HC Deb 01 August 1958 vol 592 cc1858-67

3.3 p.m.

Mr. Philip Bell (Bolton, East)

I feel sure that my right hon. Friend will remember—I am not quite sure whether with pleasure or not—the Second Reading of the Compensation (Acquisition and Planning) Bill which took place on 21st February, 1958, a Private Member's Bill promoted by my hon. and gallant Friend the Member for Gloucestershire, South (Captain Corfield). In that very interesting debate my hon. Friend the Member for Ashford (Mr. Deedes), speaking on what, perhaps, was not technically within the Bill, made this observation, which is the theme of the complaint, if I may so call it, of my constituent, and which I wish to bring before the House. There is something odious about compulsorily acquiring land from a man and then, for what are no doubt honest reasons, finding that it is not wanted and selling it to the highest bidder, who is usually not the original owner."—[OFFICIAL REPORT, 21st February, 1958; Vol. 582, c. 1579.] I have little doubt that in the course of his exhausting and onerous duties, my right hon. Friend has come across, or has had referred to him, many cases of that nature. Even this morning, apart from the particular case to which I wish to call attention, I was told of the extraordinary occasion when a local authority purchased land from a builder for housing purposes for £100 per acre, and then, finding subsequently that it did not want it, sold it back to the same builder for £1,000 per acre, which, perhaps, is an even worse case than the one which I propose to mention.

Alderman T. Glaister, my constituent, has a family company called D. Constantine and Sons, Ltd., and on 3rd December, 1948, the local authority made a compulsory purchase order, called the Breightmet Hall Estate (No. 2) Order, for the purposes of Part V of the Housing Act, 1936. Comprised in this area were 103 acres, not all of which, but only 84 acres of which, belonged to the company, which was the family company of Alderman Glaister. On 17th December, 1948, in the usual way notice was served on the company of the making of the compulsory purchase order.

It will, perhaps, be within the recollection of the House that this procedure for the purposes of housing is made under Section 74 of the Housing Act, 1936, which enables local authorities to acquire land for the erection of houses and for purposes incidental to the housing estate which they are setting up. It is not, perhaps, so commonly known that, under Section 74 (2), the Minister, when he comes to confirm the order, has to satisfy himself that the land is likely to be required for that purpose within a period of ten years. The House will notice that the compulsory purchase order was made on 3rd December, 1948, so that the period of ten years has very nearly elapsed.

Under that Act, the local authority also has power, and perhaps the duty, to sell or exchange land for land which is better adapted for the purpose. The Housing Act itself excludes some of those provisions which our more careful grandfathers saw fit to put into legislation which enabled compulsory purchase orders to be made with regard to land. As far back as the Land Clauses Act, 1845, in Section 128, there is a duty laid upon the acquiring body to offer to sell surplus land that is not required for its purposes to the original owners, or to the owners of the adjoining land from which that particular land had been taken. Indeed, if they do not do that and do not use the land themselves in ten years, it is automatically vested in the persons who could be ascertained under the Act.

This provision is not quite as archaic as it might seem, going back to 1845, because as late as 1916 the Defence of the Realm (Acquisition of Land) Act provided, in Section 5 (3), for a right of preemption being given to persons whose land had been taken if, in fact, that land was not required for the purpose for which it had been taken.

On 7th January, 1949, objections were raised in the usual way to the making of this order, and it was alleged that these 84 acres were used for grazing, and—and this is not an unusual objection—that there was ample other land available. On 3rd May, 1939, an inquiry was held.

I must make it clear, as I intended to do at the beginning, that this is not some sort of minor Crichel Down episode. There is no suggestion here that a Minister or his advisers had acted harshly, inconsiderately or illegally, and far less any suggestion that the Corporation had acted improperly, illegally or oppressively. The point of my story is to show how, under the existing law, with the best intentions in the world, something which my hon. Friend described—

Mr. Speaker

Order. I am glad that the hon. and learned Gentleman has said that, because it makes clear a suspicion that was growing in my mind that his grievance cannot be remedied without legislation. If so, this is out of order on the Motion for the Adjournment. If the hon. and learned Member can show any administrative steps that could be taken, the House would be very glad to listen to him.

Mr. Bell

I have that in mind, Mr. Speaker. I appreciate that I am not allowed to suggest legislation, but I have suggestions that I could make within the present provisions which could alleviate this hard case.

I was saying that an inquiry was held on 3rd May, 1949. Witnesses for the objector made the point that this land would not be developed in ten years' time and indeed made a concession, saying, "All we wish to retain is 20 acres of the land". But it was pressed on behalf of the advisers of the local authority that the whole of the land was required urgently for housing purpose, and, in due course, on 16th August, 1949, the order was confirmed. As to price, the compensation for 20 acres turned out to be about £196 per acre. That was owing to the system of valuation under the Town and Country Planning Act, complete with the development charges grant made as compensation for the loss of development rights.

That position remained until 9th April this year, when the local authority came to the conclusion that, after all, it did not require the land for housing and it resolved to apply for an amendment to the development plan so that the land could be used not as originally intended for housing purposes but for industrial purposes. I am assured that that improvement, as it were, in the use of the land would mean a value of at least £1,200 an acre, so that land acquired for £3,800 would probably come to a value of £24,000 if this permission were given. The disappointed company suggested to the local authority that it should be resold to the company at the price at which it had been sold. This, of course, is not possible under the law, nor am I suggesting at the moment that the law should be altered.

I am in the slight difficulty, however, by reason of the fact that the Government, possibly unconsciously, misled people about the position in these circumstances when they indicated after Crichel Down that it was the Government's policy where they released land to offer it back, though not necessarily at the same price, to the people from whom it had been taken. There seems undoubtedly an impression, therefore, among the general public that that should apply where a local authority has acquired land which it finds subsequently that it does not want to use. That is clear from a number of cases which have come before the committee which considered administrative tribunals.

What could be done under the existing law? I suggest this with some diffidence because I suppose, in a way, that since application has been made to my right hon. Friend for permission to alter the user of the land this might be said to be sub judice. But, subject to your direction Mr. Speaker, I should like to implant a few ideas without prejudicing any consideration which my right hon. Friend may have to give to this matter.

I understand that it is possible for my right hon. Friend to refuse permission for this land to be used for light industry. It is possible for him to do that on the ground that that is something in the future, something as vague and perhaps as mistaken as the original idea that it would be used for housing. If he refuses that, it is also possible for him to say, "Let the 20 acres go back to agricultural land, the original user for which it was permitted."

Having done that, having got it back as agricultural land which it was, for which it had been used practically all the years since the order was made; having done that, the duty remains upon the local authority, under the existing law, to sell that land, because the authority is not supposed to hold land as an owner of agricultural land for any length of time or for any purpose except for an immediate purpose of housing. If they did that, in that way only would it be possible for Alderman Glaister's company to come into the market as purchasers. That would perhaps prevent the effect, which is apparent at the moment, of this series of transactions resulting from an exercise of a discretion which, in the light of future events, seems to have been too ambitious.

I conclude by quoting my right hon. Friend in the debate to which I have referred. I quote him with confidence, as follows: My desire, like his, is to see justice done. I can promise him that the Government will pay heed to everything that has been said today."—[OFFICIAL REPORT, 21st February, 1958; Vol. 582, c. 1634.] My right hon. Friend, was referring to my hon. and gallant Friend the Member for Gloucestershire, South, who was moving the Second Reading of his Private Member's Bill. I hope, with modesty, that he will pay heed to the points I have had the opportunity of making today on behalf of my constituent

3.16 p.m.

The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke)

In answering the case which my hon. and learned Friend the Member for Bolton, East (Mr. Philip Bell) has so clearly put to the House I will endeavour to set out the actual matters which are before me at the moment, and then to make some more general observations on the difficulties which he has brought to the notice of Parliament.

At present, there is no question of the future ownership of the land before me, as I think he appreciates. The situation, is that the Bolton County Borough Council is proposing an amendment of its development plan to reallocate to light industry some acreage which was originally acquired compulsorily for housing purposes, having up till then been agricultural land. Any such amendment of a development plan requires my approval. The proposal has to be adequate, objections are invited, objections come in, and then I hold a local public inquiry. The period for objections to be lodged runs until tomorrow week and, obviously, I cannot peer into the future and say what further objections may have been lodged by them. I understand that one objection has been lodged.

My hon. Friend will see, therefore, that the sole question before me at the moment, and on which I may have to take a decision, is whether this land should be reallocated, and that, of course, is not the former owner's grievance. His grievance is whether there will be an opportunity to regain possession of the land at the price, or something like the price, which was originally paid to him.

I must be very careful not in any way to prejudice this question on which I may have to decide in the light of objections which perhaps have not yet come in. However, that is solely a planning question, and in all I say from now onwards I want it to be clearly appreciated that if I take hypothetical examples I am not prejudging which way my decision on that will go.

I had a somewhat similar case, with which my hon. and learned Friend may be familiar, coming to me from the Tynemouth Borough Council a short time ago. That was somewhat less complex. In that case, permission had been granted for industrial use of the land after it had been originally purchased compulsorily for housing. The council very honourably desired to sell the sur- plus land back to the original owner at housing value.

I had, somewhat regretfully, to point out that if the council did that, it would appear to be contravening the law, because when land has been acquired for housing purposes, the law says that if it is subsequently disposed of it must be disposed of at the best price obtainable. Clearly, a better price could be obtained for industrial use than for housing use. I made a suggestion to the Tynemouth Borough Council as to the manner in which it might get over that and might carry out its very reasonable desire without infringing the law. After that, it was for the council to judge.

My hon. and learned Friend probably appreciates that I have no power to compel Bolton to sell this land, whatever may happen to it, and that still less can I direct it to sell to one owner and not to another. Indeed, as I read the law, it would be quite inappropriate for me to agree to the reallocation of this land for industrial purposes subject to a condition that the land was first to be offered to the previous owner at the price originally paid, or something near it.

On the hypothetical supposition that I do agree to the amendment to the relative plan being made, the council will then, as it seems to me, need my consent to dispose of the land if it wishes to sell it, or to appropriate the land—to use the word "appropriate" in the technical sense—from housing purposes to planning purposes if the council wishes to continue to hold it. The council might in that case build factories itself, or lease the land to industrialists.

Should the council apply to me to appropriate the land for planning purposes, I could refuse my consent on the ground that I did not think that the council needed to hold the land any longer, but, of course, that would not compel the council to sell to the former owners at the old price. If I did not allow the council to appropriate the land, it could sell the 20 acres as land with planning permission for industry.

If that happened, not only could the council sell at the enhanced price, but it would be obliged to sell at the enhanced price by the Housing Acts, as my hon. and learned Friend will appreciate. The council would need my consent before it could sell it, but I am inclined to think that it would be a serious misuse of my consenting powers if I were to refuse all applications except one; and that would not get over the difficulty about price.

The position is that I cannot direct Bolton to sell back to the old owners at the old price or something near it, which is the one result which my hon. and learned Friend and his constituent desire to bring about. However, at present, such a question of disposal is not before me and I have only to reach a decision on the planning issue. Clearly, I cannot do that until I have had my inspector's report on the local inquiry. It may be that the council will fail to establish its case for any change. In that event, the position of the former owners will remain just as it is now, which is as it has been for a number of years.

I was not sure from his speech whether my hon. and learned Friend thought that the price which the former owner had received some ten years ago, under the statutory formula which determines these matters, fell greatly below the market value at that time. It may be that it did not. I do not have precise information on that. If there was no great difference in the two prices, it may be that the question at issue is not the unsatisfactory state of the law on the valuation of compensation for compulsory purchase. My hon. and learned Friend said that I had said that this was unsatisfactory. What I said was that this is the matter which should receive careful examination, and it is receiving that from the Government.

If there was no wide difference between the market value at the time of compulsory acquisition and the price paid on compulsory acquisition, then one is thrown back on an old and very familiar question, whether somebody who has had property compulsorily acquired from him at approximate market value should, at a later date, when the market value has changed, be entitled to buy it back at the lower figure which he originally received for it. That issue opens very large questions which my hon. and learned Friend will not want me to elaborate today. I thought that what was in his mind was that it was the planning permission which made the substantial difference in value, and, of course, planning permission for industrial use will make the difference very great, indeed.

All I can say to my hon. and learned Friend is that if, as a result of the public inquiry and my inspector's report on all the facts, I am convinced that an amendment to the development plan ought to be made, and if, in that event, the previous owners ask that the land should be sold back to them, the claim that they are making on grounds of equity to the council is certainly not one which could be dismissed as totally unreasonable. I feel quite sure that the council would give it a careful hearing, just as other councils have done in similar circumstances. But at this stage it would be quite wrong for me to take sides. I have no idea what the council's attitude will be, or what reasons it can produce to support whatever attitude it may take.

In those circumstances, I cannot go further than to say that if I decide to amend the development plan, and if the former owners press the claim that the land should return into their possession, and if the local authority is unwilling to agree to that claim, I will certainly take the matter up with the local authority and thoroughly inform myself on the case that each side can make before giving the necessary consent either to the disposal of the land or its appropriation for industrial purposes.

When I say that I will thoroughly inform myself I am not for a moment slighting my hon. and learned Friend, or suggesting that he has not given a full statement of the case. But I think that he would wish the whole matter to be examined at greater leisure than is possible in a half-hour's Adjournment debate.

I must ask my hon. and learned Friend to understand clearly that, as Minister, I have no power to compel the council to resell the land at the original price. I will certainly do my best to use my good offices, if circumstances suggest that it might be possible for me to help in any way, by thoroughly informing myself of the position. It is too early to say yet whether the circumstances will develop in that direction, but I would say that my hon. and learned Friend has performed a very admirable constituency duty, and perhaps more than a merely constituency duty, by bringing to the notice of Parliament the substantial difficulties which arise over these disposal cases. They are matters with which I am by no means unfamiliar, whether in general or specific cases.

It is not easy to see a way through the difficulties. What I hope my hon. and learned Friend will accept from me is that I am seized of the facts of this case, as at present known to me, and that I shall be still better informed after a public inquiry has been held into the proposed amendment to the development plan—as it will be—and I have the inspector's report in my hands.