Clauses 27 to 85

HC Deb 25 January 1967 vol 739 cc1582-622

Lords Amendment: No. 20, in page 31, leave out Clauses 27 to 85.

Mr. Willey

I beg to move, That this House doth disagree with the Lords in the said Amendment.

I understand that the Amendment was moved on procedural grounds. I think that the Lords will wish us to restore the Clauses that the Amendment would leave out.

Mr. Graham Page

On a point of order, Mr. Speaker. May we seek your guidance on this, as I understand that whether we are entitled fully to debate the Minister's Motion has been questioned? My submission is that we are entitled fully to debate it.

The Motion is to restore Part III of the Bill—the betterment levy—which has provisions creating a charge on the people. But they form a separate subject in a Bill which is otherwise within the competence of another place to amend in a non-financial Bill; they are separate financial provisions in a non-financial Bill.

Eskine May says at page 841: The right of the Lords to reject a bill for granting aids and supplies to the Crown has been held to include a right to omit provisions creating charges upon the people, when such provisions form a separate subject in a bill which the Lords are otherwise entitled to amend. The claim of privilege cannot, therefore, be raised by the Commons regarding Amendments to such bills, whereby a whole clause, or series of clauses, has been omitted by the Lords, which, though relating to a charge, and not admitting of amendment, yet concerned a subject separable from the general objects of the bill. In the present instance, the Lords have taken that course and rejected the whole of Part III. The Government have therefore seen fit to put this general Motion on the Order Paper. I submit that we are entitled to consider and debate as a whole all the Clauses which the Government seek to restore to the Bill, not merely those which, we are informed by HANSARD, were amended in another place before their removal from the Bill.

I submit that we are not limited in our debate by what Amendments were moved in another place. The Motion before us is that we restore the whole of Part III. We are not limited by the intentions of any noble Lord in another place in moving to leave out any particular Clauses. His intentions may have been that this House should discuss only certain parts, or certain Clauses of this Part of the Bill, when restoring it. But I think that even the most fervent supporter of another place would not argue that our debate should be regulated by an intention which motivated a noble Lord in making an Amendment in another place.

I therefore seek your guidance and ruling, Mr. Speaker, on whether the Motion is fully debatable.

Mr. Speaker

The hon. Gentleman raises two points of order. I want to deal with both of them, one of which I think to be of very great importance.

I understand that Lords Amendments Nos. 20 and 31, which leave out Part III —the betterment levy—and its related Schedules were left out by the Lords on Third Reading in order to avoid infringing Commons financial privilege. I would regard Part III and the related Schedule as together forming a Bill of aids and supplies, which the Lords may not amend but which they may reject in toto without infringing Commons privilege.

As the House knows, the right of the Lords to reject a Bill for granting aids and supplies to the Crown has been held to include a right to omit provisions creating charges upon the people, when such provisions form a separate subject in a Bill which the Lords are otherwise entitled to amend. The claim of privilege cannot, therefore, be raised by the Commons regarding Amendments to such Bills, whereby a whole Clause, or a whole series of Clauses, has been omitted by the Lords, which, though relating to a charge, and not admitting of Amendment, yet concerned a subject separable from the general objects of the Bill.

The scope of the debate seems to me to embrace the whole question of whether the House should agree to the Lords Amendment or, as the Minister proposes, to disagree to it. What I am concerned to preserve are the financial privileges of the Commons, and in my view they are in no way infringed by the Lords Amendments or by the Minister's Motion to disagree with that Amendment.

I hope that that deals with the question of privilege and of the scope of the debate.

Mr. Page

I am extremely grateful to you, Mr. Speaker, for that Ruling, which has made the position very clear.

I now wish to continue with the debate and answer the Motion that the House doth disagree with the Lords in their removal of the Clauses which constitute Part III, the whole of the provisions about betterment levy.

It is very fortunate that the House has been given the opportunity to consider once again the betterment levy and the whole structure of imposition of the levy, its assessment and collection. Those are the things which are included in Part III and in Schedules 4 to 13.

I would describe the whole of that part, with its Schedules, as the great unknown. A whole series of vitally important matters is still unknown about the imposition assessment and collection of the levy, and unknown at this stage when we are not at the eleventh hour, but, I would say, the thirteenth hour of the Bill. Right at the very conclusion of debates on the Bill we still do not know many of the important things which are so essential if the levy is to be administered without causing chaos.

For example, the Bill gives no date on which the acts giving rise to the levy will rank as chargeable. It is true that the Minister has said that the appointed day will be on such and such a date, but not long ago he gave us one date and has now changed his mind and thinks it will be another. For all we know, when we pass the Bill and it receives its Royal Assent, his mind will change again. This is so important at present when such a short time may be left between the Royal Assent and the appointed day that it might be better to postpone the whole business of the levy at this stage.

That is one of the unknowns: when the levy is to take effect and on what acts. The second unknown is what transactions are to be relieved from the levy, or from notification to the Land Commission. The levy is chargeable, by Clause 27, on six events—some small, some large. Those events may range from putting a wire across a person's property in order to get Rediffusion from one place to another, to a £100 million development. Each is to be treated alike concerning notification to the Land Commission, assessment of the net development value and assessment of the levy. But there is no doubt that the Government will be forced to exempt a substantial number of transactions, more than those stated in the Bill.

We have been told that there are to be 2,000 employees. A total of 1,800 has been recruited already. Therefore, there will be 2,000 little Canutes against this tidal wave of notifications and assessments of the levy.

8.0 p.m.

There is a Clause amongst those which have been removed from the Bill—Clauses 27 to 85—which gives the Minister power to exempt any transaction from the levy. That is Clause 63. We have never had an explanation of what it is intended should be exempt from the levy. Surely that alone gives reason for saying, "Let us agree with the Lords in their Amendment and leave these Clauses out of the Bill at present until the Minister knows exactly on what properties, on what transactions, he intends to charge the levy and requires notification to be made to the Land Commission."

A further unknown is the mysterious Case F. The Minister has met us to some extent on Case F. Originally, it was to be entirely at his discretion as to the transactions which would be chargeable under this Case. He wished to leave himself a completely blank cheque to fill in at any moment to say on this or that transaction that there shall be a levy chargeable. He has now defined a number of cases in which he can make orders applying the levy. That has merely described the limits within which he can make these orders. As far as I know no one has seen even draft orders as yet, but here we are about to finish our debates on the Bill with Case F an unknown quantity still. No one knows what is in the Minister's mind beyond the very wide boundary which he sets himself in the Clause imposing Case F.

There are three unknowns already. I have a fourth, and that is the amount of the levy. Again, we have had a statement from the right hon. Gentleman that the levy is to be 40 per cent. of the net development value. I believe that that is the figure in his mind at present, but his mind changes on so many matters in connection with the Bill that, when it becomes a Statute, we may be told that 40 per cent. is not enough and that it has to be 45, 50 or more, or perhaps we shall have the welcome report that it is not to be 40 per cent., but 30, 25 or perhaps 20 per cent.

This is legislating on a forecast. The figure is not firm. It is not laid down in the Bill in any way. We cannot be certain that the right hon. Gentleman, perhaps persuaded by the Chancellor, may not alter that 40 per cent. before it takes effect.

In connection with the amount of the levy, we are still in doubt about the extent to which the levy is to be double taxation. If the Bill received the Royal Assent as it is at present and if there is no amendment to the present Finance Acts, there is double taxation, in this form. At present, Capital Gains Tax, Corporation Tax and the normal Income Tax paid by a dealer in land all cover the same gain for profit as is covered by the levy. A man who may be paying a high rate of tax, with Surtax on top of Income Tax, may be paying nearly 100 per cent. or perhaps even more out of the gain which he makes on the disposal or development of property.

We have been assured that that is not intended but, as the law stands, when the Bill receives the Royal Assent, that will be the position. We are told that the Finance Bill will take care of this, that the Capital Gains Tax and the Corporation Tax in future will apply only to an increase in current use value and that, because the levy starts at a base figure of current use value, no increase in current use value will be taken into account in net development value, and it is the net development value which is the basis for the charge of the levy.

That may be—in the next Finance Bill. But we have not seen the Clauses in the Finance Bill. We can only look at the law as it stands and say that, by passing the Bill, we are double-taxing a gain made out of certain transactions, taxing at 40 per cent. Corporation Tax and 40 per cent. levy.

In addition, we do not know the position of the dealer in land who always pays on the whole of his gain out of his transactions, after taking into account what he is allowed as expenses and deductions according to the normal law of Income Tax. I have not been able to discover from any Answers, from correspondence which I have had with the right hon. Gentleman or his Parliamentary Secretary, nor from debates on the Bill as yet, what is the position of a man who pays normal Income Tax on his dealings in land and what is to be taken into account against that when he pays the levy. Is it the actual amount of the levy or the net development value on which the levy has been assessed? These are matters which are unknown to us when passing this vitally important legislation.

Again, one looks at Case B, dealing with transactions by means of a lease. These transactions are to be assessed on some capitalised value of the lease based upon the future rent. It may be that the Commission, under one of the Clauses which come into this debate, will allow the person liable to the levy to pay by instalments when he is paying it out of money which he has not yet received, as, indeed, a landlord would be paying it before he receives his rent.

We do not know to what extent the Commission is prepared to grant that right to pay by instalments, nor does anyone know how the levy is to be assessed on the granting of a lease. The Clause is extremely complicated, and only when the district valuers get down to the job of making these assessments and we know the rules which they are applying can it be known how that Clause is to be interpreted.

Case C, too, is an unknown quantity. That is where the levy is payable on the commencement of a project of material development. This being such a basic concept of the Bill, one would have thought that it would be found somewhere in the Bill. It has a vague definition somewhere in the Bill, but then we are told that "material development" is to be defined by regulations, but they are regulations which have not been seen by hon. Members, unless they happen to belong to some organisation which the Minister has consulted.

I take grave exception to that. Many of us have worked for month after month on the Bill. We have debated it on the Floor of the House and in Committee. The Minister has made certain statements to us about the regulations which he intends, but the draft regulations are not distributed amongst hon. Members. They are distributed amongst professional trade organisations, and hon. Members have to go scrounging round trying to find them.

Mr. Willey

The hon. Member will recollect that I made a very full statement in Committee at the earliest opportunity and invited him and his hon. Friends to make any representations they cared to make about it.

Mr. Page

But one must see the wording of draft Regulations in order to make intelligent representations. I have read that statement again and again. We are very grateful to the Minister for making it at that stage. No doubt that was what was in his mind at the time. But I want to give one example of the degree to which this is an unknown question. In the White Paper, outdoor advertising was said to be not a material development, and in an Answer to a Question in the House it was again said to be not a material development, but I understand that now, in the draft Regulations, outdoor advertising is regarded as a material development. That is one example. The Minister is entitled to change his mind. His statement was probably made in good faith at that time. But when he considered the Question in connection with the draft Regulations he found that it was impossible to exempt that operation. Until we see these Regulations in their proper form "material development" is an unknown quantity.

One of the worst features of the Bill is that the amount of the levy can remain unknown for six years. The Commission is given six years in which to assess a levy. Let us consider the case of a man who sells his house and perhaps a large enough garden to have a reasonable amount of development value. He receives the sale money for that house and buys himself another house in which to live. He spends that money, as anyone would, without waiting to see what the Commission decides he is lable to pay at some future date. Several years later the Commission may assess the figure and demand the money from him. This will be a matter of grave uncertainty for all those who have any transactions in property.

Other unknowns will be the factors on which the Commission or its district valuers assess the levy on any particular transaction. They are required to give notice to the person liable of the amount that he has to pay. But under the terms of the Bill they do not have to give him sufficient information to enable him to know how the levy has been calculated, and therefore to argue with the Commission that it is not the right figure.

I could go on for a long time, picking out of the Bill all the points which will be unknown to us and the public when the Measure leaves us tomorrow. This is not good enough. The Amendment made in another place has given us an opportunity to think again. The rest of the Bill could make a quite good Measure on its own. If the Minister is determined to have a Land Commission which can acquire land by compulsory purchase, can manage that land and sell it off in crown-holds and concessionary crown-holds, and so on, Part II provides what he wants. Let him proceed with that and get the Commission working. Let him drop the betterment levy altogether. It is being made law before we know its financial effects.

If we could debate this matter after we had seen the next Finance Bill it would be something, but at the moment we are dealing with this Measure—which taxes the public, although the right hon. Gentleman says that this is not a tax —without our knowing what other sums are to be taken out of the same gain or profit.

If the Government, after the public have had a chance to consider the matter further, are still determined to go ahead, let them bring back another Bill—and let us hope that it is constructed in a much better and more intelligent way than this one. I hope that the House will support another place in the Amendment, and that the betterment levy provisions will be removed, so that we may all have second thoughts and discover how it will affect individual citizens. We cannot know that as the Bill stands; therefore we should not include these Clauses.

8.15 p.m.

Mr. Rossi

My hon. Friend the Member for Crosby (Mr. Graham Page) has criticised Part III for what is not in it. I want to criticise it for what is in it. Part III gives us about 50 pages of text, supplemented by another 83 pages comprising 13 Schedules—all dealing with different ways of calculating betterment levy in a variety of different transactions with land.

We objected earlier today to the provisions for compulsory purchase, which are clear enough in their content; they are arbitrary, totalitarian and authoritarian. We complain about this part of the Bill because it is completely unintelligible. This part of the Bill has given the greatest trouble because of the way in which it is drawn and seeks to operate. It has given trouble not only to Members of both Chambers but to the professional bodies who have had the misfortune to have to consider it and who in future will have to advise their clients as to their liabilities.

According to the White Paper, the underlying philosophy of a betterment levy is that it is only right that there should be returned to the community some of the value created by it in land. That theory has an attraction. It seems quite fair that if a man is holding a piece of land, and the community, by developing outwards from the centre of the town towards that land, makes it more valuable—so that, ten years after he acquired it, he is able to sell it for development purposes at a greatly enhanced price because of this community activity—part of that value should go back to the community.

But our system of taxation could be adapted to meet this situation. It could be done quite easily by an extension of the Capital Gains Tax, without this frightful morass of words, which will cause the utmost difficulty in years to come. Citizens will not know where they stand. Their advisers will not be able to tell them. The Minister knows this, because he has had consultations with professional bodies who have told him that the Bill is unintelligible and virtually unworkable.

My hon. Friend the Member for Crosby mentioned Regulations that various bodies have been receiving but which hon. Members have not yet seen. These professional bodies are finding the regulations as unintelligible as they have found the Bill, and they consider it a gross imposition put upon them by the Government that they must consider and advise the Government on these regulations by the appointed day of 6th April. They consider this task barely possible, but they are being rushed by the Government's insistence on bringing the legislation into operation this spring.

This will boomerang on the Government's head in due course when the working out of this policy is felt by the ordinary men and women in the street. Our debates, dealing as they do with various subsections and paragraphs, have been highly technical throughout the Bill and scarcely understandable by ourselves —certainly not understood by the public. But when these provisions begin operating as an Act people will begin to see that every sale of a house, every lease of a house, the grant of a right of way over a plot of land, an application to change the use of one's property—all these matters will have to be notified to the authorities, and then, within a period of six years after the notification, one will get a bill calculated on one of the many formulæ which occupy 130 pages of text and 13 Schedules of the Bill. The people of this country will scarcely be able to do anything with the little bit of land which they own without attracting the provisions of the Act. Then they will have to rush to solicitors and valuers to ask them to explain the provisions—only to find that their advisers are almost as much in the dark as they are.

At an earlier stage I had some amusement with the Minister and the Parliamentary Secretary on one of the Schedules in trying to see how the Estate Duty provisions work. I produced a formula which looks very attractive on paper. But you have to apply this formula to your own personal affairs or the affairs of your family at some stage. I do not mean you, Mr. Deputy Speaker, although you and your family will be included and so will all our families.

I asked the Minister whether my formula was accurate, and he said that he thought that it was approximately right. This was several months ago. I asked him to write to me to tell me whether it was accurate. I have not been told that it was not accurate, and yet when I produced the formula I included a symbol "X" to represent an unknown factor. That unknown factor is still an unknown factor, and yet within a few months the Bill will become law and these formulæ will have to be operated. It will cause the gravest possible difficulty.

It is iniquitous that a man who sells his property and negotiates and receives his price should then have to wait possibly up to six years before he knows the amount of the levy or tax that he has to pay on that transaction. When a man sells a house, invariably he buys another. He makes his mortgage arrangements and enters into what is for him possibly the most important financial transaction of his life. He has to balance his finances very carefully. He knows what he is getting for his house, what he has to pay for the next house, what he has to borrow from the bank to bridge the loan, and what he has to borrow from the building society. He knows how much he is earning. He works it all out very closely, and then six years later the Government say, "We want £400 or £500". This is intolerable.

There is a later Amendment which would compel the Government to make up their minds what the tax will be within six months of the transaction, not six years. That is the kind of speed we want from the so-called efficient machinery which the great Socialist Party are building in this country. Let us see activity of this kind, which helps the citizen and does not penalise him. Then the Government can go back to the electorate saying that the action was taken for the benefit of the men and women of this country, instead of producing such Measures as this which takes their property away from them under odious special procedures and then taxes them on every little transaction they seek to undertake with their land.

This is a very one-sided business. We are told that if the value of the property is increased by an act of the community, one must pay part of the value to the community. On the face of it, that appears to be fair. But suppose the value of one's property is reduced by an act of the community. Suppose next to one's semi-detached house in a London suburb the transport authority builds a fly-over and one has cars travelling past one's bedroom window day and night through the act of the community. When one wishes to sell that house, one will not get the same price as that originally paid for it. Do the Government give a worsenment payment because of the act of the community? No. It is ready to take, apparently, but it will not give.

This is Socialism in operation—"Let us grab, boys, while we can. Let us grind our citizens into the dust." This is what the betterment levy is doing and what the whole of this wretched Bill is doing. It is in the tradition of wages and prices restraint and State control. We are marching to the Socialist millenium in which it is the State which counts for everything and the individual counts for nothing. This is just another aspect of this Socialist philosophy, against which the people of this country will one day rebel.

Sir D. Walker-Smith

I was particularly interested in the speech of my hon. Friend the Member for Hornsey (Mr. Rossi), as I always am, and more especially in the observations which he made in the concluding part of his speech about what he called "worsenment". I recall that on Second Reading, when the Bill was originally introduced in the last Parliament on 31st January last year, in the course of observations with which I then ventured to detain the House I put forward an argument for the application of some system of recoupment for worsenment as an inescapably logical parallel to the recoupment of betterment by the community—a principle in which I have always believed and which I have advocated over a considerable period. No doubt the hon. Member for Westhoughton (Mr. J. T. Price) is about to rise in his place to confirm the accuracy of my recollection.

Mr. J. T. Price

I accept that, but I was getting worried because the right hon. and learned Gentleman appeared to use a new bastard word "worsenment". Have we not enough of these horrible words on the record without a new one? This is what worries me, because I regard the right hon. and learned Gentleman as one who believes in the purity of the English language. I hope that he will not introduce another dreadful word such as "worsenment".

8.30 p.m.

Sir D. Walker-Smith

I am obliged to the hon. Member, whom I have known for a long time, for the compliment which he paid me on my regard for the purity of the English language. I regret to have to tell him and the House that this is a subject which is very prone to jargon of a somewhat inelegant sort. My recollection is that when I used the term on 31st January I apologised for it, but it seems to me the only word that accurately describes what I have in mind—the payment back to the individual citizen by the community of some compensation when a great motorway or a great airfield or something of the sort introduces considerable detriment to the amenity of his property. When that happens, surely in logic he should be entitled to some compensation. I agree that "worsenment" is a horrible word, but even more horrible is the effect of these things on the unfortunate citizen when they happen. I see the hon. Member for Putney (Mr. Hugh Jenkins) here, and I am sure that he would second my observations in this regard because of his very proper preoccupation with the effects of noise upon the citizen.

We are engaged on the discussion of a very unusual Amendment because it is designed to leave out a large part of the Bill. The scope and magnitude of the Amendment, which the other place has proposed, is in itself a condemnation of the Government's attitude to attempts to improve the Bill. The fact that they have found it necessary to seek to omit so large a part of the Measure is a sign of the exasperation they feel at the difficulty of getting the Government to accept reasonable improvements in the Bill. It is a condemnation, therefore, of the obstinacy of the Government and their unwillingness to profit by the experience of people who are able to make constructive suggestions.

It is an odd attitude, more particularly in view of the unanimous consensus of opinion outside which takes the view not only that the Bill calls for improvement but positively cries out for it. The Government, instead of turning their backs so resolutely on all efforts to improve the Bill, should welcome them.

Of course, if the Amendment of the other place were given effect, there would be no betterment levy at all. That is not a position which I would wish to see established. I have believed for a long time in the principle that the community should have the benefit of community created values, so far as one can assess them. It is known that I have taken this view. It is not a heterodox view from the point of view of the Conservative Party because Section 21 of the Town and Country Planning Act, 1932—which is going back a fair way—provides for the recoupment of betterment. That has been Conservative policy in the past and I have always believed in it. I would like, therefore, to see reasonable provision for the recoupment of betterment, but there are certain pre-requisites that must obtain before one can have such a satisfactory system.

Broadly, they fall into two categories. The first pre-requisites are common to any system of taxation. I know that the present Ministers do not like to have the levy classified as a tax, but the difference between a levy and a tax is small to those who must pay it. So the first pre-requisites are common to all taxation that it should be just, comprehnsible and relatively easy to administer.

The second set of pre-requisites applies in particular to the recovery of betterment; that is, that any system for the recovery of betterment must not distort the market in land and, above all, must not dry up the supply of land for desirable development, which is the main positive purpose of town and country planning.

The betterment levy which is provided for in Part III of the Bill and the relevant Schedules unfortunately fails to satisfy either of these tests. Indeed, it makes the worst of both worlds. It combines a confusion in application with a considerable administrative burden and also an obviously adverse effect on the future operation of the market in land and the supply of land for desirable development.

The Government would be wise to take warning from the fate of the corresponding provisions of the Town and Country Planning Act, 1947. The House will recall the provisions for the recoupment of betterment contained in the ill-fated Part VII of that Act, with the imposition of the 100 per cent. development charges. The period of operation of Part VII of the 1947 Act, in the words familiar of the philosopher Hobbes, was …nasty, poor, brutish and short". They were introduced on 1st July, 1948, the appointed day under the 1947 Act, and they came to an end, virtually unmourned, on 18th November, 1952—less than four and a half years' period of life for a system of development charges which was introduced with great confidence by the Ministers of that Administration, who commanded an even larger and more passively obedient majority than the present Government.

The Encyclopaedia of Town and Country Planning, a work which is of great assistance to many of us, describes, in a masterpiece of understatement and with commendable political objectivity, the history of those development charges by merely saying that they were the subject of a certain amount of criticism between 1948 and 1952. It is something that could be described in much more colourful terms. But, speaking as I always do, in an objective and dispassionate way, I do not exaggerate when I say that by the end of 1952 the development charges system could no longer continue. The charges were then repealed and that exercise left for this Government and the House a lesson which apparently hon. and right hon. Gentlemen opposite have refused to learn. The lesson clearly was that it is no use the Government trying to legislate on these matters in the teeth of the facts and despite the operation of the market. It is, as Virgil said in another context—and, of course, another language—in his agricultural poem: The more you expel nature, the more she returns with a fork". The more the Government seek to expel the operation of the market, the more it returns. That has been shown to be the case.

I saw the Parliamentary Secretary making a careful pencil note of the point. No doubt he is going to say that the failure of development charges in the 1947 Act was due to the fact that they were unwisely rated at 100 per cent. and that he and his right hon. Friend have avoided that patent error on the occasion of Part III of this Bill. They have avoided that error; I gladly say so. It is good to think that even this Government are able to avoid one error when it is so clearly spread before them.

But, though that no doubt was a very strong contributory cause of the ignominious collapse of the development charges of the then Socialist Administration, it was not the only one. The development charges were found to be unworkable, intractable and impracticable—all things which we can charge against the provisions in relation to betterment levy under Part III of this Bill. The development charges did exactly what the betterment levy will do if it is not put in a more workable and practicable form. They wholly distorted the market in land and dried up the market in land for desirable development.

It is right that we should have in mind some comparison between the present provisions and those of the 1947 Act because we know what happened to the relevant provisions of that Act. Nevertheless, apart from the fact that the 1947 Act prescribed 100 per cent. development charge and this Bill, as I have fairly said, avoids that basic error, in other respects—notably in respect of brevity and ease of comprehension—there is no doubt at all that the 1947 Act was immeasurably superior to the Bill now before the House which the other place has made a commendable and public-spirited effort to improve which right hon. Gentlemen opposite are now asking this House to reject.

I do not want to weary the House with more than one or two short statistics on this but I shall give one or two because I think they make the comparison far more clearly than any mere argument would. The relevant provisions of the 1947 Act were contained in Part VII, which dealt with the development charges, and Part VIII, which dealt with the application to special cases. Part VII contained six Sections. Part VIII contained 18 Sections. Only one of the Schedules of that Act dealt with the matter of development charges or, as we would now say, betterment levy. That was the Third Schedule, and it contained only six paragraphs.

That is the picture in regard to the 1947 Act The House can compare and contrast it with the contents of the present Bill. Part III, which is the subject of this Amendment, contains no fewer than 58 Clauses and the relevant Schedules, the subject of a later Amendment, No. 33, which the other place has also been constrained to move to omit, on my computation contains no fewer than 241 paragraphs. Hon. Members are responsible for the facts they give, but I am not a mathematician. A computer is not as yet part of the ordinary equipment of a Queen's Counsel, so I add "E. & O.E.". If the Parliamentary Secretary finds that I am one or two out, he is welcome to such reinforcement as that may give to his argument.

8.45 p.m.

Mr. Percy Grieve (Solihull)

That is the only point that the hon. Gentleman will be able to make.

Sir D. Walker-Smith

My hon. and learned Friend says that that is the only point the Parliamentary Secretary may be able to make, but he will not be able to make that one if the number is exactly 241. Suppose it is about 241, the position we get is that there are two-and-a-half times as many Clauses in this Bill on this subject as there were in the ill-fated 1947 Act and there is 30 times as much Schedule matter dealing with betterment levy in this Bill. The hon. Gentleman will say in a moment that it is incapable of improvement or simplification. Comparisons are notoriously odious, but they may be very illuminating. I suggest that they are very illuminating on this occasion.

It is not as if we were comparing this Bill with a Measure which is an acknowledged example of clarity and brevity. On the contrary, until Ministers in the present Administration saw fit to introduce this Bill, the 1947 Act had the doubtful honour of being rated as a Measure notoriously complex and difficult. It was a measure so notoriously complex and difficult that all the development charge provisions foundered because of their impracticability.

Through all the 20 years which separate us from the debates in which I participated in those days on that Act—and I have lived pretty closely with its consequences ever since—I had never thought in my wildest moments that I should ever stand up in this House or anywhere else and pray in aid the 1947 Act as a favourable comparison in the context of clarity and brevity. In the world of the blind, the one-eyed man is king. Compared with this Bill, the 1947 Act is a Measure of reasonable clarity and brevity, although, I hasten to say, by no other standards.

I suggest that there is only one conclusion that the House can or should draw from that comparison. Knowing what happened to Part VII of the 1947 Act, superior as it was in these basic ingredients to these present provisions, what hope can there be for Part III of the Bill in its present and unamended form? It is clear that there can be no hope indeed. If the Government are resolved to turn their back on all possibilities of constructive amendment and improvement, we will relive all this weary history again and see in due course this Measure grind to a halt because of its administrative impracticability. It will not matter much to right hon. Gentlemen opposite. They will say, "It was a pity but it was worth trying. After all, we had something in our election address". But it will matter a great deal to all the citizens who suffer from it.

Therefore, I make this appeal to the Minister. The Government should free themselves from all obstinate pride of authorship in respect of the Bill. They should take to heart the words of the exhortation of Cromwell and conceive it possible that they may be wrong.

There is nothing to be ashamed of in not getting right at the first attempt the formulation of such a complex, difficult intricate and technical, matter. The only thing to be ashamed of will be if right hon. and hon. Members opposite persist in error, in spite of advice and in spite of the efforts of the other place to help them, and then bring upon the community a great deal of difficulty and detriment which they could have avoided. That will then be a matter for regret and shame and it will be a matter in which the electorate will not be uninterested when the time comes when they have felt the effects of all this.

I do not want to stop the application of a levy, but I want to avoid the difficulties and drawbacks which will inevitably flow from an attempt to impose it in its present form.

The Government should therefore accept the Amendment of the other place and take the opportunity to recast Part III of the Bill and the relevant Schedules in a more acceptable and practical form, heeding experience and accepting counsel given in good faith and against the background of knowledge with the sole object of improving these provisions and lessening the hurt that, in their present form, they will inevitably do to the community at large.

Mr. Farr

I trust that my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) will forgive me if I do not follow his argument too closely. I would like, however, to endorse his plea relating to computers and to say that it is not only Queen's Counsel who should be equipped with these instruments. I suggest that when we endeavour to understand Measures of this nature, every humble back-bencher should have immediate and urgent access to these machines. If my right hon. and learned Friend would table an Early-Day Motion to that effect, I am sure that all the members of the Land Commission Bill Standing Committee would rally round him and add their signatures in support.

Sir D. Walker-Smith

Does my hon. Friend think that in present conditions, in the state of the economy to which the maladministration of Her Majesty's present Ministers has brought us, this would be a timely moment to bring forward that useful proposal, which must necessarily cast an additional burden upon the public purse, which is already subject to such very heavy pressures?

Mr. Farr

As right hon. and hon. Members opposite seem to concentrate all their time on buying foreign-made equipment wherever possible, and as I should hate to see American computers used instead of British, it would probably be inadvisable for us to proceed—

Mr. Deputy Speaker

Order. This is an interesting diversion, but I hope that the hon. Member will now come back to the Amendment.

Mr. Farr

I wish briefly to speak of the merit in leaving out the whole of Part III of the Bill. We had some discussion before we started to talk about Part III in earnest and it is obvious that the Amendments which were made in another place have been well received by the country as a whole. One of the most constructive Amendments is that to leave out the whole of Part III.

Later tonight, subject to Part III being restored to the Bill, we will discuss certain detailed applications and Amendments to it. Of the total number of Clauses in the Bill, no fewer than 59 are to be found in this Part, and 10 of the 17 complicated Schedules in the Bill are to be found in Part III.

It is this ghastly attempt to try to legislate for every conceivable and inconceivable eventuality which has made such burdensome nonsense of this Part of the Bill.

Moreover, this part does not follow the intentions which were laid down in the White Paper on the Land Commission which was published in September 1965. Page 4 of the White Paper under the heading "The Objectives" in paragraph 7(2) says that one of the objectives of the Land Commission will be: to secure 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. The restoration of Part III will do nothing to bring down the cost of building land. On the contrary, the passing of the Bill, including Part III, will have the result of putting up the price of building land.

Hon. Members opposite must surely see this pattern being followed in many other instances. If, for instance, a tax is put upon cigarettes, or on any other commodity, the shopkeeper who sells the cigarettes does not bear the burden of the tax himself. He cannot afford to do so. He has to pass it on to the consumer. By the same principle, those who have a certain amount of land which is suitable for development, which is ripe for development—and which they perhaps have to realise because they are nearing the age of retirement—will not endeavour to absorb the full effect of the 40 per cent. or 50 per cent. betterment levy themselves. They will be inclined to pass on some of it to the customer.

One thing is certain. Whatever the results of the Bill, one of the certain conclusions is that the price of building land can only be made more expensive, which, coupled with the intolerable mortgage rate of more than 7 per cent., the difficulty of bank loans, and so on will make the lot of the owner-occupier, the little person struggling to buy his own house and home, that much more difficult.

We would not like to see Part III amended. We think that it is beyond hope. We think it is rather like trying to patch up a leaky wine skin with new leather, because wherever the patches are made another rent appears. It is just the same with Part III of the Bill. We would like to see the whole cumbersome rigmarole swept away and in its place a fair, modest and simple tax on betterment value which can be most economically exacted through the present taxation system.

Part III of the Bill is full of gross injustices and anomalies. As I have said, later on this evening we hope to discuss some of them, assuming that the Government persist in their intention to restore Part III of the Bill.

It might be useful now to mention some of the most obvious and glaring injustices. One matter on which the House should reflect for a moment is the grossly privileged position in which local authorities are placed. Many of my hon. Friends and I are not at all sure—and I know that there is some disquiet among hon. Members opposite—that it is absolutely right that local authorities building on their own account should be exempt from the payment of levy while some wretched private builder, struggling to develop a housing estate adjoining a local authority site, has to pay the full development levy on his houses. It will take some time for the effect to work through the pipeline, but sooner or later the prices of houses built by private firms, like for like, must be more expensive than those provided by local authorities, simply because local authorities will be in the privileged position of not paying any development levy.

9.0 p.m.

Another matter which should be discussed in that connection is the fact that unless he gets on with the job fairly quickly—I think that it is a two-year period—the wretched private builder will be liable to pay double development levy. On some of the big multiple sites, which are being knocked down and redeveloped all over London and the rest of the country, it sometimes takes a firm many years to acquire all the land. There may be an odd lease here or a tenancy there of which it is sometimes very difficult to obtain possession. If this part is returned to the Bill and a builder is required to start work on a scheme within two years of acquiring the land, major schemes requiring five, or six, or even twenty years before all the land is available for comprehensive redevelopment will not be undertaken, simply because the period of waiting will put the builders in an even more difficult position with the levy.

Another matter which we shall be discussing later is the privileged position of the nationalised undertakings. No doubt we shall have a word or two to say about the callous disregard which the Government are showing of charities, their complete and utter disregard of the pitiful case of small owner-occupiers and their equally unfair treatment of the owners of mineral rights.

We discussed the latter matter when the Bill was before the House last year, but since the Bill went to another place it has become transparently obvious to anyone studying the debates of another place that there has been an under-cover deal between the Government and the mineral operators, that there has been a lot of hush-hush stuff about which the House knows nothing and about which another place knows nothing and which has never been accepted by or communicated to the owners of mineral rights. It is obvious that the Government did a deal with the operators. They are working to a scheme which is to be put into effect largely by regulation. The Government's stubborn refusal to accept what is generally regarded by those who are concerned with mineral operations as a fair and reasonable suggestion—that instead of compulsorily acquiring land and minerals, the full panoply of powers of the Bill should allow the wretched owners to continue with their title to the land—reinforces this view. The fact that they were unable to accept that fair solution is an additional reason for condemning this part of the Bill.

One could go on at considerable length picking holes in the Bill. One could go on giving one's own opinions and the opinions of those who are far more quali- fied than I and many other hon. Members —the experts, whether they be lawyers like my right hon. and learned Friend the Member for Hertfordshire, East, valuers, taxation experts or accountants. They are all agreed that the Bill is a hopeless mumbo jumbo.

One of the biggest pieces of hocus pocus in this part of the Bill is the definition of a notifiable event. I want to illustrate Case E and its application to the farming community. Many farms, particularly those near towns, have pylons running over them as well as telephone wires. Many also have gas pipelines and water pipes running underneath as well.

Many farmers grant some kind of easement for a pipeline under their land or a wire or cable over it. Naturally enough, this is reflected in a small annual payment to the farmer. But in each case the way-leave is a considerable nuisance to the man who has to earn his living from the land. In some cases he only gets 2s. or 3s. per telegraph pole but there is cost and inconvenience to him every time he sends a man into the field to work it. The man has to go round all the poles and leave the nettle and weed patches.

Yet, under the terms of Part III, the fact that the wretched farmer gets 2s. or 3s. a year for half a dozen telegraph poles becomes a notifiable event under Case E and becomes subject to a development levy being paid upon it at the rate of 40 per cent. This is nonsense. It is petty-fogging nonsense for a farmer to have to report to the Land Commission when an event like that has occurred, when a wayleave or easement has been arranged under Case E. Presumably the Land Commission will send men to check whether he is telling the truth and to see where the wires run and whether the levy should be a few shillings per annum. It will all be a waste of time and a complete nonsense.

Part III is no improvement to the Bill. The Bill was considered very carefully in the Lords and, as has been said, many of the Amendments they made were widely recognised and accepted in the country. I ask the Minister to show the same wisdom over this Amendment that he has shown over one or two of the others and be good enough to admit that he has made a mistake this time. We will forgive him with pleasure and moreover will understand him as being a human man for the first time. I hope that he will speak up graciously and say that he sees the wisdom of our case and accept the Amendment.

Mr. Boyd-Carpenter

Like my right hon. Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), I am very far from being against the idea of a charge on increased value realised as the result of the grant of planning permission. One of my objections to the provisions of the levy in this Bill is that there is this complexity, this incredibly wide scope, and the administrative problems created which will almost certainly be such as to discredit the whole concept of such a charge. As my right hon. and learned Friend said, it will be for only a limited number of years that such a scheme will attempt to operate before it collapses under its own weight. When I say that I am not against the idea of some sort of charge of this kind, I can call in aid, as the House may recall, that it fell to me nearly two years ago to express the views of my party in respect of a charge on the increased values gained as the result of the grant of planning permission.

What we had in mind then, and still have in mind, is something quite unlike this, a tax levied properly and efficiently through the normal machinery of the Inland Revenue, not through this constitutional abortion of a Land Commission, but by efficient people, skilled in the collection of taxes, and related to substantial transactions where the grant of planning permission appreciably increases the value of someone's land. This would be in cases where most people would feel that ordinary taxation should operate.

This scheme is profoundly different. One has only to look at Clauses 37 to 43 to understand what I mean. Does the House appreciate the vast number of tiny and unimportant transactions and actions committed by people in respect of their own land which have to be reported to the Land Commission, under threat of criminal penalties if they are not so reported, in order that the Land Commission may consider whether a levy should be imposed? The House will recall that this lethargic body is to be given no less than six years during which it can decide whether to impose such a charge and what that should be. That is why I feel that this is the kind of thing that discredits a sensible taxation concept, by introducing a levy demonstrably unworkable and imposing a quite appalling burden on the ordinary citizen.

Does the right hon. Gentleman really think that the ordinary citizen who grants a wayleave to someone putting lines over his land will always solemnly report this to the Commission and then wait in tense anxiety for six years to learn the financial results of his so doing? This is the kind of thing that brings discredit to any system of taxation. Taxation at this level of 40 per cent. of development value to begin with, openly stated to rise to 45 per cent. and 50 per cent. thereafter, must surely inflate the price of land. I do not know if the right hon. Gentleman's memory goes back to the time when he introduced the previous Bill in the previous Parliament.

I can remember then that he made a great point of the view that this Measure would reduce the price of land. Does he really think so now? If so, will he explain why alone of taxes, a tax of this kind will lower the price of the commodity on which it falls? I am bound to say that one has always assumed that the effect of taxation, and sometimes its purpose, is to increase the price of the commodity on which it falls. This has been the whole argument of Government financial policy for the last two years, that by increasing indirect taxation one diminishes the amount of purchasing power and operates against inflation. This does not seem to have worked here but this is what the Chancellor has been telling us again and again. Why, in this case, does the right hon. Gentleman think that a swingeing tax at this high and rising level will reduce prices? What evidence has he to support the proposition that in the case of land alone that will be the effect?

9.15 p.m.

The right hon. Gentleman has said before that there is a sort of price which land will command, that people will not pay more for it, and if there is a tax imposed the vendor will take less. But if that proposition be true of land, is it true of cigarettes, beer, or all the other commodities falling under Purchase Tax? The House knows that, when taxation is increased upon those things, prices rise almost precisely in proportion, and sometimes more than in proportion, to the increase in tax.

Whatever else the Bill does, it will as a result of these Clauses greatly inflate the price of land and make housing more expensive. This will not be the working of blind economic forces but it will be the direct consequence of measures taken by the Government, and I hope that the right hon. Gentleman will appreciate his heavy responsibility in that respect.

I take next the disposition of the levy. The Parliamentary Secretary may recall that, when he answered some questions put to him by the distinguished publication, The Local Government Chronicle, for its issue of 31st December last, he said: The benefits from the levy on betterment will go in the main to local authorities. This intention is being implemented already by the increased grants under the Local Government Act, 1966 and increased subsidies, including those for expensive sites, in the Housing Subsidies Bill". If that were true, it would be remarkable because the levy is not operating now. But his own Minister does not pretend that it is true. Earlier this week, I asked him how it would operate, and he referred me to an Answer he had given to his hon. Friend the Member for Salford East (Mr. Frank Allaun) the same day: The yield from the levy is a factor of which general account has been taken in considering the support which the Government are giving to local authorities under various measures. It would be impracticable and inequitable to relate this assistance directly to the levy raised in particular authorities' areas rather than to the needs and resources of the authorities."—[OFFICIAL REPORT, 23rd January, 1967; Vol. 739, c. 947.] That is very different from what the Parliamentary Secretary said. It is clear that the Government are not relating such yield as there may be from the levy to the aid they give to local authorities. It is, in the Minister's words, a factor to be considered in connection with it.

But if it is even to be that, the right hon. Gentleman must have some knowledge of what the yield will be. He has to this point declined to tell us what the net yield will be, yet, if it is to be taken into account in the aid given to local authorities, the Government must know the net yield. How can they take it into account otherwise? The gross yield is irrelevant because it would simply mean that less was collected by way of Income Tax, the old Profits Tax, Corporation Tax, Surtax and so on. If it is really intended to enable the Government to help local authorities, the only figure that matters is the net yield.

The right hon. Gentleman has been asked again and again what he expects the net yield to be, and he has always refused to answer. I do not know whether he has refused because he does not know or because he knows that it will be so derisory as to discredit the Bill. Those are, I think, the only two interpretations to put on his attitude. We have before us now all the Clauses under which the levy is to be imposed. Will the right hon. Gentleman still adopt the attitude that, after nearly two years of Parliamentary debate, he will ask the House to impose a tax without confiding to it how much money net he expects it to yield? After all, we can only judge a tax on what it brings in—what it brings in net. Therefore, not only all this stuff about helping local authorities but the whole justification of the tax turns on how much the right hon. Gentleman expects to get. Will he tell us?

Mr. Clegg

My right hon. and hon. Friends have pleaded with the Minister to take notice of what the other place said and withdraw the provisions of Part III. Looking through my crystal ball, I do not feel that he will accede to their requests, and I think that my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has found out why, because I also have had my attention drawn to the replies which the Minister gave to the hon. Member for Salford, East (Mr. Frank Allaun) on Monday. In my view of what he said, the Government have spent most of the levy before they have even started to raise it. I am concerned that he said: I remove that doubt at once by saying that a considerable part of the levy will go to aid local authorities."—[OFFICIAL REPORT, 23rd January, 1966; Vol. 739, c. 947.] I am very much concerned with how the provisions of Part III will bring down the price of land to owner-occupiers. I can find no means whereby this can be done under Part III, because the levy is paid to the Exchequer. It may be said that more crownhold land may be available, because the Exchequer will help the Commission. But there is no warranty of that in the Bill, and in any event we have never been able to find out just how crownhold would be allocated.

Therefore, I do not think that the Minister is in a position to withdraw the provisions, for otherwise all the calculations that have gone into the new measures under the Housing Subsidies Bill will fall to the ground, because in his Answer he spoke in the past tense. But the main electoral point which the Labour Party made with the levy was that it would help bring down the price of land. I have heard nothing today —there has been nothing but a deathly silence from the other side on Part III —or in Committee which would lead me to believe that future owner-occupiers can in any way be helped by having land made cheaper for them. There is no machinery there for—

Mr. Speaker

If there is no machinery, and the levy is not doing what the hon. Member says it does not do. But the hon. Member can only discuss at the moment what the levy is doing.

Mr. Clegg

The other side of the argument is that the levy is putting up the price of land, in contradistinction to the promises made by the right hon. Gentleman at the General Election.

I also think that too little notice has been taken by the Minister and the Parliamentary Secretary of the genuine fears of the provisions. As a solicitor, I know from talking to my colleagues that they are gloomy and extremely worried about being able to understand the Bill and advise their clients. It will not be easy—certainly in the first stages, until we have had experience of how the district valuer will value and until we know how the Commission will assess the levy—to advise on the sale of private houses, especially those with land or in the centre of cities and to say that the levy will or will not be paid. That is very difficult to advise.

The Minister says that a great many private household transactions will be outside the scope of the levy, because there will be no development value. But he will be a very brave solicitor who says to his client, until he knows how things will work out, "Put all your money from this transaction into another house, because you will not have to pay any levy." He knows that, if he is ever sued for negligence, it is no good his going to court and saying that the Minister said in discussions that it would not affect a great many private houses. That would be no protection for him at all. These are very real fears which my profession and others have.

I would agree with everything which has been said from this side of the House about the incomprehensibility which has been added to the complexity of the Bill. I want to reinforce what my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) has said in comparing it with the 1947 Act.

The right hon. Gentleman has heard two speeches from this side, one by my right hon. and learned Friend and the other by my right hon. Friend the Member for Kingston-upon-Thames, both of whom say, "We do not disagree with the fundamental idea of a levy, but we think that there are other ways of doing it." They are not asking the right hon. Gentleman to withdraw the Bill because they are against the levy. They fear that he has produced a monster which is unworkable. On that ground alone, I should have thought that he could accede to what the other place wants him to do.

Mr. Tony Gardner (Rushcliffe)

When the Government first announced their proposals dealing with land and, in particular, those dealing with the levy, one of the things which disturbed me was the sighs of relief with which the proposals were greeted by the professional bodies to which the hon. Member for North Fylde (Mr. Clegg) was referring, particularly the property-owning associations.

I find a striking contrast between statements which were made at that time and the kind of remark which we have heard during this debate. I do not know what has brought about the great change. I do not know why, suddenly, we are treated to these lavish statements. I can only suppose that the kind of debate which we are having is a reflection on current opinion polls and comments in the national Press instructing the Opposition that it is about time that they started opposing.

Mr. Clegg

Would the hon. Gentleman like to say what evidence he has that my own profession greeted the White Paper with sighs of relief?

Mr. Eyre

Would the hon. Gentleman care to quote evidence from the journal of any learned body to support his contention that there were sighs of relief when the Bill was first introduced?

Mr. Gardner

I well recall that, in the week following the announcement of these proposals, some national newspapers expressed surprise at the remarks which were made. Some of them were along the lines of, "The Bill is nowhere near as bad as we thought", and so on. However, I will leave that, because I am much more concerned in this debate to correct one point.

Throughout the past few weeks, there has been a national campaign waged, undoubtedly with the intention of frightening owner-occupiers. We are prevented from discussing the general aspects of the campaign in relation to Part III, but one aspect of it has been the attempt to spread doubts in the minds of owner-occupiers about whether they are liable for the levy.

It needs saying in the House that, in any case, only between 85 and 90 per cent. of transactions involving owner-occupiers who dispose of their property are likely to attract the levy.

9.30 p.m.

We ought to consider the difficult cases to which hon. and right hon. Gentlemen opposite have referred—the cases that may attract the levy. I can assure them that if difficult cases arise where injustice has been done or is likely to be done, not only hon. Members opposite but hon. Members on this side will have a great deal to say to the Minister, but if it is true that an owner-occupier stands to gain in quite substantial terms as a result of the transsaction if he sells his house for some purpose other than owner-occupation, the transaction should attract levy.

Mr. Ian Percival (Southport)

I understood the hon. Member to say that these levy provisions would not affect 85 or 90 per cent. of owner-occupiers. Would it not be more accurate to say that they affect all owner-occupiers but that after going through all the paraphernalia of theses Clauses it may turn out that in many cases that work will be wasted because it may be that—

Mr. Gardner

A comparatively small number will attract the levy.

Mr. Percival

Yes.

Sir S. McAdden

Will the hon. Member give us his evidence for saying that 85 or 90 per cent. will not be affected? He is not the Land Commission. How does he know?

Mr. Gardner

We are here concerned only with those transactions which involve a change in the use of the land in question. We are not concerned with a man who sells his house to a purchaser who wants to continue in owner-occupation.

Mr. John Wells (Maidstone)

On a point of order. With the greatest respect to the hon. Member, I hope that the HANSARD reporters will quote precisely verbatim in tomorrow's OFFICIAL REPORT the hocus-pocus rubbish that he is talking.

Mr. Speaker

The hon. Member knows that that is not a point of order.

Mr. Gardner

I want to turn to the much more important question of the attitude of some hon. Members opposite to the problem of betterment and the general question of raising some kind of taxation on betterment value. Hon. and right hon. Gentlemen opposite are quite sincere in what they have been saying. I am sure that they wish to overcome the problem. But I have been looking back over the records for many years, and I find that although there were some loud trumpetings from the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) and some of his colleagues, all their trumpetings failed to move the walls of Jericho on the then Government Front Bench. I saw no proposals for a kind of taxation to take up the betterment levy that were acceptable to the then Government.

Mr. Boyd-Carpenter

Does the hon. Member recall that the walls of Jericho were ultimately absolutely destroyed by a violent explosion?

Mr. Speaker

Order. I ruled that this was a broad debate, but not a scriptural one.

Sir D. Walker-Smith

rose—

Mr. Speaker

Order. I cannot have intervention upon intervention.

Sir D. Walker-Smith

rose—

Mr. Speaker

Order. The hon. Member for Rushcliffe (Mr. Gardner) has not yet replied to the first intervention.

Mr. Gardner

I am pleased to hear that the Opposition now take the view they do, but there is no such view on the record, and I saw no such view expressed in the election manifestoes of the party opposite. Only now, when this Government are taking occasion to gain some of this betterment for the community, does this view appear.

The main reason for my intervening was to say that if my right hon. Friend were to take the Opposition at their word and withdraw the whole of the Clause and replace it with some kind of taxation—the hon. Member for Hornsey (Mr. Rossi) mentioned the use of the Capital Gains Tax—I am certain that if my right hon. Friend withdrew this part of the Bill—

Mr. Speaker

Order. Hypotheses are very interesting, but we have long passed the stage when it is in order to discuss alternatives to what the House is deciding shall either remain in the Bill or be taken out of the Bill.

Mr. Gardner

I apologise, Mr. Speaker. I was led astray by various suggestions of alternatives which have been made. I am convinced that we shall have this debate over and over again on other evenings and that the cries of the Opposition would be just as strong and as loud if another alternative were provided. We have an opportunity here to show that the community means business, and that it means to take a reasonable share of the betterment levy. I hope that when he replies to the debate my right hon. Friend will make it clear that he intends to proceed.

Mr. J. T. Price

I rise only to make a brief intervention, in the hope that I may be able to restore a little equilibrium to the debate, which has been one-way traffic for several hours. I respect the views put forward by some very senior right hon. Gentleman opposite, including some right hon. and learned Gentlemen who have made a great study of this question. But I have been long enough in the House to know that whenever a major attack is made upon the property interests of the country, the House becomes like the wailing wall of Jerusalem.

I have listened with a good deal of humour and tolerance, I hope, for some time to speeches directed critically at my right hon. Friend about these Clauses which their Lordships want to remove from the Bill. Let me confess straight away that I am not a particularly enthusiastic supporter of this piece of legislation, but that is not to say that I do not agree with its intention—and I am more concerned with the intention which lies behind the legislation than with the technical machinery which, rightly or wrongly, my right hon. Friend has seen fit to put before the House.

I have been long enough in the House to know what sort of an abortion the 1947 Act was; I always thought that it was an ill-considered Measure. In the event, it was removed from the Statute Book, but it was not removed simply because it was ineffective or, as the right hon. and learned Gentleman said, it was inoperable; it was removed because of the change of Government and because the Tory Party, who, even in the days of William Cobbett and his "Rural Rides"—

Mr. Speaker

Order. Mr. Speaker is generous, but he draws the line at Cobbett. I hope that the hon. Member will come back to the Amendment.

Mr. Price

Perhaps you were not in the Chair, Mr. Speaker, when the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) quoted various literary figures, including Virgil. I thought that I was adding to the grace of the debate by giving another famous authority.

Sir S. McAdden

On a point of order. I hesitate to question your Ruling, Mr. Speaker, but would you give an assurance that the question of Cobbett's shop and whether it appreciated in value is a subject which comes within the betterment levy and therefore is in order?

Mr. Speaker

I do not think that that was exactly what the hon. Member for Westhoughton (Mr. J. T. Price) was arguing.

Mr. Price

I have been led astray in my attempts to make a good-humoured contribution to the debate. But let no one think that I am dealing with these point flippantly. I have listened with great respect to very senior and legal members of the House. Both the right hon. and learned Member for Hertfordshire, East and the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who are authorities on the matter and have declared their interest, agree in principle that the community should collect betterment on land which has appreciated in value because of the needs of the development of the community in which we all live. That is a declaration of faith which I share with them. In my younger days, when I thought that I knew much more about these matters than I feel that I know now, I saw things much more in black and white than I see them now. The picture is now clouded by all the technicalities of the modern State. In those days Henry George was good enough for me and his "Progress and Poverty" was the basic work for many of us who studied these matters.

Sir S. McAdden

rose—

Mr. Price

I know that the hon. Member wants to help me, but I do not want to be on my feet too long.

This community must take this racketeering in land by the scruff of the neck and do something about it. For 13 years I sat on the Opposition benches doing my job quietly and not obtruding myself too much, often when I was tempted to do so. I listened to a lot of tripe being talked from both sides of the House on many occasions when I was trying to do my job and to make a contribution whenever I felt that I could do so.

During those years, I never once heard the question of betterment raised by the Conservative Party, until on the eve of the 1964 election, when they knew that they would have to give an account of their stewardship to the electors, who were horrified by the enormous height to which the price of building land had risen in the previous 10 years. I heard quite senior members on my side of the House arguing in recent years when we were in Opposition that the price of land had risen from four to seven times in a short period. They were much below the mark. My constituency is in the broad-dialect-speaking part of Lancashire. Had I been a land speculator, a capitalist in an entrepreneur sense, and had I had the money to invest in land, I could have bought marginal land on the perimeter of Wigan not more tthan 12 or 15 years ago for £40 an acre and, because the community in that part of Lancashire is expanding, that land is now fetching £4,500 an acre, an appreciation of over 100 times in a little over 12 years.

The nation must take this matter seriously because it is the basic cause of inflation. When property values increase at the rate at which they have been increasing in recent years, this must have repercussions throughout society.

9.45 p.m.

Sir D. Walker-Smith

The hon. Gentleman said that there had not been any conspicuous advocacy of the recoupment of betterment by my hon. and right hon. Friends prior to the 1964 election. The recoupment of betterment was provided for, as I explained in my remarks, as long ago as 1932, in Section 21 of the Town and Country Planning Act of that year. It was only because the then Socialist Administration insisted on bedevilling the matter by imposing a wholly impracticable 100 per cent. development charge in 1947 that the clock was put back and a solution of this problem so long deferred.

Mr. Price

The right hon. and learned Gentleman is entitled to put that in defence of his party's neglect to deal with this problem. I will not deny him a lawyer's right to quote in an historical context. Whatever legislative machinery was available, it failed entirely under Conservative rule to arrest the spectacular rise in land values.

Mr. Graham Page

rose—

Mr. Price

I will give way later.

This whole matter was grossly neglected by those who are now criticising my hon. Friends for introducing this legislation. A respected former hon. Member of this House who will be remembered by senior hon. Members was Sir Frank Markham, who represented a constituency in Buckingham—the area around Bletchley and Wolverton. Before leaving Parliament he made a statement to the Press and received great publicity for saying that he had been made a very rich man as the result of inheriting a very limited acreage, just a few fields. He made something like £150,000 overnight because of the accidental appreciation in the value of his land, which was required for social purposes. He was a member of the Conservative Party. He knew that what had happened in his case was morally wrong and he condemned it. He had great courage to do so and I pay tribute to him for doing so.

The Bill, with all its defects—[HON. MEMBERS: "Hear, hear."]—and I admit that it has many and I am doubtful whether it will achieve its purpose—is a valuable Measure. Hon. Gentlemen opposite know that I am not a crude nationaliser in the ordinary sense of the word. Hon. Members who have been in the House as long as I have know that I have not taken an extreme ideological line on nationalisation. I am a Socialist in philosophy and outlook in my association with the Labour Party, but I am not an ideological bigot in this matter.

Society is demanding that there should he machinery to ensure that the nation solves this problem of increased land values. If my hon. and right hon. Friends do not see that the problem is tackled, I will be the most determined, vigorous, militant and, if necessary, revolutionary hon. Member from the point of view of nationalising land, because ultimately the nation will have to take possession of the land which it needs.

One nice hon. Member opposite—the hon. Member for Harborough (Mr. Farr) —spoke with a great deal of passion and some pessimism about the wretched builders and how they would be afflicted by what he described as "this iniquitous Measure", the wretched farmers who were going to lose wayleaves for putting stumps in fields, the wretched landowners and wretched this, that and the other. I began to wonder whether any happy men would be left in our community after a few more years of having the present Government in power. [Interruption.] Make no mistake; however much hon. Gentlemen opposite dislike being in opposition, they will have to get used to it. Some of us had to get used to it because we were there for a long time. Although we did not like it, we performed our function dutifully on behalf of our constituents, put forward matters that needed to be aired and, to a certain extent, restrained the Administration of the day. Hon. Gentlemen opposite have got to get used to the idea of being in Opposition for a very long time to come. They must not be smug and shrug off the problem we are considering.

This Government mean business and while, in their attempts to deal with this and other problems, they are making a lot of mistakes — [HON. MEMBERS: "Hear, hear."]—they are gradually tackling these issues. Hon. Gentlemen opposite cry "Hear, hear", but they know that I have not hesitated on occasion to criticise my right hon. Friends for some of the things that have gone wrong. I shall continue to do that whenever I think it appropriate. Nevertheless. hon. Members should make no mistake; this Government are animated by a different philosophy, a different outlook and a different purpose from those who exist merely to support financial vested interests in society, of which the greatest is the landed interest.

I do not believe that we shall do anything seriously to inconvenience the small owner-occupier. That is not the purpose of this legislation. The hon. Member for Hornsey (Mr. Rossi) made a very interesting speech to which I listened with close attention. He complained about the complexity of the Bill. Of course it is a complex Measure—far too complex for my liking. I prefer something much more direct. If hon. Members opposite will have the guts and courage to say in the presence of all of us here that they will support some Measure by which the nation will be ensured of the product of betterment of land and a ceiling will be put on the price of land, which is the first thing to be done, I shall be very grateful.

Local authorities are the concern of us all. The central Government have to provide most of local authority finance, but we are concerned here not only with local authorities but with vast amorphous financial corporations. These measures are not directed against small owner-occupiers. It has always been the historic privilege of the Conservative Party in this House whenever a great attack has been made on property in the way that William Cobbett spoke of property, to identify the attack not as one on the great owners of property but on widows, orphans and the poorest elements in society. They identify this Bill with an attack on owner-occupiers, but it is nothing of the kind. It is an attack on speculative landowners, people who have made vast fortunes. You know it is true; let us have a sense of humour.

Mr. Speaker

Order. The hon. Member must not bring me into it.

Mr. Price

I am very sorry, Mr. Speaker. I should not have developed that one. I do not often take the time of the House in these days but this is something on which I hold strong views which I am trying to express in a very moderate way. The problems of great civic authorities are always before us. Hon. Members in all parts of the House, regardless of whether they are on the Opposition or Government benches, express the problems of their local authorities. What greater problem has a local authority than the development of a great city? Great cities are having to pay £150,000 to £250,000 per acre for land for social purposes. This is a complete nonsense; a scandalous situation. Something must be done about it, and quickly.

I hope that the Government will dig their heels in and resist the Lords' attempt to remove Clauses 27 to 85 from the Bill. I hope, however, that the Government will take further thought on this matter. Having said all I can in a short intervention, but a longer one than it should be, in support of the Government and against the point of view put forward by hon. Members opposite, I say that I do not think this is the right way to do it. Some Government, this Government or a successor, will have to tackle this problem. That successor may be more Leftish than this Government. Do not imagine that this Government will swing to the Right; if it fails, it will swing further Left. That is the prospect confronting us and it is what bothers me about the Economic Community of Europe.

Mr. Speaker

The hon. Member is advancing into very wide fields and he must not do so.

Mr. Price

You have been very tolerant with me, Mr. Speaker, and the House has been very tolerant with me. I have a very bad cold tonight and I am not in good form. I promise to do better when I am in better form. For the moment I shall sit down and hope that what I have said will not go unnoticed by hon. Members opposite.

Mr. Peyton

May I be the first to express to the hon. Member for Westhoughton (Mr. J.T.Price) my very sincere hope that his cold will soon be better. I and the rest of us who have known him well for a long time have never had cause to doubt his sincerity, but sometimes we question a little his judgment. We wonder tonight whether he has perhaps even exercised that judgment and digested this Bill. In the earlier part of his speech, he made a few remarks which he subsequently contradicted. He said he did not know whether this was the right way of doing it. I am glad that he adhered to that view, because I believe that this is the way of making a mess but not of doing anything else. I agree with him that we have a very serious problem in an overcrowded island, but to suggest that this is the way of dealing with it is intolerable.

I would rather draw a veil over the speech made by, I believe, the Parliamentary Private Secretary, the hon. Member for Rushcliffe (Mr. Gardner), but I wish to protest about some of the language which is here being inflicted upon us. I do so in a cause which I have held for a long time, believing that obscurity in legislation is a bad thing and is hostile to freedom. I do not need to remind you, Mr. Speaker, that it was because of a certain lack of clarity in the law that the Roman people seceded from the cities for a time until the law was clear. I wish the Minister could be left alone for a bit with his minions to clear this up. It will take him an awful long time, but perhaps some time under some tremendous dispensation of which we ourselves are not capable, the right hon. Gentleman will meet his due deserts. He should be presented with a long-playing record of these Schedules which would play to him day and night, week after week, year after year, century after century. All that he will hear is stuff like this—

Sir S. McAdden

Will my hon. Friend give way?

Mr. Peyton

I will give way in a moment. All that he will hear is stuff like this. On page 185 there occurs—

Mr. Speaker

Order. We are discussing whether Clauses 27 to 85, which finish on page 84, should remain part of the Bill. We cannot discuss the Schedules.

Mr. Peyton

I was under the impression, Mr. Speaker, that the Schedules were being taken with the Clauses. I stand corrected if I am wrong.

Mr. Speaker

I understand that the Lords wish to cut out Part III—Betterment Levy—which ends on page 84. I may be wrong, but that is my impression.

Mr. Peyton

With respect, Mr. Speaker, my impression is that their Lordships wish also to eliminate the corresponding Schedules 4 to 13 and that we are discussing that Amendment at the same time. If that is incorrect, I readily bow to your Ruling.

Mr. Speaker

I am never pedantic. I am simply taking the words as they appear on the Order Paper, and the Amendment on the Order Paper deals with Clauses 27 to 85. I do not want to restrict the hon. Member in any way that is in order.

Mr. Peyton

I think I am right in saying, Mr. Speaker, that the accompanying or annexed Schedules which correspond to these Clauses are Schedules 4 to 13, which are dealt with by Lords Amendment No. 31.

Mr. Speaker

Yes, but we are not on Lords Amendment No. 31 at the moment. The hon. Member will, I am sure, acquit me of either unfairness or pedantry.

Mr. Peyton

I am obliged to you, Mr. Speaker. Of course, I always bow to your ruling, but I was under the impression, perhaps erroneously—it may be that my hon. Friend the Member for Crosby (Mr. Graham Page) on the Front Bench can correct me—that because the Schedules are the inevitable accompaniment of these horrid Clauses, we were dealing with the two sets together. If however, you say that we are not, presumably we will come to Amendment No. 31 later.

Mr. Speaker

Order. I can help the hon. Member on the second point. We will discuss ultimately Amendment No. 31. Before us, however, is the question whether Clauses 27 to 85 shall be taken out of the Bill, as the Lords recommend, or whether they should remain in the Bill, as, apparently, the Government recommend.

Mr. Peyton

I perfectly understood that we were discussing whether the Clauses should be left in the Bill, and I need hardly assure you, Mr. Speaker, that for my part, if these nasty creatures of the Minister were to be omitted, I would be very gratified.

It being Ten o'clock, the debate stood adjourned.