HC Deb 26 October 1966 vol 734 cc1254-9
Mr. Graham Page

I beg to move, Amendment No. 195, in page 46, line 36, at the end to insert: (b) show the amounts of the several factors used in the computation of the levy and the calculation of the levy therefrom.

This Clause provides for a notice of assessment of levy. The Commission is obliged to serve on the prospective levy payer a notice of how the levy is assessed. As the Clause stands, all that has to be indicated in the notice is the chargeable act or event to which it relates. This is what the levy payer has told the Commission, and now the Commission is merely obliged to state the same thing back to the levy payer. Then it must specify the principal amount of the levy, and finally it must specify a date on which the levy is charged.

No information is given to the man from whom the money is demanded as to how the principal amount of the levy is calculated. Yet within a period of two months, if he wishes to contest the levy charged upon him he has to give notice. That comes under Clause 46. But how is he going to be able to put up a reasonable claim that the levy is wrongly calculated if he does not know the factors upon which the calculation is based?

3.30 a.m.

It is not a matter of just one or two factors. In Committee I gave some equations. The process that one has to undergo to discover what the levy is, is first to discover current use value. Current use value is existing use value plus planning permission for material development. Having got current use value, one has to translate that into base value. Base value is eleven-tenths current use value plus severance depreciation levy. Another equation is base value equals the market value at the time of the last relevant disposition.

All these figures have to be discovered by the Land Commission and put into its calculations. Having got base value, one has to compare it with market value, and market value is the purchase price plus the supplementary provisions which are to be found in the depths of one Schedule. Having got as far as market value, one has to find net development value. That is market value minus base value plus expenditure on improvements and ancillary rights. Eventually one gets the betterment levy by saying that it is four times the net development value over 10. All that the levy payer is going to be told is the last figure—the betterment levy. There will be just one figure in the notice—"You are to pay £X". He will not know from that how the figures are calculated.

It would surely save a lot of administrative time if he were given that information on the notice when it went out. It must be available to the Commission. The Commission will have worked the figures out. Why not tell the levy payer exactly how the levy is calculated? If this is not done, 99 people out of 100 will ask, "How is this figure calculated?" They will write to the Commission and demand to know. That will increase the administrative work of the Commission. There may be those who are too nervous to do that, thinking that they may let themselves in for more levy if they question the figure on the notice. It is grossly unfair that they should not be told how this is calculated and be given an opportunity to question it on a notice of objection.

We discussed this earlier in Committee. The Minister said that he would look at the point again. But nothing has appeared in his name on the Amendment Paper. Whether he proposes to do anything about it by regulation I do not know, but certainly something must be done about it. These notices cannot be sent out to the person who is called upon to pay the money, with just one figure in them and a demand—"Pay this sum".

This is a new form of demand. Nobody will read through the Schedules to the Bill to find out how the amount ought to be calculated. People will rely on the Commission. But they will want to know whether the Commission has taken the right figures—for example, the right purchase price and the right amount for improvements. Suppose that the Commission, having been informed of certain improvements which have been done to the property—and the expenditure on improvements is one thing which has to be taken into account in discovering the betterment levy—decides, "These were not really improvements; we will cut the amount down by 50 per cent." The levy payer will want to know how that comes into the calculations.

This is one of the most important Amendments we have considered today. To the ordinary individual who will be charged the levy, it is a new form of taxation. It is something which people will not understand when it is first charged and it should be explained fully to them. Otherwise they will pester the Commission, and if there is any question of disorganisation of the machinery of the Commission there will certainly be disorganisation on this if the citizen is not told clearly how the amount of his levy was worked out.

Mr. Skeffington

I congratulate the hon. Gentleman in showing again that once one has grasped the simple principle of the formula these things are not so difficult to work out. He has given a graphic demonstration of that, as he did in Standing Committee. I hope that we have given some useful instruction from time to time and that, in the clash of argument, we have arrived at an understanding of the principle, which is not quite so complicated as has been suggested, although I admit that it is not absolutely simple.

There are several points about the Amendment and I hope that, when I have explained them, the hon. Gentleman will not feel the need to press it. In Committee, the Government gave an undertaking that the notice would set out the main figures used in the computation, including base value, improvements, market value and others of that kind. The levy payer will be able to query any of these by correspondence. It is likely that, in the overwhelming number of cases, the figures will be agreed by the Commission and the levy payer before notice of assessment is served. In any case, the notice will contain those factors, so the position is not as difficult as the hon. Gentleman has made out.

The Amendment uses the phrase "the several factors". That is a term of art. I do not know what the legal significance is. We have not been able to find out. It may well be that, in order to ensure that a notice is not challenged, the Commission would, if the Amendment were accepted, have to provide in some cases two or three pages of calculations which, in the overwhelming majority of cases, would be unnecessary.

For example, there is the position of a developer who has assembled over the years perhaps 50 or 60 parcels of land. The value would be the aggregate on all of them. If the Amendment were carried, it is likely that each one of the calculations for each parcel of land would have to be shown separately on the notice. I think that would be an unreasonable requirement.

Since I have specified that the main figures will be on the notice, that the figures are likely to be agreed between the levy payer and the Commission before the notice is served and that the levy payer can query any of them by correspondence, I hope that the hon. Gentleman will be satisfied. We would not be prepared to fetter the Commission with a phrase like "the several factors", which would have the consequences I have outlined. I do not think that that is what the hon. Gentleman would want and I hope that he will not press the Amendment.

Mr. Graham Page

The hon. Gentleman said that these points would be given in the notice. Why not put that in the Bill, or in regulations? At least that would give some assurance that the Commission, which will be heavily overworked and which will no doubt cut out all these frills, to put it that way, and merely abide by what it is told to do, will do what is wanted. I fear that unless the Commission is told in that way, it will not give these figures.

The hon. Gentleman will not be the Chief Commissioner—I do not know and perhaps he will be and perhaps that is why he is giving us all these assurances and undertakings. But at some time there will be somebody at the Land Commission and it will not be someone speaking at the Dispatch Box tonight and he will say "I am not bound by what Ministers say and I shall run the Commission as I choose, excepting only that I will run it according to the law. if I am bound to do something, I shall, but if to do extra things I have to engage extra staff, I shall not do them". We want the Commission by law to have to give these figures.

Mr. Skeffington

The hon. Gentleman is being a little unreasonable, for if an undertaking or assurance is given in the House, it can be relied on. In any case, one has to observe a balance between how much is put into a Bill and how much left out. There have already been complaints that the Bill is too long and now hon. Gentlemen opposite want to make it longer.

There is the other disadvantage, which I have pointed out before, that if one is too specific in the way which the hon. Gentleman requires the notice to be, in certain circumstances that may preclude the Commission from giving the sort of information which it might feel could be given, but which it might not be empowered to give. Having considered this matter, we think that the balance of advantage is with the Clause as now drafted.

Amendment negatived.

Mr. Willey

I beg to move, That further consideration of the Bill, as amended, be adjourned. We have done a very good stint and worked very hard. We have to keep our intelligence bright for the further consideration of the Bill.

Mr. Graham Page

The Minister has made a most agreeable proposal, but I do not want to be bound to any time which we might spend tomorrow. There is still a great deal left to be done and many hours to spend on the Bill and I do not know whether we can get it through tomorrow.

Question put and agreed to.

Bill, as amended, to be further considered this day.