§ Order for Second Reading read.
§ 3.52 p.m.
§ The Minister of Land and Natural Resources (Mr. Frederick Willey)
I beg to move, That the Bill be now read a Second time.
The fact that I moved a similar Motion so recently puts me in the dilemma of appearing either repetitious or deviationist. This is not a difficulty which presents itself to the right hon. and learned Member for Hexham (Mr. Rippon), whom we welcome to our discussions. I feel that he is unlikely to repeat the rhetorical fallacies with which the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) entertained us. He faces a real difficulty, and it is this. One again, the Opposition oppose the Bill, but declare that it is right that a reasonable charge should be imposed on development value.
But this is only a gesture of modesty on being caught naked and exposed. Why has the Conservative Party been so coy in explaining what it means? What is reasonable? Why, during the General Election, did not the Conservative Party election manifesto have a word to say about all this? Why was it completely silent on land prices?
We had the same ambivalence on leasehold. The Opposition Front Bench described our White Paper proposals as "a spiv's charter," but did not dare to divide the House against the Motion welcoming the White Paper. We had the most extraordinary welcoming speech from the hon. Member for Crosby (Mr. Graham Page) that I have ever heard.
What the electorate realised was that the Conservative Governments had repealed the provisions of the 1947 Act and had done nothing—in fact, had refused to do anything—to replace them. Indeed, as I have said, at the last General Election they still refused to pledge themselves to do anything.
In office, Conservative Governments were willing to accept the restraints of planning only if land speculators were able to manipulate the rigged market 607 thereby created, often enjoying outrageous profits. Out of office, they have taken an attitude which I have described as ambivalent.
I do not want to provoke hon. Members opposite unduly, but I repeat, as I said on the last occasion, that this seems to be largely the result of the tenacious hold which landed interests have had, and continue to have, on the Conservative Party. Not subject to these pressures—indeed allergic to them—the Government believe that it is wrong that planning decisions, which are public decisions, about land use should so often result in the realising of unearned increments by the owners of the land to which they apply and that desirable development should be frustrated by owners withholding the land in the hope of higher prices.
As my right hon. Friend the Minister of Housing and Local Government said in the debate on the Address, developers have now discovered that the simplest way to make a fortune is not to develop the land which they acquire but to sit tight and hold on to it knowing that the price will rise. Conservative Governments, in repealing the provisions of Lord Silkin's Act and doing nothing to replace them, have created a situation in which often enough profits are made more easily by not building a house than by building one.
§ Mr. Charles Fletcher-Cooke (Darwen)
Whatever the rights and wrongs of the financial provisions, is it not a fact that more houses were built during this period than at any other time in our history? Is not that something to which credit should be paid?
§ Mr. Willey
I pay credit to the fact that we are building more houses. We have to do so, in view of the increasing and urgent demand for an expansion of the housing programme.
§ Mr. Geoffrey Rippon (Hexham)
If we have to build more houses, perhaps the right hon. Gentleman can explain why we are now building fewer.
§ Mr. Willey
The right hon. and learned Gentleman will have an opportunity to debate this, to his discomfort, next Thursday.
608 I know that hon. Members opposite, particularly the right hon. Member for Kingston-upon-Thames and the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), who has a good deal of experience, argue that what is needed is a radical reform of the planning system. I do not deny the force of their arguments. I am equally convinced that we must improve our planning procedures. The Government will do this, and will be presenting their proposals. But this is complementary and not alternative. What we are at present concerned with is the supply of land and the price of land for development.
The right hon. and learned Member for Hexham and his hon. Friend the Member for Gloucestershire, South (Mr. Corfield), in their recent pamphlet "Target for Homes", recognised the urgent need to make more land available for building because, as they say,for one reason or another, much of the land (already allocated for development) is not coming on to the market".The right hon. and learned Gentleman is undoubtedly right. There are large numbers of outstanding planning permissions that have not been exercised. Fresh applications are constantly being received on the ground that land is urgently needed for development, despite the many sites with unused planning permission, and it is argued by the applicant for the fresh planning permission that these sites are not available to him.
The right hon. and learned Gentleman and his hon. Friend simply urge planning authorities to allocate more and more land. Not only do they ignore the fact that this land, too, might just as likely not come into the market, but also that in this way we are in danger of debasing the currency of planning.
The right hon. and learned Gentleman the Member for Hertfordshire, East would, I am sure, if he were present, respect the views of the county planning officer for Hertfordshire. He told the Housing Trust Conference some time ago that he did not believe that planning authorities had under-estimated the need. Clearly, the evidence seems to be very much the other way. He believed, in the case of Hertfordshire, that it was due to a deliberate policy by pressure groups interested in land development. He explained how his committee decided that 609 the release of further land would not be right and decided on public acquisition. What was the result? He said that land had begun to flow on the market. Here, surely, is a good precedent for the Land Commission.
My right hon. Friend the Minister of Housing and Local Government has set up a working party, on which the building industry is represented, to look into the general questions of land allocated by planning procedures. It has been making inquiries about the availability of land for private enterprise housing in a few pressure areas. These surveys show that considerable areas of land have been allocated, but, of course, these are areas in which there is a great deal of building going on. There should be a much larger margin in reserve. The surveys also show that getting the planning position straight is not everything and that it is no use having land allocated or even covered by planning permission if the land is being withheld from development.
Planning control can prevent development from taking place where it would be harmful but we need a less negative and more positive concept. If planning is to be effective it must be able to ensure that the most suitable land is developed first and at the time it is needed. Equally important, development should be co-ordinated with the provision of services so as to ensure that they are used economically.
The 1947 Act established the present planning system and was a milestone in the growth of sensible control over our environment, but, in practice, the system has proved more negative than positive, more regulatory than constructive. I am sure that this Bill, too, will be a milestone of equal importance and the means by which control over our environment is firmly turned into a positive control. A powerful commission with adequate powers and resources will bring a dynamism which hitherto has been lacking.
The objectives of the Bill, therefore, as we set out in the White Paper, are, first, to ensure that land is available at the right time for implementation of national, regional and local planning, and, secondly, on the proposition that it is morally unjustifiable that the land owner 610 should be able to profit at the expense of the community, to ensure that a substantial part of the development value created by the community returns to the community and that the burden of the cost of land for essential purposes is reduced.
We are determined to avoid, as far as possible, the duplication of professional and qualified staff, particularly those who are especially scarce, and if these two objectives are accepted it would be wasteful to create two separate bodies when the work could be more effectively done by one.
If recognising the scale of the problem, it is conceded that a national agency is necessary to speed the bringing forward of land needed for the immense task of building and reshaping our towns and cities, and if it is accepted that the present state of land prices is wholly indefensible and that the community should take a substantial part of the development value, then I believe that there is an unanswerable case for the Land Commission—the more so when the functions are interdependent and inseparable.
Indeed, if one starts with the proposal to take some share of development value from landowners by any means, there is an irrefutable need for a national body with strong and effective compulsory purchase powers. In fact, the greater the fears expressed of the effect of the levy on the price and supply of land, the greater the need for the Land Commission.
Equally, if one is concerned with the problem of betterment, the national body should be able to buy substantial areas of land well in advance before its value has significantly risen at the prospect of development, thus ensuring that an even greater part of betterment accrues to the community.
This brings me to the Bill itself, which is slightly longer than the earlier version. We did not get very far with the previous Bill in Standing Committee, but I have had the opportunity of taking account of some of the representations made by professional and other organisations, and, in some respects, I think that I have simplified the procedures under the Bill.
The Bill is in four parts. Part I and the First Schedule deal with the constitution and finances of the Commission. 611 It will be a Crown body subject to directions by the Minister of Land and Natural Resources and the Secretary of State for Scotland. These directions will be of a general character, but, in relation to Part II of the Bill, I have now provided that the Commission may also be subject to specific directions.
This is a matter that I reconsidered following its being raised in Standing Committee by my hon. Friend the Member for Oldham, East (Mr. Mapp). It is not, of course, intended that Ministers should direct the Commission to acquire a particular plot of land or to dispose of land to a particular individual. It may well be necessary, however, to ensure that the Commission is an effective instrument of Government planning and investment policy, to direct the Commission to give priority to the acquisition of land in certain areas which might not, for example, produce such a good financial return for the Commission as others.
Directions of this nature, however, would not come within directions of a general character. If we are to ensure that there is enough land to meet the housing needs of a greatly increasing population over the next few years, we need a powerful instrument with all the necessary capital required to buy land in the areas where it is most needed, well before it is needed—indeed, when it can be obtained relatively cheaply. Such a body, obviously, must act in accordance with the Government's views of priorities of need and of areas where needs have to be met and for that reason I have decided that the Commission may be subject to specific Ministerial direction. Indeed, the Commission itself might welcome such directions.
§ Mr. A. P. Costain (Folkestone and Hythe)
What ability will hon. Members have to question Ministers on decisions given under such directions?
§ Mr. Willey
The hon. Gentleman will be delighted to know that this provision extends the scope of hon. Members in questioning Ministers. This was something I had to consider in dealing with the scope of the directions and, as I think right and proper, hon. Members will have better opportunities to question Ministers than they would otherwise have had.
612 The Commission's activities on the acquisition, management and disposal of land will be financed by a fund, to which advances of up to £45 million or, if the House approves, up to £75 million may be made out of the Consolidated Fund. The advances to be made out of the Consolidated Fund are to provide working capital for the Commission's operations. The amount required—I am taking this in ceiling figures—will depend on the turnover of the land passing through the Commission's hands. As the Commission gets into its stride, its activities should largely be self supporting and self financing.
Part II of the Bill, together with the Second and Third Schedules, contains the Commission's powers of acquisition, management and disposal of land. The Commission will be able to buy, by agreement, any land which, in its opinion, is suitable for development. But before a compulsory purchase order can be made, there must be a planning decision indicating that development of the land is appropriate. I have always made it clear that it is no part of the Government's policy to set up the Land Commission as a body to supersede the local planning authorities.
The Bill also confers on the Commission comprehensive powers of compulsory purchase which will enable it to acquire any land on which there has been a planning decision, but, until a date appointed by order approved by both Houses, the compulsory powers of the Commission will be limited to the purposes set out in Clause 6(4).
The Bill then defines the Commission's activities. The power to buy land compulsorily to secure its early development is needed to make planning more positive. It is also an essential support to the levy. Although the decisive result of the General Election should help, and although I do not think that even the Opposition can deny that the proposed rate of levy is reasonable, we cannot be certain what effect the levy will have on the market, and I want to make it clear that, if there is any risk that sufficient land to maintain the essential building programme would not otherwise reach the builders, the Commission will not hesitate to use its powers to bring forward the land required.
Clearly, if we have decided that land owners or land speculators shall not, in 613 future, wholly appropriate the development value largely created by the community, then we must have powers to ensure that development is not frustrated by landowners withholding their land. As I have explained before, if they are needed, these powers will be mainly needed on behalf of the private builders who build houses for owner occupation. Indeed, they will be needed particularly on behalf of the smaller builders.
We have been considering the Commission using its powers to bring land forward where it has been withheld. In this case, action by the Commission arises from the failure to act by others. This is, as it were, the Commission acting in default. The Commission, however, need not wait for this. The other purposes for which the Commission can use compulsory purchase are sufficient to enable it to buy land for large-scale comprehensive development, whether it is urban land requiring development or open land requiring major development such as a new town or town expansion, to act on behalf of local authorities, or perhaps groups of local authorities, and to provide land for concessionary disposals for private housing.
The power to buy land for development or redevelopment as a whole and the power to act on behalf of local authorities will enable the Commission to acquire the large area, often crossing local authority boundaries, which will be needed increasingly for major expansion schemes. Obviously, the Commission will act in accord with investment and planning policy. It is for this reason that I have amended Clause 1.
It is experience in the new towns and among some of the more enlightened local authorities which has demonstrated the advantages which accrue from selective acquisition in advance of development. It certainly makes the implementation of plans easier. Indeed, very often only by unification of ownership is it possible to secure that development takes place in an orderly and co-ordinated fashion.
Again, the regional studies have shown the need for substantial development in a number of places throughout the country. Some of this will be achieved by new towns or by major expansion of existing towns undertaken by new town development corporations working in partnership 614 with local authorities. Although new town development corporations have full powers to buy land within the designated areas of the new towns, it will be on occasion for the Commission to undertake the purchase of that land immediately after designation and before the development corporation has become established with sufficient staff to undertake this work itself. In this way, the Commission will be able to accelerate development in these new towns.
The regional plans also envisage the release of substantial areas of land for private development. Once the planning authority has determined which land is to be developed, again the Commission can buy and manage the land so that it is released for development in an orderly fashion, and can also, by rearrangement of the agricultural tenancies, ensure the optimum agricultural use up to the last moment when the land is taken for development.
Nor is it only a question of urban development. I can think of plenty of stretches of beautiful countryside where the view is spoilt because such development as exists is pepperpotted and the countryside is littered with thinly-spread development. Once more, planning and ownership are out of joint. In such cases, the assembly of land by the Commission could essentially produce compact development, effectively satisfying the social needs and yet blending better with the countryside.
So far, I have spoken primarily about the development of open land, but much more needs to be done in the redevelopment of existing towns. Here again, the Commission has a part to play. Many local authorities have started or are contemplating schemes of comprehensive redevelopment of their central areas. We know the difficulties which have been encountered and we can learn from this experience. Again, this is a direction in which the Commission may be able to help the local authorities in the assembly of land.
There is, again, the field of renewal, in which so far very little has been done but which has tremendous possibilities—that is, the rehabilitation of twilight areas. My right hon. Friend the Minister of Housing and Local Government has started pilot studies. This is another 615 direction in which the Land Commission, in joint partnership with the local authorities and private enterprise, can play a considerable part.
Having outlined the scope of the Commission's compulsory purchase powers, I will touch briefly on one or two of the procedural aspects. Clause 8 and the Second Schedule provide a power which, in exceptional circumstances, could enable the Commission to act quickly if owners withheld their land on such a scale as seriously to threaten private development. It necessarily unavoidably involves some curtailment of the landowner's opportunity to elaborate upon his objection, and the Commission will not be able to use it without a Ministerial order, which will be temporary and which could, if necessary, be confined to certain parts of the country.
This is very much a reserve power, which would not be invoked unless the Commission were confronted by a serious situation. I said before that I was anxious to limit these emergency powers as much as possible. I am now providing that they will be available for no more than five years from the appointed day unless the period is extended by Parliament.
Following a compulsory purchase order, the Commission will normally use the vesting procedure in Clauses 9 and 10 and the Third Schedule. This gives the Commission a good title to land, so that it can safely dispose of it for development without the delays of the normal conveyancing procedure. The settlement of compensation will proceed independently of the vesting and the Commission will, in most cases, be able to pay out without full investigation of the owner's title. Besides simplifying and accelerating land acquisition, this should result—and this is not unimportant—in a considerable saving of legal staff to the Commission.
The Commission's management and disposal functions are dealt with in Clauses 12 to 21. The Bill provides the Commission with all the powers needed to enable it to manage land efficiently while it is in its possession, including power to carry out works and including, subject to Ministerial consent, the provision of houses.
In disposing of land, the Commission will have the widest discretion. It will 616 be expected to obtain the best price it can—that is, the best price for the use permitted—unless it is disposing of concessionary crownhold or is otherwise authorised by a direction.
Clauses 17 to 21 deal with crownhold. The Commission will be enabled under these Clauses to dispose of land freehold or leasehold, subject to such restrictions enabling it to retain the element of value attaching to prospective development other than that for which it is disposing of the land.
To repeat the example which I gave previously, the Commission, for instance, may sell freehold a piece of land for the site of a church at a price reflecting the value of the land for a church. The Commission could sell it subject to a covenant forbidding the development of the land for any more profitable purpose. Such a covenant would be a crownhold covenant. It would not only retain for the community the future development value, but it would also enable the Land Commission in such a case, and in other cases of development, to dispose of the land much more cheaply than at present.
The second purpose of crownhold is to help prospective owner-occupiers of houses. Clause 18 therefore enables the Commission to dispose of land for housing at a concessionary price. The difficulty in a provision of this kind is to make sure that it benefits the persons for whom it is intended. This is why we have been obliged to make fairly complicated provisions in the Bill. What we have done is to ensure that the Commission can recover, and recover only, the concession that has been made.
Clause 18 provides that concessionary crownhold disposals can be made when the land is to be used for houses for the purchaser or to be provided by the purchaser in accordance with arrangements approved by the Commission. They will normally do so to bodies which can effectively ensure that the benefit of the concession is passed on to the occupants of the house, for example, housing associations, co-operative groups and local authorities which are prepared to build houses for sale. Where this is not possible, the Commission itself will have the power, with the consent of the Minister, to provide houses for disposal direct.
617 I have dealt with Parts I and II of the Bill. I next turn to the levy. Part III of the Bill and six of the 13 Schedules provide for a levy at a uniform rate on the development value realised in all land transactions. The levy will normally fall not on the developer, but on the vendor—that is, the person who realises the profit. When the Land Commission buys, it will deduct the levy from the price it pays. The landowner will thus realise the same net amount from the sale of his land whether he is selling to the Land Commission or to anyone else.
The levy is a flexible instrument, and can be varied according to the supply of land and the Commission's ability to ensure sufficient land for development. We have already announced that the levy will be at 40 per cent. initially, and that it will be increased progressively to 50 per cent. in a reasonably short time. I am sure that 40 per cent. is a reasonable rate which will not discourage the bringing forward of land to the market.
Although the provisions in the Bill are unavoidably complex, the basic ideas are quite simple. There are three basic principles attaching to the levy; first, it will be charged only on development value and not on any increases in the value of the land for its current use; secondly, development value on which levy has already been paid will not be chargeable again; and, thirdly, the levy will be payable by the person who realises the development value. Development vaue will normally be realised by the person who sells the interest in the land, and the levy will be assessed on the actual price paid. A disposition of land by inheritance or gift will not be charged to levy, but, of course, if it were followed by development there would be a charge on the development.
The formulae for calculating the development value in each case differ somewhat but, broadly speaking, it is a question of finding either the amount paid or the market value of the land for development and taking from it a base value so that the difference between the two values establishes the development value.
The "base value" can be the greater of two alternatives. The first is the value of the land for its current use, without 618 any prospects of more profitable development, plus 10 per cent. The purpose of adding the 10 per cent. is to make the levy to some extent progressive, and thus to encourage the redevelopment of built-up land where the current use value can be very high.
The second alternative is simply the price which the vendor himself previously paid for the land he is selling or developing. By providing these alternative base values, the Bill gives effect to the second of the three principles I have mentioned—that is, that an owner is not charged levy on development which has already been paid for.
The rest of Part III is largely concerned with the machinery for notifying acts or events which may give rise to levy and for the assessment of levy with provision for reference of disputes over the assessment to the Lands Tribunal, and also with the procedure for payment of levy. Some detailed changes have been made in these provisions in order to simplify them and to meet some of the criticisms which were made when the Bill was first published.
§ Mr. Costain
The Minister has just made such an important statement that I would ask him to tell the House at whose option would be decided which value is taken. Would it be the Government's or the vendor's option to decide the base?
§ Mr. Willey
The vendor's option.
In the case of the disposal of a freehold, or the grant or assignment of a lease, the transactions which must be notified to the Commission are, in fact, transactions for which documents must be submitted to the Stamp Duty Office and Clause 82 and Schedules 10 and 11 will make it possible for the submission of the particulars to the Stamp Duty Office to suffice as notification to the Land Commission, and so avoid any extra burden.
The procedure for assessment has also been simplified, and it is now similar to that used for Income Tax. Certain exemptions—largely foreshadowed by the White Paper—are provided in Clauses 56 to 63. In the case of minerals, special adaptations will have to be made. This was done, for example, under the 619 1947 Act, and power to make regulations has, therefore, been taken under Clause 71. Meanwhile, we are holding discussions with representatives of the mineral interests.
As I have said, when the Commission acquires land, it will deduct the levy from the price it pays. Clause 70 provides for this. Here, of course, there is no question of any payment to the Exchequer. The necessary sanctions are contained in Clauses 75 to 77, and Clause 73 and Schedule 9 deal with attempts to evade the levy by transactions between connected persons or by the operation of close companies.
I turn now to the one particular provision which is new—Clause 81. During the previous Second Reading debate, two of my hon. Friends referred to the now notorious Lavender Hill case—the case which apparently finally persuaded the right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) that part of the development values created by the community should return to the community.
Lavender Garden Properties, having bought a plot of land for £7,500, sold it to the London Borough of Enfield for £240,000. But, not satisfied with this, since the borough council later obtained a better planning permission for blocks of flats from my right hon. Friend the Minister of Housing and Local Government, the company is now claiming, I believe, a further £150,000 under the provisions of Part IV of the Land Compensation Act, 1961.
We do not intend to allow this to continue. It is wrong to allow such financial pressures to distort the planning system and to allow land speculators to extort compensation, not by reason of their own efforts but because of increases in value created entirely by the decision of a public authority and because, since they sold the land, circumstances have changed, enabling the land to be used more profitably. Moreover, I have particularly to consider this, because I believe there is a possibility and a risk that the Land Commission, where it buys land in advance, might be subjected to claims for additional compensation if, as circumstances change, planning permission is granted for more valuable development. This would be wholly 620 contrary to the purpose of the Commission.
Those are briefly, in outline, the provisions of the Bill. The Bill deals with a problem which no one can deny must be tackled, and tackled effectively. The problem of betterment has been recognised for a long time, but today it has become imperative and urgent because of the removal in 1959 of the last restraints on the market in land for development. Conservative Governments accepted planning, but, as I have said before, only in a bingo Britain, at the cost of land prices and land famine. We have had a lot of mischievous talk about the effect of the Land Commission on the supply of land for development, but the plain truth is that the land famine was already with us, as my right hon. Friend the Minister of Housing and Local Government soon found out. And not only, I would emphasise, in the great pressure areas—Birmingham, Liverpool and Sheffield—but generally.
In fact, what our debates in this House and outside have revealed, and what was the significance of the last General Election, is the startling disparity in the approach to the problem between the major political parties.
As to land for development, it is not true that speculative freedom results in the greater good. On the contrary, our experience in the last few years has taught us, and it has been experience obtained at great expense to the community, that it is not enough to plan land use sensibly unless we also ensure that the land so planned is available for use when it is required, at prices that are equitable and fair to the community which has created the development value.
What the Opposition have done by creating the opportunity for their vast windfall profits is to allow landowners to hold the whole planning system to ransom and to frustrate development. Paradoxically, it is the builder, particularly the small builder, who has suffered most. We intend to break this log-jam which is choking urban development and to provide a fair solution to the problem of betterment by establishing the Land Commission, serving both its social and planning objectives. We shall give new dynamism which will make its contribution both to making planning constructive and to ensuring that we can meet the 621 demands which will be made on us for the next few years.
§ 4.30 p.m.
§ Mr. Geoffrey Rippon (Hexham)
I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:this House, deeply concerned to secure an increased supply of land for building, while thinking it right that a reasonable charge should be imposed on increased values resulting from the grant of planning permission, declines to give a Second Reading to a Bill which seeks to set up a Land Commission which is wholly irrelevant to the collection of a levy and which will reduce and make more expensive the supply of building land, so retarding the housing of the people and essential building programmes.Although this is my maiden speech in opposition, I am sorry that it cannot be non-controversial, much as I appreciate the gracious way in which the Minister welcomed me to these benches. In spite of that, I have not been able to find, certainly not in this Bill and certainly not in his speech, one single redeeming feature. All that has happened between the last Second Reading and this is that the Minister has very wisely eliminated the extraordinary hotch-potch of muddled thinking and political philosophy with which he introduced the Measure on the last occasion.
This time—perhaps wisely—he has tried to make it as dull a Bill as possible. So it may be for many hon. Members, but for the country it is a dangerous one with very far-reaching consequences, social as well as economic. For those of us who want to see positive and practical steps taken to increase the rate of building and to improve and speed up the planning process so that we can carry forward necessary programmes of urban and rural development, this is an extremely depressing day. [An HON. MEMBER: "It is for you."] Hon. Members opposite were very excited about the Town and Country Planning Act, 1947. That might have been excused as a noble effort, but no such excuse can be made for a Bill in this day and age equally complex, equally difficult to understand, and equally devoid of real benefit to the country in many of its provisions.
Nothing in this Bill, and nothing the Minister has said today or previously, holds out any prospect at all of better planning or faster or cheaper building. 622 On the contrary, I believe that since it is dictated by political rather than practical considerations it represents a savage setback. This will be seen increasingly in the years ahead.
Of course, the main objectives set out in the White Paper were calculated to win general nods of approval from the electorate, and perhaps to a certain extent from us all. No one denies the need to see that land is available at the right time for planning purposes. Nor is there any objection in principle to a fresh attempt to devise a means for securing that a substantial part of the development value created by the community returns to the community, provided that what the Government construe as substantial can also be regarded as reasonable, and that depends on the ultimate levy rather than on the initial rate, and also provided that it is understood that not all development value is created by the community. Much of it is created by the owner and the developer. The community can, as we all know, destroy as well as create development value, in which case it might be argued that it then ought to pay the levy itself. Nor can it be otherwise than popular to proclaim as a general objective that reductions in the cost of land should be secured.
What is depressing about this Bill to us on this side of the House, and to many people outside, is that it either pursues those objectives in the wrong way, or is calculated positively to hinder their attainment. After the shattering exposure by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), and other hon. Members in the debate which took place in the last Parliament, of its weaknesses and follies I would have hoped that if the Bill was not abandoned at least it would have been substantially modified. Unfortunately, in spite of the references which the Minister made to simplification, it is still pretty difficult to follow. It started with 88 Clauses and eight Schedules. Now its 135 pages contain 97 Clauses and 13 Schedules. It is perhaps not surprising that this morning we received a little note explaining that there had been six errors in drafting.
The only thing which is new to which the right hon. Gentleman drew attention 623 is the new Clause 81. No doubt we shall have an opportunity of discussing the implications of that further. A lot hinges on what the Minister means by "changed circumstances". What certainly is undesirable is for public authorities to acquire land for one purpose and then to use it for another if the circumstances have not actually changed. If we are not careful we shall get very near to the Crichel Down case.
Up to now I do not believe many people have bothered to look beyond the Government's electioneering promise to make more land available more cheaply. They could, therefore, have deduced that action is being taken simply because legislation is now being introduced. I do not often agree with Mr. Malcolm Muggeridge, but I thought he made a very shrewd observation during the General Election when he wrote in the Daily Mail to the effect that declarations of policy are now often taken by the public as the event itself. So many people think that the Atlantic Nuclear Force is defending us and that the Commonwealth Peace Mission is still operating in Vietnam.
It would be an equal delusion to imagine that anyone who wants purposive, dynamic, gritty action to secure the release of land for essential purposes will find it in this Bill. As the Minister said, and he said it twice, it is dynamism that is needed. Really dynamism is needed not in producing more legislation but in taking some competent administrative action for a change. If the Prime Minister had set up the Ministry of Land and Natural Resources with the necessary planning functions as well as the title and the staff, the right hon. Gentleman might have been able to fulfil his duties and occupy his time more usefully. Even so, I believe he might have justified his existence much more if he had given even a tithe of the money required under this Bill to developing natural resources or perhaps to introducing measures to improve the amenities of our National Parks and countryside.
As it is, not even the Prime Minister thinks that this Bill justifies the continued existence of the right hon. Gentleman's Ministry. Sooner or later, he is to disappear into the Ministry of Housing and Local Government, which is not a fate 624 which I should wish on anyone at present. The Minister of Housing and Local Government is equally much more preoccupied with legislation than with using the powers that the Government already possess under existing legislation. If these were used wisely and effectively, we should begin to see real improvement.
As things are, we are going backwards, not forwards. It was only a year and a half ago that the country had a booming and expanding building industry with a progressive modernisation of techniques. There was an increasing flow of houses. Now there is a decrease in the flow. It was a Conservative Government who laid the foundations for schemes of urban renewal, not only in housing and slum clearance, but also in the rebirth of town centres, servicing at, they do our commerce and industry.
We may welcome the new surveys which the right hon. Gentleman told us this afternoon are being carried out, but it was a Conservative Government who initiated the various regional land studies to ensure that sufficient land would be brought forward to support enlarged house-building and other programmes. It was the South-East Study which first provided constructive proposals for dealing with the population explosion in the South-East. We had also the studies for the North and for Scotland.
It was a Conservative Government who took steps to ensure that where major developments were in prospect land could be acquired well in advance so as to be made available to both public and private enterprise. So far from increasing the supply of land, there is increasing scarcity at the moment, which is the result of the Government's failure to secure the release of sufficient land under existing planning procedures.
The right hon. Gentleman referred to a pamphlet which I and my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) produced on these matters. My hon. Friend and I pointed out in that pamphlet that the main reason for what is now called the hoarding of land is that sufficient land is not being brought forward under existing planning procedures. What is urgently needed is administrative action by the Government to speed up the revision of development plans, to speed up public inquiries, and to give more expeditious decisions. The Minister of 625 Housing and Local Government has himself admitted that the average time now between the receipt of an appeal involving an inquiry and the Minister's decision is 44 weeks. A year ago it was 32 weeks. What a dreadful way of trying to get the country moving.
§ The Minister of Housing and Local Government (Mr. Richard Crossman)
Is the right hon. Gentleman telling us that it is his view that powers now exist, either at the local level or at the national level, for achieving all that we want in land policy and that all we need to do is to use the existing powers? Is that the point he is making?
§ Mr. Rippon
Yes, that is virtually the point I am making. If the existing powers were used wisely and sensibly, the Government would be able to do most of the things they require, at any rate up to the first appointed day. After the second appointed day, new considerations apply. I leave on one side for the moment how Part III and the development levy should be dealt with.
§ Mr. Crossman
The right hon. Gentleman refers to "the existing powers". If all the powers did exist, why when the Conservatives were in office were they not able to deal with the problem of land? Why did they leave us a problem, which we have been having to tackle, of the land famine?
§ Mr. Rippon
We were progressively dealing with the problem in a way which resulted in a greater housing and building programme. We were producing houses at prices far below the prices which are having to be paid today. If the Government had carried forward our policies, they would be getting progressive improvement. By carrying forward their own policies, they are getting a progressive deterioration.
As to town centre development and the acquisition of land in advance of requirement, it is true that the present powers of local authorities are basically adequate if the necessary Ministerial decisions were forthcoming and if the Government had not stopped giving the necessary loan sanctions. If the taxpayer is to find the necessary £45 million to £75 million so that the Commission can start its operations, I suggest that it would be better if the money were given by the Govern- 626 ment to the existing authorities. After all, it was the Minister of Housing and Local Government who himself said on 28th April—The only limiting factor is the willingness of my right hon. Friend the Chancellor of the Exchequer to make money available. If we were allowed more money we could achieve records in local authority building year by year."—[OFFICAL REPORT, 28th April, 1966; Vol. 727, c. 983.]One might add—more money at a more reasonable rate of interest, such as there was under a Conservative Government.
The local authorities who have found their loan sanctions for town centre renewals stopped have good reason to agree with this, and they have said so. They have also made it clear that, rather than the addition of yet another authority with massive compulsory purchase powers, they would much prefer a more relaxed attitude on the part of the Government towards land purchase by agreement in advance of requirement.
Instead of this administrative and financial action, we are faced with the Bill. It is our conviction that the Bill will make matters worse. It is aimed primarily at juggling the land which is available already. The Commission is to have no planning powers itself. The Bill will not bring down the price of land. It will, indeed, lead to dearer land, dearer housing, and dearer building all round. The Minister has not presented any evidence as to how it will cheapen either land or building.
Sir Philip Dingle, the Town Clerk of Manchester, speaking at the conference which was organised by the Town and Country Planning Association on 13th January of this year, said this:There is nothing in the Land Commission Bill which will benefit local authorities. They stand to lose their staffs, to have to pay more for their land, to find it quite impossible to increase their targets for new housing and consequently for slums demolished.There could hardly be a more direct condemnation of the Bill from the local authority point of view than that.
Part II deals with the acquisition, management and disposal of land. The conferment of these compulsory purchase powers which are exercisable prior to the second appointed day are certainly unnecessary. The charge made by my right hon. Friend the Member for Kingston-upon-Thames and my 627 right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) in the debate on 31st January that they are almost wholly repetitive of powers already possessed by local authorities has not and cannot be refuted; nor was the Minister of Housing and Local Government, in asking me a question this afternoon, able to suggest that it has been refuted. At the very most, all that is required is minor modifications to the existing powers of existing authorities.
Like my right hon. and learned Friend the Member for Hertfordshire, East, I do not accept the argument that the Commission's powers of compulsory purchase are necessary in order that there should be no holding back of land for development. It is the Minister's argument that they are necessary in support of the levy. If the levy were reasonable and were to remain reasonable, it would certainly not be true. They certainly do not justify the setting up of this costly new piece of machinery.
In this connection, I would hope that the Parliamentary Secretary, who I imagine will be winding up the debate, will give us much more information than we have had hitherto about the administrative costs of the Commission. Is the figure still £4 million for the cost of administering the Commission, plus the £3 million for the Valuation Office of the Inland Revenue? Is 2,000 still the estimate of the number of staff to be employed? Above all, will the hon. Gentleman break down the estimate of staff so as to show how many valuers and other professional and technical staff will be required?
How is it proposed to recruit the staff? What bodies will they be trawled away from? Everybody in the House knows that there is a desperate shortage of skills in the fields of valuation and planning. The shortage is so drastic that the Minister of Housing and Local Government is having to recruit on to his Inspectorate people without any qualifications, either as architects or as surveyors or as planners. Everybody knows as a matter of common knowledge the serious shortage of valuers in the Inland Revenue. If manpower is to be found to start the Land Commission, would it not be better to make it available to the local authorities 628 and other public bodies which already have the main responsibility for development of land?
This is a problem which I had to face when I established the National Building Agency, which, be it noted, has pretty well all the powers which are required to give central help in these matters over the whole range of building, both public and private, and not just for housing. It has power, for example, to give a full planning and design service, and the only reason why I said that this would have to be exceptional was that everyone knew that, if it were to have a very large staff to deal with these matters centrally, it would be taking staff away from the local authorities which had their own responsibilities to fulfil.
If both Ministers would read the White Paper setting up the National Building Agency, which was approved without dissent by both sides of the House, and, even more, the articles of association, they would understand what can be achieved by administrative action if there is the necessary will and if the necessary finance is made available. If the National Building Agency had even a tithe of the public money which is it proposed to give to the Land Commission, it could make very great progress in these directions.
There is no reason why it should not have power to buy land by agreement. If the Ministers set about buying land by agreement in advance of requirements—if they really accept that there ought not to be a two-price system in land and they are prepared to pay market price—they would not find any difficulty. The Minister of Housing and Local Government and the Minister of Land and Natural Resources could consult their colleague the Minister of Public Building and Works about it. I imagine that they are having many consultations at present as they carve up the empire. They would find that the Ministry of Public Building and Works can buy a great deal of land at home and abroad without the excessive compulsory purchase powers contained in this Bill.
It is what will happen after the second appointed day which gives us the gravest concern. I wonder whether the Parliamentary Secretary will tell us when the second appointed day is to be. He might 629 even tell us when the first appointed day is to be. This is very relevant, in view of the Government's intention that land transactions taking place after the production of the White Paper on 22nd September will be liable to the proposed levy unless the development is started before the first appointed day.
It is the provisions dealing with the acquisition of land after the second appointed day which are so far-reaching and drastic and ought to be carefully examined by the House before the Bill is given a Second Reading. The Commission will have compulsory powers enabling it to acquire, as I understand, any land which is suitable for material development, and this applies to industry just as much as to any other land. In our submission, these provisions are pure doctrinaire Socialism, simply a back-door way, if they are ever applied, to the nationalisation of the land.
No less objectionable, in our view, as a threat to individual rights are the provisions of Clauses 8 and 9 and the Second Schedule which give a power of streamlined compulsory purchase. This has already been severely criticised both inside and outside the House, and it is not good enough for the Minister to say that these are reserve powers. They are powers unparallelled except in wartime or in the immediate post-war era, and they ought to be resisted. Before coming forward with exceptional powers of this kind, the Minister ought to have told us more about the emergency cases in which such procedures are to be used. It may well be welcome that they are not to be permanent and will be exercised for only five years, but what are the exceptional cases which will arise in the next five years but will not arise thereafter? What is one to think of the Government's apparent concern for individual rights, which is still leading them, I understand, eventually to appoint an ombudsman, when they introduce a Bill providing for compulsory powers which give the owner no effective power to oppose?
I cannot find that any answer has been given inside or outside the House to the direct question put by my right hon. Friend the Member for Kingston-upon-Thames to the Minister in the debate on 31st January. Did the right hon. Gentleman consult the Council on Tri- 630 bunals before putting these powers in the Bill? It is a simple straightforward question, and I want the Minister to answer it. I suppose that he does not answer it because he knows that the answer is that he did not consult the Council on Tribunals. In our submission, the denial of individual rights which is inherent in the whole of this streamlined procedure is a complete contradiction of all that was implicit in the Franks Committee's Report which was accepted by both parties at the time. We can draw our own conclusions from the Minister's silence.
Another objectionable feature of Part II is the provisions in Clauses 17 to 21 for the establishment of the new form of land tenure, crownhold, to which the Minister briefly referred. This also has been the subject of fierce criticism both inside and outside the House, and the criticism has never been answered. It is impossible to reconcile this new form of tenure with the proposed Bill for leasehold enfranchisement. But what we ought to pay particular attention to is what happens when the Land Commission makes what the Minister calls its concessionary crownhold dispositions under Clause 17.
Normally, as he says, the Land Commission, as one would expect and as other public bodies have to do, must, according to Clause 16, sell the land at the best price it can obtain. But, apart from such cases as the sale of land to a church to which the right hon. Gentleman referred, the main exception to this, and the one which is really important, is that it can dispose of land below the market value under Clause 18 to local authorities or other bodies to build houses for sale or, alternatively, it can build them itself for sale with the Minister's approval. The purchasers will then be able to acquire these houses at concessionary rates.
§ Mr. Rippon
I wish I could answer. I wish the Minister would answer. What he said is that we must make sure that it benefits the persons intended. Who are the persons intended? How are they to be selected? What qualifications will they have to have? Above all, what happens when the new owner-occupiers come to sell their houses? To ensure that 631 such an owner-occupier does not cash in on his benefit—which the Minister says must be avoided at all costs—there will have to be a chain of controls over a very long period which will, in effect, create a two-price system in houses. Yet the Minister, quite rightly, says that two-price systems are to be avoided. At the end of the day, it will be the freehold owner who can sell his house at the market price. By that time, the now luckless crownholder may have to sell his house back at well below its market value and well below what is necessary to enable him to buy a freehold house elsewhere. The Minister has given no adequate explanation of how this new power is to be worked without detriment to a great many people.
Summarising the effect of Part II, in our submission, the powers which it gives to the Land Commission either are unnecessary as they duplicate existing powers or are contrary to the national interest and injurious to the community in both the economic and the social sense and, what is no less important, in the realm of personal freedom and individual rights.
If there is justification for the establishment of the Land Commission for the purposes of Part II, there is certainly no justification for the purposes of Part III and the betterment levy. The levy is essentially a form of taxation, and the Government have completely failed to justify the creation of the Land Commission for the purpose of assessing and collecting what is, in effect, a capital gains tax on development values.
I do not need on this occasion to rehearse the powerful arguments advanced by my right hon and hon. Friends on the Second Reading debate in January that this part of the Bill ought to be in a Finance Act. What concerns me first at the moment is that to begin to understand the incidence and the assessment of the levy, whoever collects it and whatever its theoretical merits, requires a comprehensive examination of 53 Clauses and more than 40 pages of Schedules. This is what we shall find. That is why I say that this is as bad a Bill as certain provisions of the 1947 Act.
To explain the Bill will require a dozen text books, all of at least 500 pages, to say nothing of hundreds of 632 papers that will be delivered to every sort of learned society, and several score of cases before the Lands Tribunal, a number of which will eventually land up in the House of Lords. My hon. Friend the Member for Gloucestershire, South wrote an erudite article in the Estates Gazette on 26th February. He pointed out that it appeared from the original Bill that there were 15 separate operations which were required in Case A in order to assess the levy payable on an assignment of sale of a tenancy even if the tenancy was only for a year and a day.
Even when all these Clauses and Schedules have been studied and applied, and that calls for considerable ingenuity, there will still be a great many important matters which will be left to be dealt with by regulation. That is a thoroughly bad practice in a taxing Statute, and one that can only make matters worse for the unfortunate valuers, whether public or private, who will have to find their way through this new welter of chaotic verbiage. Is it really to be one of the achievements of the Government in modernising Britain that we are to have taxation through regulation?
Quite apart from the uncertainties which are created by leaving tax matters to regulation, there are two other major objections that we have to the provisions of Part III. First, in Clauses 27 and 28 the rate of levy is left to Ministerial Order. The fact that affirmative Order procedure has to be followed does not make this a right or proper way of levying tax. According to the White Paper, and according to the Minister's statement today, it is the Government's intention to prescribe by Order an initial rate of 40 per cent., which is described as a modest rate leaving ample incentive to owners to offer their land for redevelopment. If that is so, it strengthens the case for keeping entirely separate compulsory powers and assessment of levy.
But it is also the Government's intention to increase the rate progressively to 45 per cent. and then to 50 per cent. at reasonably short intervals. Perhaps the Minister or the Parliamentary Secretary will say how short those intervals are to be. But apparently this is not to be the limit. The White Paper says that the question of increasing the rate still further will be examined as acquisitions by the 633 Commission increase. There ought to be a limit which should be clearly stated in the Bill, and it ought to be no higher in any circumstances than 50 per cent.
It is also objectionable that, after setting out this whole series of what are called "chargeable acts and events" in Cases A to E, there is also Case F which concerns further acts or events which may occur to the Minister in the future. It would be almost impossible to get further away from the general principle—although it has been quite seriously undetermined already—that a tax should be certain in its incidence, cheap to collect and simple.
Before any tax is levied, there ought to be a clear estimate of what will be the yield. The Financial Memorandum still says no more than that:The gross yield of the levy is estimated at £80 million in a full year, on the basis of a 4 per cent. levy.That is a manifestly fictitious figure. After the experience of the Minister of Aviation today, I will not talk about fraud, but that is a manifestly fictitious figure. Also, much of the amount collected would have come in any event by way of short or long-term Capital Gains or Corporation Tax.
The Minister has persistently refused—he has maintained the same attitude today—to give any information about the net yield. Yet it is the net yield which is clearly the relevant figure. I would quote Sir Philip Dingle at the Town and Country Planning Association Conference. The Minister can say whether he is wrong. Sir Philip said:The product of the betterment levy is estimated at £80 million a year but sooner or later the Government could get three quarters of this, i.e. £60 million, by means of the Capital Gains Tax and, indeed, sooner or later a lot more from death duties. The Land Commission is to cost £7 million a year. We must all ask ourselves 'Is it worth it viewed from a national standpoint?' Personally I doubt whether the £80 million will be achieved because all loan sanctions for town centre renewal have been stopped since the end of July. We in local government—bearing in mind that we are going to lose our quinquennial valuations of rating and are exchanging a higher level of land prices for some financial assistance which is going to be given 'in one way or another' some day, may have extra reasons for asking 'Is it worth it?'.Indeed, since, as the Minister said, the purpose is to levy a tax on the 634 realisation of development values, I should have thought that he would have given more consideration than he has done to the arguments put to him in the last Parliament. It would be much simpler and better to have this in a finance Act, perhaps to build on the provisions of the Finance Act, 1962, by taxing profits on land and property transactions as they are realised.
In short, before this House can decide—and it must decide itself—we are entitled to have a good deal more information about the Bill, its yield and its operation than the Minister has so far been willing, or perhaps able, to give us. In a sense, I can understand his difficulty. The method of assessment adds to the general uncertainty. Under Clause 37 every single land transaction will have to be notified to the Commission, which will have to scrutinise it to see, first how much, if any, levy is payable, and, secondly, what the position is in regard to Capital Gains Tax. It may be that years will pass before it is known whether any levy is payable, and how much. It is not surprising that the Commission is given six years in which to do this. That will no doubt ensure full employment for the staff which it is able to recruit.
But there is not much else in the Bill which is of any conceivable benefit to the people. The best that the Minister could say about it was that:with care and attention it is intelligible."—[OFFICIAL REPORT, 31st January, 1966; Vol. 723, c. 712.]Even that memorable statement is open to question. Of course, it will eventually be understood in outline by a limited number of people who have to make the supreme effort. There are many of us who will have to make that supreme effort to understand it. Other people will normally do it only for a suitable fee, and probably a high fee, which is one of the things that will be added on to the cost of land for housing and so on. In due course the experts will be able to reel off a string of new jargon about crownhold, disposition, chargeable acts and events, projects of material development, and so on, and they will wait for the Lands Tribunal and the courts to show that they have got it wrong. It defies common sense that they should have to do this. At the 635 end of the day when we have made sense, or some sort of sense, of the 135 pages of verbiage of which the Bill is composed, not a single thing will have been added to human happiness or human progress.
In truth, this is a dreadful Bill. In a field where there ought to be widespread agreement on objectives and on the measures to secure them, the Government have created an endless prospect of dissension, bitterness and strife, and, what may be worst of all—because Governments can survive the first three—an endless prospect of confusion. I believe that only a Minister who was born in a pigeonhole could be proud of fathering this Measure, and only the little gnomes of Transport House who now scurry around the corridors of Whitehall could have swaddled it in so much red tape. Therefore, I hope that the House will refuse tonight to give a Second Reading to a Measure which is so doctrinaire in its conception, so vicious in its provisions and so futile in its presentation, a Measure which will not provide an extra acre of land, a penny of savings or a single new building.
§ Mr. Peter Bessell (Bodmin)
Before the right hon. Gentleman resumes his seat, perhaps he could clarify one point. I have listened with great care and attention and have sympathy with much of his argument. But is he saying, in effect, that the only thing needed to stop land racketeering is a small betterment charge or an alteration in the Capital Gains Tax?
§ Mr. Rippon
I think that it is two things. First, there should be speeding up of the whole planning process and proper administrative and financial action within the framework of existing legislation. Secondly, the question of the levy could better be dealt with in the way we suggest—perhaps by a straightforward addition to the Finance Act, 1962.
§ 5.10 p.m.
§ Mr. Robert Davies (Cambridge)
It is, I believe, customary for new Members in their maiden speeches to refer to their predecessors and their constituencies and I hope that I may, therefore, have the indulgence of the House if I do not 636 follow the right hon. Member for Hexham (Mr. Rippon). My predecessor, Sir Hamilton Kerr, represented my constituency for some 16 years. He was not defeated at the polls, since he decided not to seek re-election. It was the party opposite that was defeated.
As a constituent of his during, I think, the whole of the time that he represented Cambridge in this House, I always found him extremely considerate and attentive to representations made to him, including representations which I myself made to him either in my personal capacity or as representing the local authority.
We were particularly grateful for his efforts to impress upon two successive Ministers of Housing and Local Government the need to end the anomaly whereby the Oxford and Cambridge colleges were treated as charitable institutions like Dr. Barnardo's and consequently paid only half the rates due on their rateable value, even though this meant that many of these colleges spent more on entertaining than they did in contributing to the cost of local services. We were grateful when my right hon. Friend the Minister of Housing and Local Government decided, shortly before the election, to end this anomaly, particularly since it enabled my local authority to cut the rate for this year by 1d.
Most right hon. and hon. Members will no doubt be familiar with my constituency, or at any rate with part of it the colleges and the University of Cambridge—and may, indeed, have spent some three or four of the most impressionable years of their lives there. Whether, reading this morning's newspapers, it is likely that the association between Members of this House—particularly those whose children have been sent to public schools—with the two ancient universities, will be quite as close in future is, I suppose, an open question.
I think that perhaps hon. Members may not be so familiar with the remainder of my constituency and with some of its rather peculiar problems on which this Bill will have considerable bearing. One of the problems of my constituency is that, for nearly 20 years, there has been a ban on further local industry and a ceiling on the population of the City of Cambridge. This policy has been pursued in the supposed interests of the university, although I do not myself believe 637 that it is in the interests of the university and I doubt whether many senior members of the university now think that it is.
It has had the effect of excluding science-based firms which would be particularly well sited in a university city, and it has had the effect, so it is believed locally—and there is some evidence of it—of depressing local wages. We should like to see this policy changed. We are grateful to my right hon. Friend the Minister of Housing and Local Government for insisting that the policy of limiting the population and of excluding new firms that is to say, those likely to employ more than five people, which, in effect, means all firms—should be re-examined. We hope that this will mean that there will be a change in policy, the ban lifted and that at any rate some further light industrial firms will be introduced into the constituency.
If we are successful in obtaining such a change of policy, it will, of course, involve some expansion in the city and additional land will be required for development. Without the Bill, it will be very difficult indeed for the local authority in my constituency to acquire the land except at exorbitant cost. I appreciate, of course, that the problem of rising land prices is a national problem which affects nearly all constituencies in the country. In my own constituency, the cost of building land has risen very greatly since the dismantling of the Town and Country Planning Act, 1947, particularly during the years from 1958 to 1964, when the local cost of building land rose from between £500 and £1,000 an acre to between £5,000 and £20,000 an acre and over.
I therefore greatly welcome, and I believe that my constituents will welcome, the proposal to set up a Land Commission with power to acquire building land at less than its present inflated price and to make it available for housing and other purposes. I also welcome the betterment levy on the development value of land resulting from planning permission to develop and also from public expenditure, such as expenditure on street lighting, schools and new roads.
The betterment levy will not, of course, itself reduce the price of land but neither, I believe, should it increase the price, since land is already being sold at the most that the developer or, in the last resort, 638 the purchaser, is prepared to pay. To argue otherwise—and it is argued otherwise—is to say that landowners at the present time are forgoing increased payments which they could secure if they tried, and I do not believe that this is the case.
But I regret, nevertheless, that the rate of betterment levy and, consequently, the price at which the Commission will buy building land, means that, even at the higher rate of 50 per cent. levy, land will still be sold for many times its current use value, with a great deal of the capital appreciation created by the community through the giving of planning consent and by public development remaining in the hands of those who have done nothing to create it.
The White Paper on the Land Commission gives as an example agricultural land worth £300 an acre whose value is increased to £3000 an acre by the grant of planning permission for housing development. A 50 per cent. betterment levy, the higher rate mentioned in the Bill, on the difference of £2,700 would mean that the Commission would still have to pay £1,650 an acre for land with a current-use value of only £300, and that is five times as much. Even after payment of levy at the higher 50 per cent rate, the owner would still be left with a capital gain of £1,350 for every acre for which he had presumably paid only £300, and I see no moral or social justification for that.
In conclusion, I wish to refer to a matter which is understandably not dealt with in the Bill, although it is connected, a matter which has caused considerable dissatisfaction at least in parts of my constituency. If, as I believe, there is a good case for not allowing owners of land to make an untaxed capital gain as a result of the value of their property being enhanced by planning decisions and development, there is an equally good case for not expecting owners, particularly owners of houses, to bear a capital loss as a result of their property being depreciated by planning decisions or development. This is the other side of the coin from that with which the Bill deals.
What happens in some cases is either that the owner's compensation is inadequate, or no compensation at all is payable. Where a house or the site of a 639 house is required for some public development, say, the construction of a new road, the owner of the house is paid the market value together with some sum for disturbance; but the compensation which he requires and the compensation to which he is entitled is the replacement cost of the house, namely, the cost of buying another similar house, neither better nor worse, and this may not be the same as the market value. Where the replacement cost is higher than the market value, the owner is expected to bear a capital loss. If the moral and social grounds underlying the Bill are good, there is an equally good argument for not allowing an owner in such a case to bear a capital loss.
In other cases, however, the value of a house may be lowered by a planning decision, or some development such as the construction of a new road, without any part of the property having to be acquired. In these cases, no compensation is generally payable—it is in some circumstances—and the owner, therefore, stands to bear a capital loss, due to the depreciation of his property, without any recompense from those who stand to gain from his loss, which is an insupportable position. That, too, is the other side of the coin with which the Bill deals.
I appreciate that this is a difficult problem with considerable ramifications and that any amendment of the law, which, I understand, is the Land Clauses Act, might result in local authorities being faced with heavy claims for compensation from owners whose property is devalued by some planning decision or by some public development. However, I hope that my right hon. Friend will give the matter some consideration, because if, as I believe, the social grounds for the Bill are well founded, there is equally a good case for reconsidering the present position whereby some owners of property are expected to bear a capital loss.
§ 5.25 p.m.
§ Mr. Hugh Rossi (Hornsey)
I, too, wish to take advantage of this first opportunity to address the House, for which I thank you, Mr. Deputy Speaker, to pay a tribute to my predecessor, Lady Gammans. In doing so, and I know that it would be her wish, I should like also to mention her husband, the late Sir David Gammans, also a former 640 Member for Hornsey and a former Assistant Postmaster-General. No doubt there are many yardsticks in the House by which the value and worth of a Member are judged, but to my mind the most conclusive are the warmth and affection with which a Member's name is known in his own constituency. Together, Sir David and Lady Gammans brought help and comfort to countless constituents. It will be no surprise to hon. Members to hear that today it is impossible to go about the streets of Hornsey without meeting people one after the other who say how much they owe to the Gammanses. In 25 years the names of Gammans and Hornsey have become virtually synonymous.
During those 25 years, Hornsey has experienced many and profound changes. It has suffered processes which are relevant to any discussion of land shortage, or the cost of land. Hon. Members are no doubt aware that Hornsey is an inner suburb of Greater London, a dormitory area which saw its most rapid development just before the turn of the century. Before that development took place, there was to be found on what is now the western boundary of the constituency the village of Highgate with many buildings dating back to Cromwellian times and commanding the northern route out of London. Some two miles to the east of that village was to be found another rural hamlet, Hornsey. Between the two villages rolled the fertile and wooded slopes of the Middlesex hills.
As our railway system began to develop and to spread outwards from the centre of London, bringing Highgate and Hornsey to within minutes of the centre, row after row of Victorian and Edwardian houses followed one another over those hills and slopes. By 1884, the first steam cable tramway in Europe was groaning its way to the top of Highgate Hill and the merchants and bankers and men of business who bought those houses, most of them on leasehold tenure—and on that hangs another debate, I feel sure—were the earliest commuters, although theirs was a very pleasant and agreeable commute. Travel is another frustration and grievance of my constituents.
The most pressing problem of all which we have in Hornsey is that of housing, of land shortage and of land cost. It 641 arises directly from what I have been trying to describe—the age, the size and the character of the houses which form my constituency and their nearness to the centre of London. Hornsey is more than vulnerable to the great pressure on land space which is being exerted on London from outside during the post-war years. The increase in multi-occupation, with all the attendant social evils, is more marked in my constituency than virtually anywhere else in the Greater London area, as Milner Holland has demonstrated.
One in five of the households in Greater London shared dwellings in 1961. In that year the figure for Hornsey was one in two. In the Greater London area, in the same year 8 per cent. of the dwellings were sub-divided. In Hornsey the figure was one in three. Between 1951 and 1961 there was a 20 per cent. increase in the number of dwellings split into three or more units. This process is continuing and accelerating. With the maintenance of high mortgage and interest rates, with the phenomenal rise in the rate burden—over 60 per cent. in two years—more and more owner-occupiers have been compelled to let off rooms in order to keep themselves out of debt. So multi-occupation increases.
As this demand and these densities increase, so does the cost of land, and upwards of £40,000 an acre for residential land is not an extraordinary figure to pay. These are the problems facing my constituents, and which I have in mind when I turn to this Bill. I am disappointed in what I read. There are two main purposes in the Bill, as I understand it. One is to reduce the cost of land and the other is to make more land available for redevelopment—both plausible purposes.
How is this to be done? We are to have, first of all, a levy. Secondly, we are to set up an entirely new Government Department to acquire and redevelop land. So far as the levy is concerned, I am afraid that I fail to see how any oncost will reduce the price. Taxation is one thing. By all means have a tax on profit. We have a precedent for a tax on capital gains as well as on income. But a levy on value of land is something entirely different and something that can only be passed on to the consumer. Again, with the Land Commis- 642 sion I believe that the proper agencies for the redevelopment of land are the local authorities. If their powers are not sufficient, then Parliament can extend them. If their finances are not sufficient, Parliament can supply their needs.
The Minister mentioned a little earlier that pilot schemes were to be set up, operating between the Ministry of Housing and Local Government and local authorities, to study the problem of redevelopment of twilight areas. Some years ago the Borough of Hornsey carried out a survey of its entire area, and brought forward imaginative schemes for a comprehensive redevelopment of these twilight areas. It adopted industrialised building methods—one of the first authorities in the Middlesex area to do so—in order to accelerate the rate of this redevelopment. But its plans were hampered and frustrated through the crowning problem, that of decanting families from its redevelopment areas when the remainder of its area was already highly developed and densely populated. The problem was not one of acquisition and management of the land, but of population pressure. It is the same problem which is at the basis of our high land costs. The Government should be looking for a solution to this problem. It will not help to set up an entirely new agency to acquire land in competition with the local authorities, at a cost of £7 million to the taxpayer.
The measures which the Government can take are indicated in the South East Survey. We want more new towns, more expanded towns, encouragement in the resiting of industry and commerce, the creation of attractive regional centres to remove the magnetism from London and focus it elsewhere, so that this pressure is relieved. This is the direction in which the Government should be devoting their attention. While their intentions appear to be most laudable, I feel that they have entirely missed the point. They are producing an impracticable solution, a measure unrelated to the causes of the programme, certainly so far as they affect my constituency. I regard it as a great pity that Parliamentary time should be occupied by Measures such as this.
§ 5.36 p.m.
§ Mr. A. J. Gardner (Rushcliffe)
I hope that the House will grant to me the indulgence that it normally grants to 643 Members speaking for the first time. I count it a privilege to be here, and particularly to follow the previous Member for Rushcliffe, Sir Martin Redmayne, who served that constituency for 16 years. I am sure that as a Government Chief Whip and an important Front Bench spokesman, he commanded considerable respect. I know that that is only part of the respect due to him, and rightly so, by people in my constituency. Sir Martin served the people of Rushcliffe very well indeed.
While I cannot claim to share his political views, I hope that during the time that I am in Parliament I can continue the very good service which he gave to everyone in my constituency. Rushcliffe is not an unusual constituency except perhaps in so far as the Boundary Commissioners, in their wisdom, divided it in half by the River Trent, and made it impossible for any kind of political organisation to function effectively. It is not unusual in the sense that it consists of a large and growing urban district, surrounded on the north by a part of the Nottingham coalfield and on the south by a large rural area.
In a sense it represents in microcosm the British electorate as a whole. For the purpose of this debate it shares with the rest of the country another basic and very important problem—a desperate poverty in the resources available for use in the public sector. It matters little in which direction we look. Consider the environment in which we live, or, as perhaps some people would say, have to suffer. We live in a beautiful island, but long years of the immediate pursuit of immediate financial gain have left us with an environment which is often at worst downright sordid and at best quite often shabby. Faced with the kinds of problems that that environment leaves, too often our local authorities are unable to cope.
It is true that one can look round and see fine examples of planned environment, with new towns and new neighbourhood units in old towns. We have one or two such proud places to show in Rushcliffe, but the point is that far too many of them are exceptions, and they are remarkable because they are exceptions. They are written up in the learned 644 architectural and town and county planning journals, and they make the headlines in the national newspapers because they are exceptions.
The environment in which most of us live is a very poor one. We are very short of resources when we come to look at the range of social and community services which are available in most localities, when we look at the poverty in our health and welfare services and at the shortage of facilities for whole ranges of people, whether we talk about welfare services for the old, for the young or for the mentally handicapped.
The House will forgive me when I say that I tended to smile wryly when right hon. and hon. Gentlemen were debating at length the virtues of various types of military aircraft costing millions of pounds, because I was considering how difficult it is to get someone who is mentally handicapped into a training centre, and how difficult it is to raise the odd thousand pounds which would be necessary to build a new youth club or create a new playing field.
We can see that poverty worst of all when we consider some of the basic community services which are needed. We see private commercial and housing development going ahead apace, while the basic community services lag far behind. There are those cynics in the village in which I live who suggest that there is some sort of unholy working arrangement between the manager of the local water board and the officials responsible for sanitation. The manager of the water board ensures that there is only a trickle of water coming out of one's bathroom taps in order to maintain the situation in the already grossly overloaded sewerage system.
I do not suggest that that is the fault of those responsible for the administration of local government. The responsibility clearly lies with us, because we have accepted a system of local government finance which belongs in the age of the Poor Law. We have devoted too little investment in the public sector in terms of social capital. There is a point of view which is much too prevalent and which believes that public spending is in itself wholly bad and private spending is wholly virtuous.
645 But, most of all, the situation arises because, as my right hon. Friend says, most planning has to be negative, since local authorities lack both the resources and the command of the basic factor in those resources, land.
I welcome the Bill because I believe that it is morally right that those who reap capital gains from the decisions and from the social investment undertaken by local authorities should contribute very much more to the social capital that is available and needed to do the kinds of things a about which I have been talking.
I believe that it is also important that we have the kind of planning machinery which enables us to plan our whole environment. I do not share the fears expressed by hon. Gentlemen opposite. My fear is that the rate of levy proposed may be much too small and that the powers given to the Land Commission will be much too weak. I am speaking quite seriously when I beg to doubt whether we can tackle the problems of urban renewal, plan a sensible environment and come to terms with reports like the Buchanan Report in the context of private ownership of urban land.
The Bill has been called a bad one. I regard it as one of the most radical Bills ever presented in the House. If I may express a personal view, I am sorry that there are not many more of my hon. Friends here to see this radical Bill go through its Second Reading.
Some of the kinder newspapers have suggested that this is going to be a great reforming Parliament. I hope and believe that they are right and that we are now in the first stage of an era of great reform. I hope that it will be followed by a radical look at the finance and organisation of English local government. At the same time, in the lifetime of this Parliament, I hope that we shall see the growth of sensible and democratic systems of regional government. If I can see those things come in the lifetime of this Parliament, I shall feel privileged to have been a member of it.
§ 5.45 p.m.
§ Mr. John Boyd-Carpenter (Kingston-upon-Thames)
It falls to me for the first time in my experience as a Member of the House to have the privilege of congratulating three successive and highly successful maiden speakers.
646 If I may venture into the controversial, not being debarred in that way, I will say how delighted I was that all three of them gave clear illustration that they did not wholly accept what I think is the somewhat outworn convention that a maiden speech should be wholly impartial and uncontroversial. I thought that all three speeches gained from the fact that the three hon. Members, apart from the very proper courtesy that they showed to the House, addressed themselves, from their own point of view and without fearing to enter into controversy, to the issues that arise in the Bill. The success which all three speeches had owes a great deal to that.
The House appreciated the tributes paid by all three hon. Members to their predecessors. It so happens that all three of them are old friends of mine, but I think that all hon. Members felt that those tributes were very properly paid, particularly that of the hon. Member for Cambridge (Mr. Robert Davies) to the powerful efforts which Sir Hamilton Kerr made in the matter of the rating problem of the colleges. I would only say to the hon. Member for Cambridge, with his determined advocacy of the expansion of his lovely city, that I hope that he will remember the warning of my own university of Oxford where other policies were pursued and where it has now become only too true to describe it as the Latin Quarter of Cowley.
The hon. Member for Hornsey (Mr. Rossi) referred rightly to both his predecessors. I think that the House has very warm memories of Lady Gammans and of the courageous way in which she stepped into the breach after the sudden death of her husband, and of Sir David Gammans, whom those of us who were in the 1945 Parliament will remember as one of the most formidable opponents of the Government of the day.
The tribute of the hon. Member for Rushcliffe (Mr. Gardner) to Sir Martin Redmayne—a deeply admired Chief Whip, which is a very difficult thing to be—was very much appreciated, as was his own most effective contribution dealing with the problems of his constituency.
Now may I turn to the Minister? The right hon. Gentleman referred to a speech which I made when we were considering the Bill a few months ago as being full 647 of rhetorical fallacies. No one would accuse the right hon. Gentleman of having indulged in rhetoric this afternoon. His speech might have been a little more entertaining had he done so.
The House realises that the right hon. Gentleman was speaking under very real difficulties, because, first, it is extremely difficult to move for the second time the Second Reading of what is substantially the same Bill after an interval of only three months, and, secondly, as we heard from the Prime Minister this afternoon, the right hon. Gentleman is in a very curious position. According to the Prime Minister, the right hon. Gentleman is in the process of being merged—or is it perhaps submerged?—in the Ministry of Housing and Local Government. Indeed, the Prime Minister told us that some of his staff have already moved. At times it seemed as though that included the member of the staff who writes the right hon. Gentleman's speeches, because there were a number of obvious gaps in his speech, no doubt explicable for this reason. There the right hon. Gentleman stood, his Department dissolving around him, the Casabianca of Whitehall, desperately trying to convince the House, without, of course, the aid of rhetorical fallacies, of the value of the Bill.
In those circumstances, it was understandable that, instead of trying to make a case for the Bill, the right hon. Gentleman, both at the beginning and end of his speech, devoted himself to what he thought was the more agreeable task of denouncing the housing policies of successive Conservative Governments, and denouncing what he called "Bingo Britain"—a phrase which I suggest is not particularly fresh or novel. It is significant, particularly perhaps to those who talk about bingo Britain, that it is the manufacturers of bingo equipment who are to receive a subsidy under the Government's Selective Employment Tax, while such a sober occupation as the building of houses is to be subjected to taxation. Perhaps the right hon. Gentleman will reflect for a moment before he uses that particular metaphor again.
After all, whatever he may say about the periods of Conservative Government, as my right hon. and learned Friend the Member for Hexham (Mr. Rippon) said, in that period we built more houses than 648 had ever been built in this country, and, judging from the record of the right hon. Gentleman the Minister of Housing and Local Government, will be built until we get another Conservative Government.
The Bill, no doubt for the reasons which I have mentioned, is singularly ill-drafted. We had the first set of Amendments circulated to us this morning, and there will no doubt be a series of them during the next few weeks and months. Being desirous, as always, to help the right hon. Gentleman, I set about redrafting the Long Title, and perhaps I might help the right hon. Gentleman by suggesting that instead of the rather neutral, somewhat confused language we see in the Long Title, it should read:A Bill to provide for the nationalisation of land, to increase the cost of housing, to diminish the rights of the citizen, to impose complicated taxation, to set up a large and expensive bureaucracy, and for purposes connected thereto.We now know that the main purpose of this Measure is the nationalisation of land. In the last Parliament, when the Government had a majority of three or four, and the right hon. Gentleman was necessarily very sensitive about the attitude of hon. Gentlemen sitting on the second bench below the Gangway, this was denied. In his Second Reading speech the right hon. Gentleman said:I am told that I am introducing a subtle form of creeping nationalisation. Again, this is nonsense."—[OFFICIAL REPORT, 31st January, 1966; Vol. 723, c. 697.]That is all very well, but the Prime Minister has let the cat out of the bag. I do not know whether the right hon. Gentleman recalls the Prime Minister's speech at Chiswick during the General Election, when he said:So far as the land question is concerned, we said we would take the urban building land on which planning permission has been granted into public ownership. That is what the Land Commission will do …"."Taking into public ownership" is the precise synonym for "nationalization", and, whatever the right hon. Gentleman may have said when he was sensitive about hon. Gentlemen below the Gangway, there we had the Prime Minister telling a public meeting—devoting a large part of that speech, which I understand contained most agreeable references to myself, to the statement 649 —that land was to be nationalised. The right hon. Gentleman would do better to admit that this is a Bill whose major purpose is the nationalisation of a large part of the land of this country. This is, of course, the explanation of what, after the demonstration of the confusion of this Measure which my right hon. and learned Friend the Member for Hexham gave so well earlier this afternoon, is an otherwise inexplicable Measure. This is a nationalisation Bill.
The right hon. Gentleman has referred to the sensitiveness of the previous Administration to my colleagues on this bench. Would he not agree that we opposed the Second Reading of the Bill at least as vigorously as his own party did?
§ Mr. Boyd-Carpenter
I am delighted to pay tribute to the hon. Gentleman for that. It was the more courageous, because the sensitiveness of the right hon. Gentleman was due to the fact that at that time the noble Lord, Lord Wade, wrote a letter to The Times, from which it appeared that Lord Wade was under the illusion that this was not a nationalisation Bill, but the hon. Member for Orpington (Mr. Lubbock), unlike his noble Friend, was not taken in by that. I am very glad to be able to clear that up and pay a proper tribute to the hon. Gentleman.
This is the third time that this Bill has appeared in the Queen's speech, and the second time that it has had a Second Reading, or will have if the House gives it one tonight. As the right hon. Gentleman admitted, it is basically the same Bill, except that, like everything that this Government touch it has been subjected to the processes of inflation. Three months have produced nine more Clauses, and five more Schedules—quite a rapid rate of growth since January—but the arguments put forward, the pretexts put forward, are still the same, and I should like to deal with those.
First, it is a means of raising the levy as a form of tax. We on this side of the House say quite firmly that the Inland Revenue is perfectly competent to do that. At no stage in our discussions has the right hon. Gentleman disputed the competence of the Inland Revenue to perform this task. He knows that not even the Commission can perform it without using 650 the machinery of the Inland Revenue, particularly in respect of valuation.
Secondly, we are told—the Prime Minister said this outside the House—it is to help planning, that it is necessary for the proper planning of our land. The right hon. Gentleman knows that the proposed Commission has no planning powers of any sort or kind, that these remain, and rightly remain, with local authorities and the Minister of Housing.
Then we are told that it is to enable land to be compulsorily purchased when it is needed. Is it really disputed that local authorities, the central Government, the new town corporations, the whole variety of official organisations in this country, possess an adequate collection of compulsory purchase powers? If it is suggested that these powers are inadequate, surely, instead of setting up a new body to exercise rights of compulsory purchase, the simplest thing would be to make whatever necessary adjustments are required in the law of compulsory purchase?
The existing organisations understand these things. Sometimes they make mistakes, but they are going concerns which understand the working of compulsory purchase, and the need for compulsory purchase—which no one disputes in proper cases—can surely be properly met by the experienced bodies which already possess these powers?
The advantage of many of these bodies is that, unlike the Land Commission, they are answerable to somebody. Right hon. Gentlemen opposite are answerable to the House, elected local authorities are responsible and answerable to their electors. When one is taking great powers of compulsory purchase—and let no one underrate the seriousness of taking any man's land from him compulsorily—surely there are advantages in having those powers exercised by responsible, elected bodies which can be called to account at once, rather than fix a body like this, which, as someone once said, having neither a bottom to be kicked nor a soul to be saved, is subject to neither of the normal sanctions of decent conduct.
The right hon. Gentleman still seems to cherish the illusion that the imposition of a tax will not increase the price of land; indeed, he goes further. He 651 suggests that it will decrease it. This is an important argument, but I understand that it is liable to such interruption that if, at the moment, I am indulging in oratorical water-treading, I hope that I shall not incur the displeasure of the Chair—because this is the nub of the hon. Member's argument—