

Thank you, Sir. Naturally, I bow to your Ruling. I take it that any reference that we want to make to the kind of abuse which it is within the competence of the Minister to try to remove would not be in order for discussion further on this Motion.

Mr. Speaker

Anything which requires legislation is out of order. If there is anything that the hon. Member has to say about the way in which the matter is administered within the existing law, and purely on a question of administration, his remarks would be in order. If his complaint is the basis which is laid down in the statute, that cannot be altered without legislation, and therefore it is out of order on the Adjournment Motion.

Captain Duncan

May I put a further point to you, Mr. Speaker? We are not asking for an alteration of the law but for an investigation into the facts, without any knowledge of whether the law will have to be altered or not. My hon. Friend the Joint Under-Secretary of State for Scotland has said that the remedy must be an alteration of the law, but our argument today is that he should set up a inter-Departmental committee of inquiry to consider the matter.

Mr. Speaker

I appreciate that point perfectly well. I must tell the hon. and gallant Member for South Angus (Captain Duncan) that that one has been tried often before. It does not suffice to avoid the plain purpose of the practice of this House.

2.53 p.m.

The Joint Under-Secretary of State for Scotland (Mr. J. Nixon Browne)

I trust that I shall keep in order and not stray from the path of righteousness. Anything I can say may help to solve the real problem of my hon. and gallant Friend, which is the difficulty of understanding how the law is administered. I shall do my best to reply to the debate in the spirit in which it has been raised. I am fortunate in that I have time in which to do so.

As indicated in my Answer to the hon. Member's Question on 1st November, the present statutory basis of compensation for the compulsory acquisition of land by local authorities was laid down in the Town and Country Planning (Scotland) Act, 1954. That Act came into operation as recently as 1st January of this year, and, as the hon. Member has said, it is too early to consider any change.

Mr. R. Edwards

On a point of order. Will you tell me, for my information, Mr. Speaker, how it is possible for the Minister to reply to a debate which has already been declared out of order?

Mr. Speaker

The part of the debate that was out of order was the part wherein hon. Members were asking for preliminary steps to be taken with a view to legislation. I do not say that the whole of the remarks of the two Members who have spoken were out of order. The hon. Gentleman who is now in possession of the Floor is entitled, in so far as he can keep in order, to reply to those parts of the previous speeches which happened to be in order.

Mr. Browne

Thank you, Sir, for that very lucid explanation. I speak subject to correction, but I think I can say with fairness that everything said today, or which would have been said had it been in order, was foreseen when the English and the Scottish Bills were before the House. We are not finding any new problems which were not foreseen when the legislation was framed.

The development plans of local planning authorities are based on the authority's planning proposals for the next twenty years or thereby. These forward looking proposals cannot fail to affect the existing uses of land to a varying extent, and they must frequently involve the public acquisition of land in order to give effect to them. Road widening proposals are a good example of this.

It does not follow, however, that the owners of any premises affected will inevitably receive less by way of compensation than what is justly due to them. They will receive compensation not only for their premises based on the current market value of those premises for their existing use—that is the basis of compensation—but also for any development value the land possessed at 1st July, 1948, plus a supplement of one-seventh of that value. In addition they are entitled to compensation for disturbance of their business, such as removal expenses and temporary loss of trade, and also, in appropriate cases, for injurious affection to other land owned by them, land for severance from that land.

I do not blame my hon. and gallant Friend for saying that the Act is difficult to understand. What is "injurious affection"? When I received this brief I did not know the answer myself. It means that if one loses half one's land the other half is injuriously affected, and loses value. It does not follow that, although land is acquired by local authorities on the basis of an existing use value at the time of sale plus unexpended balance, the price is necessarily less than the current market value. In a recent analysis made by the Scottish Valuation Office of local authority purchases in the first six months of 1955, the two prices were the same in almost every purchase of developed land, and frequently the same even where the land was un- developed. In more than 90 per cent. of the cases the two prices were the same in the case of developed land. Therefore, there are many times when the Act is not working unfairly.

It is true that if the premises which the authority is buying are old, owners will not receive compensation which would cover the present high cost of building other premises in which to carry on their business, but that is nothing new. Compensation on compulsory acquisition was never intended to give new for old. It has rightly always been confined to what was being bought.

Persons whose premises have been acquired by public authorities have also had to pay the current market value for any land they required for new premises. During the period from 1st July, 1948, to 18th November, 1952, persons who bought land at existing use value had to pay development charge. This in total comes to the same thing. So those who now have to purchase premises are at least no worse off than they were between 1948 and 1952. There is no reason, in general, why persons buying land from local authorities should get it any cheaper than they would pay for it in the private market.

I come now to the special consideration, which is covered, as I shall explain later, by the case of Arbroath. There is, however, one special exception to what I have been explaining, and it is in the Town and Country Planning (Scotland) Act, 1945, and in the English Act of 1944. That is where, in a comprehensive development area under the planning Acts the local planning authority, in order to secure redevelopment of the area, is disposing of land it had acquired.

In such cases it is required to secure that persons who were previously living or carrying on business in the area, and who desire to secure accommodation there are given an opportunity to obtain accommodation suitable to their requirements on terms which have due regard to the price at which the land was acquired from them. This applies to Arbroath as to other planning authorities. The question of the price of acquisition will not arise for some years, and nobody can say exactly what the price will be. It is, therefore, as yet too early to say that there has been injustice—and even then, under the Acquisition of Land (Assessment of Compensation) Act, 1919, there is arbitration by an independent arbiter. That refers to premises acquired.

Let us look for a moment at the new premises which the disturbed person wants to, or has to, acquire. As I have previously explained and will repeat, the local authority has to have due regard to the terms on which the land was acquired. The valuer's answer which my hon. and gallant Friend read out, although entirely correct, might perhaps be said to be not entirely comprehensive. It is not quite enough, in my view—and you, Mr. Speaker, will realise that this is a somewhat complicated Act—to say that it should be just at current market value. If the land at Arbroath is part of a comprehensive development area, the term "current market value" has to have regard to the price paid for the old premises. Not only that, but I am advised that an aggrieved person can at least bring the matter to the notice of the Secretary of State on the grounds that, in the view of the aggrieved person, the authority has, perhaps, not had regard to all the circumstances.

Let us consider for a moment the extent of this problem—local authorities are empowered to acquire land compulsorily for a great variety of statutory purposes. Most of the land so acquired is for housing purposes and, to a lesser extent, for town improvements, including comprehensive redevelopment and road widening. In most cases local authorities do not buy any more land than they consider they need for the statutory purpose in view. Nor do they dispose of it for private development—in general—unless, exceptionally, there are small areas which they do not require for their purposes or which—particularly in housing areas—can more appropriately be developed by private persons or bodies for such things as churches, lock-ups or shops.

When comprehensive redevelopment schemes—at present only in their early stages in Scotland—get under way, more land which has been acquired and cleared by the local planning authority, and on which preliminary development has been carried out by that authority, may be disposed of for private development in accordance with the schemes. We must think, now, of the land which will be so disposed of.

When the local authorities dispose of the land which they have acquired for a statutory purpose, it is seldom the same commodity they sell as that which they acquired. Usually, the land will form part of an area, which has, for the most part, already been developed by the authority, and serviced with roads, water supplies and sewerage. In some cases, the development by the authority—for example, for an open space or for shops—may have even further enhanced the value of the land. In the case of land which was already developed at the time of purchase, the land so acquired—for example, for road widening in a built-up area or for other town improvements—will, in general, when disposed of, have been cleared of buildings by the authority and will be sold as a cleared site available for development.

The hon. Member for Ilford, North (Mr. Iremonger) raised a point somewhat similar to that raised by my hon. and gallant Friend. The last thing I wish to do is to sound unsympathetic, but I do assure my hon. Friend that many of the injustices—or ought Ito say the apparent injustices?—arise because people buy properties without knowledge or investigation of the true position.

Only a short while ago a relative of mine wanted to buy a small house in an urban area. The house was right, the price was right, and she was just going to buy it when I said, "I think you ought to see the estate agent." The estate agent said that the house and the price were right but that a lawyer had better look into the matter. A lawyer did so, and found that the unfortunate person who wanted to sell the house did not know that the house was part of a road widening scheme, and had my relative bought that house she would have lost the front garden.

If, as a result of this debate, there goes out from this House a message to everybody, "Do not acquire property without seeing an estate agent and a solicitor and talking to the local authority," then this debate will to a great extent have served its purpose.

Mr. Iremonger

I am obliged to the hon. Gentleman for giving way. The point that he has made is most valuable, and I hope that it will be given wide publicity. The trouble is that there are many such cases, and at the moment I am receiving up to twenty letters every day on this subject. There are cases in which it is possible for somebody to have bought a property, after making proper search and having got the "all clear," and then to find that, as a result of plans which are subsequently made, his property has deteriorated in value and he cannot make up the difference from any source.

Mr. Browne

I appreciate that, but I do not think that I can, at this stage, go any further than I have done.

As I have said, we are not unsympathetic, but the House knows that however carefully even the simplest Act of Parliament is framed, there are always some personal problems and some apparent injustices, and it was perhaps the complexity and injustice of the development charge as much as anything else that brought about the downfall of the 1947 Act. The 1954 Act has substantially succeeded in righting the position. We will watch most carefully how this new Act operates, but I cannot promise an inquiry.

Question put and agreed to.

Adjourned accordingly at nine minutes past Three o'clock.