HC Deb 15 March 1967 vol 743 cc456-67

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

12.30 p.m.

Sir Harmar Nicholls (Peterborough)

I have a two-fold aim in initiating this debate. The first is to ensure justice for several of my constituents and the second is to prevent the Government from being guilty, I hope unwittingly, of a grievous breach of good faith in their dealings with a local authority which has been prevailed upon to co-operate with them in alleviating a national problem.

The history of the matter is easily told. The Government and the L.C.C. wanted provincial areas to assist in overcoming London's housing shortage by expanding quicker than they would normally have done in order to take London's overspill population and thereby alleviate one of London's greatest problems. Although an established and traditional city, Peterborough, with two other towns, was invited to do this by doubling its size very quickly indeed under the new towns procedure.

There were, and still are, many doubts in many quarters about whether this will be a good thing for Peterborough. However, the scheme was presented by the then Minister of Housing and Local Government in terms which gave the impression that many benefits would flow from the Exchequer to Peterborough if that city co-operated. It was always emphasised that if, in the process of bringing the scheme to fruition, any anomalies arose which would be detrimental to Peterborough and its people, the Government would act with sympathy and speed to try to overcome them. That was the whole atmosphere in which the Government presented their appeal to Peterborough to help when the scheme was first suggested. It was in this atmosphere that Peterborough was prevailed upon to become the guinea pig; and the scheme is now under way.

I must tell the House that, very early on, the Government's good faith is being put to the test and that their first reaction to having to honour their obligation is very disturbing to me in the light of an anomaly which I wish to put to the Minister today.

In keeping with this expansion under the new towns scheme, an outside consultant was appointed by the Minister to prepare the expansion scheme in detail. That was the right course to take. Having started the process, that was, indeed, the right road to pursue. However, until the full details of the consultant's scheme are available, planning permission has had to be refused by the local planning authority to certain private developers because of the possible risk of these developments cutting across the ultimate overall plan which will be accepted. This has caused considerable hardship to local owners, and that should not be forgotten, although I acknowledge that hardship may be inevitable in some cases.

If one is to have an overall plan that takes some time to reach fruition, it is vital that any separate planning approval which one gives in the meantime should not cut across what the final plan will be. Thus, although this represents a hardship to some of my constituents, that is not the main point to which I draw the Minister's attention, although I hope that he will bear it in mind.

This hardship would be bad enough standing alone, but in the meantime we have had what I can only call the villainous Land Commission being made the law of the land. Under the new arrangements any developer must pay a 40 per cent. levy on increased values arising from any development which has not been approved and actually started before 6th April next. Those who have permission and have started on their schemes in other towns will not have to pay this onerous 40 per cent. levy. Several of my constituents would have been in that position had not a stop been put on their schemes arising from actions which flow entirely from Peterborough's decision to co-operate in the Government's overspill scheme.

If Peterborough had said, "No, we are not prepared to help with your scheme to help London. We will not be good neighbours", these constituents of mine would have submitted their schemes, would have had them approved, there would not have been a consultant's overall scheme for which they must wait, and they would have had their developments under way. They would not, therefore, have to pay the 40 per cent. levy which arises out of the Land Commission legislation. Now, because they cannot get their schemes approved, they cannot make a start before 6th April and they must pay the 40 per cent. levy—that is, unless I can persuade the Minister to grant them an exemption, as he can under Section 63 of the Act.

If the Minister, in considering this case, does not take steps to grant this exemption, then the present state of affairs will be iniquitous and I prophesy that it may well endanger the whole expansion scheme. I say this because, without local good will, this risky revolution in Peterborough could not succeed. And if, at this early stage, the Government's protestations about having sympathy in dealing with anomalies are shown to be a sham, all local trust will vanish, and so will the expansion scheme.

From the very beginning, when the expansion idea was first mooted—remembering that it has been undertaken by Peterborough at the request of the Government—there were strong feelings locally on the subject. Many people thought that Peterborough was making a mistake. It was only on the understanding that the anomalies and difficulties which would inevitably arise in such a scheme would receive the sympathetic consideration of the Minister of the day that many local people then agreed with the idea. The undertaking to give sympathetic consideration to any anomalies was virtually a promise when the matter was first put to Peterborough.

Extreme concern about the expansion itself being endangered arises because of the terms of a letter which the Minister of State sent to me on 1st March last after I had put the matter to him privately. I put it to him in terms which I thought would at once alert him to the need to keep the Government's promise to Peterborough, but the terms of his letter are disquieting. He said, in effect, that our fears might well be exaggerated because he gathered that by no means all planning consents were refused.

There is no exaggeration here. To prove it, I will give a few of the cases that are known to me, although they touch only the tip of the iceberg. We have the industrial sites in the Fengate and Padholme Road area of Peterborough. We have the Barrets' valuable corner site in Long Causeway, in the centre of the town, a valuable site where approval has been held up for at least 12 months. Then there is the site for flats at the corner of Thorpe Road and Thorpe Lea Road. There is another Thorpe Road site for 58 flats. We have had a large development in Bridge Street. I could give many of these examples, but the value of those I have already given is many tens of thousands of pounds. I believe that I have already given sufficient instances to show without wasting the time of the House, that there is no question of exaggeration in making this appeal.

The Minister made a second implication in his letter of 1st March. Though I paraphrase it, it is a true paraphrase, so I can quote it. What the Minister said, in effect, was, "It is just hard luck on your constituents. Morally, the increase in values before 6th April ought to be within the levy for everyone." I do not know whether the Minister thinks that he ought to have made the 40 per cent. levy retrospective. He is entitled to his own views on that subject. The thing is villainous enough as it stands, but it would have been even worse had he done that. But to push this question to one side, and to make this sort of statement—which impresses Parliament, which makes the laws—is not good enough.

It is not good enough to push the complaint off with talk that, generally speaking, and morally, certain things ought to have been done. The law says that a start of development before 6th April absolves the developer from the 40 per cent. levy. If my constituents have been prevented from benefiting from this provision because of a central Government scheme, they have been prevented because they were being good neighbours. This is an anomaly which inflicts hardship on the developers through no fault of their own.

If I were to let the case stay there, it would just be a matter of making a general appeal to the Minister to see what he could do. Fortunately, bad though the Land Commission Act may be, the Government put into it a Section allowing them to grant exemptions from the levy if anomalies and unfairnesses show themselves. Under Section 63, it is possible for the Minister to exempt from having to pay this unfair penalty people who are the victims of the sort of anomalies I am describing.

If ever circumstances warranted the Minister laying an Order exempting the developers from the levy then, with all the force and sincerity I can command, I have to say to the House and to the Minister that I cannot think of any circumstances more worthy than these for calling Section 63 into action. If that Section was not intended to rectify an anomaly as glaring as this, why did the Government include it in their Act?

I am not calling upon the Joint Parliamentary Secretary necessarily to give me any detailed undertakings today. This is not a propaganda debate I have initiated. I am quite certain that if, within his Department, he will read what was said and implied to the Peterborough authorities to persuade them to join in this good neighbour scheme—to join in the new Town scheme which, to some extent, mitigates against- their own previous separate local powers, because of the development corporation being set up; if he sees how they have tried to co-operate in the highest sense of good neighbourliness, and if he can recognise, as I have tried to show as clearly as I can, that through no fault of their own certain people are to suffer great hardship, and that in his own legislation he has been given the power to rectify such hardship, I think that, on the narrow ground of being fair and the wider ground of keeping his undertaking to Peterborough, here is a matter that ought to be looked at with sympathy and concern.

I therefore do not ask the hon. Gentleman for a detailed reply now. He will acknowledge my case, I know, with all the courtesy and skill he always uses in the House, but I cannot expect him, in an Adjournment debate, to give an undertaking that will clear this matter up right away. But I do ask him to accept the force of the case and say that he will have it examined in detail and fairly in the Department. I ask him to say that if what I have said can be substantiated by examination in the Department, he will give second thoughts to the subject in order to have the matter put right. I ask for no more than that at the moment, but I beg him not to attempt to try to slide over it with generalities which may not give the appearance of a negative.

I have brought this matter before the House as early as this rather than dealing with it by correspondence with the Department purely because of the date. This levy comes into operation on 6th April, and I felt that in view of the first reply I got—which, I hope, was sent unwittingly—I should put the whole thing on record here as soon as possible. In the interests of his own Department and of the relations we want to see between the central Government and the local authorities, I hope that the hon. Gentleman will say that he will have his Department look at the matter with sympathy, and with all the bias necessary to suggest that it will use Section 63 to put this anomaly right.

12.46 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Arthur Skeffmgton)

The hon. Member for Peterborough (Sir Harmar Nicholls) has put his case very forcibly and very clearly. I tell him at once that although I think the issues are very clear, and that what I have to say will be quite definite, one always wants subsequently to examine all that has been said in such a debate as this, when an hon. Member raises a very important constituency point. I can assure the hon. Member that if I have missed anything that he has said or any point that he has made, we will read the OFFICIAL REPORT very carefully and consider the whole gravamen of his charge.

The hon. Member has really sought to exempt from the betterment levy certain cases of building development in the City of Peterborough, where planning permission has, for the reasons he has given, so far been refused. He points out that if the developers are unable to start operations before 6th April they will become liable to assessment for development levy under the Land Commission Act, 1967.

As he has said, the background is the decision in principle of the Minister of Housing to expand the City of Peterborough under the New Towns Act in order to take this very large additional population of about 70,000 from London's overspill. This decision was announced in February, 1965, after long consultations with all the parties concerned, and a draft Order was laid in October, 1966, which designated 18,000 acres in and around the city. The hon. Member will be aware that a public inquiry was held in January of this year, but as we are still awaiting the inspector's report he will not expect me to comment.

I would say in regard to the first part of the hon. Member's case that, as far as I am aware, the relations between the Ministry of Housing, the Peterborough authority, the county council, and so on, are excellent. I do not think that any charges of bad faith have been made—

Sir Harmar Nicholls

Not yet.

Mr. Skeffington

I want to put this on record, because I am not sure that the hon. Member was going as far as that. Perhaps he was anticipating making such a charge if I did not give the answer he wanted but that, again, may not be exactly how matters will work out. I can assure him that there will be the utmost good will and assistance that we can give from the centre to aid Peterborough in what will be a very considerable and exciting experiment in expansion, and one that will also be in the interests of Peterborough itself.

Following the decision of February, 1965, the local authority which had delegated powers from the county council, agreed to the policy of an interregnum on certain planning applications which came before it, as the hon. Gentleman said. That was done because immediately after the February announcement a very distinguished consultant was appointed, first to advise on the existing area, within and without the town, which should be designated for the site of the new town and, subsequently, to prepare a basic plan for expansion.

The policy of the authority was that, a consultant having been appointed, proposals affecting the existing town, and particularly the central area, should not be prejudiced, and there was therefore this interregnum on significant planning applications in the existing town. Possible developers were persuaded to hold up applications until the new proposals were known, and in some cases they voluntarily agreed to do so. That should be put on the record, and one is very glad that such agreement to defer has been possible.

In the second paragraph of his letter to my right hon. Friend, on 10th February, the hon. Member said: As you know, due to the proposed expansion of the city of Peterborough, an interregnum has been placed on many sites and buildings during the last 18 months which have either detailed or outline planning permission. The hon. Gentleman is wrong about that —I am not altogether certain that that invalidates his general argument, but, for the sake of the record, I ought to get this clear. Since the hon. Member put down this subject for discussion, I have naturally made some inquiries, but I do not think that there are any cases in which detailed permission has been given and which could have been affected by the moratorium.

The legal position is that once detailed planning permission has been given, that is that. I suppose that it would be possible for an authority again to have negotiations, but once planning permission has been allowed, it is a matter for the developer. In the short time at my disposal, I have not been able to go into the matter exhaustively, but, in general, I think that all the significant applications, some of which the hon. Gentleman mentioned, have not been affected by the interregnum policy when outline planning permission has been given. It may be so in one or two cases.

I suppose that there are 11 that could be called significantly large-scale applications to develop within the area under discussion and, from a very quick perusal, it seems that permission has been refused at a preliminary stage. Incidentally, one is now the subject of an appeal to my right hon. Friend, so I cannot say anything about that, but even in that case it was an outright refusal of the scheme as a whole. I should make that clear, because at least it makes the issue much simpler.

I do not think that the hon. Gentleman disagrees with the policy of the interregnum. Obviously, if one has a master plan for an area, it is absurd to allow planning permissions and then either have to buy back those permissions at inflated compensation prices, or acquire the land in respect of which planning permission has been given. The hon. Gentleman is arguing that because of the action of the planning authority in asking for deferment for at least a year, and sometimes longer, no operations could start and so levy will be payable.

This is a very natural argument for any hon. Member to make on behalf of his constituents and I am sure that if I were in the hon. Gentleman's position I would be making the same sort of plea. However, if he considers the matter, I think that he will realise that it is an extremely difficult thing to do, even under the provisions of Section 63 of the Land Commission Act. Perhaps I should explain why that Section is there. We are here dealing with a levy upon betterment value, that is, the difference between the existing use value of the site and its value when a planning permission has been given, although betterment may arise in some other way.

This is a matter of the raising of revenue and the body responsible will be the Land Commission. On the canons of good government which most of us in the House would accept, it would be impossible and intolerable when dealing with the raising of revenue to have any variation, either in the rate of the levy, or in its application, except by the decision of Parliament itself and, therefore, the Commission will have no discretion either to make exemptions or to decrease the rate of levy. Those will be matters to be determined by both Houses of Parliament.

However, when the legislation was being framed, it seemed that there might arise some kind of occasion—I suppose that it might be associated with a large-scale disaster—when the Government themselves might want to take action and where there might need to be rebuilding. Without Section 63, the only thing which the Government could do would be to promote special legislation to meet that kind of case. That would seem to be a lack of foresight and there is, therefore, an ultimate reserve power in the Act so that the Minister can lay an Order, which would have to be affirmatively approved in both Houses, making the exemption. That is the sort of occasion on which Section 63 could he used. It was never intended to be applied to a small number of cases in circumstances of the sort which the hon. Member has outlined.

Sir Harmar Nicholls

I agree that it has to be something significant and separate from the normal flow of things. The expansion of Peterborough, Ipswich and Northampton was announced by the Minister himself as the first of its kind ever to be tried. He said that they were guinea pigs and that the Government wanted to see how the scheme worked. It was a significant departure, he said, from anything which had gone before. Surely that justifies a separate distinction and the application of this Section.

Mr. Skeffington

At this stage, I shall have to differ from the hon. Gentleman about the constitutional meaning and application of the Section. Even if it had been intended to cover cases of this kind, there are other considerations which would have to be taken into account. Whether building operations start before 6th April depends on a number of factors. Failing to get planning permission is obviously one.

Even supposing we accept the hon. Member's plea and agree tha tthis Section can be worked—and I think that we would be constitutionally challenged if we attempted to use it—it would be impossible to say that the only reason why building operations had not started—so that the development was therefore not liable to levy—was failure to obtain planning permission. One would have to know whether the land was available and whether it could be transferred in time, whether the financial arrangements were all right and whether all the developers would agree. Administratively, that would be almost impossible to determine.

One has to fix a particular date. Frankly, if we could have made the date much earlier, we would have done so. It was to be 1st March.

It being One o'clock Mr. DEPUTY SPEAKER suspended the Sitting till half-past Two o'clock, pursuant to Order.

Sitting resumed at 2.30 p.m.